OREANDA-NEWS.  February 06, 2013. Swedbank Latvia, including its insurance business, made a profit of LVL 71m in 2012 (81m 2011) and the number of Swedbank customers in Latvia increased by 77 thousand, reported the press-centre of Swedbank.

“The past year in Latvia was a year of renewed growth in spite of a turbulent global economy. Swedbank also consolidated its leading positions in the Latvian banking market and carried out a number of significant projects – the acquisition of commercial arms of Hipoteku Banka, a new customer loyalty program ‘Smart Points’, a digital platform ‘Swedbank Business Network’ as well as our 20th year celebrations in Latvia.

This year, we will continue building a 21st century banking model by developing digital solutions and enabling remote access to everyday services, while focusing on in-depth consultations in face-to-face relationships. Another significant event this year is the expected adoption of the euro where our main role will be to support customers’ transition in most convenient way,” says Maris Mancinskis, the Head of Swedbank Latvia.

Loans and deposits
The volume of customer deposits grew by 33 per cent last year, with a similar increase in both retail deposits (up by 31 per cent) and corporate deposits (up by 36 per cent). The volume of customer deposits stood at LVL 1978m at the end of 2012.

New funding issued by Swedbank reached LVL 423m last year, representing a 53 per cent year-on-year increase. LVL 328m and LVL 95m of this was made available to business private customers respectively. The total net credit portfolio in 2012 contracted by a further 1 per cent, having been affected by continued deleveraging in the economy. The volume of the credit portfolio was LVL 2517m at the end of 2012.

The loan-to-deposit ratio continued to improve, dropping to 127 per cent (171 per cent 2011).

Credit quality
In 2012, Swedbank made net recoveries of LVL 9.6m (LVL 25.9m 2011). The recoveries were made mainly in the corporate credit portfolio, whereas in the retail mortgage lending portfolio, provisioning continued. Impaired loans, gross, continue to decline, decreasing to LVL 361m at the end of the year (LVL 605m 2011). Credit quality was positively affected by an improving national economy in 2012.

Risk-weighted assets contracted from LVL 2 782m at the start of the year to LVL 2 583m at the end of the year.

Revenues and costs
As a result of low interest rates, total revenue in 2012 dropped by 1 per cent. Costs decreased by 6 per cent, helped by efficiencies in cost management and increasing customer activity via electronic channels. The cost-income ratio in 2012 stood at 43 per cent.

Customer service news
In 2012, Swedbank continued to develop a customer-oriented business model. The bank's TRI*M corporate reputation index rating increased to 59 points (55 in 2011) and is significantly above the financial industry average.

In tune with changing customer habits, our work on developing electronic solutions continued. By the end of Q4 2012, the number of payments per month made via the Internet Banking mobile app had already topped the total combined number of payments made in all Swedbank branches outside Riga. Swedbank’s work on electronic channels received recognition in 2012 when Global Finance magazine judged our mobile banking solution for corporate customers to be the best in the world. Global Finance magazine also ranked Swedbank’s Internet Bank as the best in Latvia. The bank also developed new solutions in the digital environment – namely the Swedbank Business Network, loyalty program ‘Smart Points’ and the virtual branch on the Draugiem.lv social networking site.

One of the key projects completed in 2012 was the successful acquisition of Hipoteku Banka and the integration of its customers. Swedbank opened 11 new customer service points last year in different regions of Latvia. This means that face to face customer service is now available in 113 places in Latvia.

In celebration of its 20th anniversary in Latvia, Swedbank prepared a special gift for its customers last summer – a special concert by Prata Vetra with songs selected by a Swedbank customer ballot.