Number of clients increases, deposits grow by 6% during first six months

17.07.2018 - 14:40

During the first six month of 2018, SEB bank issued more than 8270 loans in the total amount of 508 million euros, which is 23% more than during the same period of 2017. 418 million euros, or 82% of the financing provided was issued to companies. The funding granted by SEB bank to private individuals during these six months amounted to 91 million euros. SEB group ended the first half of the year in Latvia with 27.2 million euros in profits, which is 33% more than in the first half of 2017.

Head of SEB bank Ieva Tetere noted:

“The first half of this year was marked in our industry by new supervisory requirements, though thanks to SEB’s strategy of focusing on local Latvian private individuals and companies, these requirements did not affect our business. The total amount deposited by SEB bank clients has grown by 3% since January; moreover, it has grown by 6% compared to the first six months of the last year, which shows that the clients trust our bank. However, as we make plans for future development of our industry, we must commend the dialogue established between the Prime Minister and the financial sector consultative council, whose purpose is to streamline and promote positive future changes in the banking sector, ensuring transparency in the activities of the bank and reasserting the international reputation of the Latvian financial sector. In this context, I highly appreciate the assessments of the Sustainability Index, which has placed SEB bank in the top platinum category for the second consecutive year, taking into account the real activities of the bank, as well as the quality and attention to detail we provide with our services, affecting our clients in the long run.

The rate of economic growth is high at the moment, creating challenges in some industries, in terms of both the availability of labour and the growth of salaries. We maintain and adhere to the principles of responsible lending: to private individuals and to companies. The desire and ability of our clients to take loans are represented in our credit portfolio, which has grown by 8% since the end of June last year. This development was boosted by a considerable growth of new financing (12%) in the second quarter; this value is even higher, at 23%, if we compare the first six months of this year with those of the last year. The strongest incentive for increased lending activity was created by a relatively quick increase in private income and an overall improvement in the economic outlook.

During the first six months, companies initiated bigger development projects that needed financing from the bank. We see the significant development of shopping centres: last December, we funded the construction of the Akropole multifunctional shopping centre in Riga, while this April we granted a loan of 34 million euros to Linstow group for the expansion of the Origo shopping centre. These development plans are likely to be caused by more prosperity among private individuals and their desire to improve the quality of life. I would certainly like to mention a transaction which is not so common for Latvia: we became the financial partner of Groglass in funding the company share management-buyout deal. This is a good example of how the management of a Latvian company strives to become co-owners of their company together with a foreign investor, buying the company’s shares from international owners.

We continue our support to small and medium enterprises, and in June, we congratulated three companies that were the most promising on the first stage of our Company Growth Programme. The biggest challenge for Pure Chocolate, ‘Centrālā laboratorija’ and Uzdevumi.lv now is to turn the action plan developed during the programme into reality. I would like to note that the ambition of these companies was to multiply the results of their business activities by a factor of ten.

Planning to provide our clients with more convenient financial and payment solutions, we have already prepared for meeting the requirements of the Second Payment Services Directive (PSD2), enabling various licensed service providers to offer private individual completely new financial services. We hope that the necessary legal base will be prepared for implementation in Latvia in the nearest future, enabling private individuals to use these advantages. As part of a pilot project with a number of clients we have started testing a new communication channel: videoconferencing, which is a new option for clients to by consulted by the bank’s experts remotely."

The SEB group financial indicators in Latvia in the first half of 2018 were as follows:

The revenue of SEB group in Latvia reached 50 million euros, which is 5% more than in the first six months of 2017;
The costs were 23.8 million euros, which is 2% more than in the first half of 2017;
The profits before savings reached 26.2 million euros, which is 8% more than in the same period of 2017;
During the period between 1 January and 30 June, deposits in the amount of 919 thousand euros were returned, compared to the losses of 385 thousand in the January—June period of the previous year.
The operating profits after tax and savings reached 27.2 million euros in the first six months of 2018, which is 33% more than in the first six months of 2017;
The total amount of deposits in the SEB bank was 2.43 billion euros as of 30 June 2018, which is 6% more than the deposited amount at the end of the first half of 2017;
The total credit portfolio by the end of June 2018 reached 2.8 billion euros, i.e. 8% more than by the end of June 2017;
The equity was 396.7 million euros as of 30 June 2018;
The value of assets at the end of 2018 amounted to 3.335 billion euros.

During the first half of the year, the following awards were given to the bank, recognising its activities in various fields: