Swedbank, the largest bank operating in Estonia, made a net profit of €214 million in the first half of 2023, an increase of €148 million from the same period last year. The bank's interest revenues alone were up by €150 million compared to the same time last year.

By way of comparison, Swedbank's total profit for the whole of last year was €224 million.

According to a Swedbank press release, the bank's income for the first half of 2023 was up €192 million. This was mainly due to higher interest income, resulting from the European Central Bank's increased in interest rates.

The lending volumes of Swedbank's private customers increased by 5.5 percent, while those of corporate customers were also up, by four percent. Deposits grew by one percent.  In the first six months of the year, Swedbank issued €521 million in new loans to private individuals and €800 million to enterprises.

The bank's net interest income rose by €150 million, the growth of which was mainly due to having a larger loan portfolio and increased interest rates driven by the Euribor.

Greater turnover in the private cards area and higher credit limit usage by companies, meant Swedbank's net commission income increased by €1 million. However, lower revenues related to payments and securities reduced the positive impact of cards on revenues.

Estimated credit losses for the first six months of 2023 reached €-4.5m. That indicator was €EUR -0.8m for the same period in 2022.

"Estonia's economy continues to be affected by increasing uncertainty and higher living costs, and there's more caution when consuming some products and services. At the same time, it has not yet started to affect our customer portfolio," said Olavi Lepp, CEO of Swedbank AS.

Net income from financial items increased by €5 million on year, due to unrealized profits from the revaluation of assets in the asset management and insurance business, the positive impact of which was reduced by lower income from currency trading transactions.

Other income was up €36 million, due in large part to higher insurance income.

The company's total expenses increased by €13 million. The bank cited higher staff costs and services sourced from other companies in the Swedbank Group as the main reasons for this. Expenses and investments related to digital solutions also increased.

In the first half of 2023, Swedbank AS, along with its subsidiaries and group companies operating in Estonia, paid €29 million in labor taxes, making it one of the country's largest labor tax contributors.

LHV's half-year profits exceed last year's total

LHV's net profit for the first six months of 2023 was €68.9 million, €42 million more than at the same point last year. Last year, the group's net profit was €61.4 million.

In the second quarter (Q2) of 2023, LHV Group's consolidated income was €74.9 million, which is ten percent higher than in the first quarter (Q1). €62.9 of LHV's income came from net interest and €12.4 million was from net service fees. The group's operating expenses amounted to €33 million in Q2, 8 percent more than in the first quarter.

At the end of June, the group's consolidated assets totaled €6.31 billion, an increase of four percent, or €217 million, during Q2.

The group's consolidated deposits also grew by four percent to €5.06 billion.

According to the bank, increased interest income along with a high quality credit portfolio contributed to it significantly exceeding profit goals.

Given the rising interest rates in the first half of the year, the bank's main focus was on deposits, with demand deposits up by €333 million and term deposits by €528 million.

SEB made €113.3 million in first half of year

SEB Bank's profit for the first half of the year was €113.3 million, an amount just below the bank's €116 million profit for the whole of 2022. In comparison, SEB Bank's profits for the first half of 2022 were €49.2 million.

SEB Group's operating income was €169.5 million in the first half of this year, compared to €88.8 million during the same period a year earlier. The bank's operating expenses were €37.2 million, which is €5.5 million more than in the first half of 2022.

According to SEB board chair Allan Parik, the bank's capital and liquidity base is at a good level and stable. Private individuals' savings have not increased compared to last year, with 2.7 billion units of deposits in the bank, 77 percent of which are in regular current accounts.

SEB considers the financial health of companies to be good, with company deposits growing by 12.8 percent over the year.

"At the same time, we are cautious in making new investments, because the environment is still uncertain. However, we have managed to increase the loan portfolio of companies by 6 percent over the year, which means that the bank's investments in Estonian companies reached almost €2.9 billion in the first half of the year," said Parik.

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