Swedbank Estonia reports €175 million profit for 2016

Swedbank.
Swedbank. Source: Postimees/Scanpix

Profits increased by €115.8 million compared to 2015. Revenue grew by 6 percent year on year to €309 million, whereas the bank’s expenses increased by only 2 percent to €103.6 million. The biggest increase had been in labor costs, Swedbank said on Thursday.

“Our solid results mirror the good health of the Estonian economy and consumer confidence. Loan portfolios grew both in the corporate and private segment,” Robert Kitt, CEO of Swedbank Estonia, said in a press release.

Lending volumes increased by 5.6 percent compared to the end of 2015, supported by robust household spending caused by improving consumer confidence. The increase was evident across all type of portfolios, including mortgage, corporate lending, consumer finance, and leasing.

Swedbank’s market share in lending was 38.2 percent on Dec. 31, 2016, compared to 38.5 percent on Dec. 31 a year earlier. Deposit volumes grew by 7.8 percent during the year, and Swedbank’s market share in deposits was 47.9 percent, compared to 47.4 percent on Dec. 31, 2015.

Net interest income increased by 9.1 percent during the year, mainly as a result of bigger lending volumes. Net commission income did not change in 2016. Higher customer activity resulted in an increase in fee income. At the same time, net commission income was affected by the new regulation on card interchange fees, while the number of card purchases rose by 7.2 percent. Asset management fees also fell due to lower management fee rates for pension funds.

Total expenses increased by 1.5 percent during the year. The increase was mostly a result of higher expenses on staff.

Credit and other impairments amounted to €5.6 million in 2016, compared to €3.6 million in 2015.

In the final quarter of 2016, Swedbank’s revenues grew by 3 percent year on year to €80.3 million, whereas net profit shrank by 4 percent to €44.2 million.

Editor: Editor: Dario Cavegn

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