POP Mortgage Bank Plc

BOARD OF DIRECTORS’

REPORT AND FINANCIAL

STATEMENTS

1 January – 31 December 2025

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

CONTENTS

BOARD OF DIRECTORS’ REPORT FOR THE FINANCIAL PERIOD OF

1 JANUARY – 31 DECEMBER 2025 .................................................................................................................................................................. 4

Board of Directors' review ................................................................................................................................................................................4

POP Bank Group and amalgamation of POP Banks .............................................................................................................. 4

Operating environment ......................................................................................................................................................................................6

Key ﬁgures and the formulas of key ﬁgures ....................................................................................................................................7

Performance and balance sheet ...............................................................................................................................................................8

Credit rating ................................................................................................................................................................................................................. 8

Risk and capital adequacy management and risk position ............................................................................................8

Internal control .........................................................................................................................................................................................................12

Internal audit .............................................................................................................................................................................................................. 12

Management and personnel ........................................................................................................................................................................12

The bank's corporate and governance system ..........................................................................................................................12

Audit ..................................................................................................................................................................................................................................13

Social responsibility .............................................................................................................................................................................................13

Events after the closing date .....................................................................................................................................................................13

Outlook for 2026 ....................................................................................................................................................................................................13

Board of Directors' proposal on the disposal of the result for the period ........................................................13

POP MORTGAGE BANK’S FINANCIAL STATEMENTS 1 JANUARY – 31 DECEMBER 2025 (IFRS) ............

POP Mortgage Bank’s income statement .....................................................................................................................................14

POP Mortgage Bank’s balance sheet ................................................................................................................................................14

POP Mortgage Bank’s statement of changes in equity capital .................................................................................15

POP Mortgage Bank’s cash ﬂow statement ................................................................................................................................ 16

Notes ................................................................................................................................................................................................................................. 17

Note 1 Accounting policies ................................................................................................................................................................. 17

Note 2 Risk management .................................................................................................................................................................... 23

Note 3 Interest income and expenses ......................................................................................................................................29

Note 4 Net income from hedge accounting ......................................................................................................................29

Note 5 Personnel expenses .................................................................................................................................................................29

Note 6 Other operating expenses ............................................................................................................................................... 30

Note 7 Depreciation .................................................................................................................................................................................. 30

Note 8 Income tax ..................................................................................................................................................................................... 30

Note 9 Net income and expenses of ﬁnancial assets and ﬁnancial liabilities

by measurement category ...................................................................................................................................................................31

Note 10 Classiﬁcation of ﬁnancial assets and liabilities ...................................................................................... 32

Note 11 Fair values and valuation techniques of ﬁnancial assets and ﬁnancial liabilities ........

Note 12 Loans and receivables from credit institutions .........................................................................................36

Note 13 Intangible assets .................................................................................................................................................................... 36

Note 14 Other assets ...............................................................................................................................................................................36

Note 15 Derivatives contracts and hedge accounting .............................................................................................37

Note 16 Debt securities issued to the public ....................................................................................................................38

Note 17 Offsetting ......................................................................................................................................................................................39

Note 18 Provisions and other liabilities .................................................................................................................................40

Note 19 Equity capital ............................................................................................................................................................................40

Note 20 Collateral given and received .................................................................................................................................... 41

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

Note 21 Distributable funds .............................................................................................................................................................. 41

Note 22 Related party disclosures ..............................................................................................................................................42

Note 23 Events after the closing date .....................................................................................................................................42

SIGNATURES ............................................................................................................................................................................................................43

AUDITOR’S REPORT .......................................................................................................................................................................................... 44

INDEPENDENT AUDITOR’S REPORT ON THE ESEF FINANCIAL STATEMENTS

OF POP MORTGAGE BANK PLC ............................................................................................................................................................48

This document is a translation of the original Finnish version “POP Asuntoluottopankki toimintakertomus

ja tilinpäätös 1.1.-31.12.2025”. In case of discrepancies, the Finnish version shall prevail.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

BOARD OF DIRECTORS' REPORT 4

BOARD OF DIRECTORS' REVIEW

The POP Mortgage Bank Plc (hereinafter ‘POP

Mortgage Bank’) is a member credit institution

within amalgamation of the POP Banks. POP

Mortgage Bank is responsible for acquiring exter-

nal funding for the amalgamation in cooperation

with Bonum Bank Plc. POP Mortgage Bank is also

responsible for issuing secured bonds from its 1.5

billion euros covered bond program and forwarding

the acquired funding to member credit institutions

belonging to the amalgamation of POP Banks.

POP Mortgage Bank’s operations are based on the

intermediary loan model. Thus, the mortgage-

backed

loan portfolio provided as collateral for

bonds to be issued is not recognised on POP Mort-

gage Bank’s balance sheet. Instead, it remains on

each member credit institution’s balance sheet.

POP Mortgage Bank recorded a proﬁt of EUR 1.4

(0.6) million for the reporting period and balance

sheet totalled EUR 540.6 (798.3) million at the end

of the reporting period. Intermediary loans granted

to banks belonging to the amalgamation of POP

Banks totalled EUR 500.0 (750.0) million.

The Annual General Meeting of POP Mortgage

Bank was held on March 14, 2025. The meeting

addressed the statutory matters. Juha Niemelä,

Marja Pajulahti and Matti Vainionpää were elected

to the Board of Directors. Juha Niemelä has

served as Chair of the Board. The Board appointed

Jukka Ruotinen as Deputy CEO of POP Mortgage

Bank, effective April 25, 2025.

POP BANK GROUP AND

AMALGAMATION OF POP BANKS

POP Bank Group is a Finnish ﬁnancial group that

offers retail banking services to private custom-

ers and small and medium sized companies. POP

Banks are cooperative banks owned by their

member customers. POP Bank’s vision is to be a

bank with a solid ﬁnancial standing that provides

personalised digital services, achieves the high-

est level of customer satisfaction and grows its

market share proﬁtably.

Structure of the POP Bank Group

The POP Bank Group consists of POP Banks, POP

Bank Centre coop and their controlled entities.

POP Banks are member credit institutions of POP

Bank Centre coop. POP Bank Centre coop and its

member credit institutions are mutually liable for

their debts and liabilities according to the Act on

the Amalgamation of Deposit Banks. POP Banks,

POP Bank Centre coop and their controlled ser-

vice companies constitute the amalgamation of

POP Banks.

POP Bank Centre coop is the central institu-

tion of the amalgamation of POP Banks and is

responsible for steering and supervising POP

Bank Group. POP Bank Centre coop has two

subsidiaries, Bonum Bank Plc and POP Mortgage

Bank Plc, which are also its member credit insti-

tutions.

Bonum Bank Plc serves as the central credit

institution of the POP Banks and acquires exter-

nal funding for the Group by issuing unsecured

bonds. Bonum Bank Plc is also responsible for

the POP Banks’ card business and the Group’s

payment transactions and centralised services,

in addition to granting credit to retail custom-

ers. POP Mortgage Bank Plc is responsible for

the Group’s mortgage-backed funding, which it

acquires by issuing covered bonds.

POP Bank Group also includes POP Holding Ltd

owned by POP Banks and POP Bank Centre coop.

POP Holding Ltd owns 30 per cent from Finnish

P&C Insurance Ltd that belongs to LocalTapiola

Group and uses the auxiliary business name of

POP Insurance. POP Holding Ltd is not a mem-

ber of the amalgamation of POP Banks and is

included in the scope of joint liability.

BOARD OF DIRECTORS’ REPORT FOR THE FINANCIAL PERIOD OF

1 JANUARY  31 DECEMBER 2025

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

BOARD OF DIRECTORS' REPORT 5

The following chart presents the structure of the

POP Bank Group and the entities included in the

amalgamation and scope of joint liability. There

have been no changes in the group structure dur-

ing reporting period.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

BOARD OF DIRECTORS' REPORT 6

OPERATING ENVIRONMENT

Global economic growth slowed in 2025 com-

pared with the previous year. Regionally, growth

was strongest in Asia, while growth in the euro

area remained subdued. In the United States,

however, economic growth decelerated year on

year. Global growth continued to be weighed

down by geopolitical tensions as the war in

Ukraine continued, although tensions eased

somewhat following the ceaseﬁre reached in the

conﬂict between Israel and Hamas.

Exports of goods to the United States picked up

in the ﬁrst half of the year as companies pre-

pared for the introduction of tariffs. Towards the

end of the year, growth in global trade slowed as

a result of US trade policy, weakening the out-

look for exports from the euro area and Finland

to the United States. On the other hand, the

trade agreement between the EU and the United

States reduced trade policy uncertainty, and

overall equity market performance in 2025 was

positive. Rising global uncertainty also pushed

the price of gold to record highs.

Economic growth in the euro area was slightly

faster than in the previous year, but households

remained largely cautious and saving levels

remained elevated. The automotive industry,

which is particularly important for the Euro-

pean economy, faced difﬁculties as households

extended replacement cycles for cars, while

lower-priced Chinese electric vehicles rapidly

increased their market share. The outlook and

order books for the defence industry improved as

NATO member states were required to increase

investment in maintaining and developing their

defence capabilities.

Economic growth in Finland remained weak in

2025. Although household purchasing power

improved as a result of tax and wage agree-

ments, consumers were exceptionally cautious

in their spending decisions. Cost-cutting meas-

ures aimed at halting the growth of public sec-

tor debt were felt by many in everyday life, and

households were concerned about the ongoing

deterioration of public services. In addition, the

rise in unemployment made households even

more cautious. This was reﬂected in consump-

tion behaviour and an increase in savings. Major

purchases, such as homes or new cars, continued

to be made less frequently than the long-term

average.

Households were supported by low inﬂation and

the continued decline in short-term interest

rates at the beginning of the year. The European

Central Bank cut its key interest rates four times

in the ﬁrst half of 2025, in steps of 0.25 percent-

age points. The decline in short-term Euribor

rates ended in the summer at around 2 per cent.

Towards the end of the year, the most common

reference rate for mortgage loans, the 12-month

Euribor, turned slightly upwards, ending the year

at around 2.2 per cent. As in the previous year,

mortgage loans were taken out at a moder-

ate level, and the housing market was subdued.

Prices of existing homes were generally on a

downward trend, although increases in selling

prices were observed in some areas.

The number of bankruptcies in Finland remained

high in 2025, and unemployment continued to

rise rapidly. The year was particularly challenging

for sectors dependent on household consump-

tion, such as restaurants, renovation services

and specialised retail. The ﬁnancial difﬁculties

of the wellbeing services counties were reﬂected

as a reduction in the purchase of care services

from private providers. Challenges in the con-

struction sector persisted, as sales of new homes

remained weak and the number of new residen-

tial construction starts was at a low level.

Forestry beneﬁted from strong domestic demand

for timber, which was reﬂected in record-high

stumpage earnings. Logging volumes remained

high as industrial demand for timber increased

and the availability of imported timber was lim-

ited. Producer prices in agriculture also rose, with

both meat and milk prices increasing compared

with the previous year. At the same time, prices

of production inputs mostly declined, and the

grain harvest was reasonably good.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

BOARD OF DIRECTORS' REPORT 7

Cost-to-income ratio, %

Total operating expenses

x 100

Total operating income

Return on equity (ROE), %

Proﬁt for the ﬁnancial year

x 100

Equity capital and non-controlling interest

(average of the beginning and end of period)

Return on assets (ROA), %

Proﬁt for the ﬁnancial year

x 100

Balance sheet total (average of the beginning

and the end of the period)

Equity ratio, %

Equity capital and non-controlling interest

x 100

Balance sheet total

Common Equity Tier 1 capital

ratio (CET1), %

Common Equity Tier 1 capital (CET1)

x 100

Risk weighted assets

Tier 1 capital ratio (T1), %

Tier 1 capital (T1)

x 100

Risk weighted assets

Capital adequacy ratio (TC), %

Total capital (TC)

x 100

Risk weighted assets

Leverage ratio, %

Tier 1 capital (T1)

x 100

Leverage ratio exposure

Liquidity coverage ratio (LCR), %

Liquid assets

x 100

Liquidity outﬂows - liquidity inﬂows under stressed conditions

Net stable funding ratio (NSFR), %

Stable funding

x 100

Required amount of stable funding

KEY FIGURES AND THE FORMULAS OF KEY FIGURES

31 Dec 2025 31 Dec 2024

Cost-to-income ratio, % 38% 59%

ROA, % 0.2% 0.1%

ROE, % 7.9% 3.6%

Capital adequacy ratio (TC) % 326.0% 212.7%

Equity ratio, % 3.5% 2.2%

Alternative Performance Measures (APMs) are key ﬁgures other than those speciﬁed in the account-

ing standards or other regulation and are used to describe the company’s ﬁnancial position and devel-

opment. The key ﬁgures presented by the POP Mortgage Bank are based on IFRS Financial State-

ment Reporting standards, except for the operating expenses ratio and the combined expense ratio

for insurance operations. The calculation formulas for the key ﬁgures included in the annual report are

described below.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

BOARD OF DIRECTORS' REPORT 8

PERFORMANCE AND BALANCE

SHEET

Performance

POP Mortgage Bank recorded a proﬁt of EUR 1.4

(0.6) million for the reporting period.

