OREANDA-NEWS. August 16, 2012. Sampo Pank: sound balance between deposits and loans serves as a good basis for business financing, reported the press-centre of Sampo Pank. 

Pre-tax profit: EUR 40.8 million (first half of 2011: EUR 30.2 million)

Profit before loan impairment charges: EUR 18.9 million (EUR 17.2 million)

Reversals of loan impairment charges: EUR 21.9 million (EUR 13.0 million)

Cost/income ratio: 41.3 (43.0)

Change in deposits: EUR -260 million

Change in loans: EUR -240 million

Loan/deposit ratio: 0.89 (0.89)

Customer base: 124,000

Aivar Rehe, the CEO of Sampo Pank, comments on the financial results for the first half of 2012 as follows:

“The European Union and the euro zone are caught in the middle of a debt and financial crisis in which the previously estimated risks have partially been borne out. At the same time, the member states have started to jointly ward off the crisis by means of various collections of measures. The crisis has a large effect on European economic growth. In 2012, the
outlook for the major European economies will decline, and a decline would affect our export markets and thereby the Estonian economy.

“Estonia’s dependence on foreign markets will remain high. Economic growth suffers because of low consumer spending.

“The financial behaviour of companies and private individuals reflects a desire to save, and they think long and hard before taking any risks.

“Sampo Pank continues to pursue its strategy of the past two years, whose watchwords are high liquidity, thoroughly considered risk management, stable financial activities and high-quality customer service.

“The surplus of deposits to loans remains stable. In order to ensure better management of financial expenses, the bank will reduce its liquidity buffers. At 30 June 2012, deposits exceeded loans by EUR 164 million.

“The loan/deposit ratio was 88.5% (89.0%).

“The bank’s activities remain highly efficient. The cost/income ratio in the first half of 2012 was 41.3% (43.0% ).

“Sampo Pank’s pre-tax profit in the first half of the year was EUR 40.8 million (EUR 30.2 million).

“The bank managed to increase its income 7%, or more than EUR 2 million, over the level in the first half of 2011, and its expenses rose 2%, or EUR 0.3 million.

“Total income for the first half of 2012 totalled EUR 32.2 million (EUR 30.2 million), and operating expenses amounted to EUR 13.3 million (EUR 13.0 million).

“The bank improved its results for settlement services: International payments were up 10% and card transactions were up 2% over the levels in the first half of 2011.

“Sampo Pank follows the conservative loan assessment policy of the Danske Bank Group. No addition provisions were posted in the first half of the year, and the quality of the loan portfolio is steadily improving.

“Sampo Pank’s ratio of accumulated loan impairments to the loan portfolio at the end of June 2012 was 7.0% (8.7%), which is one of the most conservative among the major Estonian banks.

“The total loan portfolio fell in Q2, but the speed of the decline has slowed considerably. The total amount of loans and leasing at the end of the quarter was EUR 1.26 billion (EUR 1.50 billion).

“Sampo’s position on the deposit market remains strong. Total deposits at the end of June amounted to EUR 1.42 billion (EUR 1.68 billion).

“Sampo’s customers can deposit their money in more than 20 currencies. The crisis in the euro zone has increased both personal and business customers’ interest in allocating part of their savings to currencies of countries rich in raw materials. As a result, about half of total bank deposits are made in foreign currencies.

“Sampo Pank also commenced the mediation of physical gold, along with gold deposit services, for Private Banking clients, and this attracted quite a bit of attention.

“The Danske Bank Group implemented organisational changes on 1 June 2012. As part of the changes, the Group decided to start operating under the Danske Bank brand name uniformly in all countries. The change is a sign of the Bank’s policy of offering uniform, high-quality services based on the requirements of customers in all its markets.

“In Estonia, the bank will continue with its current business model, operating as a universal bank and above all focusing on business banking. The new brand name will be introduced by the end of 2012.”