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Šiaulių Bankas Group results for Q3 2022
Šiaulių Bankas Group earned EUR 17.6 million of unaudited net profit in Q3 and EUR 47.1 million during the first three quarters of the year
Financing of all customer segments grew - the loan portfolio increased by 7% in Q3 and by 19% YTD and exceeded EUR 2.5 billion
Customers are increasingly using the main daily banking services of the bank
“The results of Šiaulių Bankas’ priority areas again show stability and growth: the financing portfolio of both private and corporate clients is growing, interest in modernisation of multi-apartment buildings remains stable, and the bank once again reached the record in mortgage sales. Customers also appreciated the possibility to submit online applications introduced this quarter, which has resulted in around 85% of applications being received in this way. Although economic stability is not expected in the near future, we have adapted to the changing environment,” said Vytautas Sinius, CEO of Šiaulių Bankas.
Šiaulių Bankas Group earned EUR 47.1 million of unaudited net profit during the first three quarters of this year (7% more than a year ago when the profit amounted to EUR 44.2 million). Profit for Q3 was EUR 17.6 million and increased by 8% compared to last year (EUR 16.3 million).
In the first nine months of this year, operating revenue increased compared to the corresponding period of 2021 - net interest income grew by 28% and reached EUR 75.1 million and net fee and commission income grew by 10% and amounted to EUR 14.0 million.
The geopolitical and economic situation remained unchanged significantly, the loan portfolio quality remained good, EUR 0.5 million of additional provisions for possible impairment losses on loans and other assets were formed during Q3. Provisions for the first nine months of the year amount to EUR 2.4 million, compared to EUR 1.5 million for the same period last year. At the end of September, the cost of risk ratio (CoR) reached 0.2% (compared to 0.1% during Q1-3 2021).
The Group’s cost to income ratio (excluding the impact of client portfolio of SB Draudimas) increased to 43.5% at the end of September (40.4% during Q1-3 2021), while the return on equity was 15.4% (15.8% during Q1-3 2021). The capital and liquidity position remains sustainable and prudential ratios are being met with a large reserve - liquidity coverage ratio (LCR) is 156%* and capital adequacy ratio (CAR) is 16.5%*.
Overview of Business Segments
Financing of Business and Private Customers
Financing of all customer segments grew in the first 9 months of the year. Over EUR 1.1 billion worth of new loan agreements were signed in total, i.e., 26% more than in the same period last year. The Group’s total loan and leasing portfolio grew by 7% in Q3 (EUR 161 million) and 19% since the beginning of the year (EUR 410 million) and exceeded EUR 2.5 billion.
Despite the increasing economic uncertainty, the amount of new business financing loans signed remained high (27% higher than in 9 months of the previous year) and amounts to EUR 619 million. During Q3, the business financing portfolio grew by 4% (EUR 56 million) and from the beginning of the year by 14% (EUR 163 million) and reached EUR 1.34 billion. There are no signs of customers facing difficulties in meeting their financial obligations - the loan portfolio quality remains good, and the business portfolio of non-performing loans has been declining both since the beginning of the year and in Q3 and amounted to EUR 63 million at the end of September (-3% from the beginning of the year).
In Q3, the Bank managed to maintain the growing results of home loan sales as during the whole year of 2022 – loan agreements worth EUR 196 million were signed (+32% compared to the same period in 2021). During the quarter, the mortgage financing portfolio grew by 11% (EUR 59 million) and from the beginning of the year by 34% (EUR 156 million) and reached EUR 611 million. In Q3, a remote mortgage application submission channel was offered to customers, which increased the number of potential customers.
Rising cost of energy resources that are influenced by the ongoing war in Ukraine and the approaching winter resulted in increase in the prices of services and goods encouraged people to make planned purchases and to borrow more for consumption purposes than in the same period last year. The amount of consumer loan agreements signed this year is 58% higher than in the same period last year and amounts to EUR 145 million. The consumer loan portfolio grew by 11% in Q3 and by 29% since the beginning of the year and reached EUR 220 million.
The volume of applications for financing energy-efficient projects remains high, but the significant increase in construction prices has led to fewer projects being financed. During Q3, SB Modernizavimo Fondas signed multi-apartment building modernization contracts for EUR 25.7 million, and since its inception EUR 58.2 million.
Daily Banking
Customers are increasingly using the main daily banking services of the bank. Net fee and commission income increased by 10% to EUR 14.0 million compared to the nine months of last year. The number of customers increased by 2 thousand during the quarter (total number of customers reaches 335 thousand).
With the constant increase in the attractiveness of stable commission income generating service plans, the steady growth of the number of users is also visible, which reached 185 thousand at the end of Q3 (+4% in a quarter and +9% in a year).
As customer consumption remained at a high level, the demand for credit cards continued to increase, and therefore the number of credit cards increased by 7% in a quarter and by 32% in a year, although the total number of issued payment cards decreased slightly to 177 thousand cards (-0.5% in a quarter).
Saving and Investing
The deposit portfolio grew by 1% (EUR 28 million) in the three quarters and exceeded EUR 2.71 billion at the end of September, while all liquidity indicators remained within target ranges. Demand deposits, which make up the majority of the portfolio, increased by 4% or EUR 66 million, while the term deposit portfolio decreased by EUR 38 million (-5%). The constantly increasing number of customers directs accumulated savings to the Bank’s investment products - commission income from services related to securities reached EUR 3.1 million in three quarters (32% more compared to the corresponding period in 2021). Despite the volatile financial markets, the value of client securities held at the Bank continued to grow and exceeded EUR 815 million.
For the Bank to strengthen the structure of liabilities, given the favourable situation in the financial markets, the bank plans to issue a new bond issue as early as the fourth quarter of this year.
*- forecast data
Šiaulių bankas invites shareholders, investors, analysts, and other stakeholders to join its investor conference webinar scheduled on 3 November 2022 at 4:00 PM (EET). The presentation will be held in English. For more information click here.
Additional information:
Donatas Savickas, CFO
+370 41 595 602, donatas.savickas@sb.lt
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