Bigbank's Unaudited Financial Results for Q2 2024
26 July 2024 - 7:00AM
UK Regulatory
Bigbank's Unaudited Financial Results for Q2 2024
Bigbank’s total gross loan portfolio grew to a record 1.9
billion euros by the end of the quarter, increasing by 154 million
euros (+9%) quarter on quarter and by 390 million euros (+26%) year
on year. All three main product lines posted solid
quarter-on-quarter growth. The corporate loan portfolio grew by 57
million euros (+10%) to 657 million euros, the housing loan
portfolio by 62 million euros (+16%) to 456 million euros and the
consumer loan portfolio by 40 million euros (+5%) to 802 million
euros.
On the deposit side, the term deposit portfolio grew
significantly, increasing by 145 million euros to 1.16 billion
euros (+14%) in the second quarter. The savings deposit portfolio
decreased by 43 million euros over the quarter to 1.09 billion
euros, mainly because many of our customers switched their
short-term savings products to 1- to 6-month term deposits to lock
in an attractive interest rate for the chosen period. The Group's
total deposit portfolio grew by 103 million euros (+5%) over the
quarter and by 658 million euros (+41%) over the year to 2.26
billion euros.
Bigbank ended the first half of 2024 with a net profit of 15.8
million euros, compared with 17.0 million euros in the first half
of 2023. In the second quarter, Bigbank earned a net profit of 9.4
million euros. Compared to the second quarter of 2023, net profit
increased by 2.1 million euros (+28%).
Group’s net interest income increased: net interest income for
the second quarter of 2024 was 25.0 million euros (Q2 2023: 24.2
million euros), 0.8 million euros (+3%) higher than a year earlier.
Net interest income for the first half of 2024 was 51.4 million
euros, an increase of 4.7 million euros (+10%) year on year.
The decline in the quality of the consumer and corporate loan
portfolios observed in the first quarter slowed in the second
quarter. However, compared with 2023, the quality of these
portfolios is weaker and the proportion of non-performing loans has
increased slightly. The housing loan portfolio maintains excellent
quality.
Compared to the end of the first quarter, stage 3
(non-performing) loans increased by 9.9 million euros, reaching
4.8% of total loan receivables by the end of the second quarter
(end of Q1: 4.7%). Compared to the end of 2023, stage 3 loans
increased by 42.1 million euros. However, based on historical data,
the share of stage 3 loans is still low at 5% and Bigbank aims to
keep the non-performing portfolio below this limit.
Net loss allowances for loans and provision expenses totalled
6.3 million euros. This is a significant decrease (-2.7 million
euros) compared to the first quarter (9.0 million euros). In the
second quarter of 2023, total net loss allowances for loans and
provision expenses amounted to 5.0 million euros, an increase of
1.2 million euros compared to the prior year.
The Group’s income tax expense increased by 0.7 million euros to
1.8 million euros compared to the second quarter of 2023. The
increase was mainly driven by the introduction of advance income
tax in Latvia at the end of 2023, which was only reflected in the
figures for the fourth quarter in 2023, but affects all quarters in
2024.
Bigbank updated its product range with the launch of a new
credit card in Latvia. This is a further step in the introduction
of everyday banking products, which is one of the Group's key
strategic focus areas in 2024.
The Group’s investment property portfolio, which includes both
agricultural land and commercial real estate, stood at 49 million
euros at the end of the second quarter. The Group did not conduct
any significant transactions with investment properties during the
quarter.
