OREANDA-NEWS. May 15, 2013. Danske Bank A/S Lithuania Branch has announced pre-tax profits of LTL 16 million for Q1 2013, of which profit before provisions was LTL 10 million and the reversal of provisions was LTL 6 million.

Last year’s figures for the same period were – pre-tax profits LTL 40 million and profit before provisions and provision reversals amounted to LTL 15 million and LTL 25 million respectively. The result was mostly influenced by decreasing reversals for bad loans as well as by lower market interest rates and loan portfolios.

Nevertheless, the deposit portfolio of Danske Bank has increased by one fifth, i.e. by 20 per cent, and now exceeds LTL 3 billion.

"The bank’s first quarter results reflect the macro-economic situation in the country. Despite positive economic forecasts for Lithuania, businesses are still not investing in development and demand for credit is increasing slowly," said Gintautas Galvanauskas, managing director of Danske Bank. According to Mr Galvanauskas, companies prefer to keep their accumulated funds as deposits – the bank's loan to deposit ratio during the first quarter was one of the highest during the bank's history – 83 per cent. "This shows that the confidence of customers in the country’s finance system remains very high despite changes in the finance sector during Q1."

Mr Galvanauskas emphasises that Lithuanian business remains active. This is also shown by the higher commission income of the bank, which amounted to LTL 3.8 million in the first quarter; last year’s figure for the same period was LTL 3.6 million. "If positive economic trends continue, it is expected that investments will also recover," said Mr Galvanauskas. Danske Bank analysts forecast that Lithuania's GDP will grow by 3.5 per cent this year and that further economic recovery will depend on export and domestic consumption, which will increase by 5.3 per cent and 3 per cent respectively.

At the end of Q1 2013, the share of Danske Bank on the Lithuanian deposit market amounted to 6.7 per cent and 6.6 per cent in the loan market.

Please note that with the change of procedure for publishing the financial results of the Danske Bank Group, the press release only includes results for the first quarter 2013 of Danske Bank A/S Lithuania Branch and excludes the performance results of UAB Danske Lizingas. Therefore, the 2012 results of Danske Bank A/S Lithuania Branch stated in this press release differ from those stated in the equivalent press release of 2012.