OREANDA-NEWS. November 06, 2009. Profit before loan impairment charges: EEK 519m (against EEK 526m in first nine months of 2008), reported the press-centre of Sampo Pank.

Profit before tax: EEK -1,376m (EEK 502m)

Loan impairment charges: EEK 1,895m (EEK24m)

Cost/income ratio: 38.0 (45.6)

Deposits up EEK 2,904m (15%)

Lending down EEK 2,511m (-8%)

Loan/deposit ratio: 1.4 (1.76)

Customer base: 181,000 (up 5,2%)

Bank branches: 21

Employees: 554 (649)

This interim report presents the financial results of the banking activities of the Danske Bank Group in Estonia. Sampo Pank has been a member of the Danske Bank Group since February 2007.

In addition to banking, Danske Bank operates in Estonia in the areas of asset management (Danske Capital) and financial markets (Danske Mar-kets Estonia).

Aivar Rehe, CEO of Sampo Pank, comments on the financial results for the first nine months of 2009 as follows:

“In 2009, Sampo Pank has pursued two main objectives in its operations: we have maintained profitability in our banking activities before loan impairment charges and maintained Danske Bank Group’s conservative loan portfolio assessment policy.

“During the first nine months of the year, we maintained a high level of efficiency, and improved cost/income ratio to 38.0% (first nine months of 2008: 45.6%). Profit before loan impairment charges was EEK 519m (EEK 526m). High loan impairment charges, however, caused a net loss of EEK 1,376m for the period (EEK 502m). The third-quarter results were greatly affected by the fact that collective impairment charges made earlier at the group level were brought onto Sampo Pank’s balance sheet.

“Operating income totalled EEK 837m, representing a decline of 13%. Operating expenses fell 28% to EEK 318m. Reduced staff, marketing and other operating expenses were the main reasons for the decline.

“The economic situation in Estonia remains challenging, although the first signs of recovery are visible. Customers’ solvency is likely to remain under heavy pressure at the end of 2009 and in the first half of 2010. In keeping with Danske Bank Group’s conservative loan portfolio assessment policy, Sampo Pank recognised loan impairment charges totalling EEK 1,895m in the first nine months of 2009 (EEK 24m).

“Individual impairment charges totalled EEK 1,034m, and collective impairment charges EEK 861m. The ratio of loan impairments to the loan portfolio increased to 6.5% as a result of the additional loan impairment charges (0.55%).

“Realised loan losses during the first nine months of 2009 amounted to EEK 107m, or 0.45% of the average loan portfolio.

“At the end of the period, total lending volume was EEK 30.6bn. Lending to retail customers decreased 0.5%, or EEK 82m, and lending to corporate customers fell by 13%, or EEK 2.4bn from the level a year before. The loan portfolio declined EEK 926m in the third quarter.

“Deposits totalled EEK 21.8bn at September 30, 2009. Deposits from retail customers rose 26.5%, or EEK 1.0bn, while deposits from corporate customers increased 12.5%, or EEK 1.9bn from the level a year before. The volume of deposits was almost unchanged from the level on June 30, 2009.

“At the end of September, the ratio of loans to deposits was 1.4 (1.76).

“Customers continued to use Sampo Pank’s services actively, and the volume of settlement services increased 26% during the year.

“To further increase the attractiveness of Sampo Pank’s services, we launched a unique loyalty program for retail customers. We also main-tained a high position as a provider of e-banking services: according to the 2009 Baltic E-Banking Report on Baltic retail banks’ electronic communication channels, Sampo Pank ranked first in Estonia.”

The Danske Bank Group’s Interim Report – First Nine Months 2009 is available at www.danskebank.com/reports.