Bigbank’s loan portfolio grows by 33 million euros year on year
Bigbank’s loan portfolio grew by 9.1% or 33 million euros in 2017. The group’s profit grew by 47% during the year, from its 2016 level of 11.7 million euros to 17.2 million euros. The bank’s volume of assets exceeded 459 million euros by the end of the year, representing annual growth of 16.5%.
“The EU economy’s growing faster now than at any time in the last 10 years, and forecasts indicate that’s likely to continue,” explained Sven Raba, chairman of the management board of Bigbank. “It’s done much better than people expected it to, and that’s been helped by a fiscal policy that favours financing, strong private consumption, rapid growth in the global economy and unemployment levels coming down.” Raba added that further growth in GDP will depend on whether current policy is maintained. “The European Central Bank hasn’t raised interest rates yet, although some other central banks have,” he said.
Bigbank’s loan sales hit an all-time high in 2017, posting 12% growth. “We raised the quality of our portfolio as a whole significantly during the year,” Raba said. “What’s remarkable is that the proportion of loan claims exceeding their deadlines by more than 90 days dropped from 12.9% to 6.8% of the total loan portfolio by the end of the year, which is one of the lowest levels we’ve ever seen here in Bigbank.”
Raba says a new business strategy was launched in 2017 that will take the bank through to 2021. “We’ve been aiming our services at clients with a lower credit risk, which is why we’ve been able to reduce the interest rates on our loan products as much as we have,” he explained. “The development of NEST, our new core system, which was adopted for the first time in Finland last summer, was a big investment in the future for us. With it we’re bringing all of our key information and banking technology solutions together in one modern banking platform. The transition’s taking place in stages and will continue until 2020.”
Bigbank became a member of the Estonian Banking Association in October 2017 in order to support the achievement of strategic objectives in the finance sector on the local market. In December the bank issued subordinated bonds to the value of 5 million euros with a term of 10 years and a fixed interest rate of 6.5%. The aim of this targeted offer was to reinforce the bank’s capital base since the bonds are classed as Level 2 capital.
At the end of 2017 the group had close to 144,000 loan agreements in total: 33,000 in Estonia, 60,000 in Latvia, 27,000 in Lithuania, 11,000 in Finland, 8,000 in Sweden and 5,000 in Spain. Bigbank had 417 employees at the end of the year: 212 in Estonia, 75 in Latvia, 75 in Lithuania, 25 in Spain, 18 in Finland and 12 in Sweden.