OREANDA-NEWS. February 16, 2010. In the severe economic environment characterized by a sharp decline of the country's gross domestic product, increased number of corporate bankruptcies that negatively affected labor market and disposable household incomes, AB DnB NORD Bankas, company code 112029270, VAT payer code LT120292716, registered office at J. Basanaviciaus St. 26, Vilnius, the data about the company is collected and stored at the Register of Legal Entities earned a pre-tax operating profit before provisions of LTL 253.3 million (EUR 73.4 million) in full year 2009, according to preliminary data calculated in accordance to International Financial Reporting Standards. With customer risks remaining high throughout the year, AB DnB NORD Bankas pursued conservative risk valuation policy and set aside LTL 684.7 million (EUR 198.3 million) in special provisions in 2009. As a result AB DnB NORD Bankas recorded a LTL 382.6 million (EUR 110.8 million) net loss in full year 2009, reported the press-centre of DnB NORD Bankas.

AB DnB NORD Bankas pre-tax operating profit before provisions was LTL 179 million (EUR 51,8 million) in 2008 and its net profit was LTL 70.7 million (EUR 20.5 million) in that period.
 
To ensure balanced performance of the bank in the adverse economic environment, AB DnB NORD Bankas share capital has been increased to LTL 656.7 million (EUR 190.2 million) and the bank's largest shareholder Bank DnB NORD A/S invested LTL 189.9 million (EUR 55 million) to the bank's reserve capital in 2009. AB DnB NORD Bankas met all prudential requirements of Bank of Lithuania and maintained sound capital and liquidity positions throughout 2009.

“With customer risks remaining high due to severe economic contraction we concentrated on credit risk management establishing the structures and processes needed to minimize the risks and intense credit monitoring and restructuring efforts brought about some stabilization in the bank's mortgage credit and leasing portfolios. The focus on operating efficiency through streamlining measures, strict cost control and the ability to exploit emerging business opportunities in the recession-stricken economy helped us to sustain growing income trend that eased the negative impact of the increased risk costs on the full year 2009 result. I am particularly pleased that our efforts to continue building up long-term relationships resulted in sustained growth of number of the individual and corporate customers who increasingly choose us as their home bank,” said Werner Schilli, president and the chairman of the management board of AB DnB NORD Bankas.

Supported by particularly strong commission income from intermediation in trading with securities and derivatives and foreign currency, AB DnB NORD Bankas total income rose 15.9 percent year-on-year to LTL 431.4 million (EUR 124.9 million) in 2009. Through streamlining measures the bank's operating expenses were reduced 10.0 percent year-on-year to LTL 161.0 (EUR 46.4 million) million. The constant focus on operating efficiency and productivity resulted in a cost/income ratio of 38.9 percent,the bank's best ever so far.

In 2009 AB DnB NORD Bankas signed LTL 969 million (EUR 280.6 million) worth of new loan agreements, however with credit demand declining and a smaller number of projects that met credit risk criteria in the adverse economic environment, the bank's individual customer net loan portfolio decreased 7.0 percent year-on-year to LTL 4.8 billion (EUR 1.4 billion) while the net loan portfolio to legal entities decreased 9.6 percent year-on-year to LTL 5.5 billion (EUR 1.6 billion).

Customers' savings and investments at AB DnB NORD Bankas stood at LTL 4.2 billion (EUR 1.2 billion) as at the end of December 2009, of which issued debt securities amounted to LTL 0.8 billion ( EUR 0.23 billion) and customers' deposits made LTL 3.4 (EUR 0.98 billion) billion as the Bank offered an attractive investment option to institutional and private investors placing fixed rate one year government bonds worth LTL 1.11 billion (EUR 322.4 million) at par on the secondary market during the year.

The number of AB DnB NORD Bankas customers rose by 47 thousand in 2009 and the bank provided comprehensive range of financial services to 671 thousand individual and corporate customers as at the end of December. To ensure appropriate service level AB DnB NORD Bankas measured the fulfillment of its Customer Service and Sales Standards and the delivery of the newly introduced Financial Guide client promise with the latest Mystery Shopping Survey carried out in December 2009 recording the bank achieved its best result so far also topping the strategic target for the year.