Swedbank Estonia nets €89.5 million profit in first half of 2017

Swedbank. Source: Postimees/Scanpix

The Estonian unit of Scandinavian banking grup Swedbank earned €89.5 million euros of profit in the first half of 2017, a six-percent increase over the same period last year.

The increase was driven primarily by higher income.

"We see a continuously robust growth in the Estonian economy reflected both in private and corporate lending demand," Swedbank Estonia CEO Robert Kitt said in a press release. "I would like to underline the growth of our small and medium-sized enterprises (SMEs) lending portfolios, which have increased six and five percent, respectively, demonstrating that smaller companies find growth opportunities as well.

"One of the activities that stands out for Swedbank is our goal to start hiring more people outside of Tallinn," he continued. "The 21st century is all about flexible working environments and remote work possibilities, so we aim to offer more career possibilities in Swedbank outside of our capital. In 2017, we will have added 50 jobs in Tartu and 50 in other places all over Estonia."

Lending volumes increased by four percent on year and were mainly driven by strong growth in mortgages, consumer loans and leasing. Deposit volumes grew by five percent and were largely driven by household deposits.

There were no credit impairments in 2017, down from €3.5 million in credit impairments last year.

Net interest income decreased by 0.5 percent. The decrease was mainly due to lower market rates, while higher lending volumes supported the result. Net commission income increased by two percent; the increase was due to higher income from asset management and payment processing. Total expenses increased by two percent, affected primarily by higher staff costs. Expenses for premises, meanwhile, decreased.

During the second quarter of 2017, Swedbank continued to improve the functionality of its digital channels. For corporate customers, the bank further developed the Swedbank Gateway service in order to make it easier for small businesses to link their enterprise system with their bank account. For private customers, the bank added push notifications in the mobile bank environment in June.

Smart ID, which was launched last quarter, has performed strongly. There are currently more than 39,000 Smart ID users in Estonia, who logged in 1.1 million times during the second quarter. With Smart ID, customers can identify themselves, sign contracts and confirm payments. This new tool is helpful in using Swedbank's mobile bank — as of the end of the second quarter, the amount of active users of Swedbank's mobile bank had increased to 170,000.

According to an independent survey carried out by Kantar Emor in May, Swedbank ranks among the ten most popular brands in all three Baltic countries, ranking third in Estonia.

Charlotte Elsnitz, coming from the position of CFO for Swedbank's business area Baltic Banking, was on June 30 appointed head of Baltic Banking and member of the Group Executive Committee.

Editor: Aili Vahtla

Source: BNS

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