The increase in profit, of €1.6 million, was mainly the result of increased income for the bank.

Olavi Lepp, Swedbank AS CEO, said: "Restrictions related to the COVID-19 pandemic were eased in the second quarter of 2021".

"Although confidence among consumers and companies in Estonia remains weaker than prior to the pandemic, it has improved a lot during this year," Lepp continued, according to BNS.

"We are ready to finance private customers and companies; credit demand has already recovered in several sectors. In other sectors, the recovery might require more time, but we are willing to move in the tempo that suits our customers best," Lepp added.

The bank's deposits grew by 8 percent over the same time period, while new loans totaled €554 million, to private customers, and €671 million to business clients. Household and corporate lending portfolios grew 4 percent.

Swedbank First-half 2021 in brief:

The bank reported that:

• Total expenses grew by 12 percent.
• Swedbank AS and its subsidiaries paid labor taxes of €19.5 million, one of the largest contributors nationally.
• Income rose by 6 percent on year, mainly the result of higher income from interests, service fees and financial revenues.
• Net interest income increased by 3 percent.
• Net commission income grew by 13 percent.
• Net gains and losses rose by €3 million, mainly due to the write-down of assets that occurred a year ago as a result of COVID-19.
• Other income fell by 3 percent, thanks largely to lower insurance income.
• Credit impairments of the first half-year of 2021 reached €10.6 million; for the same period in 2020, the amount was €10.1 million.

The increased expenses were mostly the result of higher staff costs, expenses related to anti-money laundering (AML) work and the strengthening of risk and compliance functions. Investments in digital solutions also continued to develop.

Net interest income this growth was supported by Swedbank's participation in the third series of the targeted longer-term refinancing program, namely the European Central Bank's TLTRO III, which, BNS reports, facilitated the attraction of funding at favorable conditions.

Net commission income rises were mainly driven by card fees, supported by increased customer activity as the pandemic and its restrictions eased. Income from payments area increased as well.

The main driver behind credit impairments was the €12.5 million post-model provision adjustment, undertaken in the first quarter, which was used to cover potential credit losses, to a total of €6.4 million during the second quarter.

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