The Annual Report in English is available on Sampo’s Internet pages at the address
The Interim Reports in English are available on Sampo’s Internet pages at the address
Directors. The shareholders of Mandatum were offered the right to exchange their Mandatum shares for new Sampo-
Leonia confirmed the new operational organisation valid for the Group as of 1 February 2001 and appointed the key management. The Board of Directors decided to propose to the Annual
General Meeting convening on 5 April 2001 that the name of the parent company of the Group be changed to
• Some of the companies belonging to the Group were renamed. Sampo-Leonia
• Sampo-Leonia transferred to a holding company structure. The Group’s parent company is a holding company with banking and insurance companies as subsidiaries.
• The Annual General Meeting elected 7 members to the Board of Directors.
Board among its members after the meeting, is Olli-Pekka Kallasvuo (Nokia
• On 13 August, the period of validity of the offer made to Storebrand shareholders was extended until 28 September.
Sampo’s offer was supported by Storebrand shareholders representing approximately 86.3% of the shares in the company.
• Sampo and TietoEnator announced an extension of co-operation. Sampo announced that it would also transfer its insurance IT services to Tietoleonia, a joint venture company owned by the two groups, as of 1 January 2002 (when the company was renamed Primasoft Oy).
• Sampo Bank was demerged into three companies, of which one, Sampo Bank plc, was left with the assets and liabilities related to banking. The entire staff was transferred to the new bank as old employees. Corporate liabilities and properties were transferred to the other companies. Of these, Sampo Credit plc comprises export and project financing as well as the liabilities of large companies.
Property owned by the bank was transferred to Sampo Business Properties Ltd.
Mandatum were centralised into one company so that the business operations of Mandatum Asset Management Ltd were transferred to Mandatum Omaisuu-
Accenture, Nokia, the leading European investment company 3i Group plc as well as persons belonging to the management of the new company.
Together, Sampo and Varma-Sampo hold 50% of the voting rights in If.
• Sampo proposed that rationalisations be initiated within the administrative and support functions of the company. The company estimated that the number of staff needs to be reduced by a maximum of 750 people.
Net asset value 5.67 8.40 –32.5 *) The holding company started its operations at the beginning of the second quarter in 2001.
Sampo is Finland’s first full-service financial group. Services relating to investment and savings hold a central position: we want to offer a varied and competitive service range to our customers interested in long-term savings. We also offer our retail, corporate and institutional customers services relating to traditional banking, insurance and investment banking operations. Our operations and customer relations are guided by Sampo’s values: ethicalness, loyalty, openness and entrepreneurship.
Sampo financial group began its operations at the beginning of 2001
Sampo and one of the leading banking groups, Leonia, combined their forces.
Company. The growth areas of our business operations comprise services relating to savings and investments (life insurance, asset management and mutual funds), retail and private banking and investment banking operations.
At the beginning of 2002, Sampo became the largest owner of the Nordic
RORAC = Net Operating Profit (taxes 29%)/Risk Allocated Capital (7% * Risk Weighted Assets) C/I -ratio = total expenses/total income RONAV = Net Operating Profit (taxes 29%)/Net Asset Value
Sampo underwent a major transformation in 2001. The Group revised its business concept and restructured its organisation. In addition, a number of legally finalised mergers were operationally implemented. This involved combining the overlapping organisational structures of the various business operations and rationalising administrative and support functions.
insurance we managed to reach our efficiency and profitability targets for the first time. The combined ratio improved to 104.1 per cent.
In last year’s annual report I pointed out that it is particularly important to keep the Group’s investment portfolio balanced in difficult market conditions and undertook to accelerate the process.
P&C insurance solution. Storebrand is the leading Norwegian life insurer with a strategy very similar to Sampo’s.
Sampo. Under Norway’s controversial financial legislation, the transaction would have required 90 per cent of the shares. European authorities have strongly criticised Norwegian legislation and, in a reasoned opinion, insisted that measures are taken to amend it. Such measures are presently being considered by the Norwegian authorities.
In October, however, Sampo made the decision not to complete the Storebrand transaction because of the significant deterioration in the market situation and the consequent weakening of Storebrand ’s value, particularly in August and
interests of our shareholders to complete the transaction after September 11.
Strategic redirection of the business and organisational restructuring were arduous tasks. The reorganisation of the legal structure of our banking operations into three companies permitted us to release significant amounts of excess capital.
Most important, however, was the fact that on the whole our businesses developed favourably under difficult internal and external circumstances. Improved operational efficiency and the excellent sales performance in the latter half of the year strengthened our conviction in the strategic choices made in January 2001.
The process of building Sampo has by no means ended. On the contrary, 2001 was but a successful start to this work.
Sampo, as the Group and associated companies have more than 2 million customers but a much smaller number who subscribe to the full range of our financial services.
The new year promises to be challenging in the investment market, although we are no longer experiencing the crisis atmosphere that we faced in the third quarter of last year. In this difficult environment I expect professionally managed financial service companies to stand out and be successful. I am certain that
Sampo will prosper, particularly in the fast-growing business areas that we have chosen to focus on.
I would like to take this opportunity to thank our customers and shareholders.
Sampo has changed and will continue to change in accordance with your interests.
The year 2001 was in many respects a difficult one for our personnel, and the changes enacted were considerable.
Nevertheless, they were implemented briskly and efficiently. I wish to extend my warmest thanks to the entire personnel for coping so well and generating good results.
The European Central Bank lowered its reference rate four times. The minimum bid rate was lowered by 1.5 percentage points during the year, to 3.25 per cent.
Money market rates began to fall at the start of the year, as signs of an economic slowdown became clearer and expectations of slower inflation in the euro area built up. For instance, the 6 and 12month euribor rates often used for housing loans fell by about 1.5 percentage points during the year.
Long-term interest rates mainly fell during the year. The fall in short-term rates in combination with the slowdown of both economic growth and inflation pushed down the entire yield curve.
Long-term rates rose somewhat towards the end of the year, as hopes of revived economic growth made themselves felt on the markets. The spread between
Finnish government bonds and German government bonds remained more or less unchanged, the spread for ten-year maturity being about 0.2 percentage points. The spread between corporate bonds and government bonds widened during the year worldwide. After a particularly sharp rise in the corporate bonds’ spread over government bonds in
Meanwhile, share prices in the forest industry rose by about 8 per cent during the year.
dollar levelled out during the year, at an exchange rate of about 0.89. Among foreign currencies important for Finland, the Swedish krona depreciated by about 10 per cent. The exchange rate of the euro against the British pound remained fairly steady all year.
Sampo did not have any direct or reinsurance liabilities relative to the targets of the September 11 attacks.
Total household housing loan stock increased by 11 per cent during the year.
Housing prices remained fairly stable throughout. The pace of construction of new housing slowed down, however.
The service industries continued to grow, but at a slower pace than in 2000.
Centre, registration of new vehicles dropped by 12.7 per cent last year.
Altogether 178,890 new vehicles were registered, compared with 204,849 in 2000. Despite this, the number of vehicles totalled 3.76 million at the end of 2001, an increase of 2 per cent on the previous year.
Industrial output went down by about one per cent on the previous year. Forest industry output in particular fell as export prospects weakened. Output in the electro-technical sector, which has grown forcefully in recent years, began to flag in the spring, but took an upward turn again towards the end of the year.
All in all, economies of the three Baltic countries continued to perform well during 2001, even if economic growth lost momentum towards the end of the year. Latvia had the fastest-growing GDP
Baltic States and Poland had all made good progress with legislative amendment and economic reform with a view to EU accession.
By international comparison, a substantial portion of Finnish household financial wealth consists of savings deposits and poorly diversified equity investments. As a result, this opens a market for investment products with better earning opportunities than ordinary deposits. These investment products are less risky than individual equities.
The role of life insurance as a savings and investment vehicle is growing considerably. This interest is fuelled in part by the introduction of new life insurance packages and solutions that are linked to various investment instruments.
After many years of positive development, the growth in Finland’s life insurance markets slowed down in 2001.
The life insurance markets were affected by the general uncertainty in the investments and savings markets. However, the life insurance markets clearly recovered in the last quarter of the year.
Sampo Life’s premiums written in 2001 performed better than the markets and totalled EUR 742 million. Total premiums were only about 3 per cent lower than in 2000. On the basis of preliminary industry figures, market share grew by 3.2 percentage points to 23.1 per cent.
The return on investments in life insurance depends to a great extent on the investment activities of the insurance company. In 2001, the result from investment activities was weakened by the decline in share prices sustained nearly throughout the year. For this reason, estimated on the basis of current share prices, Sampo Life’s income from investment activities remained low.
A key target of Sampo Life is to strengthen its market position in the retail segment. This aim was achieved and preliminary data indicate that the market share increased to 14.1 per cent.
In the corporate customer segment and group pension insurance, Sampo Life maintained its market leadership.
In the coming years, Sampo will aim at gaining market share, especially in unitlinked insurance and in the household segment. In corporate insurance, the aim is to maintain the current strong market position. High market share and Sampo’s strong capital market expertise will be utilised in launching the new products and operating methods to the markets during the current year.
Mutual Pension Insurance Company and independent brokers - provide an excellent foundation for the achievement of the goals set for this year.
These figures have been made comparable to those of 2000 by the inclusion of
The growth of assets in mutual funds registered in Finland continued in 2001.
14,506 million. The growth was partly hindered by the downward trend in share prices in all of the main markets worldwide, which decreased the value of the securities portfolios of equity and combined funds. The fall in share prices did not inhibit the growth in the popularity of mutual funds, as monthly net inflow was positive with a few exceptions, and altogether during the year funds registered in Finland gained new capital EUR
In 2001 fund investor interest was targeted at money market funds in particular. The reason for this was that many private persons chose fund investment as an alternative to traditional savings accounts during the year and, as a first step, transferred resources into money market funds. The increasing interest of corporations in improving the efficiency of their cash management also contributed to the increased popularity of money market funds. Corporate interest in Sampo funds was increased by the
Sampo Sweeper, in which customers can agree on balance thresholds over which assets are automatically transferred to the
Mutual funds still exist under the names of both Sampo and Mandatum.
Mandatum Omaisuudenhoito Ltd and carefully chosen partners abroad. With regard to funds that require special knowledge and skills, the funds are managed with the best possible expertise available worldwide in that specified area.
In particular, combined funds and equity funds, and also funds with absolute return targets, are expected to become more popular as investor interest shifts towards products offering higher expected returns in the longer term.
Kaleva Mutual Insurance Company transferred their consulting operations concerning private equity investments to
The growth in sales of mutual fund and life insurance savings products in autumn 2001 owed much to the renewed Sampo brand as well as to changes made in customer service. The Sampo brand has been traditionally identified with insurance activities. During the year, Sampo’s marketing communications profile was renewed to support the chosen business strategy. Already now, one out of five
Finns identifies Sampo as the top investment and savings professional in Finland.
