Swedbank Lithuania financial results for Q1 2012

2012-04-25 Back

  • Swedbank Lithuania earns a net profit of LTL 96m in Q1
  • Q1 growth in customer activity and deposit volumes

Swedbank Lithuania Q1 2012 overview

Swedbank Lithuania reported a profit of LTL 96m for Q1 2012 compared to a profit of LTL 170m a year ago. The decrease was mainly due to lower net recoveries which amounted to LTL 14m in Q1 2012.

“The key to a strong result for Q1 was slow, but stable growth. Despite external factors we witnessed growing Lithuanian economy that reflected in increased clients’ activity and rising deposit volumes, - says Marius Adomavicius, Acting Head and Chief Financial Officer at Swedbank Lithuania. Despite the ongoing amortisation of the loan portfolio we saw new sales activity in corporate lending. Providing funding for sustainable business projects remains a clear future priority for the bank. In the field of retail banking we continue developing self-service network thus offering easy accessible and convenient tools for daily banking”.

The growth of the Lithuanian economy in Q1 2012 was achieved despite the recession in the euro area. As a result of structural adjustments, the Lithuanian economy has become stronger and more resistant to external disruption. In 2012 Lithuania is expected to achieve positive growth as exports and domestic demand continue to grow.

Loans and deposits

Lending volumes decreased by 8 per cent compared to Q1 2011 and by 2 per cent compared to Q4 2011. In total, the loan portfolio amounted to LTL 13.7bn. The reduction was attributed to the corporate segment, despite the fact that the highest new sales activity was in this segment.

Deposits increased by 12 per cent year-on-year and by 2 per cent on Q4 2011. The total deposit portfolio amounted to LTL 13.3bn. at the end of Q1 2012. On an annual basis, a positive trend became evident both in private and corporate segments. The loan-to-deposit ratio was 103 per cent (107 per cent at the end of Q4 2011).

Credit quality

Net recoveries amounted to LTL 14m compared with LTL 93m for Q1 2011. Impaired loans, gross, continued to decline in Q1 2012 and amounted to LTL 1.7bn (LTL 2.5 bn at the end of Q1 2011). The main reason for the improvement in portfolio quality was the overall improvement in clients’ ability to service loans.

Revenues and costs

Total income was LTL 164m during Q1 2012, compared to Q1 2011 the income increased by LTL 2m.

Net interest income fell by 11 per cent compared to Q1 2011 (4 per cent compared to Q4 2011) and amounted to LTL 91m in total. A reduction in market base rates and continuing lending portfolio amortisation had a negative impact on net interest income, while increased deposit volumes had a positive impact.

Net commission income increased by 11 per cent year on year and amounted to LTL 52m in total at the end of Q1. The increase was mainly driven by a larger number of transactions and active customers. The number of active customers increased by more than 59 000 year-on-year.

Expenses increased by 4 per cent year on year. The cost/income ratio was 47% (46% in Q1 2011). Cost efficiency remains a high priority in a slow growth environment.

Customer focus

The bank is expanding self-service network all around the country. There were 45 self-service zones established by the end of Q1 2012 with a total investment of LTL 10m. This is a new and modern banking model based on effective electronic channels and self service tools for basic banking services.

To view Swedbank Lithuania’s Q1 2012 operating results, please visit: www.swedbank.lt

To view Swedbank Group’s Q1 2012 results, please visit: www.swedbank.com

Swedbank Q2 2012 financial results will be released on 18 July 2012.

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