POP Mortgage Bank’s net interest income was

EUR 2.1 (1.7) million. Interest income EUR 22.3 (25.3)

million was entirely generated from interest earn-

ings on receivables from credit institutions. Inter-

est expenses EUR 20.2 (23.6) million consisted of

EUR 21.5 (17.5) million in bonds issued to the public,

liabilities to credit institutions EUR 0.3 (0.2) million

as well as interest income recorded from derivative

contracts EUR 1.6 million. In the comparison period,

interest expenses of EUR 6.0 million were recorded

from derivative contracts.

POP Mortgage Bank’s operating expenses totalled

EUR 0.9 (0.9) million. Personnel expenses included

fees paid to the members of the Board of Direc-

tors. Other operating expenses EUR 0.8 (0.8) million

include EUR 0.2 (0.2) million in ICT expenses and

EUR 0.5 (0.5) million in purchased services. Pur-

chased services include management services pur-

chased from Bonum Bank Plc and POP Bank Cen-

tre coop, among other services. Depreciation and

amortisation include the amortisation of intangible

assets.

Balance sheet and ﬁnancial position

POP Mortgage Bank’s balance sheet totalled EUR

540.6 (798.3) million at the end of the reporting

period.

Loans and receivables from credit institutions

includes EUR 27.7 (29.7) million in deposits made in

Bonum Bank and EUR 500.0 (750.0) million in inter-

mediary loans granted to banks belonging to the

Amalgamation of POP Banks.

The bonds issued, at EUR 502.6 (756.1) million,

includes secured bonds with a nominal value

of EUR 500.0 (750.0) million, and the change in

the fair value of the underlying asset in hedge

accounting. During the reporting period, a bond

with a nominal value of EUR 250 million matured,

and no new bonds were issued.

POP Mortgage Bank’s equity was EUR 18.9 (17.5)

million at the end of the review period.

CREDIT RATING

In December 2025, the credit rating agency S&P

Global Rating conﬁrmed the ‘AAA’ credit rating with

a stable outlook for POP Mortgage Bank’s loan pro-

gram and the issued bonds.

RISK AND CAPITAL ADEQUACY

MANAGEMENT AND RISK POSITION

Principles and organisation of risk

management

The POP Bank Group’s strategy outlines the

Group’s risk appetite. Business activities are carried

out at a moderate risk level so that the risks can be

managed in full. The purpose of risk management is

to ensure the risk levels are proportionate to bank’s

and the amalgamation’s risk-bearing capacity and

capital adequacy position. Risk management pro-

cesses must be able to identify all signiﬁcant risks

of the business operations and assess, measure

and monitor these regularly.

As the central institution, POP Bank Centre coop

supervises the sufﬁciency and functioning of the

risk management systems at the level of the mem-

ber credit institutions and the amalgamation and

is liable for the Group’s risk and capital adequacy

management in accordance with section 17 of the

Amalgamation Act. The central institution of the

amalgamation issues binding instructions concern-

ing risk and capital adequacy management, corpo-

rate governance and internal control to the mem-

ber credit institutions to secure their solvency and

capital adequacy. Furthermore, common business

controlling thresholds have been established for the

member institutions to ensure that the risks taken

by an individual member institution are within

acceptable limits.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

BOARD OF DIRECTORS' REPORT 9

POP Mortgage Bank’s risk management goal is to

ensure that the bank complies with laws, decrees,

instructions and regulations issued by the authori-

ties, their own rules and the internal binding guide-

lines issued by the central institution of the amal-

gamation in its activities.

The purpose of capital adequacy management is to

ensure a sufﬁcient amount, type and efﬁcient use

of the capital of the POP Mortgage Bank. Capital

is held to cover the material risks arising from the

amalgamation’s business strategy and plan and to

secure the uninterrupted operation of the amal-

gamation in case of unexpected losses. The goal

is pursued through a documented and systematic

capital adequacy management process which is

integrally linked to the amalgamation’s and member

credit institutions’ strategy process and business

planning and management. POP Mortgage Bank is

responsible for member banks long-term funding

by issuing secured bonds. Issuing is based on the

funding needs of the amalgamation as an entity

due to which POP Mortgage Bank’s control process

of the capital adequacy is closely connected to the

strategy process of the amalgamation as well as

the planning and managing of the business opera-

tions.

The amalgamation’s risk management and capi-

tal adequacy management are described in more

detail in Note 4 to the POP Bank Group’s ﬁnan-

cial statements. POP Bank Group will deliver the

amalgamations’s Pillar III information according to

EU capital adequacy act to the European Banking

Authority (EBA) which will publish the information

in a centralised information portal (Pillar 3 data

hub).

Business risks

Credit risks

POP Mortgage Bank’s credit risk consist of inter-

mediary loans granted to the member banks of the

amalgamation of POP Banks and from derivatives.

POP Mortgage Bank engages in mortgage bank

operations under an intermediary loan model

established by the Act on Mortgage Banks and

Covered Bonds (151/2022). Thus, the Bank may

issue secured bonds and use the acquired funds to

offer intermediary loans to the member banks of

the amalgamation.

Under the intermediary loan model, the mort-

gage-backed loans provided as collateral for

secured bonds remain on the member banks’ bal-

ance sheets and are not recognised on POP Mort-

gage Bank’s balance sheet. The risks associated

with the mortgage-backed loans provided as collat-

eral are not transferred to POP Mortgage Bank. The

bonds are recognised as collateral for the secured

bonds issued. The intermediary loans granted to

member banks are presented under “Receivables

from credit institutions” on the balance sheet.

Liquidity risk

Bonum Bank Plc, the central credit institution of the

amalgamation, is responsible for liquidity manage-

ment. Liquidity risks are managed by maintaining a

liquidity reserve consisting of LCR-eligible (Liquid-

ity Coverage Ratio) liquid assets, assets eligible

as collateral for central bank funding, and short-

term bank receivables. Based on an authorization

granted by the Financial Supervisory Authority, the

member credit institutions of the amalgamation

have been exempted from the LCR and NSFR (Net

stable funding ratio) requirements by the deci-

sion of the central institution. The LCR and NSFR

requirements are calculated at the level of the

amalgamation of POP Banks.

POP Bank Group’s liquidity position remained

strong during the ﬁnancial period. The liquidity

coverage ratio (LCR) for the amalgamation of POP

Banks was 241.9 (315.1) per cent on 31 December

2025, with the regulatory minimum level being 100

per cent. The amalgamation’s Net Stable Fund-

ing Ratio (NSFR) was 136.5 (136.9) per cent on 31

December 2025.

Market risk

POP Mortgage Bank’s most signiﬁcant market risk

is the interest rate risk associated with the banking

book. The interest rate risk refers to the impact of

changes in interest rate levels on the market value

of balance sheet and off-balance-sheet items, or

on net interest income. The banking book consists

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

BOARD OF DIRECTORS' REPORT 10

of intermediary loans granted to the amalgama-

tion’s member banks and market-based ﬁnancing.

POP Mortgage Bank does not engage in trading

activities. The use of derivatives is limited to hedg-

ing interest rate risk in the banking book.

POP Mortgage Bank monitors the interest rate

risk by using the present value method and the

dynamic income risk model. The present value

method measures how changes in interest rates

affect the constructed market value of the bal-

ance sheet. In the present value method, the mar-

ket value of the balance sheet is calculated as the

present value of the expected cash ﬂows of indi-

vidual balance sheet items. Interest rate sensitiv-

ity indicators are used to monitor the market value

changes caused by changes in the interest rates

and credit spreads of investment items in different

interest rate scenarios. The income risk model pre-

dicts future net interest income and its changes in

various market rate scenarios within a time frame

of ﬁve years. The amount of interest rate risk taken

is assessed with the effect of diverse interest rate

shocks on the net interest income and net present

value.

Operational risks

The objective of the management of operational

risks is to identify essential operational risks in

business operations and minimise their materi-

alisation and impacts. The objective is pursued

through continuous personnel development and by

means of comprehensive operating instructions

and internal control measures, such as by segre-

gating preparation, decision-making, implementa-

tion and control from one another.

POP Mortgage Bank carries out an annual self-as-

sessment of operational risks based on the risks

assessments it performs, in which the monitor-

ing of operational risk incidents is utilised. The risk

assessment also aims to evaluate the risks related

to POP Mortgage Bank most signiﬁcant outsourced

operations. Some of the potential losses caused

by operational risks are hedged through insurance.

Risks caused by malfunctions in information sys-

tems are prepared for through continuity planning.

Crisis resolution plan

In accordance with the bank resolution act for own

funds and eligible liabilities, the Financial Stabil-

ity Authority has on 25 March 2025 set a minimum

requirement of own funds and eligible liabilities

(MREL-requirement) for POP Mortgage Bank. The

MREL requirement for POP Mortgage Bank is 16.0

per cent of total risk-weighted assets (TREA) or

6.0 per cent of the leverage ratio exposures (LRE).

The MREL requirement has been fulﬁlled with own

funds.

Capital adequacy management

At the end of the reporting period. POP Mortgage

Bank’s capital adequacy was at a good level. Start-

ing from 1 January 2025 POP Mortgage Bank has

applied the renewed Capital Requirements Regula-

tion (CRR III). This change has had a positive effect

on the bank’s capital adequacy position. The Bank’s

capital ratio was 326.0 (212.7) per cent and the core

capital adequacy ratio 326.0 (212.7) per cent. The

Bank’s own funds totalled EUR 17.3 (16.6) million

consisting entirely of CET1 capital adequacy.

POP Mortgage Bank’s own funds are comprised of

share capital, retained earnings and other non-re-

stricted reserves, less the deductible items in

accordance with the CRR. Member credit institu-

tions of the amalgamation have been exempted

from the own funds requirements for intragroup

items and large exposures limits for exposures

between the central credit institution and the

member credit institutions based on a permission

granted by the FIN-FSA.

POP Mortgage Bank’s leverage ratio on 31 Decem-

ber 2025 was 341.9 (235.5) per cent. The minimum

level of regulation is 3 per cent.

The statutory minimum is 8 per cent for the capital

adequacy ratio and 4.5 per cent for CET1 capital.

In addition to the minimum capital adequacy ratio,

POP Mortgage Bank is subject to the ﬁxed addi-

tional capital requirement, which is 2.5 per cent in

accordance with the Act on Credit Institutions, and

to the variable country-speciﬁc additional capital

requirements for foreign exposures.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

BOARD OF DIRECTORS' REPORT 11

Summary of capital adequacy

(EUR 1,000) 31 Dec 2025 31 Dec 2024

Own funds

Common Equity Tier 1 capital before deductions 17,481 16,855

Deductions from Common Equity Tier 1 capital -180 -304

Total Common Equity Tier 1 capital (CET1) 17,301 16,551

Additional Tier 1 capital before deductions - -

Deductions from Additional Tier 1 capital - -

Additional Tier 1 capital (AT1) - -

Tier 1 capital (T1 = CET1 + AT1) 17,301 16,551

Tier 2 capital before deductions - -

Deductions from Tier 2 capital

- -

Total Tier 2 capital (T2) - -

Total capital (TC = T1 + T2) 17,301 16,551

Total risk weighted assets 5,306 7,780

of which credit risk 1,248 1,465

of which credit valuation adjustment risk (CVA) 1,146 4,554

of which market risk (exchange rate risk) - -

of which operational risk 2,913 1,761

Fixed capital conservation buffer according to Act on Credit

institutions (2.5%)

133 195

Countercyclical capital buffer - -

CET1 Capital ratio (%) 326.0% 212.7%

T1 Capital ratio (%) 326.0% 212.7%

Total capital ratio (%) 326.0% 212.7%

Capital requirement

Total capital 17,301 16,551

Capital requirement* 557 817

Capital buffer 16,744 15,734

Leverage ratio

Tier 1 capital (T1) 17,301 16,551

Leverage ratio exposure 5,060 7,034

Leverage ratio, %

341.9% 235.3%

*The capital requirement comprises the minimum requirement of 8%, the capital conservation buffer of 2.5% and the country-specic counter-

cyclical capital requirements of foreign exposures.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

BOARD OF DIRECTORS' REPORT 12

INTERNAL CONTROL

The purpose of POP Mortgage Bank’s internal con-

trol is to ensure that the Bank, in a systematic and

effective manner, works towards the goals and

implements the procedures conﬁrmed by senior

management. Internal control aims to ensure that

the organisation complies with regulations and

manages risks comprehensively, and that its opera-

tions are efﬁcient and reliable.