The selling of savings and investment services now plays a more significant role in Sampo’s customer service. Customers have reacted positively to Sampo’s efforts to comprehensively review their situations and objectives and to identify the possibilities for long-term saving. This successful model will be further developed to serve customers even better.
The skills of the sales staff in savings and investment have been improved by training programmes, implemented in co-operation with the Institute of
“Investors’ ABC Service”, which helps customers to formulate their own investment strategy and plan. New e-services included a continuous fund savings agreement, Mandatum’s funds, an investors ’ news service and an e-deposit account.
Housing sales remained busy in 2001 and more housing loans were sold than in the previous year. Increasing use was made of Sampo’s new housing finance product, “Premium Housing Finance”, which combines a housing loan, investment and comprehensive insurance in a way that is new in Finland. The loan is paid back in a lump sum at the end of the loan period. In this way, the usual monthly instalments are freed for use in long-term investing. The loan is repaid from the invested funds and the income they generate. Any surplus directly increases the customer’s other wealth.
The Bank’s credit management process is being renewed. The first part of the new system became operational in autumn 2001 and the whole process will be fully introduced in 2002. It will make credit management more cost-effective and leave employees with more time to engage in other customer service.
achievement of agreed objectives. In addition to investment and banking services, Mandatum Private Bank also provides legal advice in taxation, family and inheritance issues.
Finnish private customers, and this kind of service is expected to become increasingly popular. These developments have been influenced by e.g. new option systems for corporate executives and the need for asset management services arising from mergers, acquisitions and
Sampo’s corporate customers are served by about 300 customer account officers in 59 branches. Services to large corporate and institutional customers are provided through separate units with their own customer account officers. The customer account officers assist their customers to effectively utilise the whole range of Sampo Group’s services in the most suitable way. The service mix includes investments, payment transactions and liquidity management. They may also include finance, risk management and mergers and acquisitions services, supplemented by insurance and bonus payment systems for corporate executives and staff.
During 2001 the corporate customers business focused on selling investment services products, which led to a substantial improvement in Sampo’s market position. At the same time, Sampo maintained its strong market position in deposits and payments, and also held on to its nearly 40 per cent share of the automated payments market for corporate and institutional customers.
New lending for project and export credit purposes has been discontinued.
Sampo’s banking operations will grow in the future by exploiting the trends in the savings and investment markets. The focus will be on products that do not tie up too much capital. Sampo’s share in the target markets will grow through active and professional selling efforts.
Sampo has a leading position in services linked to the corporate capital market in Finland: 1. Investment banking (Mandatum & Co)
The Sampo Group’s investment bank operates under the Mandatum brand name. Mandatum Investment Bank consists of two independent companies,
Share prices continued to decline for the second consecutive year and the economic outlook remained uncertain throughout the year. The repercussions of the terrorist attacks on September 11 and the ensuing political tensions slowed investor activity on a global scale and made investors more cautious in both the fixed income and equity markets. The number of mergers and acquisitions worldwide fell from the record levels of 2000. The volume of IPOs and other capital market transactions likewise decreased.
The year 2001 was Mandatum & Co’s first full year of operations, following the incorporation of Mandatum Bank’s corporate finance operations at the beginning of the year.
Despite the tough market environment, business volume and market position remained strong. Record levels were achieved in mergers and acquisitions, measured by the number of transactions and the business volume, and excellent results were thus achieved.
Notwithstanding the uncertain market situation at the beginning of 2002, the future outlook for Mandatum & Co remains positive. Corporate restructuring is expected to be as active as in previous years, and Mandatum & Co’s broad experience and expertise in this sector provide a firm foundation for continued success. If capital markets recover, the transaction volume is expected to increase considerably compared to last year.
As a part of the Sampo Group, Mandatum has been able to strengthen its position as a financial advisor and lead manager in capital market transactions.
achieved a positive result. Profitability was weakened by the low number of capital market transactions (share sales, share issues, IPOs) executed on the stock markets in 2001.
As a result of the successful merging of operations, Mandatum Stockbrokers improved its position as a provider of services for Finnish private customers.
In addition, despite the powerful onslaught of remote brokerage services from abroad, Mandatum Stockbrokers was able to maintain its market position in all key customer segments. The allocation of resources to derivatives brokerage increased its volume clearly from previous years’ levels.
Mandatum Stockbrokers’ growth in 2002 will be based on Finnish private customers. The focus on private customer services will benefit from a flexible, customer-oriented, multi-channel approach, in which customers can execute their trades on-line, as direct customers of Sampo Bank, the Mandatum branch offices or Mandatum
The aim is to achieve growth in fees and commissions, as a result of which the operating profit is expected to at least match that of 2001. The profit development will, however, be influenced by the general stock market operating environment, and especially by the conditions for capital market transactions.
property & casualty insurance. The main reorganisation was the merger of
Insurance were merged into their parent company on 31 March 2001. P&C
insurance companies and their subsidiaries became part of the If Group, the biggest property & casualty insurance group in the Nordic countries. Sampo
On the Finnish market, the profitability of private customer and SME
corporate customer operations improved considerably. The profitability of domestic direct insurance for major customers also rose.
Telephone services are clearly becoming increasingly important for customer contacts. Access to telephone services was improved in 2001. In 2002, general insurance telephone services and claimsrelated telephone services will be concentrated at Contact Centers. The operations of agents and the tools they have at their disposal will also be developed, enabling them to respond to local service needs with even greater efficiency than before.
Last summer, it became possible to obtain a home insurance policy over the
Internet services have expanded considerably in terms of both the range of services and the number of users. It is now possible to supply policy amendments over the net, ask for certificates and report the most common forms of property damage and personal injury.
Sampo’s market standing remained strong among both SMEs and public bodies. If is still clearly the market leader in insuring public bodies.
doubled. Customers view the folder as an important part of overall services, and its importance in attracting new customers has grown. Companies can also order an insurance package over the Internet which covers property, loss of profits, liability and cargo. This on-line insurance
Sampo and If. The Pan-Nordic service model, local service outlets in Europe and an international cooperation network will all help to guarantee extensive and comprehensive insurance packages which safeguard the business operations of customer corporations.
Risks and security threats are becoming increasingly complex and risk management is constantly faced with new challenges. As the market leader in
P&C insurance, the If Group can offer versatile risk management services of a high standard for Nordic corporations, and works constantly on developing new products and services in response to customer needs.
Baltic area grew. Sampo’s market share is about 36 per cent in Estonia, 6 per cent in Lithuania and 2 per cent in Latvia.
Estonia, initially only for use in servicing private customers. During 2002, however, corporate customers will also be included in the new system.
The run-off companies Patria Reinsurance Company Limited, ST International Insurance Company Limited and
The companies successfully concluded several negotiations on commutations of liabilities, concerning contracts comprising considerable sums. Disputes involving considerable financial interests were also resolved. The run-off companies were well in the black.
The new If Group created at the beginning of 2002 provides excellent opportunities for producing even more competitive solutions for all our customer segments. Synergy benefits may be derived in areas such as information technology, product development and the elimination of overlap.
Core operations are expected to grow more or less parallel with the general economic trend. There is significant growth potential in the new business operations. As the age structure of the
P&c insurance, distribution of domestic direct insurance premiums written Total EUR 854 mill.
P&c insurance, domestic direct insurance market shares *) (Aggregate premiums written in 2001 EUR 2.4 bill.)
*) Preliminary information, excl. credit and guarantee insurance of OKO Bank and Garantia 17SampoAnnual Report 2001
Annual General Meeting, the name of the parent company was changed from
EUR 1,286 million in 2001 (EUR 1,628 million in 2000). The decrease in operating profit was attributable in particular to the decrease in sales profits from investments compared to 2000. The turnover amounted to EUR 5,594 million
In April 2001, Sampo-Leonia acquired 20.1 per cent of the share capital of
AS Sampo Pank was raised by EEK 100 million, i.e. EUR 6.4 million, in May 2001. After the subscription of the whole increase, the holding of the Group’s parent company Sampo plc in AS Sampo
In September 2001, Sampo Bank sold 95 per cent of the share capital of its service company Sampo Custody Services
Leonia A share. The offer period commenced on 1 February 2001 and continued until 16 February 2001. After the exchange offer, Sampo-Leonia launched a redemption offer for Mandatum shares on 27 February 2001 which expired on 28 March 2001. Mandatum Bank became a Sampo-Leonia subsidiary on
Association was carried out at the same time as the redemption offer, subsequent to which Sampo-Leonia owned 99.76 per cent of Mandatum shares. Sampo
acquired the remaining shares through a redemption procedure in accordance with the Finnish Companies Act which commenced on 14 May 2001. The arbitration tribunal appointed by the
Central Chamber of Commerce confirmed on 22 December 2001 that the redemption price is EUR 10.33 for one
Mandatum and Sampo asset management operations were concentrated in the hands of one company, in such a manner that the business operations of Mandatum Asset Management Ltd were transferred to Mandatum Omaisuudenhoito
Ltd at the end of October. The administration of mutual funds managed by
Storebrand ASA expired on 28 September 2001. The Sampo Board of Directors decided not to extend the offer period and not to complete the Storebrand transaction due to the drawn-out process and changes in the value of Storebrand and in the market situation.
Sampo’s property & casualty insurance companies and the If Group were combined to form the largest Nordic P&C
ASA agreed on the If arrangement primarily on the basis of an agreement concluded on 20 May 2001 in connection with the Storebrand offer. The arrangement came into effect after the end of the financial period on 2 January 2002. In Finland, the P&C insurance customers are still served under the
Sampo Credit plc comprises export and project finance and the liabilities of largescale companies. The properties owned by the bank were transferred to Sampo
The operating profit of banking and investment services amounted to EUR
296 million (430). The results for 2001 include the operating profits of the new companies in the Group, Mandatum
181 million. Excluding the abovementioned items affecting comparison, the profit performance continued in a stable manner and the operating profit was at the level of the previous year.
The insurance operations of the Fund were transferred to Varma-Sampo Mutual
Pension Insurance Company on 1 July 2001, and the Fund’s functioning as a pension institution was terminated.
Depreciation and write-down of tangible and intangible assets –35 –42 7
Write-offs in respect of debt securities held as financial fixed assets 0 0 0
EUR 43 million (71). The reference period’s income included a profit of EUR
23 million and other administrative expenses by EUR 21 million. Other administrative expenses in 2000 included a total of EUR 38 million in compensations paid for the use of the service network of Finland Post and a total of
EUR 20 million in provisions for the integration of Sampo and Leonia and the introduction of the euro. These provisions were used to cover EUR 15 million of expenses in 2001.
EUR 44 million mainly due to the expenses of the new companies.
