Interim Results

SAMPO PLC         STOCK EXCHANGE RELEASE         1 (42)

                  10 August 2006, at 9:30

 

 

Sampo Group's results for January - June 2006

 

Solid operational profitability

 

Sampo Group's earnings per share in the first half of 2006 amounted to EUR 0.71 (0.81). Taking the change in the fair value reserve into account, earnings were EUR 0.56 per share (0.98). The decrease in earnings was due to the poor performance of equity markets and rising interest rates, which in the short term has a negative effect on the results of the P&C insurance business. Profit before taxes was EUR 558 million (632). Group annualised RoE, including the change in the fair value reserve, was 15.2 per cent (30.3) and thus the target of 19 per cent was not achieved. Net asset value per share was EUR 7.64 (6.74).

 

- Profitability in banking and investment services was excellent and profit before taxes rose to EUR 178 million (136) due to increases in net interest income and fees and commissions. Banking and investment services clearly exceeded its RoE target of 20 per cent as the annualised RoE rose to 26.1 per cent (20.1).

- The combined ratio for P&C insurance improved to 91.7 per cent for the first half of 2006 (92.9). The cost ratio decreased further by 1.0 percentage point to 23.7 per cent. Investment income was depressed by falling equity prices and rising interest rates. Profit before taxes decreased to EUR 186 million (376). The RoE target of 17.5 per cent was not achieved as the annualised RoE fell to 11.3 per cent (23.8).

- Life insurance reported a profit before taxes of EUR 216 million (145). Net investment income, excluding investments on unit-linked contracts, amounted to EUR 290 million (216) as a result of significant equity sales gains mainly in the first quarter of 2006. The change in the fair value reserve in the first half of 2006 amounted to EUR -89 million (101). The RoE target of 17.5 per cent was almost achieved as the annualised RoE amounted to 17.3 per cent (51.7).

 

 

* ) Less full deferred tax. 

 

The figures in this report are unaudited. Profit and loss items are compared on a year-on-year basis whereas comparison figures for balance sheet items are from 31.12.2005 unless otherwise stated.

 

 

Second quarter in brief

 

Sampo Group's profit before taxes for the second quarter of 2006 was EUR 219 million (403) and earnings per share amounted to EUR 0.27 (0.51). Taking the change in the fair value reserve into account, the earnings per share were EUR 0.04 (0.61). In the second quarter of 2006 Sampo plc paid dividends of EUR 0.60 per share, EUR 339 million in total, and repurchased its own shares for EUR 50 million. These together with the EUR -128 million change in the fair value reserve caused the net asset value per share to decrease from the end of the first quarter by EUR 0.53 to EUR 7.64.

 

Banking and investment services reported a profit before taxes of EUR 87 million (75) in the second quarter. Net interest income grew by almost 11 per cent to EUR 93 million (84), because of growth in the lending volumes and rising interest rates.

 

Profit before taxes in P&C insurance for the second quarter was EUR 53 million (258). Net investment income decreased from EUR 176 million to EUR -47 million as a consequence of falling equity prices and rising interest rates. The insurance technical result was excellent and the combined ratio improved to 89.2 per cent (90.8).

 

Life operations made a profit before taxes of EUR 87 million (83) due to high reported investment gains. Premiums written were EUR 129 million compared with EUR 183 million a year earlier. The comparison figure contains two large single premium with-profit contracts.

 

The Other segment reported a loss before taxes of EUR 15 million in the second quarter (-13), largely because of the EUR 10 million interest expenses relating to the If transactions in 2004.

 

 

Changes in Group structure

 

On 27 April 2006 Sampo Bank plc signed an agreement to acquire Industry and Finance Bank (Profibank) based in St. Petersburg. The closing of the transaction is subject to receiving necessary authority approvals.

If P&C Insurance Holding Ltd is planning to upgrade its presence and broadening its services in Russia by establishing a P&C insurance company in St. Petersburg. If has a representative office in St. Petersburg since 1995.

 

 

Administration

 

The Annual General Meeting of Sampo plc held on 5 April 2006 re-elected the following members to the company's Board of Directors: Tom Berglund, Anne Brunila, Georg Ehrnrooth, Christoffer Taxell, Matti Vuoria and Björn Wahlroos. The Annual General Meeting elected Jussi Pesonen and Jukka Pekkarinen as new members. The Board elected Georg Ehrnrooth Chairman and Matti Vuoria Vice Chairman.

