In Q1 2016 SEB in Latvia granted financing in the amount of EUR 129 million

During first three months of 2016, SEB Latvia has granted 2 840 loans with a total value of EUR 129 million, which is 58% more than in the respective period last year. EUR 101 million or 78% of the new financing has been granted to companies. During Q1 SEB Latvia has granted almost 500 mortgage loans to individual home-buyers with a total value of approximately EUR 22 million, of which EUR 10.4 million have been approved within the framework of the ALTUM programme. In Q1, more than 4 200 new customers chose SEB Latvia as their financial partner, of which more than 3 300 are private individuals. The Q1 financial result of SEB Latvia before provisions has reached EUR 10.1 million. According to the risk management standards, new provisions of EUR 2.7 million have been accrued. Therefore, SEB Latvia has concluded Q1 with a profit of EUR 6.3 million after provisions and taxes.

In Q1 of this year, the accrued pension capital of Latvia's population has increased – accrued capital of the second pension pillar at SEB in Latvia amounted to approximately EUR 580 million, which is EUR 78 million more compared to the results of Q1 2015. In the end of March 2016, the accrued pension capital of Latvia's population in the third pension pillar at SEB in Latvia amounted to EUR 120 million, which is EUR 7 million more compared to the end of Q1 2015. The capital of institutional customers amounts to approximately EUR 322 million compared to the results of Q1 2015, which is an increase of almost EUR 55 million.

In the area of leasing, in Q1 2016, the number of deals concluded by SEB in Latvia increased by 49%, especially in the segment of car financing, with new lending reaching EUR 12 million. The main increase has occured in the area of car purchases by legal entities – the number of deals increased by 56 %, and amount of financing grew by 40 % compared to the previous year.

Ieva Tetere, CEO of SEB Latvia, comments on business results of Q1 2016:

“When assessing the results of Q1 2016, it is obvious that the trend which began at the end of the previous year continues, and that the negative interest rates have a significant effect on business results, as is reflected in the decreased revenue. Additionally, the behaviour of customers is changing. The most recent data of the bank indicates that customer visits to our branches in Q1 2016 have decreased by 30%, whereas internetbank activity has increased by 8% and usage of internetbank mobile app has grown by 50%. We are aware that customers expect improved services in remote channels. Investment in introduction of bank’s new IT infrastructure is one of the practical steps in this direction – it is a comprehensive project on which we are actively working. The changes will affect each and every customer of the bank since a new internetbank and mobile application, as well as new functionalities for other services will be introduced.

Q1 was very active in terms of financing. While the low indicators for loans granted in Q1 of the previous year can be explained by the introduction of the “leave your keys” principle, activity increased significantly in January, February and March 2016. Here, the improved economic situation plays a certain role – the increase in income is overtaking the increase of housing prices, therefore the population has a more positive view when it comes to borrowing. We can see that people are interested in specific projects. Moreover, the active season – spring and summer – is approaching, which is a time when people are more interested in finding a new home.

In the servicing companies, the bank would welcome more activity and readiness to invest in development, innovation, improved processes and increased production volumes. While we often hear the excuse that EU funds are unavailable, it is important for a company to be able to pursue its goals using its own resources and not only rely on EU funds. Therefore, we are glad when businessmen do not sit around waiting, but come to the bank not only for financing but also for advice. We have good examples which show that a solution for reaching business goals and financing go hand in hand.”

SEB in Latvia financial indicators in Q1 2016:

• The revenue of SEB in Latvia has reached EUR 23.1 billion, which is 2 % less than in Q1 2015;

• Compared to Q1 2015, costs have increased by 5 % and amount to EUR 13.1 million;

• Profit before provisions reached EUR 10.1 million, which is 10 % less than in Q1 2015;

• From January until the end of March, provisions of EUR 2.7 million have been accrued, which is 63 % more than in the respective period of 2015;

• Operating profit after taxes and provisions in Q1 2016 have reached EUR 6.3 million, which is 27 % less than in Q1 2015;

• The total amount of deposits with SEB in Latvia as of 31 March 2016 was EUR 2.2 million, which is 9 % more than in Q1 2015;

• The total credit portfolio at the end of Q1 2016 was EUR 2.4 billion, i.e. 5 % less than at the end of Q1 2015;

• In Q1 2016, 2 842 new loans were granted with a total value of EUR 129 million, which is 58 % more than in the previous year. 78 % of the new loans (EUR 101 million) were granted to companies;

• Capital and provisions as of 31 March 2016 amounted to EUR 438.9 million;

• Assets at the end of Q1 2016 amounted to EUR 3.5 billion;

• SEB in Latvia's capital adequacy ratio at the end of March 2016 was 22.7 %;

• SEB in Latvia's liquidity ratio at the end of Q1 2016 was 36.2 %.

“2016 marks the start of our new three-year business plan. However in the first quarter the prevailing market sentiment led to low customer activity. Few large corporate transactions, limited credit demand and decreasing market values affected the operating result. With a strong balance sheet and a Common Equity Tier 1 capital ratio of 19.1 per cent, we are well prepared to support our customers going forward,” says Annika Falkengren, SEB's President and CEO, commenting on the quarterly result.

In Q1 2016, SEB Latvia received several acknowledgements and prizes. Within the framework of the “Dive Group” study, which assessed the professional knowledge and communication skills of bank employees using the so-called mystery consumer method, SEB in Latvia was recognised to be the best at serving bank customers. In the beginning of 2016, the leading Internet-based recruiter “CV-Online Latvia” announced “TOP employers 2014". SEB in Latvia was ranked in 10th place. “Baltic PR Awards” which brings together the leading professionals, think tanks and strategically-minded companies within the sector, recognised SEB in Latvia's Christmas greeting card in 2015 as the third best project in the Digital Communications category. For the third year in a row, the influential international financial and property management magazine “Global Investor” recognised SEB Latvia to be the best provider of securities holding services in Latvia.

Additional information:
Kristīne Martinsone, Communication Project Manager at SEB in Latvia – 67779719, kristine.martinsone@seb.lv