OREANDA-NEWS. February 14, 2011. Profit before loan impairment charges: EUR 40.6 million (EUR 41.3 million in 2009), reported the press-centre of Sampo Pank.

Loan impairment charges: EUR 10.2 million (EUR 172.4 million)

Profit: EUR 30.4 million (EUR -131.0 million)

Cost/income ratio: 38.3% (40.4%)

Deposits: up EUR 233 million (15.8%)

Lending: down EUR 254 million (-13.6%)

Loan/deposit ratio: 95% (127%)

Customer base: 159,000

Number of branches: 17

Number of employees: 531

This annual report presents the financial results of the banking activities of the Danske Bank Group in Estonia.

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 2010 as follows:

“In 2010, Sampo Pank achieved profitable financial results and maintained high operating efficiency. We were clearly the deposit growth leader in Estonia. We raised our deposits by 16%, and this increase represented a full 60% of the total increase in the market. Deposits from corporate customers grew at an especially fast pace: 21.6%.

The loan/deposit ratio stood at 95% (127% in 2009).

We should also stress the efficiency of our operations. The cost/income ratio improved to 38.3%, an excellent level.

The bank’s profit in 2010 was EUR 30.4 million (2009 ended with a loss of EUR 131.0 million).
Profit before loan impairment charges was EUR 40.6 million (EUR 41.3 million), decreasing 1.8% over the year.

Income decreased 5.1%, or EUR 3.5 million, in 2010, and operating expenses fell 10.1%, or EUR 2.8 million. The decline in net interest income was the main reason for the drop in revenue.
The bank did not book additional loan impairment charges in Q4 2010.

At the end of the year, the ratio of accumulated impairment charges to the loan portfolio was 10.1% (8.9%). The accumulated impairment charges amounted to EUR 162.8 million (EUR 166.9 million).

The total amount of loans in arrears for over 90 days reached EUR 103.5 million at the end of the year.

The loan portfolio totalled EUR 1.6 billion on 31 December. It declined 13.6% over the year. The portfolio of retail customers fell 7.4%, or EUR 66.8 million, and the portfolio of corporate customers declined 19.5%, or EUR 187.6 million.

In 2011, the bank intends to expand its settlement and credit services offerings for the corporate sector.

Sampo is the leader in the deposit market. Deposits totalled EUR 1.7 billion at the end of 2010, an increase of EUR 233.0 million, or 15.8%. Deposits from retail customers totalled EUR 294.6 million, a decline of EUR 17.4 million, or 5.6%. Deposits from corporate customers rose EUR 1.4 billion, an increase of EUR 250.4 million, or 21.6%.

The bank achieved good results servicing clients in international settlements, with the number of international payments increasing 12% in 2010. Because of a decline in consumer spending, however, the total services provided were 6% below the level in 2009.

Moneyville (Rahamaa in Estonian), an online game for preschool and primary school children in Estonia that contains no advertisements, was created at the initiative of Sampo Pank in September 2010. It quickly became very popular, with the number of users already exceeding 110,000.

In 2010, our innovative ISEKAS programme also attracted the interest of customers in Estonia. Almost 50,000 Sampo Pank customers have taken advantage of the option of choosing the banking services they need with a personal adviser and obtaining discounts for the entire family. They enjoy even more benefits after the conversion to the euro because the free online domestic payments feature now covers payments to all European Union member states. Free ATM cross-usage also increased to four times per month in the entire euro zone.

Sampo Pank successfully completed the conversion to the euro at the turn of the year. Everything went according to plan, and customers had access to Sampo Pank services even before the scheduled date. We opened the Internet bank and telephone bank, with almost all services running, and fully functioning branches one day early. Our team demonstrated impressive professionalism in completing all the preparations in due course and maintaining a high level of customer service.”

The Danske Bank Group’s Annual Report 2010 is available at www.danskebank.com/reports.