The Annual General Meeting adopted the financial accounts and discharged those accountable from liability. The firm of authorised public accountants, Ernst & Young Oy, was re-elected Auditor.

 

 

 

Changes in share capital

 

The Annual General Meeting of 5 April 2006 decided, in accordance with the proposal of the Board of Directors, to pay a dividend of EUR 0.60 per share for 2005. The dividend, amounting in total to EUR 339 million, was paid on 19 April 2006.

 

The Annual General Meeting decided to cancel the 7,000,000 Sampo A shares repurchased in 2005. The number of A shares decreased by a corresponding number. The reduction in share capital by EUR 1,777,315.50 was registered on 26 April 2006, after which Sampo plc's share capital amounted to EUR 94,975,808.67, and the number of A shares totalled 563,500,515. The total number of shares of the company, including 1,200,000 B-shares was 564,700,515.

 

The Annual General Meeting also authorised the Board of Directors to repurchase Sampo shares. The authorisation is valid until 5 April 2007. The maximum amount of A shares that can be repurchased is 5 per cent of the company's share capital or of the number of votes carried by all shares. Shares can be bought back either through an offer made to all holders of A shares in proportion to their holdings and on equal terms determined by the Board, or through public trading on the Helsinki Stock Exchange. Shares can be bought back to implement Sampo Group's equity-based incentive plans and/or to be cancelled.

 

In accordance with the above authorisation, the Board decided on 11 May 2006 to repurchase a maximum of 15 million Sampo A shares. Shares will be repurchased by 31 December 2006 at the latest. Repurchases started on 31 May 2006 and 3,421,000 A shares have been repurchased by 10 August 2006. EUR 49.5 million was used to acquire the shares.

 

At 30 June 2006 Sampo plc held 3,421,000 Sampo A shares corresponding to 0.6 per cent of the total amount of shares and votes. The repurchased shares corresponded to EUR 0.6 million in share capital at 30 June 2006.

 

At 18 May 2006 and 28 June 2006 the Board approved subscriptions with the warrants of the 2000 option programme for a total of 404,125 A shares. The subscriptions increased the share capital by EUR 67,968.95.

 

At 30 June 2006 Sampo plc's share capital amounted to EUR 95,043,777.62, and the number of A shares totalled 563,904,640. The total number of shares of the company, including 1,200,000 B-shares was 565,104,640. 

 

At 24 April 2006 Sampo received a disclosure according to which the total number of Sampo A shares held by Barclays and the funds managed by it had risen above 5 per cent. On 27 April 2006 Sampo received a disclosure that the holding of Sampo by Barclays and the funds managed by it had decreased below 5 per cent.

 

 

Staff

 

Sampo Group's full-time equivalent staff at 30 June 2006 amounted to 11,772 employees (11,783). 38 per cent of the staff worked in banking and investment services, 55 per cent in P&C insurance, 3 per cent in life insurance, 1 per cent in the holding company and 3 per cent in Primasoft. 51 per cent worked in Finland, 16 per cent in Sweden, 14 per cent in Norway and 19 per cent in other countries. The staff continued to decrease in P&C insurance and Primasoft and increase in the banking operations, mainly because of rapid growth in the Baltics. The average number of employees during the first half of 2006 was 11,592 (11,749).

 

Management long-term incentive schemes

 

The payout on Sampo Group's long-term management incentive schemes is dependent on Sampo's financial and share price performance. Payments under the current schemes cover the financial years 2005 - 2008. At 30 June 2006 the total provision for management incentive schemes, including social security costs, was EUR 36.3 million. The second pay-out from the schemes took place in June 2006. The fall in Sampo's share price also decreased the provision and had a positive effect of EUR 12 million on the second quarter 2006 result.

The Annual General Meeting approved on 5 April 2006 a new "Sampo 2006" equity-based incentive plan. The "Sampo 2006" equity-based incentive plan applies to senior executive management of Sampo plc or its subsidiaries as decided by Sampo's Board of Directors and to Sampo's President and CEO. Within the share-based incentive scheme, the maximum number of Sampo's A shares distributable as a reward is 1,500,000. On 11 May 2006 the Board decided on the persons to be included in the share-based incentive system and on the allocation of shares. The Board also confirmed the performance criteria.

 

 

Ratings

 

All the main ratings for Sampo Group companies remained unchanged in the second quarter of 2006.