Internal control is implemented at all levels of the

organisation. Internal control is implemented by the

Board of Directors, the CEO and other manage-

ment and personnel, as well as the risk manage-

ment and compliance functions independently of

business operations. As part of internal control, the

amalgamation has implemented a whistleblowing

mechanism that enables the Bank’s employees to

report, internally through an independent channel,

suspected violations of rules and regulations con-

cerning the ﬁnancial market in the central institu-

tion or a member credit institution.

INTERNAL AUDIT

Within the amalgamation, POP Bank Centre coop

is centrally responsible for the steering and organ-

isation of internal audit in the bank centre, mem-

ber credit institutions and other companies of the

amalgamation. POP Mortgage Bank’s internal audit

is based on the internal audit guidelines conﬁrmed

by the Board of Directors and the Supervisory

Board of POP Bank Centre coop as well as on the

audit plan approved by the Board of Directors of

POP Bank Centre coop.

The purpose of internal audit is to assess the scope

and sufﬁciency of the internal control of the Bank’s

operational organisation and to monitor and assess

the functionality of risk management systems.

Internal audit reports its observations primarily

to the Bank’s Board of Directors. After audits, the

Bank’s Board of Directors discusses the summaries

prepared as a result of the internal audit. Inter-

nal Audit reports of its activity and observations

regularly to central institution’s Supervisory Board,

central institution’s Board of Directors and CEO.

MANAGEMENT AND PERSONNEL

POP Mortgage Bank’s Board of Directors during the

ﬁnancial year included:

● Juha Niemelä, Chairman of the Board

● Matti Vainionpää, Vice Chairman of the Board

● Marja Pajulahti, Member of the Board

POP Mortgage Bank does not have personnel. The

Deputy CEO of Bonum Bank Timo Hulkko has acted

as the CEO of POP Mortgage Bank. Jukka Ruotinen

has acted as the CEO’s deputy.

THE BANK’S CORPORATE AND

GOVERNANCE SYSTEM

POP Mortgage Bank’s functions are controlled by

its shareholder, which exercises its decision-making

power at the General Meeting in accordance with

the Finnish Limited Liability Companies Act and the

Articles of Association. The Annual General Meet-

ing decides on the distribution of the Bank’s proﬁt

and elects the members of the Board of Directors.

The Bank is represented by and directed by the

Board of Directors. Operational decisions concern-

ing the Bank’s business operations and strategic

issues are made by the Bank’s Board of Directors.

The work of the Board of Directors is based on the

Bank’s Articles of Association, decisions of the

General Meeting and applicable legislation. The

Bank’s CEO manages the Bank’s operational activ-

ities in accordance with the instructions provided

by the Board of Directors.

The investigation of the independence of Board

members and the CEO takes place in accordance

with regulations issued by the Finnish Financial

Supervisory Authority. Board members and the CEO

shall provide an account of the entities in which

they operate when they are elected to their ofﬁce.

In addition, Board members and the CEO shall pro-

vide an account of ﬁtness and propriety accord-

ing to the regulation by the Financial Supervisory

Authority when they accept their duties.

POP Mortgage Bank’s Corporate Governance

Report is available online at www.poppankki.ﬁ/en.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

BOARD OF DIRECTORS' REPORT 13

AUDIT

The company’s auditor was KPMG Oy Ab, author-

ised public accountants, with Henrik Snellman,

authorised public accountant, as the principal

auditor.

SOCIAL RESPONSIBILITY

POP Mortgage Bank operates as part of the

POP Bank Group and supports the responsibil-

ity efforts of the local POP Banks. The POP Bank

Group publishes a sustainability report as part

of its management report. The POP Bank Group’s

management report and consolidated IFRS ﬁnan-

cial statements are published on the website at

www.poppankki.ﬁ.

EVENTS AFTER THE CLOSING DATE

Board of Directors of POP Mortgage Bank is not

aware of events after the closing date that would

have a material impact on the information pre-

sented in the ﬁnancial statements.

OUTLOOK FOR 2026

Finland’s economy has long been expected to

return to growth, but despite positive signals, the

turnaround has been delayed. Despite a recov-

ery in exports, economic development continues

to be constrained by low levels of domestic con-

sumption and investment. Uncertainty related

to the value of household assets has supported

saving and increased deposits to record levels. No

signiﬁcant change is expected until the housing

market normalises and economic growth picks up.

Geopolitical instability complicates the outlook

for global markets, which is also reﬂected in the

uncertainty surrounding Finland’s economic out-

look.

POP Mortgage Bank’s core business is expected

to generate positive results and the capital ade-

quacy is expected to stay strong.

BOARD OF DIRECTORS' PROPOSAL

ON THE DISPOSAL OF THE RESULT

FOR THE PERIOD

POP Mortgage Bank’s distributable funds were

EUR 8.9 million. POP Mortgage Bank’s Board of

Directors proposes to the Annual General Meet-

ing that the proﬁt for the period EUR 1.4 million

be recognised in retained earnings and that no

dividends be paid.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 14

POP MORTGAGE BANK’S FINANCIAL STATEMENTS

1 JANUARY  31 DECEMBER 2025 IFRS

POP MORTGAGE BANK’S INCOME STATEMENT

POP Mortgage Bank has no items to be presented in the statement of other comprehensive income.

(EUR 1,000) Note 1 Jan–31 Dec 2025 1 Jan–31 Dec 2024

Interest income 22,302 25,288

Interest expenses -20,224 -23,567

Income statement 3 2,077 1,721

Net income from hedge accounting 4 262 -204

Total operating income 2,339 1,517

Personnel expenses 5 -16 -18

Other operating expenses 6 -767 -757

Depreciation 7 -116 -116

Total operating expenses -899 -891

Prot before taxes 1,440 626

Income taxes 8 - -

Result for the period 1,440 626

POP MORTGAGE BANK’S BALANCE SHEET

(EUR 1,000) Note 31 Dec 2025 31 Dec 2024

Assets

Loans and receivables from credit institutions 10, 11, 12 527,689 779,737

Derivatives 10, 11, 12 4,643 7,872

Intangible assets 13 165 281

Other assets 14 8,095 10,363

Total assets 540,593 798,254

Liabilities

Liabilities to credit institutions 10 9,840 13,440

Derivatives 10, 11, 15, 17 1,023 587

Debt securities issued to the public 10, 11, 16 502,633 756,069

Other liabilities 18 8,176 10,677

Total liabilities 521,672 780,773

Equity capital

Share capital 19 10,000 10,000

Reserves 19 9,000 9,000

Retained earnings 19 -79 -1,519

Total equity capital 18,921 17,481

Total liabilities and equity capital 540,593 798,254

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 15

POP MORTGAGE BANK’S STATEMENT OF CHANGES IN EQUITY CAPITAL

(EUR 1,000) Share capital

Reserve for

invested non-

restricted equity

Retained

earnings Total equity

Balance at 1 Jan 2025 10,000 9,000 -1,519 17,481

Prot for the nancial year - - 1,440 1,440

Balance at 31 Dec 2025 10,000 9,000 -79 18,921

(EUR 1,000) Share capital

Reserve for

invested non-

restricted equity

Retained

earnings Total equity

Balance at 1 Jan 2024 10,000 9,000 -2,145 16,855

Prot for the nancial year - - 626 626

Balance at 31 Dec 2024 10,000 9,000 -1,519 17,481

Breakdowns of equity are presented in more detail in Note 19.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 16

POP MORTGAGE BANK’S CASH FLOW STATEMENT

(EUR 1,000) Note 1 Jan–31 Dec 2025 1 Jan–31 Dec 2024

Cash ow from operating activities

Prot for the nancial year 1,440 626

Adjustments to prot for the nancial year 345 675

Increase (-) or decrease (+) in operating assets 252,268 -236,476

Loans and receivables from credit institutions 10,11,12 250,000 -236,800

Other assets 14 2,268 324

Increase (+) or decrease (-) in operating liabilities -6,101 2,784

Liabilities to credit institutions 10 -3,600 2,790

Other liabilities 18 -2,501 -6

Total cash ow from operating activities 247,952 -232,391

Cash ow from nancing activities

Debt securities issued, increase 16 - 249,048

Debt securities issued, decrease 16 -250,000 -

Total cash ow from nancing activities -250,000 249,048

Change in cash and cash equivalents

Cash and cash equivalents at period-start 29,737 13,080

Cash and cash equivalents at the end of the period 27,689 29,737

Net change in cash and cash equivalents -2,048 16,657

Cash and cash equivalents

Receivables from credit institutions payable on demand 12 27,689 29,737

Total 27,689 29,737

Additional information of the cash ﬂow

statement

Interest received 24,599 25,298

Interest paid 22,571 23,886

Adjustments to result for the ﬁnancial year

Changes in fair value -259 203

Depreciation 7 116 116

Other 488 356

POP Mortgage Bank had no items to present in the cash ﬂow from investing activities during the review

period.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 17

NOTES

General

POP Mortgage Bank Plc and POP Bank Group

POP Mortgage Bank Plc (hereinafter ‘POP Mortgage

Bank’) is a subsidiary wholly owned by POP Bank

Centre coop and a member credit institution in the

amalgamation of POP Banks, acting as the mort-

gage bank for the member banks of the POP Bank

Centre coop (POP Banks). POP Mortgage Bank has

been established on September 2, 2021. On 25 May

2022, POP Mortgage Bank Plc was authorised by

the European Central Bank to engage in mortgage

banking operations and it was granted an operat-

ing license pursuant to the Act on Mortgage Banks

and Covered Bonds on 30 June 2022.

POP Mortgage Bank belongs to the POP Bank

Group. The POP Bank Group consists of the amal-

gamation of POP Banks and companies over which

it has control. The Group is engaged in banking

business. The central institution for the amalga-

mation of POP Banks is POP Bank Centre coop. Its

members consist of POP Mortgage Bank, Bonum

Bank Plc and 18 co-operative banks. The amalga-

mation of POP Banks is an economic entity spec-

iﬁed in the Act on the Amalgamation of Deposit

Banks, the members of which are jointly liable for

each other’s debts and commitments.

POP Mortgage Bank and Bonum Bank Plc are

responsible for acquiring external funding for the

amalgamation. POP Mortgage Bank engages in

mortgage bank operations under an intermediary

loan model established by the Act on Mortgage

Banks and Covered Bonds (151/2022). In the inter-

mediary loan model, POP Mortgage Bank distrib-

utes the capital originating from the issued bond to

the member banks of amalgamation as an interme-

diary loan. POP Mortgage Bank underwrites inter-

mediary loans on member banks balance sheets in

security for issued bonds. In the intermediary loan

model, member banks mortgage-backed loans

capital and associated risks are not transferred

to POP Mortgage Bank. Intermediary loans will be

stated to balance sheet item “Loans and receiva-

bles from credit institutions”.

POP Mortgage Bank’s registered ofﬁce is Espoo.

Copy of POP Mortgage Bank’s ﬁnancial state-

ments are available from its ofﬁce at Hevosen-

kenkä 3, 02600 Espoo, Finland and online at

www.poppankki.ﬁ/en.

POP Bank Centre coop has prepared the POP

Bank Group’s consolidated ﬁnancial statements in

accordance with the Act on the Amalgamation of

Deposit Banks. Copies of the ﬁnancial statements

of the POP Bank Group are available online at

www.poppankki.ﬁ/en or from the ofﬁce of the cen-

tral institution, address Hevosenkenkä 3, 02600

Espoo, Finland. POP Bank Group will deliver the

amalgamation’s Pillar III information according to

EU capital adequacy act to the European Banking

Auth

ority (EBA) which will publish the information in

a centralised information portal (Pillar 3 data hub).

Basis of preparation

POP Mortgage Bank’s ﬁnancial statements have

been prepared in accordance with International

Financial Reporting Standards (IFRS) approved

in the EU and the related Interpretations (IFRIC)

effective as of December 31, 2025. The applicable

Finnish accounting and corporate legislation and

regulatory requirements have also been taken into

account when preparing the notes to the ﬁnancial

statements.

The ﬁgures in the ﬁnancial statements are in thou-

sand euros, unless otherwise stated. The ﬁgures in

the calculations and tables are rounded, whereby

the sum total of individual ﬁgures may deviate

from the sum total presented. POP Mortgage Bank’s

accounting and operational currency is euro.

POP Mortgage Bank has no subsidiaries or associ-

ated companies.

NOTE 1 ACCOUNTING POLICIES

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 18

Accounting policies requiring management’s

judgement and uncertainty factors

affecting estimates

The application of the IFRS requires the man-

agement to make estimates and assumptions

concerning the future that affect the reported

amounts in the ﬁnancial statements, as well as

the information included in the notes. The man-

agement’s main estimates concern the future

and key uncertainties related to the amounts

at the balance sheet date. Such key estimates

are related to fair value measurement, as well as

the impairment of ﬁnancial assets and intan-

gible assets. The management’s estimates and

assumptions are based on the best view at the

balance sheet date, which may differ from the

actual result.

