OREANDA-NEWS. October 25, 2012. Swedbank Lithuania reported a Q1-3 profit of LTL 264m compared to LTL 430m for Q1-3 2011. The decline was mainly due to lower net recoveries and lower net interest income. The operating profit in Q1-3 2012 amounted to LTL 261m compared to LTL 288m for the same period in 2011, a decline of 9 per cent, reported the press-centre of Swedbank.

“Uncertainty in Europe resulted in a tougher business environment with falling market rates and this had a real impact for the whole banking system as it adjusted to the changing situation” – said Antanas Danys, Head of Swedbank Lithuania. “On the other hand we were glad to see the Lithuanian economy among the best performers in Europe thus indicating its resistance to the recession. This sends out a clear message that business will require investment in the near future“.

In Q3, growth in manufacturing and exports accelerated significantly, indicating continued improvement in competitiveness and resistance to the Europe-wide recession. Growth in household consumption whilst supported by rapid job creation, was restrained somewhat by continued negative growth in real wages. Investment stalled due to uncertainty in Europe. However, increasing production capacity and utilization, previous underinvestment, and the need to further boost competitiveness today, provides a strong basis for investment.

Loans and deposits
Lending volumes fell by 3 per cent (LTL 398m) in Q1-3. This was mainly due to a drop in corporate lending. Consumer lending grew slightly in recent months; the total portfolio amounted to LTL 13.5bn in Q3.

Deposits increased by 8 per cent (LTL 1.0bn) in Q1-3. Deposits from private customers grew by 3 per cent and corporate deposits by 18 per cent in this period. The deposit portfolio amounted to LTL 14.0bn in Q3. The loan-to-deposit ratio was 96 per cent (107 per cent in Q4 2011).

Credit quality
Q1-3 net recoveries amounted to LTL 16m, compared to LTL 169m for the same period in 2011. Impaired loans, gross, continued to decline in Q3 and amounted to LTL 1 446m (LTL 1 857m for Q4 2011). The improvement in credit quality was mainly due to a corresponding improvement in client finances.

Revenues and costs
Total Q1-3 income amounted to LTL 484m, representing a decline of 8 per cent on the same period in 2011.

Year on year net interest income fell by 18 per cent and amounted to LTL 259m. Year on year net commission income increased by 9 per cent (LTL 13m) and amounted to LTL 160m. The increase was driven by a rising number of transactions while payment fees remained flat.

Expenses decreased by 5 per cent (LTL 12m) compared to the same period in 2011. The cost/income ratio stood at 46.1 per cent.

To view Swedbank Lithuania’s Q3 2012 results, please visit: www.swedbank.lt