Net provisions for bad and doubtful debts were EUR 16 million (17). New provisions and write-offs for the year amounted to EUR 36 million (41).
Releases of provisions and recoveries of loans previously written off totalled EUR
At the end of the year, the amount of non-performing loans was EUR 109 million (62) and other non-interestearning loans EUR 9 million (10).
EUR 38 million (33) and corporate customers for EUR 81 million (38).
Investment income and charges, revaluations and revaluation adjustments on investments 248 526 –278
Income from companies accounted for by the equity method 5 – 5
Depreciation and write-down of tangible and intangible assets –7 –17 –10 –8 –10 –8 –9 –9
Net operating expenses –47 –60 –43 –45 –56 –56 –58 –48
Other income and charges –24 –36 2 –4 0 –19 –13 –1
Change in equalisation provision 12 –12 –4 0 –5 6 –17 –10
Revaluations and revaluation adjustments on investments – –1 – – – – – –
Net operating expenses –19 –15 –16 –7 –18 –10 –14 –10
Other income and charges 0 –1 –1 –1 0 –4 –1 –1
Bonuses and rebates 1 –6 29 –5 6 –61 –63 –119
Income from companies accounted for by the equity method 3 –1 2
Profit before appropriations and tax 104 89 86 81 586 756 470 484
Group profit for the accounting period 57 17 47 58 415 519 313 330
UAB Sampo bankas, Sampo PTE and the Group’s parent company Sampo plc.
The parent company was converted from an insurance company to a holding company on 31 March 2001. The reference figures for capital adequacy data have been computed on this date.
Change in provisions for credit loss per customer group –4 –20
Share of profit from the income from Pohjola shares received by Finanssi-Sampo Ltd – 63
2.0 billion. Liabilities to credit institutions declined by EUR 1.6 billion and funding through the issue of debt securities by EUR 1.9 billion.
13.6 billion (14.1). Loans to households increased by EUR 0.4 billion to EUR 5.3 billion. Loans to domestic corporate customers fell by EUR 0.4 billion to
Liabilities to customers at the end of the year totalled EUR 10.4 billion
demand deposit balances increased, while balances in savings and other deposit accounts decreased. Foreign currency denominated deposits were EUR 0.7 billion (0.4).
Interest rate options were used more than previously in the operations and growth in customer demand increased the amount of forward foreign exchange rate contracts. Calculated in accordance with the capital adequacy regulations, the credit equivalent amount of the contracts was EUR 0.6 billion (0.8), and the riskweighted amount EUR 0.2 billion (0.3).
The Sampo Group increased its share in the mutual fund markets. Domestic mutual fund assets under management grew to EUR 2.7 billion (2.0). The greatest net increases were experienced by money market funds. The comparable market share of Sampo Fund Management Ltd rose to 18.4 per cent (14.8).
The growth of the mutual fund assets under management comes entirely from customer assets, not from the fund’s investments. The number of continuous fund savings agreements increased to 26,906 (18,567) and the number of unit holders to 146,046 (120,921). Other assets under management grew by more than 40 per cent to EUR 7.5 billion.
Sampo PTE, the pension fund company in Poland, nearly doubled to EUR 167 million (89).
Domestic direct insurance premiums written increased by 9.2 per cent to EUR
The profitability of the entire insurance business in accordance with the financial statements improved. The combined ratio stood at 110.9 per cent
(114.1). The results for the reference year included EUR 19 million in accelerated depreciations on IT systems, which reduced the combined ratio by 2.3 percentage points.
Sampo Industrial Insurance N.V. was sold to Hampden Plc in October 2001.
A one-off provision of EUR 13 million in the reference year has been included in other expenses for expenses arising from the integration of Sampo and Leonia.
Excess capital was retained in the parent company, which was made a holding company on 31 March 2001 in the Group’s internal restructuring. At year-end the solvency capital of P&C
Sampo Life bringing with it significant product and sales know-how relating to the banking distribution channel. The
EUR 755 million (769). Premiums written in domestic life insurance performed better than the market and
Premiums written in group pension insurance, the largest insurance line, increased to EUR 239 million (287),
The uncertainty prevailing on investment markets was particularly reflected in the weighting of premiums written for single-premium endowment policies towards with-profit insurance. However, unit-linked insurance rose to 80 per cent of individual pension insurance sales.
The number of unit-linked insurances sold was 6,500 (4,450). A major part of these were sold in the last quarter of the year. Gross premiums written from unitlinked insurance amounted to EUR 86 million (168).
Claims paid rose by 35 per cent and amounted to EUR 399 million (293).
Life insurance solvency capital amounted to 14.7 per cent (21.9) of technical provisions on own account on 31 December 2001. According to the interpretation of the Principle of
The Group’s parent company adopted a holding company structure on 31 March 2001 and has now subsidiaries in the fields of banking, investment services and insurance. The holding company’s balance sheet total amounted to EUR 3.0 billion, of which holdings in banking and investment service companies accounted for EUR 1.7 billion and holdings in insurance companies for EUR 0.7 billion. Other investments totalled EUR 0.5 billion.
EUR 541 million. The EUR 401 million in net income from securities trading was the most significant item in the turnover.
Net investment income of P&C insurance amounted to EUR 707 million
Life insurance net investment income amounted to EUR 248 million (525).
The return on the whole investment portfolio, including changes in value, was 0.5 per cent (6.3).
The market capitalisation of the life insurance investment portfolio, including investments in unit-linked insurance, was
EUR 5.3 billion (5.1) at the end of the year. Foreign investments accounted for 48 per cent. Foreign investments outside the euro area amounted to EUR 1.3 billion. Equity investments accounted for 27 per cent (31) of the entire investment portfolio and investments in interestbearing instruments for 59 per cent (54).
The impact of the sales of Nokia shares on the 2000 and 2001 results is shown in the table ‘Items affecting the comparability of results’.
Risk management processes are used to limit the risk of loss by ensuring that the return to risk ratio by sector is reasonable and that every process is always efficiently and consistently carried out, even in the case of unexpected internal or external events.
As a general rule Sampo manages the risks of the business sectors separately from each other. Risk concentrations may arise at the Group level when business operations are to a large degree exposed to the same risk factors, or when fluctuations in profits correlate in a strong and positive manner. The total risks arising from different business operations are monitored regularly at
The credit risk from Sampo’s banking operations is illustrated by the expected annual credit loss from corporate exposure, which is approximately 0.4 per cent measured by CreditVaR methodology, and the amount of risk capital reserved through credit loss risk, which is approximately 5 per cent of total corporate exposure.
The interest rate risk related to the asset and liability activities of banking is illustrated by the fact that a rise of 1 percentage point in interest rates at the turn of the year would have improved the euro-denominated value of total assets by
Risk management is presented in more detail in the Notes to the Accounts.
(10,207), 52 per cent (49) in banking and investment services, 34 per cent (41)
to Hampden Plc and the reorganisation of the Polish sales agent network.
At the beginning of 2002, Sampo’s property & casualty insurance companies were combined with the If Group. Employees from other fields of operation were also transferred to If. As a result of these arrangements, Sampo Group employed approximately 5,800 people in
Jukka Härmälä, who headed the Board of Directors for more than 7 years, stepped down from the Board, as did
Amendments to the Articles of Association were made at the Annual General
Clause 11 of the new Articles of Association the company’s Managing Director is also the CEO. In addition, clauses 12, 13 and 20 concerning the authorisation to sign for the company, the number of auditors and the terms of office were amended.
Leonia A shares. The increase was entered in the Trade Register on 7 February 2001, and the new A shares were issued for public trading on the Helsinki
Board of Directors approved the share subscriptions made and decided to increase Sampo-Leonia’s share capital by
Sampo-Leonia A shares to the Mandatum Bank shareholders who had accepted the exchange offer. The increase was entered in the Trade Register on 23 February 2001, and the new A shares were issued for public trading on the Helsinki
Meeting approved an increase in the company’s shares without raising the
share capital, i.e. a five-way split (1:5), and the related amendment to the
264,684.30 in capital and reserves. The increase in share capital as a result of the subscriptions, to a total value of
The transfer to euro cash took place at the beginning of 2002 over a shorter period of time than originally estimated.
Company and Sampo Industrial Insurance Company were given the following new legal names: If P&C Insurance
The revival of the economic conditions and the investment market will create favourable conditions for growth in the investment and savings markets. Sampo will continue to develop according to its selected strategic policy. Steering of distribution channels towards offering mutual funds and unit-linked insurance, and the move from passive service to active selling will continue. An increase in efficiency is crucial in all operations.
Life insurance operations will grow again after a stagnant year. The sales organisation was already operating at a good pace during the second half of the review period and is expected to perform even better particularly in sales of unitlinked insurance.
Sampo will exercise its ownership powers to implement arrangements that will substantially improve the profitability of the If Group. The effects of measures already launched are expected to improve the combined ratio in the second half of 2002.
Board proposes to reserve EUR 0.2 million for charitable causes. The remaining distributable funds will be transferred to the contingency fund.
Interest payable 1 –726 –868 Net income from financial operations 469 426
Dividend income 27 224 Fees and commissions receivable 220 179 Fees and commissions payable –41 –30 Net income from transactions in securities and foreign exchange dealing from transactions in securities 2 25 47 from foreign exchange dealing 17 24
Depreciation and write-down of tangible and intangible assets 4 –35 –42 Other operating expenses 3 –44 –37 Provisions for bad and doubtful debts 5 –16 –17 Write-offs in respect of debt securities held as financial fixed assets 5 0 0 Income from companies accounted for by the equity method 4 1 Operating profit before elimination items 296 430
Change in the gross provision for unearned premiums Total change 4 –57 Portfolio transfer – 35 4 –22
Claims incurred 9 Claims paid –889 –908 Reinsurers’ share 133 198
Balance on technical account before the change in equalisation provision –103 –117
Claims incurred Claims paid 10 –403 –296 Reinsurers’ share 4 3
Change in the provision for outstanding claims –135 –157 Reinsurers’ share 1 1
Interest receivable 19 15 Interest payable 19 –15 Net income from financial operations 0
Banking and investment services operating profit 315 434 P&C insurance and life insurance profit before extraordinary items 635 985 Holding company operating profit 293
Loans and advances to credit institutions 29, 33, 71, 72 Repayable on demand 85 69
Tangible assets 37, 39 Property and shares in property companies 41 329 Other tangible assets 28 25
Prepayments and accrued income 41 299 723 Deferred tax assets 73 26 30 Elimination items 103 –23 –70
Land and buildings 655 821 Loans to associated undertakings 1 3
Cash at bank and in hand 93 96 Other assets 0 1
Loans and advances to credit institutions 52, 55, 92, 93 Repayable on demand 48 Other 212
Shares and participations 57, 58 89 Shares and participations in associated undertakings 58, 101 74 Intangible assets 59
Deferred tax liabilities 73 28 28 Elimination items 103 –689 –323
Liabilities to credit institutions and central banks 88, 92, 93 Credit institutions
Debt securities in issue 88, 89, 92, 93 Bonds and notes – Other 239
Other liabilities 90 62 Accruals and deferred income 91 99 Deferred tax 94 27 Elimination items 103 –19
Contingent liabilities Guarantees and assets pledged as collateral security 1,970 1,873
Interest receivable 19 14 Interest paybale 19 –12 Net income from financial operations 2
Other assets 61 16 Prepayments and accrued income 62 4 Deferred tax 94 2
The Board of Directors of Sampo plc is responsible for ensuring that the Group’s risks are properly managed and controlled. The Board sets the principles of risk management and provides guidance on the organisation of risk management and internal control in the businesses. The
Group’s businesses are the market risks of investment portfolios, insurance risks, credit risks, interest rate and funding risks in non-trading positions, and the operational risks inherent in every kind of activity. Market risks in trading activities have been reduced to a low level. All companies within Sampo
Credit risks refer to variations in results caused by customers or counterparties failing to meet their commitments.
