SEB Estonia ended the first quarter of 2020 with a profit of €22.3 million, 7 percent less than in the same quarter the year before.
In 2019, SEB Estonia ended the first quarter with a profit of €24.1 million, the bank said. In the first quarter of this year, SEB's operating profit was €41.3 million euros compared with €42 million euros in the first quarter of 2019.
The bank's operating expenses amounted to €14.7 million, compared with €15.2 million in the first quarter of 2019. The bank increased its reserves for credit losses by €1.3 million in the first quarter of 2020. During the same period in 2019, the bank reduced the reserves by €400,000.
The impact of the sudden economic slowdown is not yet visible in the first quarter results of SEB. Compared to the first quarter of the previous year, the bank earned 1.5 per cent less revenue.
Due to the increase of reserves for possible credit losses, the bank's year-on-year profit for the first quarter decreased by 7.3 percent. Within a year, clients' deposits increased by 9.8 percent, from €4.3 billion to €4.7 billion.
Meanwhile, clients' loans increased by 8.9 percent, from €5.3 billion to €5.8 billion. The growth of the deposits was driven by households, while businesses and households contributed equally to the growth of loans.
Allan Parik, chairman of the board of SEB Pank, said that in addition to public health, the economy has also been hit hard by the coronavirus and its depth and extent will only become apparent in the following quarters. Alongside other banks, SEB has developed a plan on how to contribute to helping the economy back on its feet. The key component of this solution is the bank's ability to reduce the fixed expenses of individuals and companies in the form of grace periods and to provide new financing in the coming quarters, he added.
"To date, we have provided grace periods to more than 1,600 private and 400 business clients, in the total value of more than €450 million. The principal installments of the loans are postponed, as needed, for up to six months, and in the case of home loans, for up to a year," Parik said in a press release.
Editor: Helen Wright