Bigbank posts net profit of 4.9 million euros in Q1 2020
The net profit posted by Bigbank AS in Q1 2020 was 4.9 millions euros, which is 0.9 million less than in the same period last year. Profits are down due to the increase in provisions linked to coronavirus.
Compared to Q1 2019, expenditure on provisions rose by 1.2 million euros, but Bigbank’s capitalisation remains at a very good level. Equity grew by 13% year-on-year to 138.3 million euros. The bank’s volume of assets at the end of Q1 was 608.5 million euros, an increase of 6% over the quarter.
“It was a good start to the year for us, since we were well ahead of plan in both growth in our loan portfolio and overall profit by the end of February,” explained Martin Länts, chairman of the management board of Bigbank. “When coronavirus hit in mid-March the economic situation changed significantly on all of Bigbank’s home markets, and that had a serious knock-on effect on the group’s operations and future plans.”
Länts says that the priority at the onset of the crisis was to switch to remote work in all offices and branches, which the bank was able to do quickly because of existing capability. “The most important thing was safeguarding the health of our staff while continuing to provide services to our clients as per normal,” he said. “After that we had to review our objectives for 2020 and make what changes were needed for us to adapt to the situation.”
Despite the state of emergency, Länts says that development of new products continued apace during Q1. “We’ll be introducing business clients to our car and equipment leasing and investment loans for companies as early as Q2,” he revealed. “We haven’t substantially reduced our staff numbers in any of the countries we operate in, and we don’t plan to in the coming quarters either.”
One positive outcome which Länts highlights from Q1 2020 is that interest income has grown by more than a million euros or 6%. “That’s down to 2019 being a successful year for us and the first two months of this year being good as well,” he explained. “Plus our cost-effectiveness improved in Q1 thanks to the new banking software we’re using, Nest. Our salary costs and quite a few of our operating costs were lower than in the same period last year because of it.”
The group had a total of 112,000 loan agreements at the end of Q1: 33,000 in Latvia; 32,000 in Lithuania; 28,000 in Estonia; 11,000 in Finland; and 8000 in Sweden.
Bigbank AS (www.bigbank.ee) is an Estonian-owned special bank which focusses on consumer loans and deposits. In addition to its operations in Estonia it has subsidiaries in Finland, Sweden, Latvia and Lithuania and offers its products as cross-border services in Austria, Germany and the Netherlands.
For further information please contact:
Martin Länts,Chairman of the Management Board ofBigbank AS