The Group’s credit committee is authorised to make all credit decisions.
The nominal amount of the authorisation varies according to the creditworthiness of customers and the required security. All credit requests are prepared in the customer business units. Credit decisions are primarily based on the creditworthiness of the respective customers. To reduce uncertainty related to its estimation, collateral or covenants are required.
The Group’s rating committee, which is independent of the credit decision process, decides on all significant ratings.
The use of the credit decision-making authority is controlled by the limits set for countries, customers, customer groups and products and by other reporting requirements.
estimate both expected and unexpected credit losses, i.e. the required economic capital. The measurements are based essentially on the probabilities of future defaults by customers, deduced from the ratings, and on the expected credit losses following these defaults, depending on the exposures, collateral and other recoverable amounts. The total amount of the expected credit losses has been calculated for a period of three years with a confidence level of 99.9%. When the expected credit loss for one year is deducted from this figure, the result is the economic capital.
The creditworthiness of retail customers is assessed by comparing the customer’s income, or that of his or her family, with the living expenses and debt repayment obligations. Uncertainties related to the estimation of creditworthiness are covered by collateral which, in the case of long-term loans, is usually a dwelling. In the case of smaller unsecured loans, the creditworthiness of personal customers is assessed by credit scoring, which estimates the customer’s ability to repay the loan. The incidence of delayed loan repayments and the development of nonperforming loans are monitored and reported on continuously.
The figures in the tables show the outstanding exposures of customers of
Outstanding exposures to customers decreased by about 16 per cent in the period, totalling EUR 21 billion at the end of the year. Exposures to retail customers increased by 4.5 per cent, while those to financial institutions decreased by 34 per cent, those to public sector customers by 27 per cent and those to corporate customers by 1 per cent. In regional terms, 94 per cent of credit risks applied to EU countries.
Exposures to corporate customers were reduced by EUR 850 million. Analysed by industry, the reduction was the greatest in the forest and manufacturing sectors and in wholesale and retail distribution. Exposures to customers in the IT and telecommunications sector fell, and these customers accounted for a good 2 per cent of the total exposure.
Abroad, the Bank participated in financing for the network investments of several GSM operators, but the shares were small and did not include finance for any UMTS licences. About 23 per cent of exposures to corporate customers is secured by category I and II collateral.
More than 90 per cent of lending to retail customers was secured by category
Non-performing and other non-interest earning loans stood at EUR 119 million
(71) at the end of the year. Of this amount, households accounted for EUR
38 million (33) and corporate and institutional customers for EUR 81 million
(38). An increase of EUR 37 million in the non-performing loans to corporate customers came from a loan secured by the Finnish government and banks from
Market risks arise from earnings volatility caused by changes in market values.
Market risks in trading arise from foreign exchange dealing with customers and risk and liquidity management services related to customer business. A further source of risk is small-scale proprietary trading which supports the Bank’s ability to serve customers. Very little liquidity risk arises from trading.
Market risks in trading are measured and limited by using a technique called
The main market risk in the banking operations of the Sampo Group is the interest rate risk. This manifests itself as a deterioration in the value of the nontrading positions in the balance sheet and/or a reduction in net interest income as interest rates decrease.
Hence no new fixed income investments were made. The small number of new hedging interest rate swaps were timed
Net of euro-denominated items –6 720 926 1 162 2 021 3 667 1 056
Assets denominated in other currencies 660 1 052 112 52 141 2 017
Liabilities denominated in other currencies 1 108 747 237 450 575 3 117
The figures of the liquidity position consist only of balance sheet items. For example, undrawn loans or overdraft facilities are not included. Due to changes in exchange rates, assets and liabilities in different currencies are unbalanced, because the table does not include derivative instruments. In addition, short-term deposits and customer demand deposits are included in the shortest maturity although the account balances as a whole behaved as long-term.
EUR 25 million increase in the value of the euro-denominated balance sheet.
The structural interest rate risk is mainly related to a euro-denominated balance sheet. Non-trading positions in other currencies include mainly foreign currency-denominated corporate loans and wholesale funding to finance these loans. The interest rate risks of the positions are kept neutral and the net interest income is dependent mainly on loan margins. The net interest income is transferred daily to the foreign exchange position.
The forecasted future development of retail demand deposits and loans for customers forms the basis for planning the funding structure. The retail market items were concentrated in Sampo Bank plc and large corporate assets were transferred to Sampo Credit plc on 31 October 2001. Sampo Credit plc was funded with short term liabilities.
Surplus liquidity is mainly kept in fixed income instruments that can easily be converted into cash if necessary.
An operational risk is defined as earnings volatility attributable to the failure of internal processes or to unexpected external events.
The legal risks of the e&m business have been systematically analysed and managed. The national enforcement of
EU directives related to the e&m business is pending, but the main obligations they place on service providers have already been taken into account in Sampo’s web services, such as in contract terms and conditions, in the functionality of applications and web products, in what the end user access devices show and in the instructions issued for e&m business.
In the late autumn the firewalls of the Sampo WebBank were renewed and
The Sampo Group operates in the field of banking, investment services and insurance.
The Annual Accounts and Consolidated Accounts of the parent company and the banking and investment services companies of the Group have been compiled in accordance with the provisions of Article 4 of the Act on Credit
on annual accounts and group accounts of financial institutions and investment services companies by the Ministry of
Accounting Act and Companies Act are followed, with the exceptions mentioned in the Act on Credit Institutions, 30:2§.
The Annual Accounts of the insurance companies of the Group have been compiled in accordance with the provisions of Article 10 of the Insurance Companies
Ministry of Social Affairs and Health, and after that date in accordance with the decree on the annual accounts and group accounts of financial institutions and investment services companies issued by the Ministry of Finance. The parent company’s result for the period when it was an insurance company has been incorporated into the whole year’s Profit and Loss Account as one line. No reference data has been presented of the
Account of the holding company in accordance with the decree issued by the
Intra-group transactions, amounts due to or from group companies, internal gains and losses as well as profit distribution are eliminated. Transactions between the lines of business and eliminations of amounts due to or from group companies are, however, not presented line by line, but are shown on the line elimination items as the last item of line-specific calculations in the Profit and Loss
Account and in line-specific assets and liabilities in the Balance Sheet.
Mandatum Bank has been integrated into the Consolidated Accounts as of the beginning of 2001 using the acquisition method. The acquisition, carried out through an exchange of shares, and the related increase in share capital have been booked as an interest in Mandatum
Group’s capital and reserves which equals the holding. No positive consolidation difference arose from the acquisition.
For the payment of the share acquisition, Sampo-Leonia Insurance Company plc issued 7,116,993 new A shares
(before the split). On the acquisition day, 6 February 2001, the closing price of the
A consolidation difference of EUR 8 million arose from the shares in Mandatum Bank bought before the exchange offer and acquired through the redemption offer and the redemption procedures. The difference was written off immediately.
Limited on 31 December 2000, have been implemented in the accounts by using the pooling method of accounting.
Those of Sampo Bank’s subsidiaries which are not engaged in banking and investment services have been dealt with by using the equity method of accounting.
Otherwise, intra-group cross-shareholdings are eliminated by using the acquisition method. The difference between the acquisition cost of shares in subsidiaries and their capital and reserves at the time of acquisition is entered under the concerned Balance Sheet items, primarily under subsidiaries’ land and buildings, and depreciated according to their depreciation plan. The unallocated part is entered under consolidation difference and depreciated over its useful economic life.
Section 52 d of the said Act were applied in the business transfers. Thus all assets related to the transferred business entities and the liabilities related to the assets, including the transferred insurance portfolios and the assets covering them, and the provisions related to the transferred business, were assigned at their undepreciated values as presented in the ceding company’s accounting when the business transfer entered into force.
results for the financial year and in capital and reserves are presented as separate items in the Profit and Loss
Currency-denominated assets and liabilities of banking and investment services and the holding company, currency-denominated receivables, investments in the nature of receivables and liabilities of insurance operations and all off-balance sheet items and the accounts of foreign subsidiaries have been translated to euros as follows: Items denominated in currencies of the euro area have been converted into the euro using fixed conversion rates. Items in the currencies of other countries have been translated using the European
Central Bank’s middle rate between the euro and the respective currency ruling at the Balance Sheet date.
tion or the rate on the date of closing the accounts, with the exception of holdings in other companies in the nature of investments, in the valuation of which the impact of exchange rate and the difference in market value have not been separated. Currency conversion differences on receivables and investments of insurance operations are presented under investments, under the items Other income and Charges arising from other investments.
Assets and liabilities of the banking and investment services and the holding company which are hedged by a currency swap are stated at the rate of the original currency. Exchange rate differences arising from valuation are included in
Intangible assets and equipment are entered in the Balance Sheet at acquisition cost less planned depreciation. Items capitalised under other long-term liabilities include computer systems developed by the company itself or made to order and refurbishing of rented apartments.
Balance Sheet at the lower of acquisition cost or current value. Buildings and structures are presented at the lower of acquisition cost less planned depreciation or current value. In banking and investment services and the holding company, value adjustments on all real estate investments, and in insurance operations value adjustments on real estate investments in the nature of fixed assets, are entered on the basis of their significance and permanency. In insurance operations certain book values of real estate and real estate shares include revaluations made in the previous years.
Loss Account, the amortisation of premiums and discounts is accrued as interest receivable or interest payable over the life of the contract. If the probable value of a loan or advance is estimated at lower than the book value, the loan or advance is stated in the Balance Sheet at this estimated value.
Sheet at cost less depreciation according to plan. The depreciation is stated at the amount of recovered capital from lease rentals.
Securities are classified as securities held for trading purposes and those held as financial fixed assets.
