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Ceturtdiena 22.03.2018 | Name days: Tamāra, Dziedra

Swedbank profit reaches 23 million in Q3 of 2013

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUSwedbank Latvia has earned LVL 23 million in Q3 of 2013 (this includes insurance business), compared to LVL 15 million in 2012. The increase was mainly due to increasing net recoveries.

The bank’s volume of newly-issued funding grew to LVL 118 million in Q3. LVL 99 million of this amount were allocated for enterprises and LVL 19 million for private persons. Demand for new lending was the highest in such areas as transport and agriculture in Q3, Swedbank reports.

The total net credit portfolio continued to decrease by 5% during this period.

The volume of customer deposits in Q3 increased by 23% when compared to the same period of 2012. Private deposits increased by 27% and corporate deposits by 17%. According to Swedbank, the Latvian economy saw less cash in circulation and a corresponding increase in bank account balances. This could be due to the fact that people are gradually reducing the use of cash in their day-to-day affairs with a view to making the transition to the euro as less problematic as possible. The deposit portfolio also benefited from last year’s acquisition of the commercial arm of Latvijas Hipotēku un Zemes Banka.

The Q3 loan-to-deposit ratio was 115% (127% – Q4 2012).

Net volume of impaired loans continued to decline, reaching LVL 245 million at the end of Q3 (LVL 428 million in Q3 of 2012). Overall credit quality strengthened through a gradual increase in new lower risk lending.

Risk-weighted assets reduced to LVL 2,302 million in Q3 of 2013.

Compared to last year, total revenue and costs increased by 15% in Q3 (this also includes euro project costs). Cost/income ration of Q3 2013 was 43%.

In Q3, switching to more convenient banking channels for day-to-day purposes reduced cash handling activities at branches. Cash withdrawals and deposits at branches fell by 26% and 31% respectively. Customers increasingly opted for more convenient and cheaper self-service channels, such as ATMs. in Q3, as much as 95.3% of all cash deposits at Swedbank were made via ATMs, Swedbank reports.

“Currently, we are in the final stretch towards the introduction of the euro and this issue will dominate in Q4. Customer behaviour is changing as people reduce the use of cash in their day-to-day affairs, including spending. Businesses are preparing for an increased circulation of cash at the turn of the year by signing cash-in-transit service agreements and by making it possible for customers to pay by card. By the end of Q3, over 2,000 of the most far-sighted companies had ordered euro sub-frontloading. Nevertheless, this is certainly not the time to take a breather – the turn of the year, with a much higher workload, an increased customer flow and much more cash to handle, will also be a singular time for Latvian banks. Bearing this in mind, Q4 will see us continuing to prepare all bank processes for the euro changeover and assisting customers to seamlessly switch to the new currency,“ – said Māris Mančinskis, the CEO of Swedbank Latvia.


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