 

 

At 3 April 2006 Moody's upgraded AS Sampo Pank's (Estonia) Financial Strength Rating (FSR) from D to D+ with stable outlook.

 

At 18 May 2006 Moody's assigned a positive outlook to the financial strength ratings and subordinated debt / capital contribution securities ratings of If P&C Insurance Ltd (publ), If P&C Insurance Company Ltd and Sampo plc.

 

 

Group solvency

 

Group solvency is calculated according to the consolidation method defined in the Chapter 3 of the Act of the Supervision of Financial and Insurance

Conglomerates, which entered into force on 1 January 2005. In the consolidation method items, which according to bank or insurance regulations are part of own funds but not equity, are added to group's balance sheet equity. Items, which are not available to cover losses in other group companies, are, however, not included in own funds.

 

The Group's solvency ratio (own funds in relation to minimum requirements for own funds) at 30 June 2006 was 203.6 per cent (196.1).

 

 

In Sampo Group risks are described and aggregated internally through economic capital, which describes the amount of capital needed to bear different kinds of risks. The economic capital tied up in the Group's operations at 30 June 2006 was EUR 3,224 million (3,148).

 

 

Internal dividends

 

Sampo plc received dividends of EUR 630 million from its subsidiaries in March-April 2006. In addition, in June 2006 If P&C Insurance Holding Ltd and Sampo Life Insurance Company Limited paid extra dividends to the parent company Sampo plc, SEK 1,395 million (EUR 151 million) and EUR 150 million, respectively.

 

 

Developments after the reporting period

 

Sampo Bank plc sold in July 2006 its minority holding in Suomen Asiakastieto Oy, a credit information company. The sales gain of approx. EUR 16 million will be reported in the third quarter under the segment Banking and investment services.

 

 

Banking and investment services

 

Sampo Group's banking and investment service companies are organised under Sampo Bank Group. Sampo Bank plc, the parent company, operates mainly in Finland and through subsidiaries in all the Baltic countries. Sampo Bank also has a branch office for corporate clients in Stockholm. The investment services companies are Sampo Fund Management Ltd, Mandatum Asset Management Ltd, Mandatum Securities Ltd, Mandatum & Co Ltd, 3C Asset Management Ltd and Arvo Asset Management Ltd. Sampo Bank's branch network also operates as a distribution channel for other products such as life insurance and offers financial advisory services. 

 

 

Operating performance of banking and investment services continued to improve and profit before taxes for the first six months rose to EUR 178 million (136). The improvement was largely derived from higher net interest and fee income. Period's profit includes one-off sales gains from private equity of around EUR 24 million before minority interests and taxes, which were booked already in the first quarter. Comparison period includes a one-off sales gain of EUR 19 million. Annualised return on equity amounted to 26.1 per cent (20.1).

 

Net interest income grew to EUR 180 million (168) as good growth in lending volumes continued. Higher interest rates had positive impact on interest income and income from financial transactions. The pressure on housing loan margins has levelled off but lower margins on new loans still reduce the average lending margin.

 

Net fee and commission income increased by 23 per cent compared with first half of 2005 and rose to EUR 132 million (107). All fee and commission items developed favourably and good growth continued particularly in asset management and investment banking.

 

Total operating costs were EUR 223 million (212). Half of the growth in costs derives from continuing growth in the Baltic operations. In Finland costs grew roughly in-line with wage inflation. Cost-to-income ratio improved to 56.2 per cent (61.8). Staff in banking and investment services increased to 4,457 employees (4,222) at 30 June 2006. 80 per cent of this increase derived from the Baltic operations and 20 per cent from Finland.

 

Loans and advances to customers increased by 8 per cent from year-end 2005 and totalled EUR 20,003 million (18,484). Good growth in mortgages continued and the mortgage stock grew year-on-year by 25 per cent in total and 21 per cent in Finland. Market growth in Finland during the same time period was 15 per cent. Sampo Bank's market share of Finnish housing loans increased to 15.8 per cent (15.0). Corporate lending grew by 13 per cent to EUR 7,797 million. Consumer credits and other consumer loans grew rapidly by 17 and 36 per cent, respectively.

 

Geographically the Baltic countries continued to provide the fastest growth in both lending and deposits. The Baltic loan stock increased by 27 per cent from year-end 2005 to EUR 1,843 million (1,447). Despite the strong growth and investments in distribution, the Baltic operations are starting to show good profitability as RoE for Baltic banking stood at 16.0 per cent (15.7). The cost-to-income ratio of Baltic banking improved to 64.9 per cent (69.1). Sampo has already 33 banking branches in the Baltic countries and the number of customers has exceeded 200,000.