The management must assess whether the

markets for ﬁnancial instruments are active or

not. Furthermore, the management must assess

whether an individual ﬁnancial instrument is

subject to active trading and whether the price

information obtained from the market is a relia-

ble indication of the instrument’s fair value.

When the fair value of ﬁnancial instruments

is determined using a valuation technique, the

management’s judgement is needed in the

choice of the valuation technique to be applied.

Insofar as there is no market input available for

the techniques, management must evaluate how

other data can be used for the valuation.

In the calculation of expected credit losses, the

management’s assessment has been used in

deciding that the probability of default of the

POP Banks Group’s internal items is to be zero.

The assessment was made based on the struc-

ture of the Group and the principles of risk man-

agement. The most signiﬁcant item within the

amalgamation to which the principle is applied

is the interim loans granted to POP Banks, which

are presented in Note 12.

Financial Instruments

Classiﬁcation and recognition

Financial assets are classiﬁed on initial recog-

nition into following measurement categories

based on the business model followed in their

management and the debt instruments’ cash ﬂow

characteristics:

● Financial assets at amortised cost

● Financial assets at fair value through proﬁt

In accordance with the IFRS 9 Financial instru-

ments, ﬁnancial liabilities are classiﬁed on initial

recognition into following measurement catego-

ries:

● Financial liabilities at amortised cost

● Financial liabilities at fair value through proﬁt

and loss

Purchases and sales of ﬁnancial instruments

are recognised on transaction date. Instruments

issued are recognised in the balance sheet on the

date when the customer makes the subscription.

A ﬁnancial asset is derecognised when the con-

tractual rights to the cash ﬂows from the ﬁnan-

cial asset expire, or when the rights have been

transferred to another party so that substan-

tially all the risks and rewards of ownership of

the ﬁnancial asset are transferred. In addition, an

agreement included in ﬁnancial assets is derec-

ognised on the balance sheet if the rights to

cash ﬂows that are based on the agreement are

transferred to another party or if the agreement

includes an obligation to pay the cash ﬂows in

question to one or several recipients. If a consid-

eration is received, but all the risks and rewards

of ownership of the transferred asset are sub-

stantially retained, the transferred asset is rec-

ognised in its entirety and a ﬁnancial liability is

recognised for the consideration received.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 19

Impaired ﬁnancial assets are derecognised

when no further payments are expected and the

actual ﬁnal loss can be determined. In connec-

tion to derecognition, the previously recognised

expected credit loss is cancelled and the ﬁnal

credit loss is recognised. Payments on derecog-

nised receivables received later are recognised

in the income statement as an adjustment of

impairment losses.

Financial liabilities are derecognised when the

related obligations have been fulﬁlled and they

have been extinguished. An exchange of a debt

instrument with substantially different terms or

substantial modiﬁcation of the terms of an exist-

ing ﬁnancial liability is accounted for as an extin-

guishment of the original ﬁnancial liability and

the recognition of a new ﬁnancial liability.

Business models for managing ﬁnancial

assets and measurement

According to IFRS 9, an entity’s business model

refers to how an entity manages its ﬁnancial

assets in order to generate cash ﬂows. That is,

entity’s business model determines whether cash

ﬂows will result from collecting contractual cash

ﬂows, selling ﬁnancial assets or both. The busi-

ness model is determined at a level that reﬂects

how ﬁnancial asset groups are managed together

to achieve a particular business objective.

POP Mortgage Bank’s ﬁnancial assets are man-

aged according to one business model: ﬁnancial

assets held (objective to collect contractual cash

ﬂows).

Financial assets held -business model includes

loans and receivables and debt instruments held

to maturity, which pass the SPPI-test (Solely Pay-

ments of Principal and Interest) for their cash ﬂow

characteristics. In the SPPI-test, it is determined

whether the asset’s contractual cash ﬂows are

solely payments of principal and interest on the

principal amount outstanding.

POP Mortgage Bank does not actively trade

ﬁnancial assets.

Financial instruments measured at amortised cost

Financial assets measured at amortised cost

includes loans and receivables and the debt

instruments, which are, according to the invest-

ment policy, intended to be held to maturity with

terms of regular payments of interest and princi-

pal either in part or entirety (SPPI-test). In addi-

tion, liquid assets, in which the liquidity does not

have to be tested by regular sales, may be classi-

ﬁed to this measurement class.

POP Mortgage Bank’s ﬁnancial liabilities are

measured at amortised cost according to the

effective interest rate method. Financial liabilities

measured at amortised cost includes deposits

and debt securities issued to the public, liabili-

ties to credit institutions as well as other ﬁnancial

liabilities.

Determining fair value

Fair value is the price that would be attained if

the asset was sold or would be paid to transfer

the liability from one market party to another in a

standard business transaction taking place on a

valuation day.

A ﬁnancial instrument’s fair value is based on

price quotations obtained from active markets or,

if active markets do not exist, via company’s own

valuation methods. A market is considered active

if price quotations are readily and regularly avail-

able and if they reﬂect real and regularly occur-

ring arm’s-length market transactions. Current

bid price is used as the quoted market price of

ﬁnancial assets.

If the market has a well-established valuation

technique for a ﬁnancial instrument for which

there is no direct market price available, the fair

value is based on the commonly used valuation

model and on the market quotations of the input

data used in the model.

If there is no well-established valuation technique

in the market, fair value is determined based on

a speciﬁc valuation model created for the prod-

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 20

uct in question. The valuation models are based

on widely used measuring techniques, incorporat-

ing all the factors that market participants would

consider when setting a price. The valuation prices

used include market transaction prices, the dis-

counted cash ﬂow method, as well as the fair value

of another substantially similar instrument at the

reporting date. The valuation methods take into

account an estimate of the credit risk, applicable

discount rates, early repayment options, and other

such factors that may impact reliable determina-

tion of the fair value of the ﬁnancial instrument.

The fair values of ﬁnancial instruments are divided

into three hierarchical levels depending on how the

fair value is deﬁned:

● Fair values quoted in the active markets for

identical assets or liabilities (Level 1)

● Fair values that are determined using other

input data than the quoted prices at Level 1,

which are observable for the assets or liabil-

ities either directly (e.g., prices) or indirectly

(e.g., derived from prices) (Level 2)

● Fair values determined by the input data,

which is essentially not based on the observa-

ble market data (Level 3).

The fair value hierarchy level into which an item

measured at fair value is fully classiﬁed is deter-

mined by the input data, which is at the lowest

level and is signiﬁcant in respect to the whole item.

The signiﬁcance of the input data is evaluated

considering the whole item, which is valued at fair

value.

Impairment of ﬁnancial assets

A loss allowance on ﬁnancial assets measured at

amortized cost or fair value through other compre-

hensive income and off-balance sheet credit com-

mitments is recognised on the basis of expected

credit losses. The expected credit loss of a ﬁnan-

cial instrument is determined as the difference

between the contractual cash ﬂows that the entity

is entitled to receive under the contract and the

cash ﬂows expected to be received by the entity

at the original effective interest rate at the time of

reporting.

To determine expected credit losses, ﬁnancial

instruments are classiﬁed in stages from 1 to 3.

Stage 1 represents ﬁnancial instruments whose

credit risk has not increased signiﬁcantly since

the initial recognition. Expected credit losses are

determined for such ﬁnancial instruments based

on expected loan losses for 12 months. Stage 2

represents ﬁnancial instruments whose credit risk

has increased signiﬁcantly after the initial rec-

ognition on the basis of qualitative or quantita-

tive criteria and, for stage 3, ﬁnancial instruments

whose counterparty has been declared as default.

Expected credit losses are determined for ﬁnan-

cial instruments classiﬁed in Stage 2 and 3 based

on the expected credit losses over the entire life

of the instrument.

POP Mortgage Bank’s ﬁnancial assets consist of

internal deposits of the POP Banks Group. In the

calculation of expected credit losses (ECL), the

probability of default (PD) of the group’s internal

items has been considered to be zero, based on

the group’s structure and risk management prin-

ciples. Calculation principles for expected credit

losses are described in more detail in Note 2 to

the POP Bank Group’s ﬁnancial statements.

Derivative contracts and hedge accounting

POP Mortgage Bank hedges its interest rate risk

against changes in fair value, primarily using

interest rate swaps. Hedge accounting is applied

for fair value hedging. The hedged instrument

of fair value hedging is ﬁxed-rate bonds issued.

Derivative contracts are not made for trading

purposes.

All derivative contracts are recognised and

measured at fair value through proﬁt or loss. The

positive fair values of derivative contracts are

presented as assets under Derivatives and neg-

ative fair values as liabilities under Derivatives.

Changes in the value of derivatives in hedge

accounting are recorded in the income state-

ment under Net income from Hedge account-

ing. The interest on hedging derivative contracts

is recorded on a net basis, with the interest on

derivatives hedging liabilities presented under

interest expenses. The interest on derivative con-

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 21

tracts is presented on the balance sheet as a net

amount under either other assets or other liabili-

ties, depending on the interest payment position

at each reporting date.

The hedging relationship between the hedging

derivative contract and the hedged instrument

and the objectives of risk management are doc-

umented before hedge accounting is applied. If

there is a high correlation between the change

in the value of the hedging derivative and the

hedged instrument, the hedging is considered

effective.

POP Mortgage Bank applies IFRS 9 Financial

Instruments to hedge accounting for all hedging

relationships.

Intangible assets

Intangible assets comprise the implementation

cost of information system. An intangible asset

is recognised in the balance sheet at acquisition

cost if it is probable that the expected economic

beneﬁts associated, and the acquisition cost of

the asset can be measured reliably. Acquisition

cost includes all costs that are directly attribut-

able to bringing the asset to its working condi-

tion for its intended use.

Intangible assets have a limited useful life. The

acquisition cost of intangible assets is amortised

in the income statement on the basis of the

estimated useful lives of assets. The estimated

useful life is 3–5 years for information systems

and licenses.

The amortisation of the acquisition cost of

intangible assets begins when the asset is ready

to be taken into use. Indications of impairment

of intangible assets are examined annually and

intangible assets are tested for impairment when

necessary.

Employee beneﬁts

Employee beneﬁts are short-term employee

beneﬁts, such as remunerations for positions of

responsibility, which are expected to be paid in

connection with the work performance they are

related to or within the following 12 months.

POP Mortgage Bank does not have employees.

The company purchases the administrative and

management services needed from its parent

company POP Bank Centre coop and its sister

company Bonum Bank Plc.

Income Tax

The income statement includes taxes on income

for the ﬁnancial year and changes in deferred

taxes.

Deferred tax liabilities and assets are calculated

on taxable and deductible temporary differences

between the carrying amount and the tax basis.

Deferred tax assets are recognised to the extent

that it is probable that taxable income will be

available against which the deductible tempo-

rary difference can be utilised.

Deferred tax assets and liabilities are measured

at the tax rate that is expected to apply at the

time when the temporary difference is reversed.

A deferred tax asset is recognised for the carry

forward of unused tax losses to the extent that

future taxable proﬁt will be probable and unused

tax credits can be utilised.

Segment reporting

POP Mortgage Bank engages in mortgage bank-

ing operations. As the bank has only one busi-

ness segment, it does not present segment

reporting in its ﬁnancial statements.

Changes in accounting policies

Adoption of new IFRS standards, amendments

to standards and interpretations

The amendments to standards and interpre-

tations that came into effect in 2025 had no

impact on POP Mortgage Bank’s ﬁnancial state-

ments.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 22

Adoption of new IFRS standards,

amendments to standards and

interpretations in future ﬁnancial years

The standard amendments approved for appli-

cation in the ﬁnancial year beginning 1 January

2026 are not estimated to have an impact on

POP Mortgage Bank’s ﬁnancial statements.

POP Mortgage Bank intends to adopt IFRS 18

Presentation and Disclosures standard for the

ﬁnancial year commencing 1 January 2027, if the

standard has been approved for application in

the EU. The Standard shall be applied in periods

beginning on or after 1 January 2027, but its ear-

lier application is permitted. IFRS 18 supersedes

IAS 1 Presentation of Financial Statements. The

adoption of the standard will have an impact on

the presentation of POP Mortgage Bank’s ﬁnan-

cial statements. POP Mortgage Bank continues

to assess the impact of the standard during the

ﬁnancial year 2026.

