Swedbank’s profit in Latvia reached 65 million euros in the first quarter – BauskasDzive.lv

Swedbank’s profit in Latvia in the first quarter of this year was 65 million euros, which is four million euros more than in the corresponding period of 2023, the bank’s media relations manager Jānis Krops told LETA.

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He points out that the increase in profit was facilitated by the effect of the release of credit savings and higher income. In the first quarter of this year, credit reserves in the amount of three million euros were released, while last year in the corresponding period, credit reserves in the amount of one million euros were created.

At the same time, the financial report published on the bank’s website shows that in the first quarter of 2024, the profit of the “Swedbank” group in Latvia was 61.747 million euros, which is 7.9% more than in the first quarter of 2023, while the profit of “Swedbank” itself has increased by 8, 1% and was 66.695 million euros.

The assets of the “Swedbank” group at the end of March 2024 were 9.503 billion euros, which is 2.2% or 203.598 million euros more than at the end of 2023, when the assets of the bank group were 9.299 billion euros.

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Krops states that the bank’s expenses in the first quarter have reached 36 million euros in contrast to 31 million in the first three months of last year.

At the same time, the net interest income in the first quarter of 2024, compared to the first quarter of last year, has increased by 15 million euros, while the net commission income remained unchanged.

He also mentions that the size of the loan portfolio has increased by 5%, including the amount of lending to households has increased by 8%, while the loan portfolio of companies has increased by 1%. At the same time, deposits have grown by 5% compared to the same period last year, including household deposits by 5%, while corporate deposits have grown by 7%.

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Also, Krops states that in connection with credit interest compensation for mortgage borrowers, the payment of the bank fee for the first quarter reached almost 10 million euros, and all bank clients who qualified for support have already received it.

“In the first quarter of 2024, the inflation indicators in the Eurozone are gradually approaching the target set by the European Central Bank (ECB), which makes the question of a possible gradual reduction of the rates set by the ECB already this year topical. At the same time, economists’ forecasts show that after a stagnant economic situation last year, this year there is a potential for faster development of the national economy,” says Lauris Mencis, chairman of the board of Latvia’s Swedbank.

He also points out that the stage of high inflation has been overcome, and currently the challenge for Latvia, as well as other countries, is to restart the cooled economic engine with greater power.

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The bank notes that the growing average wages and the reduced unemployment rates refer favorably to the improvement in the purchasing power of households. Public spending, including investments in the defense sector, could contribute to the growth of domestic consumption. On the other hand, there are hopes for greater growth in the export markets next year alone. The previous trend also continued in the first quarter, with customers choosing to deposit more money in term deposits or diverting it to a savings vehicle to receive interest income.

The bank also states that it is evident that not only Riga and Pieriga, but also other Latvian cities and regions are developing in Latvia. “Swedbank” loan data show that 30% of housing loans are issued for the construction or purchase of property in the regions. The largest development takes place in Vidzeme – Valmiera, Sigulda, Limbažu and Cēsi counties, Kurzeme – in Talsu, Tukum, Ventspils, Saldus and Kuldiga counties, while in Latgale and Zemgale, more loans were made in Madona, Rēzekne, Jēkabpils, Aizkraukle and Jelgava, Dobele and Bauska counties.

According to the bank, the increase is also observed in leasing transactions. Private customers actively use the opportunity to receive both state support when buying environmentally friendly vehicles and to change the car fleet as a whole – the leasing portfolio of private individuals shows an increase of 14% during the year.

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In the financing of companies, as in the case of private individuals, there has been great activity not only in Riga and around Riga, but also in the regions. Apart from Riga and Pieriga, entrepreneurs have also actively attracted loans in Valmiera, Sigulda, Cēsa, Baldone, Vecumnieku, Olaine, Jelgava, Daugavpils, Preiļu, Rēzekne, Saldus, Aizpute, Liepāja and Ventspils. Within three months, 144 million euros were issued to companies, of which 44% of funding was issued in the regions.

The bank notes that although the geopolitical situation still affects the general investment mood, companies are looking for new markets, investing in the development of new products.

It has already been announced that in the first quarter of 2023 the profit of the “Swedbank” group in Latvia was 57.216 million euros, which is 3.2 times more than in the first quarter of 2022, but the profit of “Swedbank” itself increased by 2.7 times and was 61.691 million euros .

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Swedbank is the largest bank in Latvia in terms of assets.

Photo: LETA