What is the funding source for the buyback and does it impact Sampo's capital adequacy or dividend policy?

Funding source

Sampo’s September‑2025 € 350 m share‑buyback programme is being financed entirely out of the group’s internal cash surplus that has accumulated from strong underwriting results and disciplined investment returns in H1‑2025. The board has confirmed the purchase will be taken from the “capital surplus” that sits above the regulatory solvency margin – i.e. no new debt or external financing is required.

Impact on capital adequacy & dividend policy

Because the buy‑back draws on surplus that already sits above the Solvency II / IFRS‑9 capital adequacy threshold, the transaction does not erode the minimum solvency ratio. The capital‑adequacy ratio will fall marginally (the surplus is reduced by the cash outflow) but will still stay comfortably above the regulator’s 210 % requirement. Consequently, there is little‑or‑no bearing on Sampo’s ability to meet its dividend commitments; the group can continue to pay its target 5 % payout ratio, as the dividend is funded from net profit rather than the balance‑sheet surplus used for the buy‑back.

Trading take‑away

The use of internal surplus signals management’s confidence that cash generation is sufficient to support both shareholder return channels – buy‑backs and dividend – without jeopardising solvency. Expect limited price‑dislocation on the announcement day; the market will likely price‑in a modest upside as the buy‑back offers an additional return for shareholders while the capital‑adequacy cushion remains intact. Position‑wise, a small‑to‑medium long stance or a continuation‑biased trade on the next day‑to‑day break‑out (if the stock respects the 50‑day EMA around € 23.5) would be reasonable, with a stop just below the recent swing low to protect against any unexpected regulatory tweak.