In 2023, banks were highly profitable, earning a total profit of €235 million in the final quarter and €940 million for the year as a whole.

According to Eesti Pank (the Bank of Estonia), the profitability of banks operating in Estonia has since declined from these high levels.

"As market interest rates, including the Euribor, decrease, banks' interest income declines more rapidly than the interest expenses incurred from deposits and other funding sources. This causes a reduction in banks' primary profit component — net interest income. Compared to the fourth quarter of 2023, banks' interest income fell by €11 million, while interest expenses increased by €26 million," Eesti Pank announced on Tuesday.

The exact total profit of commercial banks for 2024 was not disclosed in the central bank's report.

A significant contribution to the exceptionally high profit recorded in the final quarter of 2024 came from a transaction by one major bank at the end of the year, which involved withdrawing significantly more dividends than usual from a subsidiary, Eesti Pank noted.

"Excluding this transaction, the profit for the final quarter of last year would have been €169 million. When compared to banks' assets, this translates into a profitability rate of 1.5 percent for the final quarter. This is slightly above the long-term average but clearly lower than in 2023," Eesti Pank confirmed.

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