Luminor bank announces the results of the 1st quarter of 2024 – Economy, finance

In the first quarter of this year, Luminor Bank’s operations improved, liquidity and capital positions were strengthened. The quality of the bank’s lending has remained stable, the volume of non-performing loans is 2% of gross loans.

Luminor’s net profit in the first quarter of this year increased to 66.8 million euros, which is 10.8% more than in the corresponding period last year. On the other hand, taxes and duties related to banking activity in Latvia and Lithuania and contributions to resolution funds increased by 10.3 million euros in the first quarter, reaching 11.6 million euros.

“Currently, society is expecting a period of gradual stabilization and recovery after the economic challenges of recent years. In general, we observe that people feel more secure and financially stable. In the first quarter of this year, the total amount of deposits amounted to 3.05 billion euros, which is a slight increase compared to the end of last year, and the savings of private individuals in the first three months of the year increased by 14% compared to the last quarter of last year. Industry data for the past year also outline this sentiment, with the total deposits of Latvian residents increasing to around 21 billion euros,” he says. Kerli Vares, head of Luminor Bank in Latvia.

In the first quarter of this year, Luminor banka improved its product offer for individuals, while at the same time the volume of lending remained unchanged and the volume of term deposits continued to grow. In the corporate segment, Luminor continued to support the development of the Baltic capital market and the move towards the green course by organizing a new bond issue in the segment of renewable energy resources. The bank also implemented an agreement with the European Investment Bank to promote additional lending to Baltic small and medium-sized companies and support the development of the green economy.

Last year’s sharp rise in the Euribor rate was certainly one of the most significant events in the industry, affecting both individuals and entrepreneurs, and caution is still observed among them. “Although the drop in the Euribor rate was not expected as previously planned, the summer forecasts currently show hopes for a more positive future. Therefore, one could expect both a faster development in business and an increase in demand in the housing market. In the first quarter of this year, the amount of financing provided by Luminor to individuals and companies in Latvia is 2.84 billion euros, which is equivalent to the previous three quarters,” explains K. Vares.

Luminor Bank improved its net interest margin to 3.64%, reducing its expense-to-income ratio to 47.5%, and the bank’s adjusted return on equity was 14.8%. By increasing net interest income, the bank increased total operating income by 8.4%. Taking into account the investments for the improvement of IT systems and processes, the operating expenses for the quarter increased by 4.4%.

Luminor maintains a strong liquidity and capital position. At the end of the quarter, the bank’s liquidity coverage ratio was 207.6%, and its capital, equity (Tier 1) and total capital ratios, including profit for the period, were 25.4%. In April, Luminor paid a dividend of 194.5 million euros. Taking into account this dividend payment, the bank’s capital ratios (pro forma capital ratios) would be 22.6% at the end of the quarter. On April 30, international rating agency Moody’s Investors Service upgraded Luminor’s long-term senior unsecured debt rating to A3 from Baa1.

“Since I joined Luminor in March, I have been fascinated by our customers, amazed by my colleagues and inspired by the opportunities available to us. We still have work to do to ensure that we are successful with our clients, but thanks to the character of our people and their achievements under my predecessor Peter Bosek, we have a strong foundation in place. Initially, I will focus on the following directions: improving our offer to customers and adapting our IT systems to benefit our customers while improving our efficiency,” says Vojcehs Sass, chairman of the board of Luminor banka.

Luminor’s Q1 2024 report in English is available here.

About Luminor

Luminor is the leading independent bank in the Baltic States and the third largest financial services provider in the region. We provide financial services to individuals, families and businesses. Like the Estonian, Latvian and Lithuanian markets, we are young, dynamic and focused on the future.

Luminor