Final Results

SAMPO BANK PLC STOCK EXCHANGE RELEASE

13 February 2007, at 09:30

SAMPO HOUSING LOAN BANK PLC'S RESULTS ANNOUNCEMENT FOR THE YEAR 2006

The profit for the financial year was EUR 8,8 million
During the year the company purchased mortgage credits worth EUR 1.4 billion from Sampo Bank plc
The company issued a covered bond at nominal value of EUR 1.0 billion
Loans and advances to customers were EUR 2,090 million at the end of the year
Mortgage credits and supplementary collateral referred to in section 10 of the Act on Mortgage Banks which collateralises the mortgage backed bonds covered the outstanding principal amount of the bonds by 116.6 per cent as at 31 December 2006
Capital adequacy stood at 11.7 per cent

The profit for the financial year was EUR 8,8 million (2,2). The net interest income increased to EUR 13.4 million (4.4).

The balance sheet total was EUR 2,422.4 million (1,119.1) at the end of the year. Loans and advances to customers were EUR 2,090.3 million (1,093.4). Non-performing loans were EUR 0.4 million (0.1).

The company issued in September its second covered bond with a nominal amount of EUR 1 billion under the EUR 5 billion Euro Medium Term Covered Note Programme. In addition, the company issued a lower tier two EUR 20 million subordinated debenture loan.

The aggregate value of the collateral of the mortgage backed bonds was 2,339.2 million euros, consisting of mortgage credits worth 2,082.8 million euros and supplementary collateral referred to in section 10 of the Act on Mortgage Banks worth 256.4 million euros.The ratio of mortgage credits and supplementary capital to the outstanding principal amount of the mortgage backed bonds, as calculated in accordance with the terms of the covered note programme, was 116.6 per cent.

Equity capital of the company was increased by EUR 35 million when Sampo Bank plc made an additional investment. Sampo Housing Loan Bank plc is a wholly owned subsidiary of Sampo Bank plc. The equity was EUR 87,6 million (43,8) at the end of the year.

The capital adequacy ratio at the end of the year was 11,7 per cent (11,1). Risk-weighted assets increased to EUR 1,088.3 million (577.1).

Sampo Housing Loan Bank plc has no staff of its own, but purchased administrative services from Sampo Bank plc.

The growth of the housing loan market is expected to continue in 2007, which will also reflect positively on the development of Sampo Housing Loan Bank's operations. The growth of the parent company's new lending as expected and the existing issuance programme will enable the launching of new covered bond issues.

Sampo Housing Loan Bank plc's Board of Directors does not propose dividend to be distributed from year 2006.

The figures concerning year 2006 in this results announcement are unaudited.

Sampo Housing Loan Bank plc's Board of Directors' report for year 2006 will be published on Sampo Bank plc's Internet pages at http://www.sampopankki.fi at week 13.

Helsinki, 13 February 2007

Sampo Housing Loan Bank plc

Board of Directors

Further information:

Head of Communication Hannu Vuola, +358 (0)10 516 0040

Attachments

Income Statement

Balance sheet

Statement of changes in equity

Cash flow statement

Capital adequacy

Notes

Financial highlights

SAMPO HOUSING LOAN BANK PLC

INCOME STATEMENT

1 000 EUR	Year ended at 31 Dec. 2006	Year ended at 31 Dec. 2005

Interest income	57, 752	13, 593
Interest expenses	44, 388	9, 195
NET INTEREST INCOME	13, 364	4, 398

Fee and commission income	319	124
Fee and commission expenses	-32	-25
Net income from transactions in securities
and foreign exchange dealing	1, 816	785
Net income from financial assets available-for-sale	-2, 000	-
Net gains on hedge accounting	2, 044	-630
Other operating income	-	0
Administrative expenses	-3, 353	-1, 286
Other operating expenses	-296	-359
PROFIT BEFORE TAXES	11, 862	3, 007

