OREANDA-NEWS. April 29, 2013. Swedbank Lithuania earned a profit of LTL 112m in Q1 2013 against LTL 96m for Q1 2012.

A LTL 33m share of Q1 2013 profits was derived from the sale of Swedbank Life Insurance shares to Swedbank Estonia. Excluding the sales share, the net profit in Q1 2013 amounted to LTL 79m - 18 per cent down on Q1 2012.

“Low market rates had a negative impact on our profits, which decreased in Q1. Market rates will continue to be a dominant factor in the banking sector. Consequently the banks are looking for ways to increase operational efficiency. On the other hand, business should take advantage of favourable financing conditions compared to neighbouring markets. In order to stay competitive business enterprises should plan to invest and our bank is actively looking for opportunities to support sustainable projects”, – said Antanas Danys, Head of Swedbank Lithuania.

Loans and deposits
Lending volumes increased by 5 per cent year-on-year and by 6 per cent on Q4 2012. The increase went primarily to the corporate sector. Volumes in new household lending remain low. In total the loans portfolio amounted to LTL 14 407m.

Deposits grew by 13 per cent year-on-year and by 1 per cent on Q4 2012. Both corporate and private customer deposits show significant growth. The total Q1 2013 deposit portfolio amounted to LTL 15 020m.

The Q1 2013 loan to deposit ratio stood at 96 per cent compared to 91 per cent for Q4 2012.

Credit quality
Net recoveries amounted to LTL 8m compared to LTL 14m for Q1 2012. Recoveries were mainly generated in the corporate portfolio. Impaired loans, gross, continued to decline in the first quarter of 2013 and amounted to LTL 830m (LTL 1 698m Q1 2012). The main cause of decline was impaired exposures shifting back to the primary portfolio and a smaller number of new impaired loans. Overall credit quality has strengthened through a gradual increase in new low risk lending.

Revenues and costs
Total Q1 income was LTL 151m; a LTL 13m drop on Q1 2012.

Net interest income declined by 14 per cent year on year to LTL 78m in total. This was mainly due to low market rates. Net commission income amounted to LTL 54m in Q1 2013, a 5 percent increase year-on-year. This improvement was driven by increasing client activity as well as a growing client base.

Expenses decreased by 3 per cent year-on-year and amounted to LTL 76m in Q1 2013. The cost to income ratio for Q1 2013 stood at 50 per cent (Q1 2012: 47 per cent). The return on equity for Q1 2013 was 10,9 per cent (not counting profit from the sale of life insurance company shares); 4,2 per cent down on Q1 2012.

Looking to the future, the bank will continue focusing on promoting electronic channels as alternatives to cash-operations. Therefore the bank will work on developing solutions for increased accessibility and functionality of everyday banking. Consequently the bank will balance fees for operations conducted at the bank branches and other channels.

To view Swedbank Lithuania’s Q1 2013 financial results, please visit: www.swedbank.lt

To view Swedbank Group’s Q1 2013 financial results, please visit: www.swedbank.com

Swedbank Lithuania’s Q2 2013 financial results will be released on July 16, 2013.