OP-Pohjola Group has benefited from its solid retail banking foundation, high deposit-to-loan ratio, and close customer relationships associated with its countrywide network of local member banks and branches. Mr Karhinen says the bank expects to emerge out of the crisis “even stronger, and we intend to take advantage of the opportunities on offer in the transformed competitive landscape”. The bank is well positioned to realise this ambition. Last year OP-Pohjola boosted its Tier 1 capital by 13% to €4.8bn, with a 10.4% increase in assets and 23.5% in net profits.
Efficiency has been rigorously improved by leveraging the cost synergies of the group’s banking and insurance businesses, particularly in IT functions and the service network. In 2007, the growth differential between income and expenses was 11 percentage points.
The bank has been forging ahead with the integration, unification and partial merging of its banking and non-life insurance information systems. Revenue synergies have been pursued by implementing measures that support cross-selling and enhanced customer loyalty, such as raising the level of loyal customer benefits, unifying customer relationship management processes and developing product packages and hybrid products.
As a result, the number of joint banking and non-life insurance customers increased by 94,000 to 900,000 last year. Loyal customer benefits were increased by 50% in February 2007 and by a further 40% from the beginning of the current year.
