Good operational performance in challenging market environment

Key figures, EURm	1-3/2018	1-3/2017	Change, %
Profit before taxes	445	430	4
If	193	180	7
Topdanmark	60	21	283
Associate (Nordea)	165	171	-4
Mandatum	73	54	35
Holding (excl. Nordea)	-46	3	-
Profit for the period	375	378	-1
			Change
Earnings per share, EUR	0.63	0.68	-0.05
EPS (incl. change in FVR), EUR	0.15	0.99	-0.84
NAV per share, EUR*	24.27	25.37	-1.10
Average number of staff, FTE	9,419	6,844	2,575
Group solvency ratio, %	145.7	158.9	-13.2
RoE, %*	2.5	18.4	-15.9

*Comparison figure from 31 December 2017
The figures are not audited. Income statement items are compared on a year-on-year basis and comparison figures for balance sheet items are from 31 December 2017 unless otherwise stated.

After a few years break, Nordic countries experienced a so called normal winter. Particularly, in Norway the weather conditions were more challenging than a year ago. Despite the challenging conditions, If's performance was excellent. The profit before taxes increased to EUR 193 million from last year's EUR 180 million. If's combined ratio was 86.5 per cent, which was one of the best Q1 performances in the company's history. In addition, Topdanmark showed solid performance with combined ratio of 83.7 per cent. One can say that challenging conditions emphasize Sampo's diversification benefits from operating in all Nordic countries.

One of the main highlights in the first quarter was the growth in insurance businesses. If's customer base grew in all markets compared to the first quarter of 2017. In local currency, If's premiums increased in all business areas and in all markets besides in Finland. In euros, premiums decreased somewhat compared to the first quarter in 2017, affected by the Swedish krone weakening against euro. Topdanmark's premiums increased both in the non-life insurance business and particularly in the life insurance business, in which the growth was near 20 per cent.

Mandatum Life's premiums increased 6 per cent in from last year and profit before taxes was very strong, EUR 73 million. After the end of the reporting period, Mandatum Life and Danske Bank agreed to continue their co-operation and that the transfer of the insurance portfolio agreed earlier will not take place. On closing of the transaction, Mandatum Life will receive a transaction price of EUR 197 million from Danske Bank. In addition, the company's result is estimated to increase annually EUR 20 million compared to the situation where the portfolio would have been transferred. This supports Mandatum Life's growth prospects and ability to pay dividend.

Nordea is on the right path. Large-scale projects proceed as planned and the bank's de-risking has been successful. The banks solvency is stronger than ever and credit losses continued to decrease. Nordea's management reiterates its guidance that net profit will grow in 2018 compared to 2017. As the largest shareholder, we are confident with this guidance.

The profit before taxes for Holding segment was EUR -46 million. Main reason for the large loss was the weak Swedish krona. In total, the credit losses for the Holding segment were EUR 59 million. At the end of March, krona had weakened around 8 per cent against euro from a year ago. The weakening has continued in Q2.

In the financial markets, the big picture has not dramatically changed. Although, the jittering in the markets has reflected to increased volatility. The fear of the tariff war and political risks have remained as the main concerns. In addition, markets watch closely on interest rates. In U.S. the yield of the 10 year government bond exceeded 3 per cent for the first time in 4 years in April. There has been some movement upwards in Europe too, but interest rates are still at very low level. For Sampo, rising interest rates would be the most welcome.