OREANDA-NEWS. May 06, 2009. According to preliminary data AB DnB NORD Bankas earned a pre-tax operating profit before provisions of LTL 57.7 million in the first three months of 2009, reported the press-centre of AB DnB NORD Bankas.

Taking into consideration the sharp downturn in Lithuania’s economy seen over the past six months, the bank continued to pursue a conservative customer risk valuation policy from the very start of the year and set aside LTL 106 million in provisions in the first quarter of 2009. As a result AB DnB NORD Bankas recorded a LTL 48.3 million loss for the first quarter of 2009.
In the first quarter of 2008 AB DnB NORD Bankas pre-tax operating profit before provisions was LTL 46.9 million and net profit was LTL 37.6 million.

„In the adverse economic environment the bank demonstrated strong competitive and income generation potential. The bank‘s total income increased markedly and expenses were well under control, with both factors contributing to significant improvement of the operating efficiency. Taking into account the negative impact of country‘s sharp economic downturn seen over the past six months, we continued to pursue a conservative customer risk valuation approach. We firmly believe that taking this conservative and transparent approach ensures we remain well prepared for the possibility of handling an even more challenging macro-economic scenario than the one we currently face “, said Werner Schilli, president and the chairman of the management board of AB DnB NORD Bankas.

AB DnB NORD Bankas first quarter total income rose 9.3 percent year-on-year to 104.4 million, operating expenses fell 6.2 percent year-on-year to LTL 42.6 million, as the constant focus on increasing operating efficiency helped to improve the bank‘s cost income ratio significantly to 39.4 percent, from 47.4 percent in the same period a year ago. The bulk of provisions were set aside on loans extended to small and medium size companies operating in real estate development, construction and transport sectors.

“The solid backing of our strong shareholders and their long-term commitment to the Lithuanian market, along with our robust capital and liquidity positions, give us firm ground to continue providing top quality financial services and financing to public sector, businesses and households, and make every effort to increase the number of customers who choose DnB NORD as their home bank. We will continue focusing on building strong customer relationships with our business and private clients and work closely together to develop best possible solutions in order to be ready for the next phase of growth once the recession is over,” Werner Schilli added.

As at the end of March AB DnB NORD Bankas assets stood at LTL 12.8 billion, a 6.8 percent rise compared to the same period a year ago. As at the end of March the bank’s net loan portfolio stood at LTL 11.0 billion, a rise of 13.4 percent year-on-year. Compared to the previous quarter the bank’s net loan portfolio decreased by 2.2 percent, due to declining credit demand and a smaller number of projects that meet credit risk criteria. The bank signed credit contracts worth LTL 653 million litas during the first three months of the year.

As at the end of March, the savings and investments at AB DnB NORD Bankas stood at LTL 4.7 billion, of which issued debt securities amounted to LTL 984 million and customers‘deposits were LTL 3.7 billion. To offer its customers attractive investment options, the bank pioneered placement of government fixed rate debt securities worth EUR 145.5 million to the bank’s institutional and private investors.

Due to proper risk management AB DnB NORD Bankas met all prudential requirements of the Bank of Lithuania. To ensure further balanced growth the bank’s shareholders reinvested the 2008 net profit of LTL 70.7 million and have pledged to invest another LTL 71 million through the increase of the bank’s authorized share capital to LTL 656.7 million from LTL 591 million with an issue price set at LTL 125 per each newly issued share with nominal value of LTL 115.

AB DnB NORD Bankas, a part of DnB NORD financial group, a joint venture owned 51% Norway’s largest bank DnB NOR (Standard & Poor's long term AA- rating) and 49% by North Germany’s largest bank NORD/LB (FitchRatings long term A rating), maintained the highest creditworthiness rating among Lithuanian banks assigned by FitchRatings (long term A rating).