TAXES	-3, 084	-782

PROFIT FOR THE FINANCIAL YEAR	8, 778	2, 225

SAMPO HOUSING LOAN BANK PLC

BALANCE SHEET

1 000 EUR	At 31 Dec. 2006	At 31 Dec. 2005

ASSETS

Treasury bills and other eligible bills	256, 400	-
Loans and advances to credit institutions	43, 883	16, 078
Loans and advances to customers	2, 090, 314	1, 093, 388
Derivatives	5, 428	785
Other assets	17	65
Prepayments and accrued income	26, 315	8, 749
Deferred tax assets	11	-
TOTAL ASSETS	2, 422, 368	1, 119, 065

LIABILITIES

LIABILITIES
Liabilities to credit institutitons	82, 000	45, 000
Debt securities in issue	1, 930, 074	971, 739
Derivatives and other liabilities
held for trading	55, 810	20, 513
Other liabilities	191, 931	236
Accruals and deferred income	34, 957	17, 728
Subordinated liabilities	40, 000	20, 000
EQUITY
Share capital	41, 050	23, 550
Share premium account	35, 000	17, 500
Fair value reserve	-32	-
Retained earnings	2, 799	574
Profit for the year	8, 778	2, 225
TOTAL LIABILITIES	2, 422, 368	1, 119, 065


OFF-BALANCE SHEET ITEMS
Commitments
Other	30	504

SAMPO HOUSING LOAN BANK PLC

STATEMENT OF CHANGES IN EQUITY


	Share	Share premium	Fair value	Retained
1 000 EUR	capital	account	reserve	earnings	Total

Equity at 1 Jan. 2005 FAS = IFRS	6, 050			574	6, 624
Increase in share capital	17, 500	17, 500			35, 000
Profit for the year				2, 225	2, 225
Equity at 31 Dec. 2005	23, 550	17, 500	-	2, 799	43, 849

Equity at 1 Jan. 2006 IFRS	23, 550	17, 500	-	2, 799	43, 849
Financial assets available-for-sale
- Change in fair value			-32		-32
Increase in share capital	17, 500	17, 500			35, 000
Profit for the year				8, 778	8, 778
Equity at 31 Dec. 2006	41, 050	35, 000	-32	11, 577	87, 595

SAMPO HOUSING LOAN BANK PLC

CASH FLOW STATEMENT

1 000 EUR
	2006	2005

Cash and cash equivalents at 1 January	9, 697	691
Cash flows from operating activities	-1, 030, 976	-1, 035, 947
Cash flows from financing activities	1, 049, 189	1, 044, 953
Cash and cash equivalents at 31 December	27, 910	9, 697


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. 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).

SAMPO HOUSING LOAN BANK PLC

CAPITAL ADEQUACY

1 000 EUR	At 31 Dec. 2006	At 31 Dec. 2005

Tier 1	87, 627	43, 849
Share capital	41, 050	23, 550
Share premium capital	35, 000	17, 500
Distributable capital	11, 577	2, 799
Tier 2	39, 968	20, 000
Subordinated liabilities	40, 000	20, 000
Other	-32	-
TOTAL CAPITAL	127, 595	63, 849

RISK-WEIGHTED ASSETS (ON-BALANCE SHEET
AND OFF-BALANCE SHEET)	1, 088, 343	577, 076

CAPITAL ADEQUACY RAITIO, %
- Total capital/
Risk-weighted assets	11.72 %	11.06 %
- Tier 1 capital/
Risk-weighted assets	8.05 %	7.60 %

SAMPO HOUSING LOAN BANK PLC

NOTES


1000 EUR

1 Interest income and expenses by balance sheet item	2006	2005

Interest income
	3, 577	-
Loans and advances to credit institutions	1, 105	370
Loans and advances to customers	52, 006	14, 083
Debt securities	-	7
Derivatives	1, 058	-868
Other interest income	5	1
Total	57, 752	13, 593

Interest expeneses
Liabilities to credit institutions	2, 481	663
Debt securities in issue	38, 218	7, 510
Derivatives and other liabilities
held for trading	1, 248	-1, 376
Subordinated liabilities	974	212
Other interest expenses	1, 467	2, 187
Total	44, 388	9, 195