The unrealised profits and losses arising from valuation of the securities held for trading purposes is included in
Securities held as financial fixed assets consist of treasury bills and other eligible bills and debt securities acquired with the
In addition, shares and participations in companies needed in order to acquire services ancillary to banking, and in subsidiary and associated undertakings, are treated as securities held as financial fixed assets.
Securities which are sold or purchased under commitments to resell or repurchase them, or lent securities, are included in the original Balance Sheet item irrespective of the contract. The purchase price is treated as a loan and the selling price as a liability in the Balance
Sheet item which is relevant to each counterparty. The difference between the resell price and the purchase price of a purchased security is treated as interest receivable and accrued income over the life of the contract. Conversely, the difference between the repurchase price and the sale price is treated as interest payable and accruals over the life of the contract.
Debt securities are considered to include bonds and money-market instruments. They are generally entered in the
Balance Sheet at acquisition cost. The difference between par value and acquisition cost of debt securities is accrued under interest income and as increase or decrease of their acquisition cost.
A consolidation difference of EUR 114 million arose from the acquisition of a 20.1 per cent holding in Sampo Life during the financial year. It will be written off over a period of 10 years.
The write-off period of the goodwill which arose from the acquisition of the
assessed on the basis of rentals which can potentially be received, assuming that a property is used for similar purposes.
Properties, and shares and participations in property companies, are classified as those occupied for the Group’s own activities and those for other activities.
Shares in other group companies are valued at net asset value or the remaining acquisition cost. With respect to shares in associated undertakings, net asset value, a value based on the equity method, or the remaining acquisition cost is used as their current value.
As the current value of other shares and debt securities is used e.g. a value based on net asset value, the undepreciated portion of acquisition cost or the lower of estimated market price. In banking and investment services and the holding company, the estimated market value of debt securities is considered the net present value of future cash flows discounted at the current market rate.
Loans, deposits with credit institutions, and deposits with ceding undertakings are valued at the lower of par value or probable value.
In insurance operations the organisation’s own operating expenses and depreciation on capitalised IT systems and equipment are divided between activities. Part of them are allocated directly to activities, part on the basis of a study on working hours which is carried out annually. Thus the percentual share of activities varies from year to year. Expenses by activity are presented under operating expenses
A provision is made against a certain group of loans pooled by customers when a bad debt is expected but the provision cannot yet be made against a specific individual loan. A specific provision is made when it is considered that recovery is doubtful and the estimated sales value of the asset pledged as collateral security does not cover the principal of the loan.
In assessing the amount of a provision, the assets pledged as collateral have been valued at their fair values.
Recoveries of loans and advances and other items previously written off, releases of provisions, and profits on the sale of assets acquired in settlement of unpaid loans are deducted from Provisions for bad and doubtful debts.
In banking and investment services and the holding company loans are regarded as non-performing if either the principal or the interest on a loan become overdue by 90 days. Loans to companies declared bankrupt are classified as non-performing
on the date that the bankruptcy is declared. Bank guarantees are treated as non-performing when the bank has made a payment on the basis of a guarantee.
In respect of leased assets, the cost less depreciation according to plan is recognised as non-performing when a rental becomes overdue by 90 days.
Other non-interest earning loans comprise loans from which no income of any kind will be received, based on agreement with customers.
Income taxes and taxes on extraordinary items are presented separately in the
Profit and Loss Account. Taxes for the year are calculated on the basis of the taxable income calculated in accordance with tax regulations.
The avoir fiscal tax credit relating to dividends received from subsidiaries and associated undertakings is transferred in the Consolidated Profit and Loss
The deferred tax entered in the Profit and Loss Account and Balance Sheet is calculated with respect to the temporary differences between the taxation and the accounting more comprehensively than is required by the Accounting Act, taking into consideration also other items than those affecting the Profit and Loss
Account in accordance with the main principles laid down in IAS 12. As the insurance operations commence to present deferred tax in 2000, the deferred taxes for previous accounting periods, the changes of which are stated in the Profit and Loss Account, are entered as extraordinary items. The change in the deferred taxes of the accounting period is entered in connection with income taxes.
Deferred taxes calculated on the basis of the revaluation reserve and allocated positive or negative consolidation difference are entered directly in the
Profit and Loss Account. The deferred tax is calculated on the basis of the tax base applied in the state of location. In
Insurance Companies’ Act, the share entered under capital and reserves is not distributable non-restricted capital and reserves. In calculating the Group’s net asset value per share, return on equity and equity/assets ratio, a 29 per cent deferred tax liability, which has been estimated to be realised during the following three years, has been deducted from the valuation differences of the holding company. Furthermore, the net asset value per share has been presented deducting the full 29 per cent deferred tax liability. Two calculation practices were applied for calculating the abovementioned key figures and the solvency capital of the insurance operations in 1999 and 2000; from P&C insurance valuation differences were deducted the entire tax liabilities and the deferred tax liabilities which are estimated to be realised during the next few years. This tax liability constitutes 18.6 per cent of the valuation differences of P&C insurance. The tax liability has not been deducted from the key figures of previous years. The net asset value per share, the return on equity in percentages and the return on assets in percentages are calculated and presented as annual income.
The provision for unearned premiums is calculated by use of the pro rata rule or by insurance contract.
The premium reserve is calculated by policy in direct insurance, and according to the disclosure of the ceding company or the company’s own calculation basis in reinsurance.
The zillmerisation of individual life and pension insurance and capital redemption policies, which has been deducted from the premium reserve, has been planned in such a manner that the future expense loading will suffice to cover related amortisations and future operating expenses. The amortisation period of zillmerisation cannot exceed the insurance period. However, in a
The discounting rate for technical provisions follows the rules described in
Sampo Life aims at giving a total return before charges and taxes on policyholders ’ with-profit insurance savings, which is at least the yield of a Finnish treasury bond. The total return consists of the guaranteed interest and bonuses determined annually on the basis of the company’s performance. As for the level of the total return, continuity is pursued.
The aim is to maintain the company’s solvency status on such a level that it does not limit the giving of bonuses to the policyholders nor the distribution of profit to shareholders.
Sampo Life as per the annual accounts of 31 December 2001, no share of the valuation differences is allocated to the shareholders of the company. This calculatory distribution of valuation differences does not entitle individual shareholders or policyholders to these valuation differences.
Lithuania and Poland do not contain regulations corresponding to the Principle of Fairness.
Derivative contracts which are accounted for as hedges are treated in the accounts in accordance with the treatment of hedged contracts. Interest on interest rate contracts hedging loans and advances, liabilities and debt securities held as financial fixed assets are included in Net income from financial operations, while profits and losses on derivative contracts that are used for hedging securities held for trading purposes are included in Net income from transactions in securities and foreign exchange dealing.
In the Note on Net income from securities transactions, item Net income from transactions in debt securities includes also the profits and losses on interest rate contracts. Profits and losses on equity contracts are included in Net income from transactions in equity shares. Profits and losses on exchange rate contracts are included in Net income from foreign exchange dealing.
Derivative contracts are valued at their current value on the date of closing the accounts. The difference between the current value of a hedging derivative contract and a lower book value/contract rate is entered as income up to the amount which corresponds to the amount of the hedged Balance Sheet item entered as an expense. If the value of the hedging derivative is negative, the valuation difference has not been entered as an expense insofar as the negative valuation difference corresponds to the appreciation of the underlying Balance
The negative difference between the current value of derivative contracts not concluded for hedging purposes and a higher book value/contract rate is entered as an expense. A positive difference is taken into account only in the solvency margin calculation.
Group companies, statutory pension cover has been arranged in compliance with the Employees’ Pensions Act, TEL.
The Leonia Pension Fund, in which basic and additional pension cover had been arranged for the staff of the companies belonging to the Sampo Bank Group on the basis of majority holdings, was dissolved during the financial year. Some group companies have additional pension arrangements handled by insurance companies. In foreign subsidiaries, pension schemes have been arranged in accordance with local practice.
The key figures of banking and investment services as well as the holding company have been calculated in accordance with regulation 20/420/98 of the
The formula has been presented above in connection with the calculation of the turnover of banking and investment services.
Banking and investment services operating profit + P&C insurance operating profit + life insurance operating profit + holding company operating profit
– write-offs in respect of debt securities held as financial assets
+ technical result before bonuses and rebates and change in the equalisation provision
The formula has been presented above in connection with the calculation of the operating profit of banking and investment services.
± valuation differences on investments (average on 1 Jan. and 31 Dec.)
Capital and reserves per share capital and reserves (excl. preferred capital notes of banking)
± valuation differences on investments ± deferred tax and minority interest of valuation differences on investments adjusted number of shares at 31 Dec.
Relative share trading volume number of shares traded through the Helsinki Exchanges x 100%
adjusted average number of shares * The solvency capital of life insurance has been separated from the solvency capital of the insurance business, and the difference is disclosed as the solvency capital of P&C insurance.
In calculating return on equity, return on assets, solvency-related key figures and net asset value per share, the same “other items prescribed in the decree” of insurance business have been deducted from valuation differences as in calculating solvency margin.
Profit before extraordinary items and tax EURm 1,243 1,419 620 415 206 116
Profit before appropriations and tax EURm 1,246 1,411 633 415 166 111
Premiums written before reinsurers’ share EURm 1,115 1,023 881 881 871 782
Premiums written before reinsurers’ share EURm 755 769 686 541 225 191
Net asset value per share no deferred tax liability deduction EUR 12.69 6.52 4.90
Share trading volume during accounting period ‘000 231,389 170,689 – 182,495 239,510 150,955
Adjusted average number of shares ‘000 1,200 1,200 – 1,200 1,200 1,200 Number of shares at 31 Dec. ‘000 1,200 1,200 – 1,200 1,200 1,200 Adjusted number of shares at 31 Dec. ‘000 1,200 1,200 – 1,200 1,200 1,200 *) The turnover of leasing income of banking and investment services for the reference years 1999 and 2000 has been changed to conform to the current method of gross presentation.
***) The dilution effect for 2001 has beeen calculated as if all the remaining subscriptions (3,261,450) entitled to would have been realised. In 2000, there were 3,300,000 possible subscription rights. One subscription right entitles to subscribe for 5 shares.
The number of shares used is 555,623,515. The amount includes the number of shares after the split on 20 April 2001, i.e. 555,584,965, to which 38,550 A shares subscribed in 2001 under the warrant certificates of the 1998 option programme have been added. The number of shares of the reference periods have been adjusted to comply with the current share capital and number of shares.
