Baltic, Banks, Financial Services, Loan

“Recently, we have been focusing on expanding the service availability to customers, for example, by opening more and more new self service branches in regional towns so that all Latvian inhabitants would have full access to both everyday banking services and advisory meetings, the number of which has doubled over a year. Also, the number of customers who handle their financial matters by simply making a call is on a steady rise. However, most rapid changes are brought about by the penetration of smartphones – today customers choose to check their account balance through mobile phone instead on internet-bank in nearly half of the cases. In the coming months our efforts in enhancing customer service will also be appreciated by the customers of Danske Bank as supervisory authorities have approved the transferring of retail banking business to Swedbank,” says Maris Mancinskis, Head of Swedbank Latvia.

The lending portfolio remained largely unchanged compared to December 31, 2015. The increase was in corporate lending and consumer finance, while mortgage portfolio decreased. Swedbank Latvia market share in lending was 22% as of February 29, 2016.

Deposit volumes increased by 1% during the quarter. Swedbank Latvia market share was 18% as of February 29, 2016. The loan-to-deposit ratio was 82% (86% as of March 31, 2015).

Swedbank Latvia credit quality remained stable. Net recoveries amounted to EUR 2 million, against EUR 1 million recoveries in the first quarter 2015.

Net interest income increased by 3% compared to the first quarter of 2015.

Net commission income increased by 6% compared to the first quarter of 2015. Higher customer activity strengthened card-related commissions, and the number of card purchases rose by 13%. At the same time net commission income was negatively affected by the new regulation on interchange fees.

Total expenses increased by 1% year over year.

The first quarter of 2016 saw continued digitalization of services, for example, Swedbank’s corporate customers now have a new feature available – user administration in the internetbank which allows companies to grant and modify access rights for their employees. The number of monthly users of our mobile application, in turn, increased to 129,000 in March, which represents an increase by 30% on year-on-year basis. The feature that allows to quickly check account balance via the mobile phone has been used close to 7.7 million times in the first quarter of this year. On average, customers use internet bank to check their account balance once a week, whereas the mobile application is used every day.

In order to expand the availability of banking services in the regions of Latvia, Swedbank opened 3 new self service branches during the first quarter of 2016 – in Ludza, Balvi and Valka.

Swedbank, a leading bank in Lithuania, said on Tuesday that its first-quarter net profit rose to 22 million euros, up 3% from 21 million euros a year earlier.

"Despite operating in an environment of negative interest rates, Swedbank Lithuania recorded a positive performance during the first quarter of 2016. Household demand for mortgages and consumer financing continued to grow and good economic conditions encouraged business investment," Dovile Grigiene, the bank's CEO, said in a press release.

The bank's total first-quarter revenue edged up by 0.3% year-on-year to 44 million euros. Net interest income rose by 3% to 24 million euros, while net commission income fell by 1% to 16 million euros.

Its total expenses decreased by 11% year-on-year to 19 million euros.

Swedbank Lithuania's assets grew by 1% over the year to reach 6.174 billion euros in late March. Its loan portfolio, which makes up the largest part of the assets, remained almost unchanged from a year ago at 4.1 billion euros. Total deposits increased by 1% to 5.3 billion euros.

Swedbank's shareholders have this year approved a 491.2-million-euro dividend payout. The bank paid out 64.8 million euros as dividends last year.

The Estonian unit of the Scandinavian banking group Swedbank made a profit of 45.5 million euros in the first quarter 2016, 23% more than in the first quarter of 2015.

Total income was down 3% year over year at 73.8 million euros.

The increase in earnings can be attributed to an increase in income, a reduction in costs and good performance of loans, the bank said.

"Our strong operating result for the first quarter shows that Estonian people and businesses continue to take a positive look to the future and feel confident. The volumes of both the corporate and private loan portfolios increased in the first quarter," said the manager of the Estonian unit of Swedbank, Robert Kitt.

The loan portfolio expanded by 1.5% during the first three months to 6.56 billion euros at the end of March. All the portfolios – loans to corporate customers, mortgage loans, consumer finance and the leasing portfolio – increased. Swedbank Estonia had a market share of 38.5% on the lending market at the end of February.

Deposits grew by 0.8% during the quarter to 6.9 billion euros and the bank's market share on the deposit market was 47.1% at the end of February. The loan to deposit ratio was 95%.

Credit quality remained stable. The loan impairment reserve decreased by 2.7 million euros; in the first quarter of 2015 it decreased by 1.5 million euros.

Net interest income grew by 12% year over year to 48.5 million euros, primarily as a result of loan growth. Net commissions moved up 4% to 18.3 million euros. Customers' increased activity boosted bankcard related fees and the sum total of bankcard transactions increased 6%. At the same time, the new fee regulation reduced net commissions. Total expenses decreased 4% year over year.

Return on equity of the Estonian unit grew 2.3 percentage points to 20.2%.