Of which received from or paid to Group companies
Interest income	2, 163	-498
Interest expenses	6, 169	1, 686

2 Fee and commission income and expenses	2006	2005

Fee and commission income
From loans	319	124
From other activities	0	0
Total	319	124

Fee and commission expenses
Fees and commissions payable	32	25
Total	32	25

3 Net income from transactions in securities	2006	2005
	Change in	Change in
	fair value	fair value

From derivatives	1, 816	785
Net income from transactions in securities,
total	1, 816	785

4 Net income from available for sale financial assets	2006	2005

Treasury bills and other eligible bills
Disposals of financial assets (gains/losses)	-470	-
Revaluation	-1, 530	-
Total	-2, 000	-

5 Net gains on hedge accounting	2006	2005

Change in fair value of hedging
instruments, net	-32, 471	-20, 513
Change in fair value of hedged items, net	34, 515	19, 883
Total	2, 044	-630

6 Loans and receivables to credit institutions	2006	2005

To domestic credit institutions
Repayable on demand	27, 910	9, 697
Other	15, 973	6, 381
Total	43, 883	16, 078

7 Loans and advances to customers	2006	2005

Corporations and housing companies	228	332
Households	2, 087, 411	1, 090, 287
Non-profit institutions servicing
households	2, 149	2, 279
Foreign	525	490
Total	2, 090, 314	1, 093, 388

Non-performing loans	2006	2005

Households	412	106

Loans and advances to customers	2006	2005
By type of loan
Home loans	1, 859, 333	964, 891
Consumer loans	148, 709	83, 540
Other consumer loans	82, 044	44, 625
Other commercial loans	228	332
Total	2, 090, 314	1, 093, 388

8 Debt securities

Treasury bills and other eligible bills	2006	2005

Issued by public bodies
Available-for-sale
Treasury bills	99, 890	-
Government bonds	156, 510	-
Total	256, 400	-

9 Derivatives	2006		2006
	Contract/notional amount		Fair value
	Remaining maturity
	1-5 years	5-15 years	Positive	Negative
Held for hedging purpopses
Interest rate swaps	1, 105, 023	1, 156, 000	2, 827	55, 810
- of which with Group companies	1, 105, 023	1, 156, 000

Held for other purposes
Interest rate swaps	1, 986, 612	-	2, 602	-
- of which with Group companies	1, 986, 612	-

	2005		2005
	Contract/notional amount		Fair value
	Remaining maturity
	1-5 years	5-15 years	Positive	Negative
Held for hedging purpopses
Interest rate swaps	1, 000, 000	-	-	20, 513
- of which with Group companies	1, 000, 000	-

Held for other purposes
Interest rate swaps	1, 093, 388	-	785	-
- of which with Group companies	1, 093, 388	-

Sampo Housing Loan Bank has no derivative contracts with remaining maturity less than 1 year or over 15 years.

Sampo Housing Loan Bank uses derivative contracts to hedge against interest rate risks. The counterparty of all derivative contracts is Sampo Bank plc.

Sampo Housing Loan Bank has hedged its mortgage loan portfolio with two interest rate swaps, one of which targets the fixed interest rate portfolio while the other targets the floating rate portfolio. These interest rate swaps are used to exchange the base rate cash flows from the hedged mortgages (total loan interest rate less customer-specific margin) to three month Euribor cash flows. The maturity date for the interest rate swap that hedges the fixed rate mortgages is determined on the basis of the end date of the hedged mortgages' interest rate period, while the due date for the interest rate swap hedging the floating rate mortgages is determined on the basis of the hedged mortgages' maturity date.







In addition to hedging the mortgage loan portfolio, Sampo Housing Loan Bank has used interest rate swaps for swapping the fixed coupon rates of bonds used as supplementary collateral to the three month Euribor rate.

As a counter for the above-mentioned arrangements are two interest rate swaps, with which Sampo Housing Loan Bank has swapped the fixed coupon rates of the covered bonds it has issued to the three month Euribor rate. Due to the aggregate effect of the interest rate swaps made, Sampo Housing Loan Bank's balance sheet is almost free of interest rate risks.