Group 25 Extraordinary items 26 Income taxes 27 Elimination items of consolidated profit and loss account BALANCE SHEET NOTES
Banking and investment services assets 28 Treasury bills and other eligible bills 29 Loans and advances to central banks included in loans and advances to credit institutions 30 Loans and advances to customers 31 Non-performing and other non-interest earning loans 32 Assets acquired in settlement of unpaid loans and those acquired in connection with the reorganisation of a customer’s business operations 33 Subordinated liabilities 34 Lease assets 35 Debt securities 36 Shares and participations 37 Movements in shares and participations held as financial fixed assets and in tangible assets 38 Intangible assets 39 Properties and shares in property companies 40 Other assets 41 Prepayments and accrued income
Insurance business assets 42 Changes in intangible and tangible assets 43 Current value and valuation difference on investments
Holding company assets 52 Loans and advances to central banks included in loans and advances to credit institutions 53 Loans and advances to customers 54 Assets acquired in settlement of unpaid loans and those acquired in connection with the reorganisation of a customer’s business operations 55 Subordinated assets 56 Debt securities 57 Shares and participations for trading purposes 58 Movements in shares and participations held as financial fixed assets and in tanginble assets 59 Intangible assets 60 Properties and shares in property companies 61 Other assets 62 Prepayments and accrued income
Insurance business liabilities 83 Technical provisions 84 Obligatory provisions 85 Long-term liabilities (5 years or longer) 86 Deferred tax 87 Contingent liabilities, pledged assets and derivatives
Holding company liabilities 88 Unamortised discounts and premiums on liabilities 89 Debt securities in issue 90 Other liabilities 91 Accruals and deferred income 92 Maturity analysis of assets and liabilities, by remaining maturity 93 Assets and liabilities denominated in domestic and foreign currencies 94 Deferred tax 95 Assets pledged as collateral security and secured liabilities as well as other assets pledged on behalf of the company and other Group undertakings 96 Pension liability 97 Off-balance sheet items 98 Staff numbers 99 Emoluments of members of administrative and supervisory bodies 100 Loans and advances to and guarantees on behalf of members of administrative and supervisory bodies Group 101 Group subsidiaries 102 Associated undertakings of the Group 103 Elimination items of the consolidated balance sheet
Other operating expenses Rental expenses 19 14 Expenses on properties and property companies 10 10 Loss on disposal of properties and property companies 1 0 Other expenses 14 13
5 PROVISIONS FOR BAD AND DOUBTFUL DEBTS PLUS WRITE-OFFS IN RESPECT OF DEBT SECURITIES HELD AS FINANCIAL FIXED ASSETS
Premiums written before reinsurers’ share 1,870 1,792 8 ITEMS DEDUCTED FROM PREMIUMS WRITTEN
Columns: 1 = Premiums written before reinsurers’ share 5 = Reinsurance balance 2 = Gross premiums earned before reinsurers’ share 6 = Balance on technical account before the change in collective guarantee 3 = Gross claims incurred before reinsurers’ share item, other technical charges and the change in the equalisation provision 4 = Gross operating expenses before reinsurance 7 = Combined ratio commissions and profit participations 8 = Combined ratio, excl. change in bases of technical provisions
Change in the collective guarantee item 2001 –1 2000 –1 1999 –1
Impact of bonuses and rebates attached to life and pension insurance policies reserved during the year, on the technical result 37 141
Direct insurance commissions 33 34 Commissions on reinsurance assumed and profit participations 7 7 Other policy acquisition costs 53 57
Policy management expenses 82 82 Administrative expenses 46 59 Commissions on reinsurance ceded and profit participations (–) –19 –29
Change in deferred policy acquisition costs included in the change in premium reserve
Managing Directors and Deputy Managing Directors 1.5 1.8 Members and deputy members of the Board of Directors 0.4 0.4 Members and deputy members of the Supervisory Board 0.0 0.1 14 AVERAGE STAFF NUMBERS
Income from investments in associated undertakings Share of profit of associated undertakings 1 0 Dividend income 1 –
Value readjustments 15 33 Gains on realisation of investments 665 115
Value adjustments and depreciations Value adjustments on investments –101 –104 Planned depreciation on buildings –8 –7
Revaluations on investments – 3 Revaluation adjustments on investments – –5
Investment income and charges include Exchange rate differences of insurance business –6 –1 Exchange rate differences of investments 15 39
Share of unit-linked insurance of net investment income – –42 16 NET INVESTMENT INCOME Group
Income from investments in land and buildings Interest income from Group undertakings 0 – Interest income from associated undertakings 0 0 Other income from Group undertakings 3 – Other income from other than Group undertakings 54 57
Value readjustments 48 15 Gains on realisation of investments 780 996
Value adjustments and depreciations Value adjustments on investments –205 –245 Planned depreciation on buildings –14 –15
Share of unit-linked insurance of net investment income –42 –35 17 OTHER INCOME
Debt securities and interest rate derivatives 0 0 Equities and equity derivatives 401 401 21 OTHER OPERATING INCOME AND EXPENSES
22 PROVISIONS FOR BAD AND DOUBTFUL DEBTS PLUS WRITE-OFFS IN RESPECT OF DEBT SECURITIES HELD AS FINANCIAL FIXED ASSETS
Write-downs of properties and property companies 6 0 other – –
Extraordinary income Relinquishing Pohjola’s portfolio of capital redemption policies 3 – Deferred tax – 19
On ordinary activities Tax for the financial year –392 –438 Tax from previous periods –5 1 Deferred tax –1 8
Dividend income –14 Fees and commissions receivable –1 –3 Fees and commissions payable – 0
Other operating income –11 – Other operating expenses 24 – Operating profit 18 4
Claims paid 1 0 Operating expenses 14 2 Balance on technical account 15 2
Interest receivable –8 Interest payable 6 Net income from financial operations –2
Other operating income –83 Other operating expenses 6 Profit before extraordinary items –79
Bad and doubtful debt provisions based on credit rating –31 –27
Specific provisions for bad and doubtful debts Provisions at beginning of year 64 45 + New provisions for year 32 41 – Releases of provisions –9 –14 – Provisions written off –11 –8 Provisions at end of year 76 64
Assets required in connection with the reorganisation of a customer’s business operations – –
Amounts include due from Group undertakings – – due from associated undertakings 0 –
For trading purposes Differences between the market value and the lower book value of securities 0 5
Shares and participations in property companies Occupied for own activities 14 14 –
*) Properties and shares in property companies occupied for other than own activities
Water areas and agricultural forest land 34,750 3 0.0 0.0 Buildings under construction – – – –
Capital employed in properties occupied for other than own activity - by net income %
Total 82 1) The capital employed is the undepreciated cost of an asset which, in case of shares in property companies, is added by Group’s share of liabilities relating to equity shares in these companies and/or share of debts of these companies.
Items in transit 35 8 Guarantee claims 11 10 Derivative contracts 93 81 41 PREPAYMENTS AND ACCRUED INCOME
43 CURRENT VALUE AND VALUATION DIFFERENCE ON INVESTMENTS AT 31 DECEMBER 2001
Valuation difference (difference between current value and book value) 351 366
Book value comprises Unrealised gains entered as income 54 45 Other revaluations – 11
Valuation difference (difference between current value and book value) 716 2,438
Acquisition cost, 1 Jan. 941 3 Change in Group structure –200 –
Value adjustments on investments, 1 Jan. –105 – Change in Group structure 55 – Value adjustments on decreases and appropriations 1 – Value adjustments for the financial period –8 – Value readjustments 5 –
Revaluations, 1 Jan. 67 – Change in Group structure –2 – Decrease –1 –
46 SHARES AND PARTICIPATIONS IN OTHER THAN SUBSIDIARIES AND ASSOCIATED COMPANIES
UNIT TRUSTS Alfred Berg Small Cap B 6,251,141 – 15 15 Alfred Berg Small Cap B Europe 17,338,594 – 18 22
Mandatum BioTech+ Kasvu 603,292 – 12 13 Mandatum Emerging Asia Kasvu 528,146 – 10 10 Mandatum Euro Yrityslaina Kasvu 178,938,286 – 32 33 Mandatum Eurooppa Kasvu 535,360 – 9 9 Mandatum Global Kasvu 543,165 – 10 14 Mandatum Korko Konvergenssi Kasvu 20,105,637 – 20 24 Mandatum MediLife Kasvu 22,589,421 – 19 19 Mandatum Osake Konvergenssi Kasvu 10,070,253 – 9 9
Sampo Japani Osake Kasvu 22,706,975 – 20 20 Sampo Sektorit (Eurooppa) Kasvu 8,479,825 – 9 10
CAPITAL TRUSTS Fenno rahasto Ky 5,671,889 – 10 10 Finnventure rahasto IV Ky 3,517,037 – 6 6 Finnventure rahasto V Ky 718,722 – 7 7 First European Fund Investments UK L.P. 516,910 – 5 5 Nordic Mezzanine Fund 1 Ltd 703,893 – 7 7
Holding value value Name of company Country No. of shares % EURm EURm
Pharmaceuticals Bristol Myers Squibb Co United States 104,800 0.01 4 6 Glaxo Smithkline Plc UK 370,974 0.01 8 11
UNIT TRUSTS APS Japan Growth Fund Cayman Islands 141,375 – 10 10 APS Japan Growth Fund Singapore 150,000 – 11 11 Key International Trust Fund Cayman Islands 520 – 30 43 Nektar Hedge Fund Sweden 64,595 – 8 12 New Providence Fund Ltd Bahamian Islands 48,552 – 10 13 Prosperity Cub Fund Cayman Islands 350,000 – 4 12 Russian Prosperity Fund A Cayman Islands 486,688 – 6 12 Sapic II Reference Fund 14 Limited Cayman Islands 500,000 – 59 59 Swiss Life Relative Value Strategies Class C Cayman Islands 12,051 – 18 19
CAPITAL TRUSTS Access Capital L.P. UK 2,647,608 – 26 26 Duke Street Capital IV UK L.P. UK 1,149,880 – 11 11 EQT Northern Europe UK No. I L.P. UK 1,430,791 – 14 14 EQT Scandinavia II The Netherlands 9,142,432 – 10 10
Acquisition cost, 1 Jan. 110 83 Change in Group structure –28 –70
49 LOANS TO EXECUTIVES (Insurance Companies’ Act, Chapter 12, Section 5) Group
Members and deputy members of the Board of Directors Loans (EURm) 0.1 0.7
Average loan period (years) – 8 50 INVESTMENTS COVERING UNIT-LINKED INSURANCE
Investments pertaining to unit-linked insurances, corresponding to technical provisions 343 300 280 270 51 DEBTORS AND CREDITORS, ASSOCIATED UNDERTAKINGS
Debtors Arising out of reinsurance operations – 0 Other debtors 0 1
Loans and advances to credit institutions 260 240 of which to central banks – –
Book value of assets which had been pledged as collateral security and acquired by the Bank in settlement of unpaid loans
Difference between the market value and the lower book value of the securities
Shares and participations in associated undertakings Other than credit institutions 74 65
58 MOVEMENTS IN SHARES AND PARTICIPATIONS HELD AS FINANCIAL FIXED ASSETS AND IN TANGIBLE ASSETS
Shares and buildings, Equipment Shares and buildings, Equipment participations shares and and other participations shares and and other participations in tangible participations in tangible
Book value at end of year 74 390 18 2,516 78 18 59 INTANGIBLE ASSETS Group Parent Company
Intangible rights 3 3 Consolidation difference 349 – Other intangible assets *) 10 4 *) Incl. intra-group items arising from IT systems
Shares and participations in property companies Occupied for own activities 36 45 – 3 6 *) Properties and shares in property companies occupied for other than own activities 31 December 2001
Other assets and advances 20 16 62 PREPAYMENTS AND ACCRUED INCOME
63 CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL AND RESERVES 1 JAN. - 31 DEC. 2001
Legal reserve 1 Jan. = 31 Dec. 369 From profit brought forward 1
Other reserves Reserves provided for by the articles of association, 1 Jan. 346 From profit brought forward 275 For dividend distribution –237
Other non-restricted reserves, 1 Jan. 82 From profit brought forward 6 Group restructurings –11
Profit for the financial year 833 + Reserves provided for by articles of association 384 + Other non-restricted reserves 77 + Profit brought forward 134 – Amount of appropriations of the Group’s corporations which has been entered in the capital and reserves in the consolidated accounts –96
At the end of the financial year, EUR 10 million of the preferred capital notes issued in 1998 by Sampo Bank were in issue. The loan totalled EUR 94 million, of which Leonia Corporate Bank had subscribed EUR 84 million when it merged with Sampo Bank on 31 December 2000. The notes bear interest at the Helibor 12-month rate plus 100 basis points for 5 years, and thereafter the Helibor 12-month rate plus 225 basis points. The interest on the loan can be paid only from distributable capital. The interest is paid annually in arrears. The loan is undated and is repayable, with the consent of the Finnish Financial Supervisory Authority, 5 years after the date of issue. The preferred capital notes are included in the Tier 1 capital of the Bank.
