SEB Group performance in Latvia in the first half of 2021

Residents have received by 73% more funding for housing purchase and have deposited by 20% more in their savings

In the first half of this year, SEB Group's profit after tax in Latvia increased by EUR 16.1 million reaching EUR 31.7 million, which can be explained by the recovery of economics that is driven by the desire of households to improve their living conditions, readiness to start spending money again and recovery of investment activity of businesses as well.

Bank has decreased the amount of expenses for the creation of provisions for expected credit loss due to the improvement of financial situation of several clients and because the effects of Covid-19 currently are less significant than bank expected last year.

Household demand for financing has increased significantly

Newly allocated financing for the purchase or repair of housing reached EUR 91 million in the first half of the year, up 73% year-on-year. The total amount of loans granted by SEB to its customers amounted to EUR 363 million in the six months of 2021, which is 27% less than in the first six months of last year. The reason for such a decrease is also related to the fact that in June last year a significant loan agreement was signed with AS Augstsprieguma tīkls for more than EUR 130 million.

As at 30 June 2021, total deposits at SEB banka amounted to EUR 3.8 billion, an increase of 20% compared to the deposit base at the end of June 2020. At the end of June 2021, SEB Group’s assets in Latvia amounted to EUR 4.3 billion, while SEB Group’s capital in Latvia amounted to EUR 443 million, up 7% and 9%, respectively, compared to the first half of last year. 

Ieva Tetere
CEO of SEB banka Latvia

Commenting on the second quarter results, Ieva Tetere, CEO of SEB banka Latvia, points out that the recovery of the economy of Latvia by overcoming the obstacles created by COVID-19 is reflected in the Bank’s operating performance.

“After the decline in economic activity in the first quarter, in the second quarter there are convincing signs of economic growth. In June the economic sentiment has climbed to the level which is one of the highest in the period of more than a decade and it will be reflected in the increase of activity of households and businesses. With the increase in exports, a good basis for growth of manufacturing industry is being formed. On the other hand, trade and service industries, as well as the hotel and accommodation, entertainment and recreation sectors, are stimulated by the revival of domestic consumption by the population. There is brisk activity in the construction sector, which is reflected in the demand for credit. However, the impact of the Covid-19 on the economy will be still felt in a foreseeable future. Positive fact is that the quality of the Bank's loan portfolio is very good and that during this period we also managed to develop and implement several new digital solutions for the convenience of our customers,” says Ieva Tetere, CEO of SEB banka in Latvia.

Roboinvestor and other significant digital innovations for our customers 

A number of key innovations were implemented in the second quarter. To facilitate the first step towards personal investments, SEB banka introduced a novelty to the Baltic market, the Roboinvestor tool in the mobile application, which offers customers personalised investment recommendations and the possibility to invest at any time of the day, starting from as little as one euro. Currently, over 2000 SEB banka customers in Baltics are using the Roboinvestor service. They have opened a securities account, made a fund purchase or a regular payment for the purchase of long-term investments. In June, SEB banka added the functionality of internet banking, offering customers the opportunity to manage their finances freely, conveniently and in a modern way not only in other bank accounts, but also in their Revolut accounts. SEB thus offers the broadest opportunity to keep track of finances in one place.

Although the use of digital channels has increased greatly in recent years, the bank's branches remain important to customers. Continuing the development of digital branches, the renovated Alfa branch was opened in April, where customers not only have access to personal advice, but also have the opportunity to use the new and spacious self-service area independently.

For the fifth consecutive year, the Bank received the highest rating in the field of sustainability

In the second quarter, SEB banka continued to focus on developing an innovative and sustainable business. As part of the fifth cycle of Growth Programme, nine Latvian companies, with the support of experts, had the opportunity not only to evaluate their current activities, but also to work on new products, services and sustainable business models, as well as master various innovation methods.

Furthermore, SEB banka’s experts participated in various forums on sustainability topics. For example, with the support of SEB banka, an online forum “Sustainability – where will your company be in 2030?” was held on 27 May, where more than 30 experts and industry insiders shared their practical experience on implementing sustainability principles and discussed their role in areas such as the environment, employees, organisation and governance.

As confirmation of the Bank’s long-term efforts in the area of sustainability, in the annual Sustainability Index assessment, for the fifth consecutive year, SEB banka in Latvia was awarded the Platinum category, which is one of the highest ratings in accordance with international requirements in all areas of corporate social responsibility.

Financial performance of SEB Group in Latvia in the six months of 2021:

• Revenue of SEB Group in Latvia amounted to EUR 53.9 million, up 2% on the six months of 2020;
• Costs amounted to EUR 24.8 million, remaining at the same level as in 2020;
• Profit before provisions amounted to EUR 29.1 million, 3% higher than in the January – June 2020 period;
• In the period from 1 January to 30 June provisions for expected credit losses were decreased by EUR 3.7 million. During the same period last year EUR 12,1 million were allocated for provisions for expected credit losses;
• Operating profit after tax and provisions was EUR 31.7 million in the six months ended 30 June 2021, up 103% year-on-year;
• Total deposits at SEB banka amounted to EUR 3.8 billion at 30 June 2021, up 20% from total deposits at the end of June 2020;
• Total loan portfolio was EUR 3.0 billion at the end of June 2021, i.e., down around 4% compared to the end of June 2020;
• As at 30 June 2021, capital and reserves amounted to EUR 442.6 million;
• At the end of June 2021, total assets amounted to EUR 4.3 billion.