The interest rate swaps made in order to hedge the issued bonds, the fixed interest rate mortgage loan portfolio and the bonds used as supplementary collateral comply with the rules for hedge accounting as per IAS 39, and hedge accounting has been applied to them. The interest rate swap hedging the floating rate mortgage loans does not comply with the rules for hedge accounting as per IAS 39, for which reason it has been recognised in the accounting as other than a hedging derivative agreement and its effect on the result has been itemised under the net income from securities trading.






10 Debt securities in issue	2006		2005
	Carrying amount	Nominal value	Carrying amount	Nominal value
Bonds	1, 930, 074	2, 000, 100	971, 739	1, 001, 670
Total	1, 930, 074	2, 000, 100	971, 739	1, 001, 670

11 Other liabilities	2006	2005
Loan purchase, debt/Sampo Bank plc	191, 891	-
Other	40	236
Total	191, 931	236

12 Subordinated liabilities

Subordinated liabilities	2006	2005

Due to Group companies	40, 000	20, 000

13 Assets pledged as collateral security	2006	2005

Secured liabilities
Balance sheet item	Pledges	Pledges
Debt securities in issue	2, 339, 187	1, 086, 202
Total	2, 339, 187	1, 086, 202

14 Off-balance sheet item	2006	2005

Undrawn loans, overdraft facilities and
other irrevocable commitments to lend	30	504

FINANCIAL HIGHLIGHTS


1000 EUR	2006	2005	2004	2003	2002

Revenues	59, 932	13, 873	973	1, 725	2, 527
Net interest income	13, 364	4, 398	315	550	743
% of revenue	22.3	31.7	32.4	31.9	29.4
Profit before taxes	11, 862	3, 007	68	434	486
% of revenue	19.8	21.7	7.0	25.1	19.2
Total income 1)	15, 512	4, 653	331	611	749
Total operating expenses 2)	3, 649	1, 645	263	178	263
Cost to income ratio %	23.5	35.4	79.4	29.1	35.1
Total assets	2, 422, 368	1, 119, 065	27, 381	36, 272	48, 167
Equity	87, 595	43, 849	6, 624	6, 575	6, 268
Return on assets, % 3)	0.5	0.4	0.2	0.7	0.8
Return on equity, % 3)	13.3	8.8	0.7	4.8	6.5
Equity/assets ratio, %	3.6	3.9	24.2	18.1	13.0
Capital adequacy ratio, % 4)	11.7	11.1	50.4	36.1	28.7
Off-balance sheet items	30	504	-	20	-


The financial highlights have been calculated as referred to in the regulations of the Finnish Financial
Supervision Authority, taking into account renamed income statement and balance sheet items resulting
from changes in the accounting practice.
1) Total income comprises the income in the formula for the cost to income ratio.
2) Total operating expenses comprise the cost in the formula for the cost to income ratio.
3) The financial highlights have been calculated with taking into account the amount of the fair value reserve
in equity and changes in it. Without the change in the fair value reserve the return on equity would have
been 13.4 % for 2006.
4) Credit Institutions Act (1607/1993), as amended, sections 79 and 79a.

Formulas used in calculating the financial highlights
Revenues:	interest income, fee and commission income, net income from
	transactions in securities and foreign exchange dealing,
	net income from financial assets available-for-sale, net gains on hedge accounting, other operating income

Cost to income ratio, %:	administrative expenses + other operating expenses	x 100
	net interest income + fee and commission income, net + net income from
	transactions in securities and foreign exchange dealing + net income from
	financial assets available-for-sale + net gains on hedge accounting +
	other operating income

Return on equity	profit before taxes +/- change in fair value reserve - taxes	x 100
(at fair values), %:	equity ( average)

Return on assets	profit before taxes +/- change in fair value reserve - taxes	x 100
(at fair values), %:	average total assets

Equity/assets ratio	equity	x 100
(at fair values), %:	total assets

Final Results

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