 

Credit quality remained firm while net impairment on loans and receivables was positive and added EUR 5 million (7) to the profit.

 

Deposits amounted to EUR 12,286 million increasing 7 per cent from year end 2005 (11,442) and 15 per cent from June 2005 (10,696).

 

Sampo's mutual fund assets increased by 12 per cent from year-end 2005 to EUR 10.0 billion (8.9). Increased market volatility during the second quarter changed the breakdown of mutual fund assets as some investors decreased equity exposure and shifted their allocations towards less risky products. As Sampo has a strong market position in equity funds, this development had an unfavourable effect on Sampo's market share which dropped to 19.1 per cent (19.9). Mutual fund assets include EUR 970 million of Sampo Group investments (1,200), representing 9.7 per cent of total assets (13.5).

 

Sampo Bank Group's capital adequacy was 10.9 per cent (10.6). The tier 1 ratio was 7.1 per cent (7.6) and tier 1 capital rose to EUR 1,282 million (1,255). Risk-weighted assets grew to EUR 18,071 million (16,466) mainly because of the growth in lending.

 

 

P&C insurance

 

If is the leading property and casualty insurance company in the Nordic region, with insurance operations that also encompass the Baltic countries. If P&C Insurance Holding Ltd,  headquartered in Sweden, is the parent company for property and casualty insurance within the Sampo Group. Business operations are conducted via subsidiaries and branch offices in the Nordic and Baltic countries.

 

 

P&C insurance operation's profit before taxes decreased to EUR 186 million (376), because of the poor performance of the investment markets in the second quarter of 2006. The technical result improved further to EUR 239 million (223), of which Private business area accounted for 59 per cent, Commercial for 28 per cent, Industrial for 11 per cent and the Baltic countries for 1 per cent. The insurance margin - technical result in relation to net premiums earned - rose to 12.9 per cent (12.2). The annualised RoE was 11.3 per cent (23.8) and the target of 17.5 per cent was not achieved.

 

Despite marginally increased competition the combined ratio for the first half of 2006 improved by 1.2 percentage points to 91.7 per cent (92.9). Improvements were most significant in business areas Private and Commercial. In business area Industrial the combined ratio remained fairly stable. The combined ratio for business area Baltics is still depressed by the large claims in the first quarter of 2006 while the second quarter combined ratio was below 90 per cent. EUR 39 million was released from technical reserves relating to prior year claims (5).

 

Cost efficiency continued to develop well with the costs decreasing to EUR 459 million (465). The cost ratio improved in all business areas and was down by 1.0 percentage points to 23.7 per cent.

 

Gross written premiums grew to EUR 2,475 million (2,430). Premium growth was strongest in business area Commercial and, particularly, in Baltics.

 

At June 2006 the total investment assets of If amounted to EUR 9.9 billion, 88 per cent of which was invested in fixed income instruments (85), 11 per cent in equity (13) and 1 per cent in other assets (2). Investment income decreased to EUR 36 million (250), because of the weak equity markets and the decrease in the value of fixed income investments. The return on investments was 0.7 per cent at market value (3.1).

 

If marks to market through profit and loss account all its investments and rise in interest rates has an immediate negative effect on investment income. Going forward the running yield on fixed income assets, however, improves.

 

The solvency ratio - i.e. solvency capital in relation to net premiums written - amounted to 74 per cent (88) and solvency capital was EUR 2,842 million (3,216). The decrease resulted from the dividends totalling EUR 579 million which If paid to its parent Sampo plc during the second quarter of 2006. Reserve ratios were stable as reserves were 156 per cent (155) of net premiums written and 254 per cent of claims paid (258).

 

Life insurance

 

Sampo Life Group consists of Sampo Life, a wholly-owned subsidiary of Sampo plc, operating in Finland and of its subsidiaries in all the Baltic countries. The company also has a subsidiary in Sweden and a branch office in Norway to complement the product offering of If P&C.

 

 

 

Sampo Life Group's profit before taxes amounted to EUR 216 million (145). Net investment income rose to EUR 299 million (286), which includes EUR 9 million of income on unit-linked contracts (70). Sampo Life has realised a significant amount of gains from equity during the first half of 2006. The fair value reserve decreased by EUR -89 million, when in the same period last year it increased by EUR 101 million.

