Statement re Sampo Group's transition to IFRS

SAMPO GROUP'S TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
 
Sampo has applied the IFRS in its consolidated financial statements from the beginning of 2005 and will prepare its interim report for the first quarter of 2005 in conformance with the IFRS endorsed by the EU.
 
This release and the more extensive information package on the Internet pages (www.sampo.com/ir) present the preliminary changes caused by the transition to IFRS. The more extensive information also includes income statements for 2004 (annual and quarterly) and the opening and closing balance sheets for 2004 in IFRS format. The figures are based on the IAS/IFRS valid when they were prepared.
 
For Sampo Group, the major impacts of the transition are:
-       A greater proportion of investment instruments will be measured at fair value.
-       The Group's equity will grow mainly as a result of this.
-       Goodwill will no longer be amortised, but may be impaired on the basis of impairment tests.                                                 
 
Sampo Group's financial reporting by segments (as prescribed by the IFRS) will correspond with the previous reporting practice in which the business comprises four primary segments: banking and investment services, property & casualty insurance business, life insurance business and holding company business (= other business).
 
The investments of the P&C insurance business will be measured at fair value and the change in fair value will be presented in the income statement. The investments of the life insurance business will also be measured at fair value. These investments will be classified as available-for-sale financial assets, with changes in the fair value recognised directly in equity.
 
The changes will mainly impact the life insurance business, in which financial instruments were earlier measured at the lower of cost and market value, as prescribed by the previously valid accounting standards.
 
If, which engages in the P&C insurance business in Sampo Group, is included in the opening balance sheet for 2004 as an associate (38.05% holding). Therefore, with respect to P&C insurance, the transition does not materially impact the consolidated financial statements. Moreover, the Swedish accounting policies followed by If already mainly met the requirements of the IFRS.
 
As a majority of the financial assets and liabilities of banking and investment services were already, under the previous accounting practice, measured in accordance with IAS 39, the transition will not cause any material impact on the opening balance sheet for 1 January 2004.
 
The adoption of IFRS will increase Sampo Group's equity in the opening balance sheet for 2004 (1 January 2004) by EUR 307 million, of which the life insurance business accounts for EUR 246 million. The increase is due mostly to the measurement of financial instruments at fair value in accordance with IAS 39.   
 
Group goodwill on the closing balance sheet for 31 December 2004 will diminish by EUR 133.5 million compared with the previous method of accounting. This is mainly because, in connection with the acquisitions of If shares in 2004, the company's assets and liabilities have been measured at fair value at the acquisition date and some of them have been allocated to the identifiable balance sheet items. A key factor affecting the change has been the recognition of the equalisation provision as equity.
 
On the closing balance sheet date, 31 December 2004, consolidated equity was EUR 3,454.9 million and goodwill was EUR 773.3 million.
 
Sampo will arrange an English-language conference for investors and analysts in London on 15 April 2005, for the purpose of discussing the major changes caused by the transition to IFRS. The conference will begin at 12.00 (GMT). The key information is available for viewing at www.sampo.com/ir. The conference can also be followed from a direct transmission on the Internet at the same address.
 
 
SAMPO PLC
 
Jarmo Salonen
Head of Investor Relations
Tel. +358 10 516 0030
 
 
For more information, please contact:
Peter Johansson, CFO, tel. +358 10 516 0010
Jarmo Salonen, Head of Investor Relations, tel. +358 10 516 0030
 
 
DISTRIBUTION:
Helsinki Stock Exchange
The principal media
Financial Supervision
www.sampo.com