OREANDA-NEWS. Swedbank Latvia profit for Q1 2016 amounted to EUR 28m, an increase of 19 per cent compared with Q1 2015. The increase is driven by income growth and higher net recoveries.

“Recently, we have been focusing on expanding the service availability to customers, e.g., by opening more and more new self service branches in regional towns so that all Latvian inhabitants would have full access to both everyday banking services and advisory meetings, the number of which has doubled over a year. Also, the number of customers who handle their financial matters by simply making a call is on a steady rise. However, most rapid changes are brought about by the penetration of smartphones – today customers choose to check their account balance through mobile phone instead on internet-bank in nearly half of the cases. In the coming months our efforts in enhancing customer service will also be appreciated by the customers of Danske Bank as supervisory authorities have approved the transferring of retail banking business to Swedbank,” says M?ris Man?inskis, Head of Swedbank Latvia.

Loans and deposits

The lending portfolio remained largely unchanged compared with 31 December 2015. The increase was in corporate lending and consumer finance, while mortgage portfolio decreased. Swedbank Latvia market share in lending was 22 per cent as of 29 February 2016.

Deposit volumes increased by 1 per cent during the quarter. Swedbank Latvia market share was 18 per cent as of 29 February 2016. The loan-to-deposit ratio was 82 per cent (86 per cent as of 31 March 2015).

Credit quality

Swedbank Latvia credit quality remained stable. Net recoveries amounted to EUR 2m, against EUR 1m recoveries in the first quarter 2015.

Revenues and costs

Net interest income increased by 3 per cent compared with Q1 2015.

Net commission income increased by 6 per cent compared with Q1 2015. Higher customer activity strengthened card-related commissions, and the number of card purchases rose by 13 per cent. At the same time net commission income was negatively affected by the new regulation on interchange fees.

Total expenses increased by 1 per cent year over year.

Customer focus

The 1st quarter of 2016 saw continued digitalization of services, for example, Swedbank’s corporate customers now has a new feature available – user administration in the internetbank which allows companies to grant and modify access rights for their employees. The number of monthly users of our mobile app, in turn, increased to 129 thousand in March, which represents an increase by 30 per cent on year-on-year basis.The feature that allows to quickly check account balance via the mobile phone has been used close to 7.7 million times in the 1st quarter of this year. On average, customers use internet bank to check their account balance once a week, whereas mobile app – every day.

In order to expand the availability of banking services in the regions of Latvia, Swedbank opened 3 new self service branches during the 1st quarter of 2016 – in Ludza, Balvi and Valka.