SEB Group’s performance in Latvia in the first quarter of 2021

In the first quarter of this year, SEB Group’s profit after tax in Latvia increased by EUR 6 million and reached EUR 15 million.

• Housing loan financing – support for Latvian households – up by one-third;
• SEB Index Plan – a new solution in Latvia that will ensure the sustainable development of society's welfare;
• Expansion of SEB Group’s activities in Europe and partnership with Google – a logical continuation of the expansion initiative;
• Ieva Tetere: “As restrictions ease and the economy recovers, businesses must continue to take advantage of e-commerce opportunities by investing in new technologies. It is important that new investments flow in the direction of a sustainable and green economy”.

In the first quarter of this year, SEB Group’s profit after tax in Latvia increased by EUR 6 million and reached EUR 15 million. The performance was affected by the decrease in provisions for expected credit losses that the Bank created a year ago, mainly in relation to individual transactions. The Bank continues to create provisions prudently and assess potential risks. The Bank has a sound loan portfolio, and its quality is good.

Total loans extended by SEB to customers in the first three months of 2021 reached EUR 180 million, a decrease of 4% compared to 2020, influenced by the still low activity in the business segment. There is an increase in lending to households, i.e., new financing for the purchase or repair of housing reached EUR 42 million, up 35% compared to the same period last year.

The overall bank loan portfolio remained healthy at 0.5%, and deposits were EUR 3.7 billion as at 31 March 2021, up 25% from the deposit base at the end of March 2020.

At the end of March 2021, SEB Group’s assets in Latvia amounted to EUR 4.307 billion, while SEB Group’s capital in Latvia was EUR 425 million, up 12% and 7%, respectively, compared to the first quarter of last year.

Commenting on the first quarter performance, CEO of SEB banka Ieva Tetere points out that the nature of the Covid 19 crisis created very different conditions for different sectors of the economy and that the exposure and lessons learned from the previous crisis helped the banking sector to overcome it.

“Tighter restrictions have significantly reduced consumption opportunities and the use of services, especially in the first months of the year. Meanwhile, better conditions have developed in manufacturing sector as well as the sectors capable of functioning remotely. Many sectors have been able to increase growth and jobs through the successful use of support mechanisms and available financing.

As restrictions ease, the economy will recover, and growth is likely to stabilise in the second half of the year. However, I believe the effects of Covid-19 will last longer than the current support measures. Businesses will therefore need to continue to adapt, make greater use of e-commerce, invest in new technology and improve efficiency. It is important that new investments flow in the direction of a sustainable and green economy.”

SEB in Latvia continues to support entrepreneurs and look after the long-term development of society’s welfare

Despite Covid’s limiting factors, SEB continues to support entrepreneurs. Together with Mastercard, SEB banka invited Latvian FinTech companies to apply for participation in the Lighthouse development programme, held a dialogue with SME representatives on what the current challenges were and how to see new opportunities in the development of the business, and kept a constructive view on the development of commercial spaces, which is confirmed by the financing of EUR 16 million in the “Damme” shopping centre at Imanta.

With the long-term society’s welfare in mind, SEB banka introduced a solution unprecedented on the Latvian 3rd pillar pension market, i.e., SEB Index Plan, whose assets can be invested up to 100% in financial instruments linked to stock market indices by reference to the most suitable age and risk tolerance level accumulation strategy – with medium, medium or high-risk level.

SEB Group expands activities in Northern Europe and enters into partnership with Google

In the first quarter of the year, the SEB Group continued its development and expanded its activities in the area of services for large companies in several European countries – Switzerland, Austria and the Netherlands. This step is a consistent continuation of the expansion initiative aimed at offering more opportunities to the large corporates segment operating in international markets and demonstrating the ambitions of sustainable and ambitious growth.

The long-term strategic partnership between SEB Group and Google Cloud will accelerate the Bank’s digitalisation process. SEB will use the innovative cloud technologies of Google Cloud and jointly develop new services for its customers.

Financial performance indicators of SEB Group in Latvia for the three months of 2021:

• SEB Group’s revenue in Latvia reached EUR 26.2 million, up 1% compared to the three months of 2020;
• Costs amounted to EUR 11.8 million, down 4% year-on-year;
• Profit before provisions was EUR 14.4 million, up 6% compared to January-March 2020;
• From 1 January to 31 March, provisions for expected credit losses were reduced by EUR 1.1 million;
• Operating profit after tax and provisions were EUR 14.8 million in the three months of 2021, 77% higher than a year ago;
• Deposits at SEB banka were EUR 3.7 billion as at 31 March 2021, up 25% from the deposit levels at the end of 2020;
• The total loan portfolio was EUR 3.1 billion at the end of March 2021, up 0.5% compared to the end of March 2020;
• Shareholders’ equity as at 31 March 2021 was EUR 425.6 million;
• Total assets at the end of March 2021 amounted to EUR 4.3 billion.