Swedbank Lithuania profits fall 20% in 2015

“In 2015 the banking sector operated in a record-low interest rate environment that put pressure on Swedbank’s net interest income. Besides, revenue from international payments and foreign exchange dropped following the euro introduction,” said Dovilė Grigienė, Head of Swedbank Lithuania.

“Nevertheless, Swedbank’s performance improved from quarter to quarter throughout the year and we managed to maintain strong efficiency. In addition, we saw a positive trend in financing to private clients. New lending in consumer loans and mortgages grew by nearly 40% compared with 2014,” said Grigienė.

Lending to private individuals, including both mortgages and consumer finance, increased by 9% but corporate lending decreased by 9% year on year. Swedbank Lithuania’s lending volumes in 2015 stayed almost flat compared with 2014, with a total loan portfolio of €4 billion.

The bank’s total income decreased by €26 million in 2015 to €184 million. During the year net interest income decreased by 12% due to pressure from low market interest rates. Net interest income was €97 million in 2015 and net commission income fell 3% to €72 million.

Swedbank Lithuania reported credit impairments of €3 million in 2015, compared to net recoveries of €9 million in 2014. The bank’s impaired loans continued to decline throughout the year and amounted to €106 million in 2015, down from €128 million in 2014.

Total expenses at the bank decreased by 13% to €84 million in 2015.

Swedbank’s deposit volumes increased by 8% during the year with private deposits growing by 9% while corporate deposits were up 3%. The bank’s gross loan-to-deposit ratio stood at 76% in 2015, from 82% in 2014.

Swedbank said it paid €37 million in taxes to the Lithuanian state budget in 2015.

Swedbank reached an agreement with Danske Bank to acquire its retail banking business in Lithuania and Latvia but the acquisition is subject to regulatory approval in both Lithuania and Latvia. The bank said this process is scheduled to be completed in the first half of 2016.