OREANDA-NEWS. May 04, 2012. “As the economy picks up, the need and demand for banking services is also on the rise. It is obvious that an understanding of the benefits of saving has increased hand in hand with a growth in demand for loans, especially in the corporate segment. Regarding day-to-day banking, electronic channels are increasingly popular with customers. We will continue to provide best-fit solutions for our customers in tandem with support and expert advice whilst developing ever more modern ways of providing banking services,” says Maris Mancinskis, Head of Swedbank Latvia, reported the press-centre of Swedbank.

Swedbank Latvia, including its insurance business, reported a profit of LVL 18m in Q1 2012. Year on year operating profits before provisions rose to LVL 19m in Q1 2012. Net recoveries in Q1 2012 amounted to LVL 2m.

Loans and deposits

Whilst the deposit portfolio grew by 3 per cent year-on-year in Q1 2012, it flattened out after Q4 2011. The volume of customer deposits was LVL 1 484 m as at the end of Q1 2012.

New lending volumes in Q1 2012 increased year-on-year amounting to LVL 63m (compared to LVL 49m in Q1 2011), of which LVL 26m was made available to businesses. In  March, the volume of mortgage loans made available was the highest monthly sum for three years.

The amortisation of the total net credit portfolio continued in line with changes in economic activity, decreasing by 12 per cent year-on-year and by 3 per cent quarter-on-quarter. The net credit portfolio was LVL 2 459 m as of Q1 2012. The loan-to-deposit ratio continued to improve, falling to 166 per cent (171 per cent as of Q4 2011).

Credit quality

Net recoveries in Q1 2012 amounted to LVL 2m (LVL 11m during Q1 2011), mainly in the corporate lending portfolio.

Impaired loans, gross, continued to decline and shrank to LVL 538m at the end of Q1 2012 (compared to LVL 831 for Q1 2011).

Revenues and costs

Income in Q1 2012 increased by 5 per cent and costs fell by 3 per cent year-on-year. In a low interest rate environment, net interest income decreased. This was offset by increased income from banking operations, resulting from a larger number of customers and general economic recovery.

The cost/income ratio in Q1 2012 was 42 per cent.

Customer focus

In Q1 2012, more than 9,000 new customers joined Swedbank Latvia. In order to strengthen long-term relations with all customers, we will continue to develop our customer-centric business model. Financial consultation is proactively offered  at branches and our customers appreciate and use electronic tools, such as a budget planning tool in Swedbank Internet Banking. A number of campaigns for raising public awareness in financial matters were organised by the Swedbank Institute of Private Finance and the Swedbank Entrepreneurship Competence Centre.

In order to make the day-to-day life of our customers more convenient, Swedbank installed new ATMs in 10 Latvian towns and cities. In addition to the anti-skimming devices which were fitted last year, ATMs were fitted with a new security feature i.e. non-removable ink. Furthermore, the range of our outreach services was expanded. For example, the option to receive a renewed payment card by post was introduced and offered to Swedbank’s customers in Q1 2012. During E-Skills Week, Swedbank organised seminars on the use of internet banking in 27 cities, towns and villages throughout Latvia.

Swedbank Private Banking received the ‘best in Latvia’ award in Q1 2012 from Euromoney.