OREANDA-NEWS. February 14, 2011. During Q4 of 2010 Swedbank Estonia earned EUR 46.2 million in net profit. The year resulted with  profit of EUR 78 million, reported the press-centre of Swedbank Estonia.

The financial situation of customers is improving. The need for provisions has decreased, in 2010 the bank formed provisions of EUR 103.7 million which is 58 per cent less compared to prior year.

During Q4 the bank focused on successful completion of changeover to Euro

During Q4 of 2010, Swedbank Estonia earned EUR 46.2 million net profit. The quarterly results were influenced the most by a low rate of formed provisions. In 2010, the operating profit prior to provisions increased by 12 per cent (187 million EUR).The economic recovery continued in the fourth quarter and Swedbank analysts predict this trend to continue in 2011 – this year’s expected economic growth is 4.2 per cent.

Priit Perens, Head of Swedbank Estonia said that: "When speaking about the Estonian economy, we can say that , it has balanced and we are back on track, although the new  differs from the one before the crisis".

According to Perens recent rough times have taught us to be more efficiently operating organization. “2010 stands out as a year when focus was shifted from scaling-down to development thanks to both economic growth and the committed work of the bank employees. Last year, we started the journey towards becoming a truly customer-centric organization, we have worked on activating the new customer service concept and will continue to strengthen it this year, too,” explained Perens

Most of the activities in Q4 carried a mark of Euro changeover. "The bank assisted the clients with introduction of the new currency. We lowered the cash handling fee of coins to the lowest in Estonian market,," stated Perens . Positive effects of changeover will appear gradually, increasing economic activity and investments. Perens suggested to act cautiously in  today?s positive environment and stressed the importance of responsible lending. ".

Loans and deposits
In Q4 deposits stood on the same level d compared to  2009 and credit portfolio declined by 8 per cent. Regardless of moderate growth in loan demand in the second half of 2010, deleveraging continued last year. In 2011 loan demand is expected to increase as the consumer confidence is growing.

Credit quality
In 2010, the bank formed  provisions amounting to EUR 103.7 million, which is 58 per cent less than the previous year (EUR 245 million). In 2010 the gross volume of impaired loans was EUR 526 million, which is the same as previous year. . As the quality of the private and corporate loan portfolio has increased the gross volume of impaired loans decreased during second half-year  Improved risk levels and slowly recovering client demand directed the bank’s focus to new lending quality. Credit portfolio management has been enhanced in all countries to ensure well-balanced and sustainable growth.

Revenues and costs
In 2010 net interest income increased compared to previous year by 11 per cent. The increase of interest income was supported by levelling of EEK and EURinterest rates

The increase in revenues was also influenced by more active use of bank services by clients. In 2010, the bank focused on operational efficiency enabling it to reduce the costs by five percentage points. Q4 cost were higher due to seasonal influence and consist Euro changeover project, in the amount of EUR 10 million.

The cost/income  ratio of Estonian division in 2010 was 0.37 (0.40 in 2009).

The number of employees in 2010 remained the same compared to the previous year.
At the end of 2010 the number of bank offices was 64 and number of ATMs 445. Thus Swedbank holds the title of a bank with largest number of bank offices and ATMs, offering our clients a wide range of services also through electronic channels.

Customer satisfaction
Swedbank’s customer satisfaction has strengthened last year, as confirmed the annual study conducted by TNS EMOR. In addition, TNS EMOR?s annual corporate reputation study ranked Swedbank  as the most reputable Estonian company for the third consecutive year, Swedbank internet bank was appointed as best i-bank by the numerous of international assessors last year.

Swedbank’s 2011 Q1 financial results will be published on 28 April 2011.
To view Swedbank’s 2010 Q4 operating results in Estonia, please visit: www.swedbank.ee
To view the Swedbank Group’s 2010 Q4 report, please visit: www.swedbank.com.