SEB Pank, Estonia's second largest commercial bank, finished 2023 with a profit of €231.7 million, similarly to Swedbank more than doubling its profits on year from €115.9 million.
SEB's operating income totaled €356 million – up from €206.9 million in 2022 – and operating expenses €78.4 million – up from €69.1 million on year, the bank announced Thursday.
Income tax was calculated in the amount of €47.1 million in 2023, up from €19.8 million on year. In 2023, SEB paid a total of €64.5 million in various taxes to the Estonian state.
According to SEB CEO Allan Parik, the bank's 2023 economic results were most impacted by the rapid rise in key interest rates, i.e. the cost of money.
"We used the year 2023 to strengthen SEB's market position," Parik said. "We reduced our fees and loan margins, invested in the modernization of our IT systems as well as recruited new employees and raised wages. With these investments, we hope to be in the best position as the economy recovers."
Despite the gradual deterioration of the economic environment, SEB's loan quality has remained steadily good.
"We reduced loan loss provisions in the amount of €3.1 million last year, which is an indication of responsible lending; increased base rates and a weak economic environment has not increased our clients' arrears," the CEO highlighted.
Earlier this week, Swedbank Estonia, the country's largest and likewise Swedish-owned commercial bank, similarly reported a doubling of profits in 2023 to €385 million, once again raising the question of whether Estonia should follow Lithuania and several other European countries' suit in specifically taxing banks' extraordinary windfall profits resulting from sharp interest rate hikes.
Editor: Aili Vahtla