OREANDA-NEWS. May 11, 2010.
Profit before loan impairment charges: EEK 147m (against EEK 229m in 2009)

Loan impairment charges: EEK 120m (EEK 283m)

Profit before tax: EEK 27m (EEK -54m)

Cost/income ratio: 39.8% (31.0%)

Deposits up EEK 1,978m (+9%)

Lending down EEK 4,588m (-14%)

Loan/deposit ratio: 120% (150%)

Customer base: 176,000 (down 3%)

Bank branches: 19 (24)

Employees: 551 (585)

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 the first quarter 2010 as follows:
 
“In the first quarter of 2010 there were signs of stability in the Estonian economy, including the banking sector. The risks threatening the financial stability of the banking sector diminished, and the entire economy continued to adjust to the changed conditions. Sampo Pank continued to pursue two main objectives: we maintained profitability in our banking activities before loan impairment charges, and we implemented the Danske Bank Group’s conservative loan portfolio assessment policy. 
 
“Profit before loan impairment charges totalled EEK 147m (Q1 2009: EEK 229m). Net profit was 27m (EEK -54m).
 
“Operating income totalled EEK 244m, and operating expenses  amounted to EEK 97m.  The decrease in income was caused mainly by a considerable decline in business volumes over the year. No significant changes were made in cost management.
 
“In Q1 2010 we maintained a high level of efficiency in banking activities – the cost/income ratio was  39.8% (31.0%).
 
“Although the economic recession in Estonia is abating, the unemployment rate is still high. The Estonian economy must undergo a long period of restructuring. In the first half of 2010, the income and solvency of both retail and corporate customers is likely to remain under great pressure.
 
“In keeping with the Danske Bank Group’s conservative loan portfolio assessment policy, Sampo Pank recognised loan impairment charges totalling EEK 120m (EEK 283m). The ratio of accumulated loan impairments to the annual average loan portfolio was 9.2% (1.9%).
 
“At the end of Q1 2010, total lending volume was EEK 28.6bn (-13.8%). Lending to retail customers decreased 5.6 %, or EEK 0.8bn, and lending to corporate customers fell by 20.2%, or EEK 3.7bn, over the year. The loan portfolio declined EEK 0.6bn in Q1 2010.
 
“In Q1 2010 Sampo Pank again achieved sound business results in the deposit market. Deposits amounted to EEK 23.9bn on March 31, 2010 (a rise of 9.1% over the year). Deposits from retail customers totalled EEK 4.8bn (a decline of 4.8% over the year), while deposits from corporate customers increased to 19.2bn (+13.2%, or EEK 2.2bn).  The volume of deposits rose EEK 0.9bn  in the first quarter.
 
“At the end of 2009, the ratio of loans to deposits was 120% (150%).
 
“In late 2009 Sampo Pank successfully launched a unique retail customer loyalty programme that enables customers to choose the banking services that benefit them most. Customers can also use the services of a personal adviser and enjoy various benefits intended for the whole family. Thus far, more than 30,000 customers, or about one-third of Sampo Pank’s active retail customers, have joined the programme. ”
 
The Danske Bank Group’s  Interim report for Q1 2010 is available at www.danskebank.com/reports.