65 PARENT COMPANY STATEMENT OF CHANGES IN CAPITAL AND RESERVES 1 JAN. - 31 DEC. 2001
Subscribed capital, 1 Jan. 87 Increase in subscribed capital/Mandatum exchange 6 Increase in subscribed capital/subscription with warrants 0
Premium reserve, 1 Jan. 902 Increase in subscribed capital/Mandatum exchange 63 Increase in subscribed capital/subscription with warrants 0
Profit brought forward, 1 Jan. 652 For dividend distribution –652 Transfer to other reserves 0
Discounts Liabilities to credit institutions and central banks – – Liabilities to customers – – Debt securities in issue 88 148 Subordinated liabilities 0 0
Premiums Liabilities to credit institutions and central banks – – Liabilities to customers – – Debt securities in issue 3 11 Subordinated liabilities 0 –
Items in transit 412 358 Derivative contracts 88 137 69 ACCRUALS AND DEFERRED INCOME
Due to Group undertakings – – Due to associated undertakings – –
Treasury bills and other eligible bills 671 1,168 Loans and advances to credit institutions 78 41 Loans and advances to customers 4,587 4,636 Debt securities 160 299
Liabilities to credit institutions and central banks 180 105 Liabilities to customers 32 36 Debt securities in issue 301 598 72 ASSETS AND LIABILITIES DENOMINATED IN DOMESTIC AND FOREIGN CURRENCIES
Assets pledged as collateral security on behalf of Group undertakings – –
Other commitments 1 3 of which to or on behalf of Group undertakings – – of which to or on behalf of associated undertakings 0 2 of which to or on behalf of Group undertakings – – of which to or on behalf of associated undertakings 0 2
Exchange rate contracts Futures and forward exchange 1 6,679 76 4,873 Options
Asset managemet services supplied Asset management services based on an agreement between the customer and the company Mutual fund services Securities custody services
Sampo Bank plc had no customer funds intermediated as credits to other customers at end of year.
Provision for outstanding claims (discounted part) Before discounting 21 30 After discounting –15 –22 Amount of discounting 6 8
VAT deductions 30 25 From new construction and real estate refurbishments during 1997-2001/1996-2000
Option contracts Bought underlying instruments 338 371 current value 0 10 Sold underlying instruments 625 785 current value 3 4 Locked underlying instruments 88 292 current value – – Share derivatives
Futures and forwards, open underlying instruments 22 4 current value –1 1
The currenct values of option contracts include received and paid premiums. Negative valuation differences of derivative contracts made for other than hedging purposes have been entered as charges (current value = 0).
Book value at end of year Commercial paper 239 239 90 OTHER LIABILITIES
Loans and advances to customers 6 6 Debt securities 8 3
Less than 3 months 227 227 Liabilities to customers 227 227
Deferred tax assets 4 2 Timing differences 3 2 Mergers 0 –
Income taxes Ordinary activities 161 159 95 ASSETS PLEDGED AS COLLATERAL SECURITY AND SECURED LIABILITIES AS WELL AS OTHER ASSETS PLEDGED ON BEHALF OF THE COMPANY AND OTHER GROUP UNDERTAKINGS
Underwriting commitments 59 59 to Group companies – – to associated undertakings – –
of which to or on behalf of Group companies – – associated undertakings – –
Members and deputy members of the Supervisory Board 0.0 0.0 Members and deputy members of the Board of Directors/ Management and President and Executive Vice Presidents 0.9 0.9 of which performance-related bonuses 0.0 0.0
Banking Sampo Card Ltd Helsinki Finland 100.00 – 22 15 3 Sampo Credit plc Helsinki Finland 100.00 100.00 621 670 7*) Sampo MB Group Oy Helsinki Finland 100.00 – 8 18 5 Sampo Bank plc Helsinki Finland 100.00 100.00 787 840 13*) Sampo Finance Ltd Helsinki Finland 100.00 – 25 57 4 Housing Loan Bank of Finland plc Helsinki Finland 100.00 – 6 6 0 AS Sampo Pank Tallinn Estonia 95.29 95.29 28 24 3 UAB Sampo bankas Vilnius Lithuania 99.99 99.99 11 9 –3
Insurance business Patria Reinsurance Company Ltd Helsinki Finland 100.00 100.00 14 19 4 Sampo Industrial Insurance Company Ltd Helsinki Finland 100.00 100.00 68 101 30 Sampo Life Insurance Company Limited Helsinki Finland 100.00 88.21 401 302 51 ST International Insurance Company Ltd Helsinki Finland 100.00 100.00 17 20 5 Sampo Insurance Company Limited Helsinki Finland 100.00 100.00 103 178 75 AS Sampo Eesti Elukindlustuse Tallinn Estonia 100.00 100.00 2 2 0 AS Sampo Eesti Varakindlustus Tallinn Estonia 100.00 100.00 14 12 2 UAB Sampo Lietuva Vilnius Lithuania 100.00 100.00 6 3 –2 UAB Sampo Lietuva Gyvbes
AAS Sampo Latvija Riga Latvia 99.99 99.99 3 2 1 AAS Sampo Latvija Dziviba Riga Latvia 99.99 99.99 4 3 0 Lakewood Insurance Company Ltd London UK 100.00 – 0 3 –1 Sampo Towarzystwo Ubezpieczen na Zycie S.A. Warsaw Poland 100.00 100.00 56 4 –21 Sampo Towarzystwo Ubezpieczén Spolka Akcyjna Warsaw Poland 100.00 100.00 4 2 –1
In addition, a total of 64 property and housing companies have been accounted for in the consolidated accounts. By virtue of regulations for credit institutions 60 property companies have been excluded from consolidation, the balance sheet total of which is less than EUR 10 million.
Name of company country holding % holding % EURm EURm 1) EURm
Financing MB Equity Fund Ky Helsinki Finland 32.54 11.63 2 19 12 MB Equity Fund II Ky 2) Helsinki Finland 28.02 9.99 8 29 1 WD Power Management Oy 2) Helsinki Finland 21.74 – 0 0 0
Other Automatia Pankkiautomaatit Oy Helsinki Finland 33.33 – 9 20 1 Autovahinkokeskus Oy Espoo Finland 35.54 – 1 3 0
Finanssi-Sampo Ltd 4) Helsinki Finland 50.00 50.00 17 33 0 Kiinteistövarma Oy Helsinki Finland 46.74 37.04 0 0 0 Netwheels Oy Helsinki Finland 20.06 – 1 2 0 SV Benefic Oy Helsinki Finland 49.00 – 0 0 0 Tampereen Kiinteistö Invest Oy Tampere Finland 25.00 – 10 34 3 Toimiraha Oy Helsinki Finland 33.33 – 1 4 0 Vahinkopalvelu Oy Loppi Finland 20.00 – 0 1 0
Loans and advances to credit institutions –42 Loans and advances to customers –2 Debt securities
We have audited the accounting records and the financial statements, as well as the administration by the Board of Directors and the Managing Director of Sampo plc for the financial year 2001. The financial statements, which include the report of the Board of Directors, consolidated and parent company income statements, balance sheets and notes to the financial statements, have been prepared by the Board of Directors and the
Managing Director. Based on our audit we express an opinion on these financial statements and on the company’s administration.
Furthermore, the Board of Directors has confirmed Guidelines for Insiders of the
Guidelines for Insiders also cover the regulations of the Financial Supervision
Authority, the guidelines for insiders and trading of the Finnish Association of
Association of Mutual Funds as well as the recommendation for Guidelines for
Insiders for investment activities issued by the Federation of Finnish Insurance
The Sampo Board of Directors is responsible for the management of the company in accordance with the laws, authority regulations, Articles of
Association and the decisions taken by the General Meeting of Shareholders.
The Board of Directors confirms i.a the business strategy and the long-term
Annual General Meeting 2002. The term of office of the Board members is one year. The members of the Board of
The Board may appoint committees, executive committees and other permanent or fixed-term organs for the duties assigned by the Board. The Board confirms the rules of procedure of the
Committee and the Investment Committee. The personal data of these are presented as per 31 December 2001.
Vice Chairman and one member elected by the Board among the members. The
Nomination Committee convenes at the request of the Chairman. The duty of the
Board and the remuneration and rewarding principles for the Board members. The Nomination Committee comprises Olli-Pekka Kallasvuo, Jyrki
Committee comprise i.a. the supervision of the compliance with the Sampo
and risk accumulations and the quality and scope of risk management. The Risk
CEO, the Chairmen of the Group’s Asset and Liability Committee, Investment
Patrick Lapveteläinen. The Committee convenes at the request of the Chairman regularly in each quarter and reports to the Board on its activities at least four times a year.
