Swedbank Estonia's first quarter profits up 5.7 percent on year
The Estonian unit of Scandinavian banking group Swedbank earned a profit of €47 million in the first quarter of 2018, marking a 5.7 percent increase on year driven by higher incomes and lower expenses.
"We are witnessing continuous high economic activity — companies' interest in lending as well as consumers' confidence remain strong," Swedbank Estonia CEO Robert Kitt said in a statement issued by the bank. "This is confirmed by the growth of our loan portfolio — seven percent on year and 1.4 percent on quarter."
According to Kitt, the bank is also seeing an increasing interest in mobile banking as well as secure new authentication methods. The Swedbank-developed Smart-ID has 140,000 users, while the bank's mobile app is now in use by more than 260,000 users, and both numbers continue to grow.
"Our more and more intense cooperation with universities is in large part driven by the rapid digitalization of banking," the CEO said. "We are working actively with universities to develop curricula and trainee programs that help to educate future bankers. The skills needed by future bankers have to do for example with big data analysis and the development of digital channels. Our cooperation with the University of Tartu has helped us recruit more people in Tartu. We have set a goal to recruit more outside Tallinn, and with 192 employees, Tartu has now become the second largest unit we have in Estonia."
Loan volume rose seven percent in the first quarter to €7.37 billion, supported by growth in household and corporate lending. Deposit volumes, meanwhile, increased by four percent to €7.77 billion. Household deposits showed growth and corporate client deposits declined.
Net recoveries amounted to €1.2 million compared to recoveries of €1 million in the first quarter of 2017.
Net interest income rose by 5.4 percent to €50.7 million. The increase was primarily the result of higher lending volumes. Net commission income rose by 4.9 percent to €19.4 million, mainly due to higher income from cards, payments and securities.
Total expenses decreased by 2.6 percent to €24.7 million, due mainly to lower costs of premises and marketing costs.
During the first quarter of 2018, Swedbank has continued working on improving customer experience through digital channels, and development continues on the newest version of the bank's mobile app for private as well as corporate customers. The bank is likewise developing mobile contactless payments.
Editor: Aili Vahtla
Source: BNS
