Bigbank's 2024 Q3 results: profitable growth and loan portfolio surpassing the 2-billion-euro mark
Bigbank's net profit for the third quarter of this year was 11.8 million euros, which is 0.6 million, or 5%, lower than the same period last year. The net profit for the first nine months was 27.6 million euros, falling short of the corresponding figure for 2023, which was 29.4 million euros. However, significant growth has been achieved in business volumes, with the gross loan portfolio surpassing the 2-billion-euro mark.
According to Martin Länts, chairman of the management board, third quarter of 2024 marked the continuation of stable and strategic growth for Bigbank, highlighted by a significant milestone as our gross loan portfolio surpassed 2 billion euros for the first time, reaching 2.1 billion euros. “Bigbank’s strategy focuses on stable growth in the home loan and business loan product lines, and this is reflected in the quarterly results. In the third quarter, our gross portfolio grew by 158 million euros (+8%), marking the largest quarterly growth in Bigbank’s history. I would particularly highlight the home loan portfolio's quarterly growth of 78 million euros (+17%), bringing it to a total of 534 million,” said Länts. The business loan portfolio grew by 46 million euros (+7%) to 703 million euros, while the consumer loan portfolio increased by 36 million euros (+4%) to €837 million.
Martin Länts specifically highlighted that Bigbank is pleased with the solid growth of net interest income, despite the declining interest rate environment, with a 6% increase compared to the third quarter of last year and a 9% rise over the first nine months compared to the same period last year. The group's net interest income for the third quarter amounted to 27.7 million euros, and for the first nine months of the year, the total net interest income was 79.1 million euros.
On the deposit side, the term deposit portfolio showed solid growth, increasing by 86 million euros to 1.25 billion euros (+7%) in the third quarter. The savings deposit portfolio decreased by 82 million euros to 1.01 billion euros during the quarter. This was mainly because our deposit customers continued to switch their short-term savings products to 3- to 9-month term deposits to lock in an attractive interest rate for the chosen period. The Group’s total deposit portfolio grew by 11 million euros (+0.5%) over the quarter and by 484 million euros (+27%) over the year to 2.27 billion euros.
In the third quarter, the credit quality of the loan portfolio remained stable compared to the previous quarter. However, compared with the 2023 figures, there was some deterioration in the consumer and corporate loan portfolios, but this is due to a decline in quality in the first quarter of 2024. The quality of the housing loan portfolio remains excellent.
Net loss allowances for loans and provision expenses totalled 4.2 million euros. This represents a significant decrease of 2.1 million euros compared to the previous quarter (6.3 million euros) and a decrease of 0.8 million euros compared to the third quarter of 2023 (5.0 million euros).
The Group’s income tax expense increased by 0.6 million euros to 2.4 million euros compared to the third quarter of 2023. The increase was 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 of 2023 but will affect all quarters in 2024.