OREANDA-NEWS. November 09, 2010. Profit before loan impairment charges: EEK 483 million (EEK 520 million in first nine months of 2009), reported the press-centre of Sampo Pank.

Loan impairment charges: EEK 192 million (EEK 1,895 million)

Profit before tax: EEK 291 million (EEK -1375 million)

Cost/income ratio: 37.4% (37.9%)

Deposits up: EEK 4,194 million (19.3%)

Lending down: EEK -4,246 million (-13.9%)

Loan/deposit ratio: 1.02 (1.41)

Customer base: 176,000 (-2.9%)

Number of branches: 18 (21)

Number of employees: 530 (554)

This interim report presents the financial results of the banking activities of the Danske Bank Group in Estonia.

In addition to banking, Danske Bank is represented in Estonia in the areas of asset management (Danske Capital) and financial markets (Danske Markets Estonia).

Aivar Rehe, the CEO of Sampo Pank, comments on the financial results for the first nine months of 2010 as follows:

“Estonia’s economic growth accelerated in the third quarter of 2010. Activity picked up in Estonia’s important foreign markets, and the resulting increase in demand had a positive effect on our export-based economy. Domestic consumption, however, remained modest.

“Sampo Pank’s activities remained very efficient in the changing economic environment – the cost/income ratio was 35.4% in the third quarter (vs. 37.3% in Q2 2010). For the first nine months, the ratio was 37.4% (37.9% in 2009).

“Profit from banking operations before loan impairment charges amounted to EEK 169 million in Q3 (EEK 167 million in Q2 2010). Profit before loan impairment charges for the first nine months of 2010 came to EEK 483 million (EEK 520 million in 2009).

“Sampo Pank’s net profit in Q3 was EEK 173 million (EEK 92 million in Q2 2010). For the first nine months, the net profit amounted to EEK 291 million (EEK -1,375 million in 2009).

“Operating income in Q3 2010 amounted to EEK 263 million (EEK 266 million in Q2 2010), and operating expenses amounted to EEK 93 million (EEK 99 million in Q2 2010). In comparison with the first nine months of 2009, revenue decreased 8% and operating expenses decreased 9%. The decline in interest income was the main reason for the drop in revenue.

“The bank did not make additional loan impairment charges in Q3 2010 (EEK 75 million in Q2 2010). The loan impairment charges made in the first nine months of 2010 amounted to EEK 192 million (EEK 1,895 million in 2009).

“At the end of September, the ratio of loan impairment reserves to the loan portfolio was 10.2% (6.5% at the end of September 2009). The reserves amounted to EEK 2.7 billion, and they did not increase in Q3.

“The total amount of loans in arrears for over 90 days continued to decrease and amounted to EEK 0.9 billion at the end of the period (EEK 1.2 billion end-September 2009). The ratio of non-performing loans to the total portfolio was 3.4% (3.8% end-September 2009).

“The loan portfolio totalled EEK 26.4 billion at the end of September. It decreased by 14% over the year. The portfolio of personal customers decreased by 7%, or EEK 0.9 billion, over the year, and the portfolio of corporate customers decreased by 20%, or EEK 3.3 billion. In Q3 the loan portfolio decreased by EEK 1.1 billion.

“Sampo Pank demonstrated stability on the deposit market in Q3, as deposits rose 1%, or EEK 0.1 billion. Deposits totalled EEK 25.9 billion at the end of September, an increase of 19% over the year. Deposits from personal customers totalled EEK 4.6 billion (down 7% from the level a year before). The deposits from corporate customers increased by EEK 21.4 billion over the year (+28%). At the end of September, the loan-to-deposit ratio was 101.5% (140.7% end-September 2009).

Rahamaa (Moneyville), an online game for preschool and primary school children in Estonia, was created at the initiative of Sampo Pank and launched in September. The game, which contains no advertising, is part of Sampo Pank’s corporate responsibility activities and is intended to develop the financial literacy of children aged 5 to 9. It also helps parents and teachers explain financial matters to children. Rahamaa is already very popular, with almost 20,000 children registered.

“Some 95% of the active customers of Sampo Pank and some 25% of customers who use at least four services have joined the innovative ISEKAS customer service model. ISEKAS, which was launched a year ago, gives customers the option of choosing the banking services they need with a personal adviser and offers discounts for the entire family. The customers who joined ISEKAS will enjoy even more benefits after the conversion to the euro because their current benefits – free domestic payments from online banking and free cross-usage of ATMs up to four times a month – will be expanded to cover the entire euro zone.

“The work on Estonia’s changeover to the euro in 2011 will increase considerably in the last quarter of this year so that we can guarantee that our banking systems are updated in time and the quality of our customer services remains high.”

The Danske Bank Group’s Interim Report – First Nine Months 2010 can be viewed online at www.danskebank.com/reports.