OREANDA-NEWS. May 15, 2012.
Profit before tax: EUR 21.3 million (Q1 2011: EUR 11.2 million)

Profit before loan impairment charges: EUR 9.1 million (EUR 8.4 million)

Loan impairment charges: EUR -12.2 million (EUR -2.8 million)

Cost/income ratio: 42.0% (42.9%)

Deposits: down EUR 27 million

Lending: down EUR 250 million

Loan/deposit ratio: 83% (97%)

Customer base: 126,000

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 of 2012 as follows:

“Whilst the Estonian economy achieved the highest growth in the Euro-pean Union in 2011, the first quarter of 2012 gives reason to believe that the worsening outlook for the largest European economies will affect Estonia as well. Economic growth in 2011 was 7.6%, but growth expectations for the current year are more modest.
 
“Estonia’s dependence on foreign markets will remain high. Rapid price growth and low consumption are putting pressure on economic growth.

“Both companies and private individuals are exhibiting a tendency to save, and they think long and hard before taking any risks. The Estonian people continue to increase their reserves in order to cope better with the overall economic instability that is continuing in 2012.

“Sampo Pank continues to pursue its strategy of the past two years, whose keywords are high liquidity, stability in financial performance and high-quality customer service.

“The surplus of deposits over loans has been stable and amounted to EUR 268 million at the end of Q1 2012.

“The loan/deposit ratio was 83% (against 97% in 2011).

“The bank’s operations remained very efficient. The cost/income ratio in Q1 2012 was 42.0% (42.9%).

“Sampo Pank’s profit before tax in the first quarter was EUR 21.3 million (EUR 11.2 million).

“In Q1 2012, the bank managed to increase its income 7%, or EUR 1.0 million, from the level in Q1 2011. Expenses rose 5%, or EUR 0.3 million.

“Total income for the period was EUR 15.7 million (EUR 14.7 million), and operating expenses amounted to EUR 6.6 million (EUR 6.3 million).

“The bank demonstrated improved results in the provision of settlement services: international payments were up 11%, and card transactions were up 4%, over the levels in Q1 2011.

“Sampo Pank adheres to the conservative loan portfolio assessment policy of the Danske Bank Group but did not recognise additional loan impairment charges in the first quarter. At the end of Q1 2012, the ratio of the loan impairment reserve to the loan portfolio at Sampo Pank was 7.5% (10.1%).

“The total loan portfolio decreased in Q1, but the pace of the decline has slowed down considerably. The total amount of loans and leasing at the end of the quarter was EUR 1.31 billion (EUR 1.56 billion).

“Sampo’s position on the deposit market remained strong. At end of Q1 2012, total deposits remained at the level of EUR 1.58 billion (EUR 1.60 billion) and exceeded the loan portfolio by EUR 268 million.

“Sampo’s customers can deposit their money in more than 20 currencies. In the beginning of February, we became the first bank in Estonia to allow deposits in Chinese yuan. Until recently, there were restrictions prohibiting foreigners from buying, selling and depositing Chinese yuan. These transactions are possible now that China is opening up to the outside world.

“The market research company Dive carried out a survey of the service level of banks in the Baltic states. Sampo Pank and the other branches of Danske Bank in Latvia and Lithuania were all among the banks with the best service levels.

“In the survey, Sampo Pank was ranked the best in Estonia for Net Pro-moted Score and for added value. The first category indicates the likeli-hood that customers will recommend the bank to their friends and ac-quaintances on the basis of their own service experience. Danske Bank’s other Baltic branches also achieved first place in this category.

“Sampo Pank was also the best Estonian bank at providing added value, which indicates that it takes a comprehensive approach to customers and advises them to use additional services that create further value for them.

“In 2011 Sampo Pank also achieved the highest score in the Estonian Service Index survey of respected companies carried out by the Emor research company. The service surveys carried out by Dive and Emor both resulted in high scores for Sampo Pank, confirming that we are one of Estonia’s leading service companies, our servicing standards remain high, and we are constantly improving our service quality.”

The Danske Bank Group’s interim report for Q1 2012 is available at www.danskebank.com/reports.