Bigbank's Unaudited Financial Results for Q1 2024
26 Abril 2024 - 1:30PM
Bigbank's Unaudited Financial Results for Q1 2024
Bigbank’s total gross loan portfolio grew to a record 1.75
billion euros by the end of the first quarter, increasing by 86
million euros (+5%) over the quarter and by 325 million euros
(+23%) year-on-year. During the quarter, the corporate loan
portfolio grew by 22 million euros (+4%) to 600 million euros, the
housing loan portfolio by 43 million euros (+12%) to 394 million
euros and the consumer loan portfolio by 25 million euros (+3%) to
762 million euros.
The savings deposit portfolio and the term deposit portfolio
grew at fairly equal rates in the first quarter. The Group’s total
deposit portfolio increased by 215 million euros (+11%) over the
quarter and by 655 million euros (+44%) year-on-year, expanding to
2.15 billion euros. The term deposit portfolio increased by 100
million euros (+11%) to 1.02 billion euros, exceeding the
1-billion-euro mark for the first time. The savings deposit
portfolio increased by 116 million euros (+11%) to 1.14 billion
euros over the quarter. An important milestone at the beginning of
the quarter was the launch of term deposits in Lithuania, the last
market where Bigbank did not offer this product. As of January
2024, Bigbank offers term deposits in all markets where it
operates.
Bigbank earned a net profit of 6.4 million euros in the first
quarter of 2024. Compared to the first quarter of 2023, net profit
decreased by 3.2 million euros.
Compared to the first quarter of 2023, the Group’s net interest
income increased: in the first quarter of 2024, net interest income
was 26.4 million euros (Q1 2023: 22.5 million euros), 3.9 million
euros (+17%) higher than a year earlier.
For the second quarter in a row, the overall economic stagnation
and weak consumer confidence had a negative impact on Bigbank’s
consumer loan portfolio. Compared to historical data, there is
still no significant deterioration, but the quality of the
portfolio has declined over the past six months. While there was no
sign of deterioration in the quality of the housing loan portfolio,
the quality of the corporate loan portfolio also declined somewhat
in the first quarter. The share of loans in default, credit loss
allowances on loans and additional provisions have all
increased.
In the first quarter of 2024, credit loss allowances on loans
increased by 2.6 million euros year-on-year. Compared with the end
of 2023, Stage 3 loan receivables grew by 32.2 million euros and
accounted for 4.7% of all loan receivables at the reporting date.
In addition, the Group updated the inputs to the loan impairment
model in the first quarter of 2024: new historical data were
included in the probability of default (PD) and loss given default
(LGD) calculations, and the forward-looking models were updated
with macroeconomic indicators using central banks’ March 2024
forecasts. As a result of the update, additional provisions for
future loan impairment were recognised in the amount of 2.2 million
euros.
The Group’s income tax expense increased by 0.2 million euros to
1.3 million euros compared to the same period last year. The
increase was mainly driven by the introduction of the advance
income tax in Latvia at the end of 2023, which in 2023 was only
reflected in the figures for the fourth quarter but will affect all
quarters in 2024.
The Group’s investment property portfolio, which includes both
agricultural land and commercial real estate, stood at 49 million
euros at the end of the quarter. The Group did not conduct any
significant transactions with investment properties during the
quarter.
In 2024, the Group identified an error in the calculations for
the application of the effective interest method. The error was
made in periodisation of income and expenses directly related to
the issuance of loans in 2022, which was corrected in the first
quarter of this year. As a result of the correction of the error,
the retained earnings of the previous periods decreased by 3.2
million euros. Also, as of December 31, 2023, receivables from
customers decreased by 3.7 million euros and income tax liabilities
by 0.5 million euros.