Other standard amendments to be adopted later

are not expected to have a material impact on

POP Mortgage Bank’s ﬁnancial statements.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 23

NOTE 2 RISK MANAGEMENT

Principles of risk management and capital

adequacy management

POP Mortgage Bank is the mortgage bank and a

member credit institution of the amalgamation

of POP Banks and a subsidiary of the POP Bank

Centre coop. The central institution issues binding

instructions concerning risk and capital adequacy

management, corporate governance, and internal

control to the member credit institutions to secure

their solvency and capital adequacy. Furthermore,

common business controlling thresholds have been

established for the member institutions to ensure

that the risks taken by an individual member insti-

tution are within acceptable limits.

Risk and capital adequacy management is regu-

lated by EU legislation, Act on Credit Institutions

(610/2014), Act on the Amalgamation of Deposit

Banks (2010/599; hereinafter referred to as the

“Amalgamation Act”) and the standards, regula-

tions and guidelines issued by the Financial Super-

visory Authority. POP Mortgage Bank also com-

plies with the Act on Mortgage Banks and Covered

Bonds (151/2022).

The purpose of risk management is to ensure that

the bank does not take such risks in its operations

that would result in a material threat to the cap-

ital adequacy or solvency. The purpose of the risk

management process is to ensure that all signif-

icant risks resulting from business activities are

identiﬁed, assessed, measured, and monitored on

a regular basis and that they are proportionate to

the risk appetite capacity of POP Mortgage Bank.

The purpose of capital adequacy management is

to ensure the sufﬁcient amount, type and efﬁcient

use of the capital of POP Mortgage Bank. Capital

is held to cover the material risks arising from POP

Mortgage Bank’s business strategy and plan and to

secure the uninterrupted operation of POP Mort-

gage Bank in case of unexpected losses. The goal

is pursued through a documented and systematic

capital adequacy management process that is

integrally linked to the amalgamations and other

member credit institutions’ business planning and

management.

The central institution is responsible for the risk

and capital adequacy management of the POP

Bank Group. The central institution provides guid-

ance to the member credit institutions to ensure

risk management and supervises that the member

institutions operate in accordance with regulation,

their own rules, guidelines issued by the central

institution and in accordance with appropriate and

ethically acceptable procedures. The special reg-

ulations related to the operations of a mortgage

bank have been taken into account in the guidance

of the central cooperative and in the steering lim-

its and process requirements set for the business

operations of POP Mortgage Bank. The bank, within

limits set by conﬁrmed business risk thresholds,

carries its business risks independently in its oper-

ations and is liable for its capital adequacy. The

capital adequacy, liquidity coverage ratio and cus-

tomer risks of POP Mortgage Bank are supervised

both at the level of individual member institu-

tions and at the consolidated amalgamation level.

Violations of the risk management principles are

addressed in accordance with the agreed operat-

ing models.

POP Mortgage Bank conducts an extensive identi-

ﬁcation and evaluation of risks related to its oper-

ations and sets risk-bearing capacity to match

the total amount of the risks. In order to secure

the capital adequacy, bank sets risk-based capital

objectives and prepares a capital plan to achieve

these objectives. Calculation methods deﬁned by

the central institution’s risk monitoring function

are used when preparing the capital plan.

The most signiﬁcant risks associated with POP

Mortgage Bank’s operations are credit risk, liquidity

risk, interest rate risk and operational risk. The risk

strategy conﬁrmed by the Board of Directors of

the central institution outlines the risk appetite of

the operations, within which the Board of Directors

of the POP Mortgage Bank sets its own guidelines

and restrictions. Business activities are carried out

at a moderate risk level so that the risks can be

managed in full.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 24

Risk management is an essential part of the

internal controls of POP Mortgage Bank. The

purpose of internal controls is to ensure that the

institution complies with regulations, carries out

comprehensive risk management and operates

efﬁciently and reliably. Moreover, internal con-

trols serve to ensure that the objectives and goals

set for different levels of the amalgamation are

achieved in accordance with internal guidelines.

Organisation of risk and capital adequacy

management

POP Mortgage Bank’s Board of Directors conﬁrms

the objectives of the business operations, guide-

lines, limits to the risk levels of the operations as

well as the risk-taking authorities. The Board of

Directors is also responsible for proactive capi-

tal planning and adapting the capital adequacy

management planning and proactive capital

planning into reliable governance and guidance.

The Board of Directors assesses the appropriate-

ness, extent and reliability of capital adequacy

management. The Board of Directors sets the

target level for capital adequacy and conﬁrms the

level and structure of capital required by the risk

proﬁle. The executive management is responsible

for the risk management of the daily operations

within the scope of the risk limits and risk-taking

authority.

The executive management is responsible for the

practical implementation, continuous monitoring,

supervision and reporting of capital adequacy

and risk management to the Board of Directors

of the amalgamation. The executive management

also ensures that the responsibilities, authori-

zations, processes and reporting relationships

related to capital adequacy management have

been clearly deﬁned and sufﬁciently described

and that the employees are familiar with capi-

tal adequacy management and the related pro-

cesses and methods to the extent required by

their duties.

POP Mortgage Bank’s independent risk monitor-

ing is responsible for monitoring the risk limits and

capital adequacy in the business operations as

well as reporting them to the Board of Directors

and the independent risk management function

of the central institution of the amalgamation.

The assignment of Bonum Bank’s risk monitoring

function is to form a comprehensive view of the

risks included in the bank’s operations, develop

risk management methods and processes for

identifying, measuring, and monitoring risks in

accordance with the principles issued by the cen-

tral institution.

The centralized compliance function of the cen-

tral institution supervises that the bank complies

with applicable laws, decrees, instructions and

regulations issued by the authorities, their own

rules and the internal binding guidelines issued

by the central institution of the amalgamation in

its activities. As the central institution, POP Bank

Centre coop supervises the sufﬁciency and func-

tioning of the risk management systems in all the

member credit institutions in accordance with

section 17 of the Amalgamation Act. In addition,

the supervision of a mortgage bank takes into

account the requirements and special features of

the regulation related to the mortgage banking

business.

The principles, organisation and internal con-

trol measures of amalgamation’s risk and capi-

tal adequacy management are described in more

detail in Note 4 to the POP Bank Group’s ﬁnancial

statements. Material information regarding capi-

tal adequacy as speciﬁed in the Capital Require-

ments Regulation (EU575/2013) is presented in a

separate Pillar III report. Copies of the ﬁnancial

statements of the POP Bank Group are available

from the ofﬁce of the central institution, address

Hevosenkenkä 3, 02600 Espoo, Finland, and online

at www.poppankki.ﬁ.

Capital adequacy management

The objective of capital adequacy management

is to ensure that POP Mortgage Bank has an

adequate capital buffer to achieve its business

strategy and to cover the material risks arising

from them in all circumstances. In solvency man-

agement, POP Mortgage Bank complies with the

solvency management principles set by the central

cooperative of the amalgamation.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 25

Capital adequacy management is pursued through

a systematic capital adequacy management pro-

cess that is integrally linked to the amalgamation’s

and other member credit institutions’ business

planning and management. As part of the capital

adequacy management process the aim is to iden-

tify all material risks and assess their magnitude

and required capital levels.

Under the supervision of the central institution,

POP Mortgage Bank prepares its own capital plan

and stress tests on an annual basis using harmo-

nized principles deﬁned by the central institution.

The process ensures that POP Mortgage Bank’s

growth, proﬁtability and risk-bearing capacity

objectives are appropriate and consistent.

The most signiﬁcant capital requirements of POP

Mortgage Bank arise from receivables from inter-

mediary loans granted to the member banks of the

amalgamation of POP Banks. The amalgamation

applies the standardised approach for the calcula-

tion of the capital requirement for credit risk, and

the basic indicator approach for calculating the

capital requirement to the operational risk. POP

Mortgage Bank does not engage in trading activi-

ties.

POP Mortgage Bank’s own funds consist of share

capital, retained earnings and other non-restricted

reserves, less the deductible items in accordance

with the EU’s Capital Requirements Regulation (No.

575/2013).

POP Mortgage Bank releases the essential infor-

mation in terms of capital adequacy calculation

annually as part of its Board of Directors’ report

and notes to the ﬁnancial statements.

Business risks

Credit risk

POP Mortgage Bank’s most signiﬁcant risk is credit

and counterparty risk. Credit risk refers to a situa-

tion in which a counterparty cannot fulﬁl its con-

tractual obligations. POP Mortgage Bank’s credit

risk consist of intermediary loans granted to the

member banks of the amalgamation of POP Banks

and from derivatives.

POP Mortgage Bank engages in mortgage bank

operations under an intermediary loan model

established in accordance with the Act on Mort-

gage Credit Banks and Covered Bonds (151/2022).

Thus, the bank may issue secured bonds and use

the acquired funds to offer intermediary loans to

the member banks of the amalgamation. Under the

intermediary loan model, the mortgage-backed

loans provided as collateral for secured bonds

remain on the member banks’ balance sheets and

are not recognised on POP Mortgage Bank’s bal-

ance sheet. The risks associated with the mort-

gage-backed loans provided as collateral are not

transferred to POP Mortgage Bank. The loans are

recognised as collateral for the secured bonds

issued. The intermediary loans granted to member

banks are presented under “Receivables from credit

institutions” on the balance sheet.

POP Mortgage Bank is responsible for monitor-

ing the amount and adequacy of the eligible loan

portfolio in the POP Bank Group’s mortgage bank-

ing operations. The pool eligibility of collateral is

reviewed on a daily basis, based on the criteria of

the business operations and the Act on Mortgage

Credit Banks. POP Mortgage Bank has a framework

agreement with the member credit institutions of

the POP Bank Group on the issue of secured bonds

and the use of mortgage-backed loans on the

balance sheets of the member banks as collateral

for the bonds to be issued. Credit decisions, credit

management and collateral assessment are car-

ried out locally by the member banks, based on the

guidelines issued by the central institution. Loan

collateral is prudently valued at fair value, and mar-

ket valuations are monitored regularly using both

statistical models and good industry knowledge.

The valuation factors applied to collateral are con-

sistent across all the member credit institutions of

the amalgamation.

The amalgamation’s risk management and capi-

tal adequacy management are described in more

detail in Note 4 to POP Bank Group’s ﬁnancial

statements. Copies of the ﬁnancial statements

of the POP Bank Group are available online at

www.poppankki.ﬁ/en or from the ofﬁce of the

POP Bank Centre coop, address Hevosenkenkä 3,

02600 Espoo, Finland.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 26

Market risks

Market risk refers to the effect of changes in inter-

est rates or other market prices on the bank’s result

and capital adequacy. The market risk classes are

interest rate, currency, equity and commodity risk.

The objective of market risk management is to

identify and assess market risks related to the

business operations, mitigate the risks to an

acceptable level and timely monitoring of the risk

exposures. Within the amalgamation of POP Banks,

the central institution’s Board of Directors conﬁrms

the market risk strategy and market risk manage-

ment guidelines, which create the foundation for

market risk management at POP Mortgage Bank.

In accordance with the Act on Mortgage Credit

Banks and Covered Bonds, the business of POP

Mortgage Bank is to issue euro-denominated

secured bonds and to grant intermediate loans to

the member credit banks of the Amalgamation of

POP Banks. POP Mortgage Bank does not have a

trading book, and it invests its excess liquid assets

as deposits in Bonum Bank Plc, a member of the

Amalgamation of POP Banks.

POP Mortgage Bank does not take stock risk, com-

modity risk or currency risk in its operations. Both

the secured bonds and intermediary loans issued

are denominated in euros. In its operations, POP

Mortgage Bank uses interest rates derivatives,

where necessary, to match the interest cash ﬂows

of issued bonds and intermediary loans to reduce

the interest rate risk.

The interest rate risk is the most signiﬁcant market

risk in POP Mortgage Bank’s business operations.

Interest rate risk refers to the effect of changes in

interest rate levels on the market value or net inter-

est income of balance sheet items and off-balance

sheet items. The banking book consists of loans

and receivables from credit institutions and mar-

ket-based ﬁnancing.

Interest rate risk arises from differences in the

interest terms of receivables and liabilities and

mismatches in interest rate repricing and maturity

dates. The objective of interest rate risk manage-

ment is to stabilise the interest rate risk involved

in the bank’s balance sheet to a level at which the

effect of open risk is minor in all circumstances and

meet the regulatory requirements set for mortgage

banks as well as stricter internal risk limits. Inter-

est rate risk is managed primarily by planning the

balance sheet structure, such as the interest rate

ﬁxing or maturity of assets and liabilities or alter-

natively by using interest rate derivatives for hedg-

ing purposes. The information on the derivatives

have been disclosed in Note 15.

Interest rate risk in POP Mortgage Bank is mon-

itored using the net present value method and

the net interest income model. The net present

value method measures how changes in interest

rates change the calculated market value of bal-

ance sheet items. In the net present value method,

the market values of each balance sheet item are

expected to be formed as the present value of the

cash ﬂows generated by the instrument in ques-

tion. The net interest income model predicts the

future net interest income as market interest rates

change. The net interest income forecast is cal-

culated at the reporting date using forward inter-

est rates available in the market for the following

ﬁve years. The amount of interest rate risk taken

is assessed with the effect of diverse interest rate

shocks on the net interest income and net present

value.

