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NEWS - 2018 04 30 - 10:20

In the first quarter of 2018, SEB Group in Latvia issued EUR 240 million in loans, its crediting volumes rose by 24 %

Economic growth conditions and the dynamics of business activity have fuelled an increase in demand for loans. As a result, SEB issued EUR 240 million (M) in loans in the first quarter of 2018. Of the new loans issued by SEB Group, EUR 200 M were issued to legal entities and EUR 30 M – to finance housing loans.

Overall, in the first three months of 2018, the performance of SEB Group in Latvia was a net profit of EUR 13.9 M, up by 16 % against the last quarter of 2017.

Ieva Tetere, CEO of SEB banka:

“This has been an extremely dynamic quarter. Our international counterparties have clearly pointed out to the need for changes in Latvia, demanding a faster transition towards a transparent financial industry. This may not be ignored if Latvia is willing to be part of the international financial system. On a positive note, a Consultative Group tasked with the change management in the Latvian financial sector as well as coordinated communication between businesses and the Government has been established in Latvia. This is a grand step towards engaging international as well as national counterparties to move forward together to constructively embracing the changes.

The medium-term forecasts of the growth rate of Latvian economy given by economists marks an optimistic view of the growth prospects of Latvia. We can feel it now – discussing business and development plans with our customers. Over the last 12 months, we have demonstrated a compelling portfolio growth rate of 7 per cent. The loan portfolio has been growong in the large corporations as well as small and medium businesses segments; the individual portfolio has also been growing steadily. In the small and medium business segment, the new financing increased by 12 % in the first quarter of the year compared to the relevant period a year earlier, while in the large enterprise segment the growth rate rose by 34 per cent.

Overall, our financial performance has been very sound. As for the revenue dynamics, we can see that even given the stable pace of lending, which is going to favourably impact the bank's revenue, negative interest rates are a critical factor that generates significant interest costs. Considering that in the first quarter of 2018, deposits increased by 2.5 %, whereas the annualised growth rate was 6.8 %, this is viewed as one of the biggest challenges. The return on sales is also affected by the ever-growing fees for financial sector supervision as well as the costs of implementing control systems.

The first quarter has been very important in that we launched a number of initiatives to support our customers in promoting their growth. Currently, with the support of SEB banka, 12 Latvian companies participate in the Growth programme, several startup have received support within the scope of Goodwill Entrepreneur Programme as well as the(ie)dvesma (inspiration/breathing) Programme. Smart-ID is being used increasingly, the mobile application is getting more and more popular, and we can see that flash payments will demonstrate their real added value when all the banks will have joined the system.

The thirty financial literacy lectures run by us during the first three months this year definitely deserve mentioning. I am grateful to all staff who devoted their time to ensure that more than 600 young people from all over Latvia would receive an insight into financial literacy topics, who debated financial skills with young people, were the source of inspiration as well as shared ideas on how to organise their first financial decisions.”

The financial indicators of SEB Group in Latvia in the first quarter of 2018:

  • Revenue of SEB Group in Latvia amounted to EUR 23.8 M, down by 1 % compared to the first quarter of 2017;
  • Costs amounted to EUR 11.6 M, up by 7 % compared to the first three months of 2017;
  • Profit before provisions amounted to EUR 12.3 M, down by 4 % compared to the first quarter of 2017;
  • The provisions made during the period from December to the end of March amounted to EUR 1.49 M, up by 67 % compared to the period from January - March 2017;
  • Operating profit after tax and provisions amounted to EUR 13.9 M in the first three months of this year, up by 16% compared to the relevant period in 2017;
  • At 31 March 2018, the total amount of deposits with SEB banka was EUR 2.43 billion, up by 7% compared to the volume of deposits at the end of the first quarter of 2017;
  • At the end of March 2018, the total loan portfolio was EUR 2.7 billion, i.e., up by 7 % than at the end of March of 2017;
  • At 31 March 2018, own funds and reserves amounted to EUR 383.2 M.
  • • At the end of March 2018, assets amounted to EUR 3.566 billion.

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