 

Although depressed by the negative fixed income yield of -0.3 per cent, the overall return on investments at market value remained good at 3.2 per cent (6.1). Life operations have an RoE target of 17.5 per cent, which was almost achieved as the annualised RoE was 17.3 per cent (51.7).

 

Sampo Life Group's investment assets at market value, excluding the assets of EUR 1.5 billion (1.3) covering unit-linked liabilities, were EUR 5.6 billion (5.5) at 30 June 2006. Fixed income covered 66 per cent (64), equity 31 per cent (33) and real estate 3 per cent (3) of the total assets. Equity investments include direct equity holdings, equity funds and private equity.

 

Investments in Finland accounted for 44 per cent (40) of total investments at 30 June 2006, the rest of the euro zone for 26 per cent (29) and other foreign investments for 30 per cent (31). Finnish equity investments were 86 per cent of all direct equity investments.

                       

Sampo Life Group's solvency continues to be very good although the parent company, Sampo Life, paid a dividend of EUR 150 million to Sampo plc in June 2006. Sampo Life Group had at 30 June 2006 a solvency ratio of 19.1 per cent (21.3). The solvency capital of the Group amounted to EUR 967 million (1,077). Total technical reserves increased to EUR 6.2 billion (6.0), of which unit-linked reserves accounted for 23.5 per cent (20.8).

 

Total premium income of Sampo Life Group was EUR 306 million (324). The comparison figure contains two single premium with-profit contracts transferring the liabilities of two pension funds to Sampo Life and totalling almost EUR 80 million in premiums. Life operation was successful at its focus area unit-linked insurance. Unit-linked premiums grew by approx. 60 per cent from EUR 134 million to EUR 214 million, while premiums from other policies decreased sharply to EUR 92 million (190). The share of unit-linked premiums rose to 69 per cent (41) of total premiums. Regular premiums amounted to EUR 149 million (145) and their share of total premiums increased to 49 per cent (45).

 

Sampo Life maintained its strong position in the Finnish insurance market with a market share in unit-linked premiums of 23.6 per cent (21.8). The company's overall market share in Finland was 18.9 per cent (20.5).

 

Premium income of the Baltic subsidiaries grew by 136 per cent to EUR 17 million (7). Sampo Life Group's share was 30 per cent of the Latvian market, 20 per cent of the Estonian market and 7 per cent of the Lithuanian market.

 

 

Other

 

The operations of Sampo plc (the holding company) and Primasoft are reported in this segment. Sampo plc's main function is to own and control the subsidiaries engaged in insurance, banking and investment services. Primasoft provides IT services for various companies in Sampo Group.

 

 

The segment's loss before taxes amounted to EUR 34 million (-24). Sampo plc's balance sheet total was EUR 4.0 billion (3.6). Of this amount, holdings in banking and investment services companies accounted for EUR 0.8 billion (0.8) and holdings in insurance companies for EUR 2.4 billion (2.4). In addition to short-term operational financing, liabilities include two debt instruments - a subordinated note and a senior note with face values of EUR 600 million and EUR 300 million respectively. At current market rates Sampo plc is liable for interest payments on the above instruments of approximately EUR 10 million per quarter. 

 

Primasoft has a negligible impact on the profit or loss of the Other segment.

 

 

Outlook for the rest of 2006

 

Sampo Group is expected to report a good result for 2006 as operating profitability remains good in all of its business areas.

 

Sampo Bank Group benefits from rising interest rates and its result is expected to be very good for 2006. With current interest rates the Bank's earnings are foreseen to increase substantially. Further rate increases may, however, temporarily postpone the effect as the Bank's funding is of a shorter duration than its lending. There are no signs of credit quality weakening. Growth in fee income and a solid cost development are expected to continue.

 

Sampo Group's P&C insurance operation, If, is expected to achieve its combined ratio target of 95 per cent or better and to reach a combined ratio of around 92.5 per cent or better. If reports its investments at market value through the profit and loss account and changes in share prices or interest rates will be directly reflected in its result.

 

Sampo Life Group is expected to report a good full-year 2006 result although its marked-to-market result is highly dependent on capital market development. The focus on unit-linked insurance will be maintained.

 

Sampo plc, the parent company, is included in the Other segment, which reports a loss of approximately EUR 12 million per quarter, mainly because of interest payments on the financing associated with the If acquisition in 2004.

