Last year, SEB banka’s loan portfolio grew by 3.7%, earning depositors EUR 29 million
In 2023, SEB banka’s financial performance was most strongly influenced by the sharp rise in EURIBOR interest rates (cost of money). This led to an increase in the interest rate for the repayment of customer loans on the one hand and a significant increase in deposit interest rates on the other. While our customers earned around EUR 1.4 million from fixed-term deposits in 2022, this amount reached EUR 29 million in 2023. Last year, SEB banka repeatedly increased its deposit interest rates and was the only bank on the market to start paying interest on its customers' current account balances.
“The rise in interest rates has presented borrowers with challenges, but at the same time has strengthened our customers’ earning power. In 2023, SEB banka increased deposit rates a total of eight times and introduced several new deposit products. In the summer, for example, we began offering savings accounts for companies as well, which attracted record-breaking interest - over the course of the year, the volume of savings and term deposits from companies at SEB banka increased by 180% to almost EUR 340 million at the end of December, while the volume of term deposits and savings accounts from private customers increased by 60% to EUR 710 million,” says Ieva Tetere, CEO of SEB banka.
Last year, SEB banka provided EUR 852 million in financing for companies and EUR 218 million in financing for private individuals. SEB financed the business plans and ideas of almost 4,100 companies and helped with the purchase of 1,860 new homes. In 2023, demand for loans increased in both the retail and corporate segments, and SEB banka’s loan portfolio grew by 3.7% to EUR 3.3 billion at the end of the year.
“The SEB banka has used 2023 as a platform for preparing for the next phase of its growth cycle in collaboration with its customers. To support our customers in times of high-interest rates, we abolished processing fees for home loans and reduced credit margins last year. And to accelerate the development of our banking services, we have hired new employees, increased salaries and invested in the modernisation of our IT systems. SEB is thus ideally equipped to provide our customers with the necessary financial resources and expertise in times of economic growth,” says Ieva Tetere.
Business financing returns to pre-pandemic levels
In the Large Corporates segment, the volume of newly provided funding reached EUR 584 million last year, up by 16.9% from 2022. Financing has been provided to companies in various sectors - energy, telecoms, manufacturing, transport, real estate and others. Financing is provided for the acquisition of new fixed assets, the expansion of production capacity, business acquisitions, and working capital.
In the small and medium-sized enterprise (SME) segment, the demand for financing in 2023 increased most rapidly for municipal companies for infrastructure projects, for logging and agricultural companies for the purchase of machinery, and for companies in various sectors for working capital. Overall, the SME loan portfolio increased by 13.3% to EUR 650 million, which has returned the SME loan portfolio to its pre-pandemic level.
1860 new homes for private households
SEB banka’s mortgage loan portfolio grew by 2.5% in 2023. We helped customers buy almost 1860 new homes. In 2023, the number of customers who repaid their loan obligations both partially and fully early increased by 24%. The financial situation of households is generally considered stable, which is reflected in the good payment discipline of customers. This means that both customers and the bank have carefully assessed the potential risks in advance.
SEB’s credit quality has remained consistently good. Last year, we increased the provision for expected credit losses by only EUR 2 million, reflecting responsible lending behaviour.
Strong interest in high-yielding fixed-term deposits
Given the significant rise in interest rates, deposits by private customers in fixed-term deposits and savings accounts rose by 60% last year. In total, private individuals deposited EUR 710 million in these two instruments, which corresponds to around a third of all money held in private accounts.
In 2023, customer interest in various alternative investment options (stock market, savings bonds, etc.) increased, leading to a 1.8% decrease in the total portfolio of private customer deposits and current accounts in 2023. In the corporate segment, total deposits and current accounts grew by 5.3% last year
SEB Group Latvia’s financial performance for the 12 months to 2023:
• Revenue – EUR 246 million
• Profit before provisions – EUR 186.4 million
• Operating profit (after tax and provisions) – EUR 152.4 million
• Costs – EUR 59.6 million
• Provision for expected credit losses – increased by EUR 2 million from 1 January to 31 December
• Total deposits – EUR 4.5 billion
• Total loan portfolio – EUR 3.3 billion
• Assets – EUR 5.6 billion
• Equity – EUR 611 million
