Bigbank: stable and profitable growth both in Q2 2024 and H1 2024
Bigbank earned 9.4 million euros in net profit for the second quarter of 2024. Compared to the second quarter of 2023, net profit increased by 2.1 million euros (28%). Net profit for the first half of 2024 totalled 15.8 million euros, and is only slightly lower than in the first half of 2023 (17 million euros).
Martin Länts, chairman of the Management Board, said that 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 154 million euros or 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,“ he noted. According to Länts, Bigbank has reason to be pleased with the good sales performance of home loans across the Baltics.
Bigbank’s total gross loan portfolio grew to a record 1.9 billion euros by the end of the second quarter. 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.
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. „In the field of bank deposits, Bigbank offers 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). 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,“ noted Länts.
Group’s net interest income increased as compared to the second quarter of 2023. Net interest income for the second quarter of 2024 was 25.0 million euros (Q2 2023: 24.2 million euros), which is 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.
According to Martin Länts, the deterioration in the quality of the portfolio of consumer loans and corporate loans that took place in the first quarter of 2024 slowed down in the second quarter. “As compared to 2023 it can be noted that the quality of the consumer loan and corporate loan portfolio has deteriorated and the proportion of non-performing loans has slightly increased. At the same time, the quality of the home loan portfolio remains very good,” he explained.
As a further step on the road to everyday banking services, Bigbank 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,“ Länts said in comment.
To finance growth, Bigbank raised capital in the second quarter through the issuance of 4.96 million euros of AT1 bonds and a second series of 7 million euros of unsecured subordinated bonds. Martin Länts thanked all the investors who participated in the fundraising for their confidence in the Bank's strategy and growth prospects.