The interest rate sensitivity analysis of the banking book

Impact to interest margin 31 Dec 2025 31 Dec 2024

(EUR 1,000) Change 1-12 mo. 1-12 mo.

Interest rate risk +2% -point -216 -242

Interest rate risk -2% -point 218 246

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 27

The impact of the interest rate risk on operat-

ing income has been calculated as a change to

the 12-month forecast of the net interest income,

assuming two percentage point upward or down-

ward parallel interest rate level shift. The effect

on own funds has been determined through pres-

ent value change in balance sheet with the same

interest rate shocks.

Liquidity risks

Liquidity risk refers to the POP Mortgage Bank’s

ability to fulﬁl its commitments. Liquidity risk can

be divided into short-term liquidity risk and long-

term structural ﬁnancing risk. Short-term liquidity

risk refers to a situation in which the bank cannot

without difﬁculty fulﬁl its liabilities to pay. Struc-

tural ﬁnancing risk refers to a reﬁnancing risk that

arises from the difference in the maturities of

balance sheet receivables and liabilities.

The central institution of amalgamation applies

a permission by the Finnish Financial Supervisory

Authority to decide that the requirements laid

down in the sixth part of the EU Capital Require-

ments Regulation and EU’s statutory orders based

on the Regulation are not applied to its member

credit institutions. According to the permission,

the regulatory requirements for liquidity risk are

met at the amalgamation level only. The central

credit institution, Bonum Bank Plc, is responsible

for meeting the regulatory requirements.

Bonum Bank as the central credit institution is

responsible for coordinating the implementation

of the liquidity strategy at the amalgamation

level, and it monitors and supervises the liquidity

strategy implemented by the member credit insti-

tutions. The central credit institution coordinates

the payment transactions of the member credit

institutions and the acquisition and balancing

of liquidity in the amalgamation. The task of the

amalgamation’s independent risk control function

is to supervise and monitor the liquidity risk.

Maturity of ﬁnancial liabilities 31 Dec 2025

(EUR 1,000)

Less than

3 months

3-12

months

1-5

years

Over 5

years Total

Debt securities issued to the public - - 502,633 - 502,633

Derivatives - - 1,023 - 1,023

Total - - 503,656 - 503,656

Maturity of ﬁnancial liabilities 31 Dec 2024

(EUR 1,000)

Less than

3 months

3-12

months

1-5

years

Over 5

years Total

Debt securities issued to the public - 249,329 506,741 - 756,069

Derivatives - 587 - - 587

Total - 249,915 506,741 - 756,656

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 28

Operational risks

Operational risks refer to ﬁnancial losses or other

harmful consequences to business that may be

caused by internal inadequacies or errors in sys-

tems, processes, procedures and the actions of

personnel, or by external factors affecting the

business. The operational risk of POP Mortgage

Bank also arises from outsourced operations and

major business projects.

The objective of the management of operational

risks is to identify essential operational risks in

the business operations and minimise their mate-

rialisation and effects. The objective is pursued

by continuous personnel development, as well as

comprehensive operating instructions and internal

control measures, such as by segregating prepa-

ration, decision-making, implementation and con-

trol from each other, whenever possible.

The operational risks associated with the key

products, services, functions, processes and sys-

tems are identiﬁed in the assessment process

concerning a new product or service carried out

by the business function and reviewed by the

compliance and risk control function. The bank

carries out annual self-assessment of operational

risks on the basis of the risk assessments it per-

forms, in which the monitoring of operational risk

incidents is applied. Some of the losses caused by

operational risks are hedged through insurance.

Risks caused by malfunctions of information sys-

tems are prepared for by continuity planning.

Operational risks are monitored by collecting

information on operational risk events, ﬁnancial

losses and any malpractices encountered. The

executive management utilises reporting pro-

duced by internal control on compliance with

instructions and information on changes in the

operating environment.

Strategic risk

Strategic risk refers to losses caused by choos-

ing wrong strategy or business model in rela-

tion to the development of the bank’s operating

environment. The losses may also be caused by

unsuccessful implementation of strategy, unex-

pected changes in the competitive environment

or responding too slowly to changes.

In accordance with the strategic objectives spec-

iﬁed in the business plan, POP Mortgage Bank

must be able to secure the long-term funding

needed by the banks within the amalgamation.

Potential strategic threats have been considered

when estimating capital needs.

POP Mortgage Bank aims to minimise strategic

risks by means of regular updates of its strate-

gic and annual plans. Analyses of the condition

and development of the POP Bank Group, as

well as other analyses and estimates concerning

the development of the sector, competition and

ﬁnancial operating environment are utilized in the

planning.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 29

NOTE 3 INTEREST INCOME AND EXPENSES

NOTE 4 NET INCOME FROM HEDGE ACCOUNTING

(EUR 1,000) 1 Jan–31 Dec 2025 1 Jan–31 Dec 2024

Interest income

Loans and receivables from credit institutions 22,302 25,288

Total interest income 22,302 25,288

Interest expenses

Liabilities to credit institutions -333 -221

Debt securities issued to the public -21,457 -17,520

Hedging derivatives of liabilities 1,566 -5,826

Total interest expenses -20,224 -23,567

Net interest income 2,077 1,721

(EUR 1,000) 1 Jan–31 Dec 2025 1 Jan–31 Dec 2024

Change in hedging instruments' fair value -3,665 3,204

Change in hedged items' fair value 3,927 -3,408

Net income from hedge accounting 262 -204

Derivatives and hedge accounting are explained in more detail in Note 15.

NOTE 5 PERSONNEL EXPENSES

Personnel costs consist of administrative fees. POP Mortgage Bank has no employees.

(EUR 1,000) 1 Jan–31 Dec 2025 1 Jan–31 Dec 2024

Wages and salaries -16 -18

Total personnel expenses -16 -18

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 30

NOTE 6 OTHER OPERATING EXPENSES

(EUR 1,000) 1 Jan–31 Dec 2025 1 Jan–31 Dec 2024

Purchased services -540 -515

ICT expenses -153 -169

Audit fees -22 -18

Other operating expenses -52 -54

Total other operating expenses -767 -757

Audit fees

Statutory audit -22 -18

Total audit fees -22 -18

NOTE 7 DEPRECIATION

(EUR 1,000) 1 Jan–31 Dec 2025 1 Jan–31 Dec 2024

Intangible assets -116 -116

Total depreciation -116 -116

NOTE 8 INCOME TAX

The bank has unused tax losses totalling EUR 52,3 (1,519) thousand after deducting the ﬁscal year’s

result, which will expire in 2031. No deferred tax assets have been recognised for these losses.

Reconciliation between tax expense in the income statement and tax expense calculated

using the applicable tax rate

(EUR 1,000) 1 Jan–31 Dec 2025 1 Jan–31 Dec 2024

Prot before tax 1,440 626

Income tax rate 20% 20%

Tax calculated at the tax rate -288 -125

+ Use of tax losses carried forward from previous years 288 125

Tax expense in the income statement - -

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 31

(EUR 1,000) 1 Jan–31 Dec 2025 1 Jan–31 Dec 2024

Financial assets

At amortised cost

Interest income and expenses 22,302 25,288

Total 22,302 25,288

NOTE 9 NET INCOME AND EXPENSES OF FINANCIAL ASSETS AND

FINANCIAL LIABILITIES BY MEASUREMENT CATEGORY

(EUR 1,000) 1 Jan–31 Dec 2025 1 Jan–31 Dec 2024

Financial liabilities

At amortised cost

Interest income and expenses -21,790 -17,741

Total -21,790 -17,741

At fair value through prot or loss

Derivatives and hedge accounting

Fair value gains and losses 262 -204

Interest income and expenses 1,566 -5,826

Total 1,828 -6,030

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 32

NOTE 10 CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES

Financial assets 31 Dec 2025

(EUR 1,000)

At amortised

cost

Hedging

derivatives

Total carrying

amount

Loans and receivables from credit institutions 527,689 - 527,689

Derivative contracts - 4,643 4,643

Financial assets total 527,689 4,643 532,332

Other assets 8,260

Total assets 540,593

Financial assets 31 Dec 2024

(EUR 1,000)

At amortised

cost

Hedging

derivatives

Total carrying

amount

Loans and receivables from credit institutions 779,737 - 779,737

Derivative contracts - 7,872 7,872

Financial assets total 779,737 7,872 787,609

Other assets 10,645

Total assets 798,254

Financial liabilities 31 Dec 2025

(EUR 1,000)

At amortised

cost

Hedging

derivatives

Total carrying

amount

Liabilities to credit institutions 9,840 - 9,840

Derivative contracts

- 1,023 1,023

Debt securities issued to the public*

502,633 - 502,633

Financial liabilities total 512,473 1,023 513,496

Other liabilities 8,176

Total liabilities 521,672

Financial liabilities 31 Dec 2024

(EUR 1,000)

At amortised

cost

Hedging

derivatives

Total carrying

amount

Liabilities to credit institutions 13,440 - 13,440

Derivative contracts - 587 587

Debt securities issued to the public* 756,069 - 756,069

Financial liabilities total 769,509 587 770,096

Other liabilities 10,677

Total liabilities 780,773

*Debt securities issued to the public include hedge adjustments of EUR 3,806 thousand. The hedged items included in the balance sheet items

are presented in more detail in Note 15.

*Debt securities issued to the public include hedge adjustments of EUR 7,734 thousand. The hedged items included in the balance sheet items

are presented in more detail in Note 15.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 33

NOTE 11 FAIR VALUES AND VALUATION TECHNIQUES OF FINANCIAL

ASSETS AND FINANCIAL LIABILITIES

Financial assets measured at fair value 31 Dec 2025

(EUR 1,000) Level 1 Level 2 Level 3

Total fair

value

Carrying

amount

Derivatives - 4,643 - 4,643 4,643

Total - 4,643 - 4,643 4,643

Financial liabilities measured at fair value 31 Dec 2025

(EUR 1,000) Level 1 Level 2 Level 3

Total fair

value

Carrying

amount

Derivatives - 1,023 - 1,023 1,023

Total - 1,023 - 1,023 1,023

Financial assets measured at fair value 31 Dec 2024

(EUR 1,000) Level 1 Level 2 Level 3

Total fair

value

Carrying

amount

Derivatives - 7,872 - 7,872 7,872

Total - 7,872 - 7,872 7,872

Financial liabilities measured at fair value 31 Dec 2024

(EUR 1,000) Level 1 Level 2 Level 3

Total fair

value

Carrying

amount

Derivatives - 587 - 587 587

Total - 587 - 587 587

Fair value hierarchy levels of items recurrently recognised at fair value

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 34

Fair value hierarchy levels of items recognised at amortised cost

Assets measured at amortised cost 31 Dec 2025

(EUR 1,000) Level 1 Level 2 Level 3

Total fair

value

Carrying

amount

Loans and receivables from

credit institutions

- 541,659 - 541,659 527,689

Total - 541,659 - 541,659 527,689

Liabilities measured at amortised cost 31 Dec 2025

(EUR 1,000) Level 1 Level 2 Level 3

Total fair

value

Carrying

amount

Debt securities issued to

the public

- 504,775 - 504,775 502,633

Total - 504,775 - 504,775 502,633

Assets measured at amortised cost 31 Dec 2024

(EUR 1,000) Level 1 Level 2 Level 3

Total fair

value

Carrying

amount

Loans and receivables from

credit institutions

- 801,317 - 801,317 779,737

Total - 801,317 - 801,317 779,737

Liabilities measured at amortised cost 31 Dec 2024

(EUR 1,000) Level 1 Level 2 Level 3

Total fair

value

Carrying

amount

Debt securities issued to

the public

- 767,622 - 767,622 756,069

Total - 767,622 - 767,622 756,069

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 35

Fair value determination of ﬁnancial assets and ﬁnancial liabilities

Financial assets and liabilities are recognised in balance sheet at fair value or amortised cost. Classiﬁ-

cation and valuation of ﬁnancial instruments are described in more detail in Note 1.

Fair value hierarchies

Level 1 includes ﬁnancial instruments that are measured on the basis of quotations obtained from liq-

uid markets. A market is considered as liquid if quotations are regularly available. This group included

all securities with publicly quoted prices.

Level 2 includes ﬁnancial instruments measures using generally approved measurement techniques or

models which are based on assumptions made on the basis of observable market prices. For example,

the fair value of a ﬁnancial instrument allocated to Level 2 may be based on the value derived from the

market quotation of components of an instrument. This group includes, among other things, interest

rate derivatives, including interest rate swaps, as well as other instruments not traded in liquid markets.

Publicly available valuation curves are used for the valuation of interest rate derivatives.

