OREANDA-NEWS. February 11, 2010. Profit before loan impairment charges: EEK 647m (against EEK 707m in 2008), reported the press-centre of Sampo Pank.   

Loan impairment charges: EEK 2,697m (EEK 245m)

Profit before tax: EEK 2,050m (profit of EEK 462m in 2008)

Cost/income ratio: 40.4 (46.1)

Deposits increase EEK 950m (4%)

Lending down EEK 4,576m (-14%)

Loan/deposit ratio: 1.27 (1.53)

Customer base: 179,000 (up 2%)

Bank branches: 20 (24)

Employees: 551 (634)

This interim report presents the financial results of the banking activities of the Danske Bank Group in Estonia. Sampo Pank has been part 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 Markets Estonia).
 
Aivar Rehe, CEO of Sampo Pank, comments on the financial results for 2009 as follows:
 
For the banking sector, 2009 can be characterised as a year of adaptation to a new operating environment and of risk minimisation. Last year Sampo Pank achieved two main objectives: maintaining profitability in our banking activities before loan impairment charges and implementing the Danske Bank Group's conservative loan portfolio assessment policy.
 
Profit before loan impairment charges totalled EEK 647m (in 2008: EEK 707m), which represented a year-on-year decline of 9%. After pursuing a conservative loan portfolio management policy, Sampo Pank ended the year with a pre-tax loss of EEK 2,050m (200: profit of EEK 462m).
 
Operating income totalled EEK 1,085m, representing a decline of 17%. Operating expenses fell 28% to EEK 438m. Reduced staff levels, marketing activities and other operating expenses were the main reasons for the decline.
 
In 2009 we maintained a high level of efficiency in banking activities, posting a cost/income ratio was 40.4% (46.1%).
 
The Estonian economy is in the midst of a transition. In the coming year, we expect economic stabilisation and recovery, the first signs of which are already visible. In the first half of 2010, however, income and solvency are likely to remain under pressure for both retail and corporate customers.
 
In keeping with the Danske Bank Group's conservative loan portfolio assessment policy, Sampo Pank recognised loan impairment charges totalling EEK 2,697m (EEK 245m).
 
Individual impairment charges amounted to EEK 1.8bn, and collective impairment charges to EEK 0.9bn. The ratio of loan impairments to the annual average loan portfolio increased to 8.5% (0.8%) as a result of the additional loan impairment charges.
 
Realised loan losses in 2009 amounted to EEK 358m, or 1.14% of the annual average loan portfolio.
 
At the end of 2009, total lending volume was EEK 29.2bn (-14%). Lending to retail customers decreased 5%, or EEK 691m, and lending to corporate customers fell by 21%, or EEK 3.9bn. The loan portfolio declined EEK 1.4bn in the fourth quarter.
 
In 2009 Sampo Pank again achieved sound deposit growth. At December 31, 2009, deposits amounted to EEK 23bn, a 4% increase. Deposits from retail customers increased 1% to EEK 4.9bn, while deposits from corporate customers increased 5%, or 0.9bn, to EEK 18.1bn. The volume of deposits rose by EEK 1.3bn in the fourth quarter.
 
At the end of December, the ratio of loans to deposits was 1.27 (1.53), the best level in the Estonian banking sector.
 
Customers continued to use Sampo Pank's services actively, and the volume of payment services increased 16% during the year.
 
In 2009 Sampo Pank successfully launched a new retail customer loyalty programme. We also maintained a high level of online services. According to Baltic E-Banking Report 2009, Sampo Pank was the best provider of ebanking and mobile banking services in Estonia.
 
For four consecutive years, Sampo Pank's service quality has been ranked number one in the banking sector by TNS Emor. In 2009 Sampo Pank was named not only the best bank but also the best corporation in Estonia.
 
The Danske Bank Group's Annual Report 2009 is available at www.danskebank.com/reports.