Swedbank Lithuania Q1 2016 financial results
OREANDA-NEWS. The profit of Swedbank Lithuania for Q1 2016 amounted to EUR 22m, an increase of 3 per cent compared with Q1 2015 (EUR 21m). The result was supported by stable revenues and smaller expenses.
„Despite operating in an environment of negative interest rates, Swedbank Lithuania recorded a positive performance during Q1 2016. Household demand for mortgages and consumer financing continued to grow and good economic conditions encouraged business investment. The bank put great emphasis on improving the availability of digital services for both private and corporate clients. Usage of mobile application increased ? the amount of transactions that clients made by app grew by 55 per cent during the year and it overcame the amount of transactions made in the branches”, – said Dovile Grigiene, Head of Swedbank Lithuania.
Loans and deposits
In Q1 2016 Swedbank Lithuania lending volumes increased by 2 per cent compared to 31 December 2015. Consumer financing and private mortgages together grew by 2 per cent, while corporate lending increased by 1 percent compared to Q4 2015. In total, the loan portfolios amounted to EUR 4.1bn.
Deposit volumes increased by 1 per cent during the quarter. Private deposits decreased by 3 per cent, while corporate deposits grew by 10 per cent compared to Q4 2015. The total deposit portfolio of Swedbank Lithuania in Q1 2016 amounted to EUR 5.3bn.
The Q1 2016 loan-to-deposit ratio stood at 77 per cent (87 per cent as of 31 March 2015).
Credit quality in Swedbank Lithuania remained stable. Net recoveries amounted to EUR 0.1m, against EUR 1.7m recoveries in the first quarter 2015. Impaired loans continued to decline in Q1 2016 and amounted to EUR 102m (EUR 112m Q1 2015).
Revenues and costs
Total Q1 2016 income amounted to EUR 44m and remained nearly unchanged (up 0.3 per cent YoY).
Net interest income increased by 3 per cent YoY and reached EUR 24m. Net commission income decreased by 1 per cent and amounted to EUR 16m in Q1 2016.
Total expenses decreased by 11 per cent YoY in Q1 2016 expenses, amounting to EUR 19m. The cost to income ratio for Q1 2016 stood at 43 per cent (Q1 2015 ? 48 per cent).
Swedbank Lithuania will pay EUR 10.4m in tax to the state budget for the period January – March 2016.
Swedbank’s acquisition of Danske Bank retail banking business was approved by the Lithuanian Competition Council. Products and services will be transferred to Swedbank at the beginning of June 2016 and the transfer will be fully free of charge to customers. Personal accounts, mortgages and consumer loans, leasing, deposits and securities will be transferred to Swedbank automatically. Customers will need to approach Swedbank only for payment cards and access to internet bank.
On March 1st, Swedbank AB launched a branch for operational services in Lithuania. The newly opened branch will cover functions needed for the whole of Swedbank Group. At the moment, there are 140 employees working in the branch, and the number of employees will increase during the coming years.
The European capital regulatory requirements (CRR/CRD IV) have been clarified, which made it possible to review Swedbank Group’s capital structure. Swedbank Lithuania is well capitalized following a long period of solid performance, with a total capital adequacy ratio of 40 per cent as of 31 December 2015. Swedbank has therefore decided to take an extra dividend from Swedbank Lithuania of EUR 491.2 million. The dividend pay-out has no impact on customers or Swedbank’s lending operations and as of 31 March the total capital adequacy ratio of Swedbank Lithuania is 23.85 per cent, maintaining a significant buffer to the minimum requirements imposed by the regulator.