 

Further poor equity market performance poses the biggest risk for the outlook. The Group has significantly reduced its equity holding during the last three quarters and increasing bond yields raise expected investment income. Sampo Group is, moreover, strongly capitalised and can therefore withstand significant investment market volatility.

 

 

SAMPO PLC

Board of Directors

 

 

For more information, please contact:

Peter Johansson, Group CFO, tel. +358 10 516 0010

Jarmo Salonen, Head of Investor Relations, tel. +358 10 516 0030

Hannu Vuola, Head of Group Communications, tel. +358 10 516 0040

 

Sampo will arrange a press conference at 2 pm (Unionkatu 22, Helsinki) and an English-language telephone conference for investors and analysts on the second quarter results at 3.30 p.m. Please call +44 (0) 207 162 0125 (UK/Europe) or +1 33 334 323 6203 (North America). Password: SAMPO.

 

The conference can also be followed from a direct transmission on the Internet at www.sampo.com/ir. A recorded version will later be available at the same address.

 

Sampo will publish the third quarter 2006 interim report on 9 November 2006.

 

DISTRIBUTION:

The Helsinki Stock Exchange

The principal media

Financial Supervisory Authority

 

 

 

 

 

¹) Group solvency is calculated according to the consolidation method defined in Chapter 3 of the Act on the Supervision of Financial and Insurance Conglomerates, which entered into force on 1 January 2005. Solvency ratio is defined as the ratio of own funds to the sum of minimum requirements calculated under sectoral rules.                    

                       

²) Key figures for P&C Insurance are based on activity based costs and cannot, therefore, be calculated directly from the consolidated income statement. The result analysis of P&C insurance is presented in note 20.                   

                       

In calculating the per share key figures the number of shares used at the balance sheet date was 565,104,640, the average number of shares during the period 564,744,174 and the diluted average number of shares 579,383,339.                      

                       

³) The dilution effect has been calculated as if all the remaining subscription rights (4,681,685/the option programme of 2000 at the end of June, 2006) would have been realised. One subscription right entitles to subscribe 5 shares.                       

                       

In calculating the key figures the tax corresponding to the result for the accounting period has been taken into account. Investment property has been measured at fair value when calculating return on assets, return on equity, equity/assets ratio and net asset value per share. Additionally, the change in fair value reserve has been taken into account in return on assets and return on equity. A deferred tax liabilities has been deducted from valuation differences.                       

                       

The key figures for Banking and Investment Services and Other business have been calculated in accordance with FSA standard 3.1. The key figures for the insurance business have been calculated in accordance with the decree of the Ministry of Finance and the specifying instruction 12/002/2005 of the Insurance Supervisory Authority.                    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The cash flow statement reports cash flows during the period classified by operating, investing and financing activities. Cash flows are reported by using the indirect method. Cash flows from operating activities derive primarily from the principal revenue-producing activities. Cash flows from investments in subsidiaries and associated undertakings and those from investments in intangible assets and property, plant and equipment are presented in investing activities. Financing activities include cash flows resulting from changes in equity and borrowings in order to conduct the business. Cash and cash equivalents consist of cash at bank and in hand, balances with central banks, loans and advances to credit institutions repayable on demand and short-term deposits (under 3 months).               

 

NOTES                              

                                   

ACCOUNTING POLICIES                                  

                                   

Sampo Group's consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the EU. The interim financial statements are presented in accordance with IAS 34 Interim Financial Reporting.                                  

                                   

In preparing the interim financial statements, the same accounting policies and methods of computation are applied as in the financial statements for 2005. The financial statements for 2005 are available on Sampo's website at the address www.sampo.com/ir.                               

                                   

                                   

SEGMENT INFORMATION                                  

                                   

The Group's primary segmentation is based on business areas whose risks and performance bases as well as regulatory environment differ from each other. Business segments are Banking and investment services, P&C insurance, Life insurance and Other operations. Other operations comprise the operations of the holding company and the Primasoft Oy information technology firm.                              

                                   

Inter-segment pricing is based on market prices. Inter-segment transactions, assets and liabilities are eliminated in the consolidated financial statements on a line-by-line basis.                                   

CONSOLIDATED INCOME STATEMENT BY SEGMENT FOR SIX MONTHS ENDED 30 JUNE 2006

 

 

 

CONSOLIDATED BALANCE SHEET BY SEGMENT AT 30 JUNE 2006