Level 3 includes ﬁnancial instruments and other assets that are not measured using market quotations

or values determined on the basis of observable market prices using measurement techniques or mod-

els. The assumptions applied in the measurement techniques often involve insecurity. The fair value of

assets allocated to Level 3 is often based on price information obtained from a third party.

Transfers between fair value hierarchy levels

Transfers between hierarchy levels are considered to have taken place on the date of the occurrence of

the event that caused the transfer or the date when the circumstances changed. There were no trans-

fers between levels during the reporting period.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 36

NOTE 12 LOANS AND RECEIVABLES FROM CREDIT INSTITUTIONS

(EUR 1,000) 31 Dec 2025 31 Dec 2024

Deposits

Repayable on demand 27,689 29,737

Intermediary loans 500,000 750,000

Total 527,689 779,737

NOTE 13 INTANGIBLE ASSETS

Changes in intangible assets 2025

(EUR 1,000) Information systems Total

Acquisition cost 1 Jan 582 582

+ Increases - -

+/- Transfers - -

Acquisition cost 31 Dec 582 582

Accumulated depreciation 1 Jan -301 -301

- Depreciation -116 -116

Accumulated depreciation 31 Dec -417 -417

Carrying amount 1 Jan 281 281

Carrying amount 31 Dec 165 165

Changes in intangible assets 2024

(EUR 1,000) Information systems Total

Acquisition cost 1 Jan 582 582

Acquisition cost 31 Dec 582 582

Accumulated depreciation 1 Jan -184 -184

- Depreciation -116 -116

Accumulated depreciation 31 Dec -301 -301

Carrying amount 1 Jan 398 398

Carrying amount 31 Dec 281 281

NOTE 14 OTHER ASSETS

(EUR 1,000) 31 Dec 2025 31 Dec 2024

Accrued income and prepaid expenses

Interest 7,994 10,291

Other 101 72

Other assets total 8,095 10,363

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 37

NOTE 15 DERIVATIVES CONTRACTS AND HEDGE ACCOUNTING

POP Mortgage bank hedges its interest rate risk against fair value changes primarily using interest rate

swaps. With interest rate swaps, the interest rates of variable-rate intermediate loans and ﬁxed-rate

issued bonds are swapped to the same interest basis. As a result of the hedging, changes in market

interest rates have a minimal impact on net interest income.

Hedge accounting is applied to fair value hedging. During the period, there were no new issuances.

Fair value 31 Dec 2025 Fair value 31 Dec 2024

(EUR 1,000) Assets Liabilities Assets Liabilities

Derivatives

Fair value hedging 4,643 1,023 7,872 587

Derivatives total 4,643 1,023 7,872 587

Interest rate risk 31 Dec 2025 Interest rate risk 31 Dec 2024

(EUR 1,000)

Carrying

amount

of hedged

liabilities

of which

accumulated

amount of fair

value hedge

adjustment

Carrying

amount

of hedged

liabilities

of which

accumulated

amount of fair

value hedge

adjustment

Micro hedge

Hedged debt securities issued to the public 503,806 3,806 757,734 7,734

Liabilities 503,806 3,806 757,734 7,734

Interest rate risk

Fair value hedging

(EUR 1,000) 1 Jan–31 Dec 2025 1 Jan–31 Dec 2024

Change in the fair value of the derivative contract -3,668 3,205

Change in the fair value of the hedged item 3,927 -3,408

Hedge ineffectiveness recognized in the income statement 259 -203

Derivatives and hedged items covered by hedge accounting

Effects of hedge accounting on ﬁnancial position and result

Hedging interest rate derivatives

Fair value hedge

Proﬁts and losses from hedge accounting and hedge ineffectiveness

The nominal value of the ﬁxed-rate bond subject to fair value hedging at the end of reporting period

was EUR 500,000 (750,000) thousand. This item is included on the balance sheet under “Debt securi-

ties issued to the public”. The nominal values of derivative instruments correspond to the nominal val-

ues of the objects to be hedged.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 38

31 Dec 2025

(EUR 1,000)

Nominal value / Remaining maturity

Less than

1 year

1-5

years

More than

5 years Total

Instruments hedging interest rate risk - 500,000 - 500,000

31 Dec 2024

(EUR 1,000)

Nominal value / Remaining maturity

Less than

1 year

1-5

years

More than

5 years Total

Instruments hedging interest rate risk 250,000 500,000 - 750,000

Maturity proﬁle of the nominal amount of hedging interest rate risk

The maturities of the hedged items fully correspond to the maturities of the hedging contracts.

NOTE 16 DEBT SECURITIES ISSUED TO THE PUBLIC

(EUR 1,000) 31 Dec 2025 31 Dec 2024

Balance 1 Jan 756,069 503,259

Debt securities issued, increase - 249,048

Total increase - 249,048

Debt securities issued, decrease -250,000 -

Total decrease -250,000 -

Total changes in cash ow -250,000 249,048

Valuation -3,437 3,762

Balance at the end of period 502,633 756,069

(EUR 1,000) 31 Dec 2025 31 Dec 2024

Covered bonds 498,826 748,336

Change in fair value due to hedge accounting 3,806 7,734

Total debt securities issued to the public 502,633 756,069

Bond Issue date Due date Interest

Nominal

(EUR 1,000) Currency

POPA 26042028 26 Apr 2023 26 Apr 2028 3.625% / xed 250,000 EUR

POPA15102029 15 Oct 2024 15 Oct 2029 2.875% / xed 250,000 EUR

Debt securities issued to the public

Amounts recognised in statement of cash ﬂows

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 39

Amounts which are not offset but are

subject to enforceable master netting

arrangements or similar agreements

(EUR 1,000)

Carrying

amount in

balance

sheet,

gross

Recognised

nancial

liabilities

offset in

balance

sheet,

gross

Carrying

amount in

balance

sheet, net

Enforcea-

ble master

netting ar-

rangement

Financial

instruments

held as

collateral*

Cash held

as collateral Net amount

Assets

Derivatives 9,805 - 9,805 -126 -9,679 - -

Total 9,805 - 9,805 -126 -9,679 - -

Liabilities

Derivatives 1,023 - 1,023 -126 - - 898

Total 1,023 - 1,023 -126 - - 898

Amounts which are not offset but are

subject to enforceable master netting

arrangements or similar agreements

(EUR 1,000)

Carrying

amount in

balance

sheet,

gross

Recognised

nancial

liabilities

offset in

balance

sheet,

gross

Carrying

amount in

balance

sheet, net

Enforcea-

ble master

netting ar-

rangement

Financial

instruments

held as

collateral

Cash held

as collateral

Net

amount*

Assets

Derivatives 14,172 - 14,172 -1,086 -13,440 - -

Total 14,172 - 14,172 -1,086 -13,440 - -

Liabilities

Derivatives 1,086 - 1,086 -1,086 - - -

Total 1,086 - 1,086 -1,086 - - -

NOTE 17 OFFSETTING

Offsetting of ﬁnancial assets and liabilities

The table below presents items that, in certain circumstances, can be settled on a net basis, even

though they are presented on a gross basis in the balance sheet. The netting arrangement is based on

a mutually enforceable general netting agreement (ISDA).

*The total amount of cash received as collateral is EUR 9,840 thousand. The table does not take into account overcollateralization.

*The total in the “Net” column of the table does not equal the sum of the preceding columns due to differences between the valuation and collat-

eral review dates. The collateral is determined such that, at the time of the review, the collateral received fully neutralises the counterparty risk.

31 Dec 2025

31 Dec 2024

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 40

(EUR 1,000) 31 Dec 2025 31 Dec 2024

Accrued expenses

Interest payable 7,649 9,995

Other accrued expenses 527 681

Total provisions and other liabilities 8,176 10,677

NOTE 18 PROVISIONS AND OTHER LIABILITIES

(EUR 1,000) 31 Dec 2025 31 Dec 2024

Share capital 10,000 10,000

Reserve for invested non-restricted equity 9,000 9,000

Retained earnings

Prot (loss) for previous nancial years -1,519 -2,145

Prot (loss) for the period 1,440 626

Total equity 18,921 17,481

NOTE 19 EQUITY CAPITAL

Share capital

POP Mortgage Bank has one class of shares, and

each share has one vote and equal rights to div-

idend. Shares have no nominal value. All issued

shares have been fully paid. The total number of

shares issued is 500.

There are no restrictions on the use of equity

items.

The share subscription price received in connec-

tion with the share issues is entered in share cap-

ital to the extent that it has not been recorded in

the invested unrestricted equity reserve according

to the share issue decision.

Invested unrestricted equity reserve

The invested unrestricted equity reserve includes

the subscription price of shares to the extent that

it has not been recorded in share capital accord-

ing to speciﬁc resolution.

Retained earnings

Retained earnings are earnings accrued in previ-

ous ﬁnancial years that have not been transferred

to equity reserves or distributed to shareholders.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 41

(EUR 1,000) 31 Dec 2025 31 Dec 2024

Given on behalf of own liabilities and commitments

Mortgage-backed loan portfolio* 681,134 1,028,621

Total collateral given 681,134 1,028,621

Collateral received

Collateral received from member banks of the amalgamation* 675,134 1,022,621

Other 9,840 13,440

Total collaterals received 684,974 1,036,061

NOTE 20 COLLATERAL GIVEN AND RECEIVED

*The collateral provided and received by POP Mortgage Bank is related to secured bonds issued under the EUR 1.5 billion issuance pro-

gramme, as well as the interim loans based on it. The collateral given and received consists of loans secured by real estate.

Other collateral is related to derivatives and are collateral given and received in cash.

NOTE 21 DISTRIBUTABLE FUNDS

(EUR 1,000) 31 Dec 2025 31 Dec 2024

Prot (loss) for the period 1,440 626

Prot (loss) for previous nancial years -1,519 -2,145

Reserve for invested non-restricted equity 9,000 9,000

Distributable funds total 8,921 7,481

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 42

NOTE 22 RELATED PARTY DISCLOSURES

The related parties of POP Mortgage Bank comprise the members of the company’s Board of Direc-

tors and Executive Group and members of their immediate families. In addition, related parties include

POP Mortgage Bank’s parent entity POP Bank Centre coop, as well as its managing director and deputy

managing director. Furthermore, related parties include those entities over which key persons included

in the management and/or members of their immediate families have control or joint control. The related

parties also include the entities belonging to the POP Bank Centre Group, speciﬁcally POP Bank Centre

coop and Bonum Bank Plc.

NOTE 23 EVENTS AFTER THE CLOSING DATE

POP Mortgage Bank’s Board of Directors is not aware of other events having taken place after the clos-

ing date that would have a material impact on the information presented in the ﬁnancial statements.

(EUR 1,000) 31 Dec 2025 31 Dec 2024

Assets

Loans 27,684 29,733

Liabilities

Debt securities issued to the public - 8,000

Income statement

Income statement 648 535

Other operating expenses 191 186

Business transactions with related party companies

Salaries and remuneration

(EUR 1,000) 31 Dec 2025 31 Dec 2024

Juha Niemelä, Chairman of the Board 5 6

Matti Vainionpää, Vice Chairman of the Board 5 6

Marja Pajulahti, Member of the Board 5 6

Total 16 18

Compensation to members of the Board

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 43

SIGNATURES TO THE FINANCIAL STATEMENTS AND BOARD OF

DIRECTORS’ REPORT

The ﬁnancial statements, prepared in compliance with the applicable ﬁnancial statement framework

give a true and fair view of POP Mortgage Bank’s assets, liabilities, ﬁnancial position, and proﬁt or loss.

The Board of Directors’ report contains an account giving a true view of the business development and

performance of the POP Mortgage Bank, as well as a description of the most signiﬁcant risks, uncer-

tainties, and other relevant aspects of the company’s status.

Espoo 13 February 2026

Board of Directors of POP Mortgage Bank

Auditor’s note

A report on the audit performed has been issued today.

Helsinki 13

February 2026

KPMG Oy Ab

Audit Firm

Henrik Snellman

Authorised Public Accountant, APA

Juha Niemelä

Chairman of the Board

Marja Pajulahti

Member of the Board

Timo Hulkko

CEO

Matti Vainionpää

Vice Chairman of the Board

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 44

AUDITOR’S REPORT

To the Annual General Meeting of POP Mortgage

Bank Plc

Report on the Audit of the Financial

Statements

Opinion

We have audited the ﬁnancial statements of

POP Mortgage Bank Plc (business identity code

3236645-3) for the year ended 31 December

2025. The ﬁnancial statements comprise balance

sheet, income statement, statement of changes in

equity, cash ﬂow statement and notes, including a

material accounting policy information.

In our opinion the ﬁnancial statements give a true

and fair view of the bank’s ﬁnancial performance,

ﬁnancial position and cash ﬂows in accordance

with IFRS Accounting Standards as adopted by

the EU and comply with statutory requirements.