The Sampo Group Executive Committee appointed by the Board of Directors supports the CEO in the preparation of strategic issues relating to the Sampo
Maarit Näkyvä, Executive Vice President, Head of Retail and Private Banking
The Executive Committee convenes regularly once a week at the request of the CEO.
Group, the Credit Committee to control credit risks and the Investment Committee to control investment risks. The
Board has also appointed the members of these committees. The Asset and
Jyrki Appelqvist and Pekka Kainulainen as experts. The Credit Committee comprises Ilkka Hallavo, Jukka
According to Sampo’s Articles of Association the Annual General Meeting resolves on the remuneration of the
Board members. The Board decides on the employment terms and other compensation of the CEO and the executives of the Sampo Group’s Executive
The Chairman, Vice Chairman and members of the Board of Directors will be paid monthly remuneration until the closing of the Annual General Meeting in 2002 as follows: the Chairman approximately EUR 4,200 (FIM 25,000), the
787,933.08 in salary and shares of profit for 2001 and the Deputy CEO a total of
EUR 385,105.66. The retirement age of the CEO and the Deputy CEO is 60 years and the amount of pension corresponds to the full amount of the pension under the Employees’ Pensions Act TEL.
Holding S.A and Nokian Tyres plc. He was appointed member of the Board of Directors of Sampo plc and Chairman of the
Chairperson of the Board, Avesta Polarit Oyj Abp. Member of the Board, Confederation of Finnish Industry and Employers,
Board of Directors of Sampo plc on 25 May 2000. Term of office started on 26 May 2000. Holds 905 Sampo plc shares.
Board of Directors of Sampo plc on 25 May 2000. Term of office started on 26 May 2000. Holds no Sampo plc shares.
Supervisory Board, Alma Media Corporation. He was appointed member of the Board of Sampo plc on 22 January 1999. Holds no Sampo plc shares.
Company. He transferred to the Board of Sampo plc from the
Towards the end of the year these projects resulted in restructuring measures, whose impact on personnel will become clear in 2002.
At the end of 2001, Sampo Group employed a total of 9,684 people (10,207 at year-end 2000), 8,143 of these in
Credit plc, Mandatum Holding Ltd and foreign subsidiaries, at the end of 2001 totalled 5,623, of which 610 in life insurance operations. 3,311 employees worked in P&C insurance at year-end.
Baltic area. The number of foreign employees fell because Sampo Industrial
Plc, and as a consequence of reorganisation in the Polish agency network.
P&C insurance companies became part of the If Group. Employees also transferred to If from Group functions. As a result of these arrangements, the number of Sampo Group staff was just under 5,800 people at the beginning of January, with about 260 of these employees working for Group functions.
The outcome of these arrangements will begin to be visible in 2002. Staff support measures and supervisor training linked with the restructuring measures were planned and launched. The annual staff satisfaction survey was not carried out because these measures were going on.
Further development of a common corporate culture within the new Sampo
As of 1 January 2001, the Group introduced three-year collective labour agreements covering both banking and insurance operations. Employment terms were also standardised where working hours, remuneration and annual holiday are concerned.
Group previously had a Leonia personnel fund, which was now converted into a personnel fund for the Sampo Group.
If Group as of the beginning of 2002 were not covered by the personnel fund.
The restructuring procedure was developed, and a joint committee for the purpose was set up for the whole Group.
In the same context, Sampo and Leonia’s former separate committees ceased to operate.
Agreement was reached with the staff concerning staff representatives on the
Ltd (now If Industrial Insurance Ltd, part of the If Group). The staff representatives ’ term of office on these Boards began on 1 September 2001.
Sampo’s environmental policy was reformulated as a policy for sustainable development, and a CR (Corporate
Responsibility) steering group was appointed representing the various business areas and support operations to oversee planning and coordinate implementation. The aim is to take the principles of sustainable development into account in the product and service range and in-house operating procedures.
Forum, Finland was the leading country in the world in environmental sustainability in 2001, while also being at the top in terms of competitiveness.
Among Sampo’s corporate values, ethics provides particularly clear support for sustainable development efforts.
Thus, in its portfolio management, for instance, Sampo uses carefully handpicked foreign asset managers in addition to the Group’s own asset management company, all in an effort to secure the best possible expertise on the investment markets of the world. Sampo has developed services based on ethical viewpoints in life insurance and mutual fund products, and in the form of a special environmental loan. Where investment objects are concerned, in addition to the traditional criteria for investment, also an assessment of environmental issues and social responsibility is made.
Sustainability Group Global Index as its benchmark index when it started. Investments in the fund can be made directly or in the form of life insurance. The number of unit holders in the fund went up to 1,429 during the year.
• Sampo offers its corporate customers environmental loans guaranteed by the
EUR 1.78 million. Compensation for environmental damage to a total of EUR
Finnish Association of Building Owners and Construction Clients (RAKLI) for the environmental classification of buildings.
• An energy review was made of 15 buildings, with a total volume of 656,000 m3.
• The staff took part in an Energy Conservation Week, in which each employee was issued with an electronic energy pass.
There were over 1,200 replies, many of which also contained energy-saving tips.
• Indicators of electricity, heating, water and paper consumption were collected for most of Sampo’s units. The indicators, which now cover five years of operations, are shown on Sampo’s website.
Sampo sponsorship focuses on highstandard long-term projects in sports, culture and science. Examples: • Sampo sponsors the Sampo Alpine Ski
• Sampo Fund Management Ltd is sponsoring the training of a sniffer dog.
16,800 was divided between three winners: the nursing staff at Jorvi hospital for developing an autonomous working time model, a project between the Single
In summer 2001, Sampo was elected to the FTSE4Good index family along with three other major Finnish companies. The selection criteria include the companies’ work in promoting environmental sustainability, developing relationships with stakeholders and supporting universal human rights.
Association, the share capital of Sampo plc is at least EUR 30,105,638.84 and at the most EUR 120,422,555.30. The company’s share capital was EUR
with 555,623,515 shares, of which 554,423,515 were A shares and 1,200,000 were B shares. The shares have no nominal value. Their book countervalue is EUR 0.17 (not an exact value).
Each A share has 1 vote and each B share 5 votes at the General Meeting of Shareholders. A shares have been quoted at the
shares. Furthermore, the A and B warrants of Sampo plc’s Bond Loan with
91,455,763.21 by giving the shareholders of Mandatum who approved the exchange offer 4,754,255 Sampo A shares.
Register on 7 February 2001, and the new A shares were issued for public trading on the Helsinki Exchanges Main
Sampo’s Board of Directors approved the share subscriptions made and decided to increase Sampo’s share capital by EUR
Meeting approved the increase in the company’s number of shares without raising the share capital, i.e., of a split of the shares in five (1:5). The Annual
General Meeting also approved the related amendment to the Articles of
Association on the minimum and maximum number of shares. The change was entered in the Trade Register on 20 April 2001. After the split, the company had 555,584,965 shares, of which 554,384,965 are A shares and 1,200,000 are unlisted B shares.
During the period under review, 38,550 A shares were subscribed with warrant certificates of Sampo plc’s Bond
Loan with Warrants of 1998. As a result of the subscriptions, Sampo received
Meeting authorised the Board to buy back and convey own shares. The maximum amount of A shares that can be bought back is 5 per cent of the company’s share capital or the total number of votes attached to the shares.
The shares can be bought back to be used as consideration in possible acquisitions or other structural reorganisations, for the development of the company’s capital structure, or as a part of the company’s incentive scheme. The authorisations are valid until 4 April 2002, thus replacing the authorisations of 12 April 2000.
General Meeting authorised in June 2001 the company’s Board of Directors to decide on the increase in the share capital by no more than EUR 9,670,805.77 through a rights issue in one lot or more.
By virtue of the authorisation, the maximum of 57,500,000 Sampo A shares could be issued for Storebrand shareholders ’ subscription with a counter-value of approximately EUR 0.17 (not an exact value) per share. At the beginning of
Approximately 72 per cent of the staff at the time subscribed for the bond loan.
250 warrant certificates are attached to each bond of a nominal value of EUR
84.09. Of these, 75 will be marked with the letter A, 75 with the letter B and 100 with the letter C. With each warrant certificate, five Sampo A shares can be subscribed as follows: the subscription period for warrants A is from 1 May 2000 to 31 May 2005, for warrants B from 1 May 2001 to 31
May 2002 to 31 May 2005. A options have been quoted on the Helsinki
Exchanges Main List since 2 May 2000 and the B options since 2 May 2001.
On 29 September 2000, with deviation from the shareholders’ pre-emptive right to subscription, Sampo’s Extraordinary
Meeting of Shareholders decided to offer option rights without consideration to the management, middle management and other key persons of Sampo and its subsidiaries as well as to a wholly-owned subsidiary specified by the Board of
The right to subscribe for shares by virtue of the option rights arises only if the development of the trading volume weighted average price of Sampo’s A
A total of 5,200,000 option rights will be issued, of which 2,600,000 are marked with the letter A and 2,600,000 with the letter B. Each option right entitles its holder to subscribe for five
Mode Subscription Term of subscription No. of new Share capital after period / or subscriber shares the issue / decrease registration or reason for decrease EURm*)
The Bond Loan with 28 November 2001 Warrant conversion 38,550**) 93.45
A warrants *) Rounded off **) On 5 April 2001, the Annual General Meeting approved of an increase in the number of shares without raising the share capital, i.e. a split of the share in five.
SHAREHOLDERS BY NUMBER OF SHARES OWNED AT 31 DECEMBER 2001 1 Public companies 0.12% 2 Private companies 12.04% 3 Financial institutions and insurance companies 4.13% 4 Public corporations 48.04% 5 Non-profit corporations 0.72%
Monthly share price performance (lowest and highest trading price in euro)
2 January 2004. The share subscription period expires on 31 December 2007 for all option rights. The share subscription price is the trading volume weighted average price of Sampo’s A share on the
Helsinki Exchanges during the period 15-28 September 2000, with an addition of 10 per cent and rounded up to the nearest 10 cents. The subscription price thus became EUR 55.70. The share subscription price is reduced by the amount of dividends.
In the spring of 2001, the subscription price for a share, after the realised split and distribution of dividend, was EUR
The total holdings constituted 2.13 per cent of the share capital and 2.11 per cent of the votes.
According to its own statement on 19 April 2001, GE Asset Management
Varma-Sampo Group’s share of Sampo’s share capital and votes was reduced to less than 10 per cent.
Depository Ltd (Suomen Arvopaperikeskus Oy) by 27 March 2002. Trustees shall report nominee shareholders to the shareholders’ register of Sampo held by the Finnish Central Securities Depository
Legal Affairs, Unioninkatu 22, Helsinki, and at the address Yliopistonkatu 27,
Sampo plc, registered domicile and address Turku, Yliopistonkatu 27, FIN-20075 SAMPO, Finland, Business ID 0142213-3