Income statement, in thousands of euros |
Q2 2024 |
Q2 2023 |
6M 2024 |
6M 2023 |
Net interest income |
24,981 |
24,181 |
51,373 |
46,700 |
Net fee and commission income |
2,245 |
2,046 |
4,409 |
4,019 |
Net income (loss) on financial assets |
2,007 |
439 |
3,078 |
1,011 |
Net other operating income |
-977 |
-536 |
-1,826 |
-653 |
Total net operating income |
28,256 |
26,130 |
57,034 |
51,077 |
Salaries and associated charges |
-6,351 |
-5,963 |
-12,763 |
-11,615 |
Administrative expenses |
-2,285 |
-3,790 |
-5,954 |
-7,313 |
Depreciation, amortisation and impairment |
-2,100 |
-1,347 |
-4,152 |
-2,360 |
Total expenses |
-10,736 |
-11,100 |
-22,869 |
-21,288 |
Provision income (expense) |
1,090 |
56 |
-1,329 |
61 |
Gain on change in the fair value of investment properties |
0 |
-1,022 |
0 |
-1,022 |
Profit before loss allowances |
18,610 |
14,064 |
32,836 |
28,828 |
Net loss allowances on loans and financial investments |
-7,328 |
-5,053 |
-13,883 |
-8,962 |
Profit
before income tax |
11,282 |
9,011 |
18,953 |
19,866 |
Income tax expense |
-1,857 |
-1,169 |
-3,132 |
-2,282 |
Profit for the period from continuing operations |
9,425 |
7,842 |
15,821 |
17,584 |
Income (loss) from discontinued operations |
8 |
-497 |
29 |
-618 |
Profit for the period |
9,433 |
7,345 |
15,850 |
16,966 |
Statement of financial position, in thousands of euros |
30 June 2024 |
31 March 2024 |
31 Dec 2023 (restated) |
30 June 2023 |
Cash and cash equivalents |
626,081 |
652,065 |
518,672 |
297,194 |
Debt securities at FVOCI |
9,907 |
13,586 |
15,400 |
14,877 |
Loans to customers |
1,902,001 |
1,747,606 |
1,662,002 |
1,512,110 |
Other assets |
89,255 |
89,823 |
91,324 |
91,116 |
Total assets |
2,627,244 |
2,503,080 |
2,287,398 |
1,915,297 |
Customer deposits and loans received |
2,264,137 |
2,161,463 |
1,946,314 |
1,607,328 |
Subordinated notes |
88,148 |
76,476 |
76,109 |
66,014 |
Other liabilities |
22,113 |
21,688 |
20,182 |
17,066 |
Total liabilities |
2,374,398 |
2,259,627 |
2,042,605 |
1,690,408 |
Equity |
252,846 |
243,453 |
244,793 |
224,889 |
Total liabilities and equity |
2,627,244 |
2,503,080 |
2,287,398 |
1,915,297 |
Commentary by Martin Länts, chairman of the management
board of Bigbank AS:
For Bigbank, the second quarter and the first half of 2024 have
been a period of stable profitable growth. As a bank
specialising in loans, we are pleased that the loan portfolio grew
by 9% in the last quarter and by as much as 26% on the yearly
bases. All three main product lines - business loans, home
loans and consumer loans - have grown. We are pleased with the
good sales performance of home loans across the Baltics. As an
innovation, we were the first in Estonia to launch a flipping
loan designed specifically for legal entity real estate investors,
which can be used to buy and renovate apartments in Tallinn, Tartu
or Pärnu for resale on a cycle of up to one year.
In the field of bank deposits, Bigbank offers clearly the best
interest rates on the Estonian market for both personal savings
deposits (3.3% on an annual basis) and 3-month and 6-month term
deposits (both 4% on an annual basis). This trend is also
reflected in the growth of the group's deposit portfolio - 5%
quarter-on-quarter and 41% year-on-year. In terms of deposit
rates, it is likely that the peaks of this economic cycle have now
been reached and, in the light of the policy of interest rate cuts
initiated by the European Central Bank, it is now prudent for
depositors to fix higher rates for as long as possible in order to
achieve a monetary gain.
As a further step on the road to everyday banking services, we
launched a credit card product in Latvia. In the second
quarter, we also launched a large-scale recruitment campaign to
prepare both the software development and the organisation support
for the launch of the next everyday banking products, first in
Estonia and then in the Group's other operating markets.
To finance growth, we raised capital in the second
quarter through the issuance of EUR 4.96 million of AT1 bonds
and a second series of EUR 7 million of unsecured
subordinated bonds. I would like to thank all the investors
who participated in the fundraising for their confidence in
the Bank's strategy and growth prospects.
Bigbank AS (www.bigbank.eu)
is an Estonian capital-based bank specialising in loans and
deposits for private and business customers. In addition to
operations in Estonia, the bank has branches in Finland, Sweden,
Latvia, Lithuania, and Bulgaria and offers its products on a
cross-border basis in Austria, Germany, and the Netherlands.
Bigbank’s total assets exceed 2,5 billion euros.
Argo Kiltsmann
Member of the Management Board
Telephone: +372 5393 0833
Email: argo.kiltsmann@bigbank.ee
www.bigbank.ee
- Bigbank_interimreport_Q2_2024