Our opinion is consistent with the additional

report submitted to the Board of Directors.

Basis for Opinion

We conducted our audit in accordance with

good auditing practice in Finland. Our responsi-

bilities under good auditing practice are further

described in the Auditor’s Responsibilities for the

Audit of the Financial Statements section of our

report.

We are independent of the company in accord-

ance with the ethical requirements that are appli-

cable in Finland and are relevant to our audit, and

we have fulﬁlled our other ethical responsibilities

in accordance with these requirements.

We have not provided any non-audit services to

POP Mortgage Bank Plc.

We believe that the audit evidence we have

obtained is sufﬁcient and appropriate to provide a

basis for our opinion.

Materiality

The scope of our audit was inﬂuenced by our

application of materiality. The materiality is

determined based on our professional judge-

ment and is used to determine the nature, timing

and extent of our audit procedures and to eval-

uate the effect of identiﬁed misstatements on

the ﬁnancial statements as a whole. The level of

materiality we set is based on our assessment of

the magnitude of misstatements that, individually

or in aggregate, could reasonably be expected to

have inﬂuence on the economic decisions of the

users of the ﬁnancial statements. We have also

taken into account misstatements and/or possible

misstatements that in our opinion are material for

qualitative reasons for the users of the ﬁnancial

statements.

Key Audit Matters

Key audit matters are those matters that, in our

professional judgment, were of most signiﬁcance

in our audit of the ﬁnancial statements of the

current period. These matters were addressed in

the context of our audit of the ﬁnancial state-

ments as a whole, and in forming our opinion

thereon, and we do not provide a separate opinion

on these matters. The signiﬁcant risks of material

misstatement referred to in the EU Regulation No

537/2014 point (c) of Article 10(2) are included in

the description of key audit matters below.

We have also addressed the risk of management

override of internal controls. This includes consid-

eration of whether there was evidence of man-

agement bias that represented a risk of material

misstatement due to fraud.

This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the re-

port is legally binding.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 45

The key audit matter

How the matter was addressed in the audit

Receivables from credit institutions, Debt securities issued to the public

(accounting policies, notes 10, 11, 12, 16 and 20 to ﬁnancial statements)

● Receivables from credit institutions, EUR

528 million, and Debt securities issued to

the public, EUR 503 million, are signiﬁcant

items on the POP Mortgage Bank’s balance

sheet. Receivables from credit institutions

mainly include intermediary loans issued to

POP Bank Group’s member banks, and Debt

securities issued to the public comprise

covered bonds.

● In the intermediary loan model, POP

Mortgage Bank issues covered bonds and

provides POP banks with intermediary

loans against property mortgages. The

mortgage-backed loans included in the

cover pool constituting the collateral for the

covered bonds are recorded on the balance

sheets of POP banks.

● POP Mortgage Bank manages the bond

but also collaterals given and received, as

well as intermediary loans. The company is

responsible for ensuring that the collaterals

comply with the regulatory requirements at

all times.

● Due to the signiﬁcance of the carrying

amounts of Receivables from credit insti-

tutions and Debt securities issued to the

public, Receivables from credit institutions

and Debt securities issued to the public are

addressed as a key audit matter.

● We evaluated the intermediary loan process

of POP Mortgage Bank, including provision

of loans to POP banks, collateral manage-

ment for intermediary loans (cover pool) and

bond register management.

● The main areas of the audit were the

assessment of the monitoring process of

collateral valuations for covered bonds

using data analyses, and inspection of

intermediary loan contracts on a sample

basis.

● Furthermore, we considered the appro-

priateness of the notes provided by POP

Mortgage Bank in respect of Receivables

from credit institutions and Debt securities

issued to the public.

Responsibilities of the Board of Directors

and the Managing Director for the Financial

Statements

The Board of Directors and the Managing Direc-

tor are responsible for the preparation of ﬁnan-

cial statements that give a true and fair view

in accordance with IFRS Accounting Standards

as adopted by the EU and that ﬁnancial state-

ments comply with statutory requirements. The

Board of Directors and the Managing Director are

also responsible for such internal control as they

determine is necessary to enable the preparation

of ﬁnancial statements that are free from mate-

rial misstatement, whether due to fraud or error.

In preparing the ﬁnancial statements, the Board of

Directors and the Managing Director are respon-

sible for assessing the company’s ability to con-

tinue as a going concern, disclosing, as applicable,

matters relating to going concern and using the

going concern basis of accounting. The ﬁnancial

statements are prepared using the going concern

basis of accounting unless there is an intention

to liquidate the company or cease operations, or

there is no realistic alternative but to do so.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 46

Auditor’s Responsibilities for the Audit of the

Financial Statements

Our objectives are to obtain reasonable assurance

about whether the ﬁnancial statements as a whole

are free from material misstatement, whether due

to fraud or error, and to issue an auditor’s report

that includes our opinion. Reasonable assurance

is a high level of assurance, but is not a guarantee

that an audit conducted in accordance with good

auditing practice will always detect a material

misstatement when it exists. Misstatements can

arise from fraud or error and are considered mate-

rial if, individually or in the aggregate, they could

reasonably be expected to inﬂuence the economic

decisions of users taken on the basis of the ﬁnan-

cial statements.

As part of an audit in accordance with good audit-

ing practice, we exercise professional judgment

and maintain professional scepticism throughout

the audit. We also:

● Identify and assess the risks of material

misstatement of the ﬁnancial statements,

whether due to fraud or error, design and

perform audit procedures responsive to

those risks, and obtain audit evidence that is

sufﬁcient and appropriate to provide a basis

for our opinion. The risk of not detecting a

material misstatement resulting from fraud

is higher than for one resulting from error, as

fraud may involve collusion, forgery, inten-

tional omissions, misrepresentations, or the

override of internal control.

● Obtain an understanding of internal control

relevant to the audit in order to design

audit procedures that are appropriate in the

circumstances, but not for the purpose of

expressing an opinion on the effectiveness of

the company’s internal control.

● Evaluate the appropriateness of accounting

policies used and the reasonableness of

accounting estimates and related disclosures

made by management.

● Conclude on the appropriateness of the

Board of Directors’ and the Managing

Director’s use of the going concern basis of

accounting and based on the audit evidence

obtained, whether a material uncertainty

exists related to events or conditions that

may cast signiﬁcant doubt on the company’s

ability to continue as a going concern. If we

conclude that a material uncertainty exists,

we are required to draw attention in our

auditor’s report to the related disclosures in

the ﬁnancial statements or, if such disclo-

sures are inadequate, to modify our opinion.

Our conclusions are based on the audit evi-

dence obtained up to the date of our auditor’s

report. However, future events or conditions

may cause the company to cease to continue

as a going concern.

● Evaluate the overall presentation, structure

and content of the ﬁnancial statements,

including the disclosures, and whether the

ﬁnancial statements represent the underlying

transactions and events so that the ﬁnancial

statements give a true and fair view.

We communicate with those charged with govern-

ance regarding, among other matters, the planned

scope and timing of the audit and signiﬁcant audit

ﬁndings, including any signiﬁcant deﬁciencies in

internal control that we identify during our audit.

We also provide those charged with governance

with a statement that we have complied with rele-

vant ethical requirements regarding independence,

and communicate with them all relationships and

other matters that may reasonably be thought to

bear on our independence, and where applicable,

related safeguards.

From the matters communicated with those

charged with governance, we determine those

matters that were of most signiﬁcance in the

audit of the ﬁnancial statements of the current

period and are therefore the key audit matters.

We describe these matters in our auditor’s report

unless law or regulation precludes public disclo-

sure about the matter or when, in extremely rare

circumstances, we determine that a matter should

not be communicated in our report because the

adverse consequences of doing so would reason-

ably be expected to outweigh the public interest

beneﬁts of such communication.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 47

Other Reporting Requirements

Information on our audit engagement

We were ﬁrst appointed as auditors by the

Annual General Meeting in 2021 and our

appointment represents a total period of unin-

terrupted engagement of 5 years.

Other Information

The Board of Directors and the Managing Direc-

tor are responsible for the other information. The

other information comprises the report of the

Board of Directors.

Our opinion on the ﬁnancial statements does not

cover the other information.

In connection with our audit of the ﬁnancial

statements, our responsibility is to read the other

information and, in doing so, consider whether

the other information is materially inconsistent

with the ﬁnancial statements or our knowledge

obtained in the audit, or otherwise appears to

be materially misstated. Our responsibility also

includes considering whether the report of the

Board of Directors has been prepared in compli-

ance with the applicable provisions.

In our opinion, the information in the report of

the Board of Directors is consistent with the

information in the ﬁnancial statements and the

report of the Board of Directors has been pre-

pared in compliance with the applicable provi-

sions.

If, based on the work we have performed, we

conclude that there is a material misstatement

of the report of the Board of Directors, we are

required to report that fact. We have nothing to

report in this regard.

Helsinki, 13 February 2026

KPMG OY AB

Audit Firm

Henrik Snellman

Authorised Public Accountant, APA

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 48

INDEPENDENT AUDITOR’S REPORT ON THE ESEF FINANCIAL STATEMENTS

OF POP MORTGAGE BANK PLC

Translation of the Finnish original

To the Board of Directors of POP Mortgage

Bank Plc

We have performed a reasonable assur-

ance engagement on the ﬁnancial statements

743700I7HTCNLUBZTZ74-2025-12-31-0-ﬁ.html

of POP Mortgage Bank Plc (Business ID 3236645-

3) that have been prepared in accordance with

the Commission’s regulatory technical standard

for the ﬁnancial year ended 31.12.2025.

Responsibilities of the Board of Directors

and the Managing Director

The Board of Directors and the Managing Direc-

tor are responsible for the preparation of the

company’s report of the Board of Directors and

ﬁnancial statements (the ESEF ﬁnancial state-

ments) in such a way that they comply with the

requirements of the Commission’s regulatory

technical standard. This responsibility includes:

● preparing the ESEF ﬁnancial statements in

XHTML format in accordance with Article

3 of the Commission’s regulatory technical

standard and

● ensuring the consistency between the ESEF

ﬁnancial statements and the audited ﬁnan-

cial statements.

The Board of Directors and the Managing Direc-

tor are also responsible for such internal con-

trol as they determine is necessary to enable

the preparation of ESEF ﬁnancial statements in

accordance with the requirements of the Com-

mission’s regulatory technical standard.

Auditor’s independence and quality

management

We are independent of the company in accord-

ance with the ethical requirements that are

applicable in Finland and are relevant to the

engagement we have performed, and we have

fulﬁlled our other ethical responsibilities in

accordance with these requirements.

The auditor applies International Standard on

Quality Management (ISQM) 1, which requires the

ﬁrm to design, implement and operate a sys-

tem of quality management including policies or

procedures regarding compliance with ethical

requirements, professional standards and appli-

cable legal and regulatory requirements.

Auditor’s responsibilities

Our responsibility is to, in accordance with Chap-

ter 7, Section 8 of the Securities Markets Act,

provide assurance on the ﬁnancial statements

that have been prepared in accordance with the

Commission’s regulatory technical standard.

Our responsibility is to indicate in our opinion to

what extent the assurance has been provided. We

conducted a reasonable assurance engagement

in accordance with International Standard on

Assurance Engagements (ISAE) 3000.

The engagement includes procedures to obtain

evidence on:

● whether the ﬁnancial statements that are

included in the ESEF ﬁnancial statements

are, in all material respects, in accordance

with the requirements of Article 4 of the

Commission’s regulatory technical standard

and

● whether there is consistency between the

ESEF ﬁnancial statements and the audited

ﬁnancial statements.

The nature, timing and extent of the selected

procedures depend on the auditor’s judgment.

This includes an assessment of the risk of a

material deviation due to fraud or error from the

requirements of the Commission’s regulatory

technical standard.

POP Mortgage Bank Plc Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2025

FINANCIAL STATEMENT 49

We believe that the evidence we have obtained is

sufﬁcient and appropriate to provide a basis for

our opinion.

Opinion

Our opinion pursuant to Chapter 7, Section 8 of

the Securities Markets Act is that the company’s

ﬁnancial statements that are included in the ESEF

ﬁnancial statements of POP Mortgage Bank Plc

743700I7HTCNLUBZTZ74-2025-12-31-0-ﬁ.html

for the ﬁnancial year ended 31.12.2025 have been

prepared, in all material respects, in accordance

with the requirements of the Commission’s regu-

latory technical standard.

Our opinion on the audit of the ﬁnancial state-

ments of POP Mortgage Bank Plc for the ﬁnancial

year ended 31.12.2025 has been expressed in our

auditor’s report dated 13.2.2026. With this report

we do not express an opinion on the audit of the

ﬁnancial statements nor express another assur-

ance conclusion.

Helsinki 12 March 2026

KPMG OY AB

Audit Firm

Henrik Snellman

Authorised Public Accountant, APA