2023 Q3 and 9-month results – Bigbank asset volume exceeds 2 billion euros, loan and deposit portfolios and profit continue to grow
In the third quarter of 2023, Bigbank earned 12.4 million euros in net profit, which is 73% more than during the same period last year. The net profit for the first nine months of 2023 was 29.4 million euros, an increase by 8.1 million euros (+38%) compared to the year before.
"Our third-quarter and 9-months results show the Bigbank continues strongly on the path for growth – for the first time, the volume of the Group's assets exceeded 2 billion euros. Among the factors influencing the economic environment, the Group’s third-quarter results were most impacted by the relative stabilisation of interest rates at a high level. This means that compared to the third quarter of 2022, the interest income of Euribor-related loans has increased significantly, but in a quarterly perspective, the growth has slowed down," said Chairman of the Bigbank Management Board Martin Länts.
According to Martin Länts, at the same time the competition for customer deposits has intensified, and in the third quarter the growth of deposit interest rates continued to rise faster than Euribor. "Bigbank has traditionally been the provider of the best interest rates for depositors in its operating markets, which is also confirmed by the 30% growth of our deposit portfolio during this year. In the Estonian market, we successfully expanded our product range this fall by launching the savings deposit, and now we offer both savings deposits and term deposits to both private and corporate customers.”
Net interest income in the first nine months of 2023 amounted to 72.8 million euros, which is 11.7 million euros (+19%) more than a year earlier (61.1 million euros). Net interest income for the third quarter was 26.1 million euros, an increase by 4.7 million euros from in the same period in 2022.
The total loan portfolio grew to a record-breaking 1.6 billion euros, increasing by 97 million euros (+6%) in the third quarter and by 259 million euros (+19%) in the first nine months of 2023. The quality of the loan portfolio remains good and by the end of the quarter the share of loans overdue for more than 90 days was only 1.6% from the total loan portfolio.
Corporate banking segment posted a strong result in the third quarter as pre-tax profit amounted to 8.4 million and the quarterly growth of the loan portfolio was 29 million euros, totaling 579 million euros (+5%).
The home loan portfolio increased by 38 million euros in a quarter (+14%) to 307 million euros and the volume of consumer loans increased by 27 million euros (+4%) to 720 million euros.
In the third quarter, the most important developments in the deposit portfolio were significant increase in the volumes of savings deposits and term deposits as well as the launch of savings deposits on the Estonian market. The Group’s total deposit portfolio increased by 184 million euros (+12%) during the quarter and by 415 million euros (+30%) during the nine months, totaling 1.8 billion euros. In a quarter, the term deposit portfolio grew by 43 million euros (+5%) to 919 million euros and the savings deposit portfolio expanded by 142 million euros (+20.8%) to 863 million euros.
In addition to regular business, the Group continued to raise capital in the third quarter 2023. In August, Bigbank issued AT1 bonds, which qualify as Tier 1 capital. The issue size was 5.1 million euros: 508 bonds with a face value of 10,000 euros were issued. The funds raised will help the Group implement its growth plans in the home and corporate loan segments, and to meet the additional capital requirements resulting from the macroeconomic situation.