Income statement, in thousands of euros |
Q1 2024 |
Q1 2023 |
3M 2024 |
3M 2023 |
Net interest income |
26,392 |
22,519 |
26,392 |
22,519 |
Net fee and commission income |
2,164 |
1,973 |
2,164 |
1,973 |
Net income (loss) on financial assets |
1,071 |
572 |
1,071 |
572 |
Net other operating income |
-849 |
-117 |
-849 |
-117 |
Total net operating income |
28,778 |
24,947 |
28,778 |
24,947 |
Salaries and associated charges |
-6,412 |
-5,652 |
-6,412 |
-5,652 |
Administrative expenses |
-3,669 |
-3,523 |
-3,669 |
-3,523 |
Depreciation, amortisation and impairment |
-2,052 |
-1,013 |
-2,052 |
-1,013 |
Total expenses |
-12,133 |
-10,188 |
-12,133 |
-10,188 |
Provision expenses (income) |
-2,419 |
5 |
-2,419 |
5 |
Profit before loss allowances |
14,226 |
14,764 |
14,226 |
14,764 |
Net loss allowances on loans and financial investments |
-6,555 |
-3,909 |
-6,555 |
-3,909 |
Profit
before income tax |
7,671 |
10,855 |
7,671 |
10,855 |
Income tax expense |
-1,275 |
-1,113 |
-1,275 |
-1,113 |
Profit for the period from continuing operations |
6,396 |
9,742 |
6,396 |
9,742 |
Income (loss) from discontinued operations |
21 |
-121 |
21 |
-121 |
Profit for the period |
6,417 |
9,621 |
6,417 |
9,621 |
Statement of financial position, in thousands of euros |
31 March 2024 |
31 Dec 2023 (restated) |
31 March 2023 |
Cash and cash equivalents |
652,065 |
518,672 |
258,316 |
Debt securities at FVOCI |
13,586 |
15,400 |
18,531 |
Loans to customers |
1,747,606 |
1,662,002 |
1,422,702 |
Other assets |
89,823 |
91,324 |
104,985 |
Total assets |
2,503,080 |
2,287,398 |
1,804,534 |
Customer deposits and loans received |
2,161,463 |
1,946,314 |
1,507,115 |
Subordinated notes |
76,476 |
76,109 |
62,908 |
Other liabilities |
21,688 |
20,182 |
17,310 |
Total liabilities |
2,259,627 |
2,042,605 |
1,587,333 |
Equity |
243,453 |
244,793 |
217,201 |
Total liabilities and equity |
2,503,080 |
2,287,398 |
1,804,534 |
Commentary by Martin Länts, chairman of the management
board of Bigbank AS:
The loan portfolio has continued to grow strongly in all product
categories. Particularly pleasing is the growth of the home loan
portfolio, which increased by 43 million euros in the first quarter
of the year, surpassing the growth of the same period last year by
23 million euros. There are signs of revitalisation in the real
estate markets, and it's gratifying to see that an increasing
number of clients are choosing Bigbank as their home purchase
financier.
The sales volume of business loans and leases also experienced
strong growth in the first quarter, reaching 114.4 million euros,
which is 93% higher than the same period last year. Particularly
rapid – three times higher compared to last year – was the growth
in sales of loans and leases to businesses in Lithuania.
Our funding base remains strong – in the first quarter, the
Group's deposit portfolio grew faster than the loan portfolio,
increasing by 215 million euros, exceeding the growth of the first
quarter of last year by 85 million euros. It is important to note
regarding deposits that we recently started offering deposits in
the Lithuanian market. We are proud to announce that now our
Lithuanian clients can also be part of Bigbank's overall strategy
to offer one of the highest market rates across all home
markets.
Bigbank's profit for the first quarter of 2024 was lower
compared to the previous year. The largest impact was due to
increased credit loss allowances on loans, personnel expenses, and
the cost of the deposit guarantee fund, as well as increased
amortisation of intangible assets.
As for the outlook, we continue our work and the systematic
implementation of the Group's strategy, which includes continued
growth and expanding the product portfolio towards everyday
banking.
Bigbank AS (www.bigbank.eu) is an Estonian
capital-based bank specialising in loans and deposits for private
and business customers. In addition to operations in Estonia, the
bank has branches in Finland, Sweden, Latvia, Lithuania, and
Bulgaria and offers its products on a cross-border basis in
Austria, Germany, and the Netherlands. Bigbank’s total assets
exceed 2 billion euros.
Argo Kiltsmann Member of the Management Board Telephone: +372
5393 0833 Email: argo.kiltsmann@bigbank.ee www.bigbank.ee
- Bigbank_interimreport_Q1_2024