Swedbank Lithuania Q4 2011 results
- Swedbank Lithuania earned a net profit of LTL 592m in 2011
- Net profit increase was driven by net recoveries
Swedbank Lithuania reported a profit of LTL 162m in Q4 and LTL 592m for 2011. Net profit increased by LTL 554m year on year. The improved result was mainly due to net recoveries. Excluding impairments, the bank’s profit amounted to LTL 330m in 2011. Total income increased by LTL 90m in 2011 and reached LTL 711m.
In 2011 GDP grew by 5.8 per cent in Lithuania compared to the previous year. Overall economic growth was more broadly-based, and was mainly driven by exports as well as domestic demand that grew considerably during the second half of 2011. GDP growth is expected to slow down in 2012 due to euro-zone issues and a deteriorating global outlook.
"The increase in Swedbank’s net profit goes hand in hand with Lithuania’s successful return to growth in 2011. A positive economic outlook as well as the improved financial situation of our customers are both reflected in net recoveries, which continued to improve, - said Antanas Danys, Head of Swedbank Lithuania. However, the growth is expected to slow down in 2012 due to challenges in the global macro environment that were already visible in Q4 2011. The profit allows us keeping the bank well-capitalised and ready for facing the external risks”.
Loans and deposits
Lending volumes decreased by 7 per cent compared to Q4 2010 and in total, the loans portfolio amounted to LTL 13 926m. This was mainly due to amortisation and limited demand for new loans. With growing macroeconomic uncertainty and slowing foreign demand, companies were more cautious about investment decisions.
Deposits rose by 4 per cent in 2011 with private deposits increasing more than corporate deposits over the year. The total deposits portfolio amounted to LTL 13 019m. The net loan-to-deposit ratio fell to 99 per cent (down from 108 per cent at the end of Q4 2010) proving that the bank is less dependant on international markets.
Net recoveries for 2011 amounted to LTL 262m compared to LTL 313m in credit impairments for the previous year. The reversal in credit impairment trends started in Q4 2010 and continued throughout the subsequent year. In 2011, net recoveries mainly came from corporate portfolios. Impaired loans, gross, amounted to LTL 1 857m - down from LTL 2 510m at the end of Q4 2010.
Revenues and costs
Net interest income increased by 17 per cent year on year and amounted to LTL 412m in total. Year on year net commission income increased by 9 per cent and amounted to LTL 202m. This was in large part driven by higher commission income i.e a larger number of active customers and more customer transactions while the avarage transaction fee fell down. Over the year, the number of active customers increased by more than 73,000. The total number of active clients was 974,058 at the end of Q4 2011.
Expenses increased by 2 per cent compared to the previous year due to the costs adjusting to the anticipated slow down in growth; the number of full-time employees decreased by 281 to 2 403 by the end of Q4.
The cost-income ratio for 2011 improved and stood at 0.47 (0.52 in 2010)
In 2011 Swedbank continued improving e-banking channels and services. Swedbank’s Internet bank was recognized as the best in Lithuania by the financial magazine Global Finance for its user-friendly functionality, design and wide scope of e-services offered.
During 2011 Swedbank also continued focus on providing expert knowledge in the fields of financial literacy, macro economy and financial markets both for clients and media channels. For the initiatives in the field of sustainable development Swedbank was awarded as the Socially Responsible Company.
Swedbank’s strategy to enhance dialogue with the clients in the social media networks resulted in becoming top performer in the social media field among the banks and top 3 among all business entities in Lithuania.
To see Swedbank Lithuania’s Q4 2011 results, please visit: www.swedbank.lt
To see Swedbank Group’s Q4 2011 results, please visit: www.swedbank.com
Swedbank Q1 2012 results will be released on 25 April 2012