The year 2024 started with strong results for Bigbank. Business volumes increased in January, which was also reflected in the revenues.
In a changing interest rate environment, where deposit interest rates have peaked and are expected to decline during 2024, many depositors are actively seeking opportunities to place their available funds under reasonable conditions. Bigbank continues to offer attractive interest rates in the market, and therefore, the deposit portfolio showed significant growth in January, reaching the level of 2.0 billion euros. Both the savings deposit portfolio and the term deposit portfolio showed growth individually. A significant milestone was the introduction of term deposits in Lithuania, marking the coverage of Bigbank's last domestic market where this product was not previously offered. Since January 2024, Bigbank offers term deposits on all its operating markets.
The growth in the loan portfolio was driven by the home loan portfolio, although there was also slight growth in the business loan and consumer loan portfolios. There has been some revitalisation in the home loan market, partly due to changes in the interest rate environment and expectations of further declines in Euribor, as well as increased competition, ultimately resulting in more favorable interest rates for clients.
The increased loan portfolio and the declining yet still high-interest rate environment have ultimately enabled Bigbank to increase net interest income in January compared to the previous year by 2 million euros or 27%.
There is evidence of a certain continuation of the quality decline in the consumer loan portfolio that began in the last quarter of the previous year. This is confirmed by the increased volume of net loss allowances on loans and financial investments, which amounted to 2.5 million euros in January. However, the level of non-performing loan portfolio remains low, and the overall quality of the loan portfolio is good.
A net profit of 3.2 million euros in January is a positive indicator. It is also gratifying that the cost-to-income ratio has decrease below the 40% level, with the January figure at 38.5%.
Bigbank's January 2024 Financial Results:
- Customer deposits and loans increased by 557 million euros to 2.0 billion euros (+39%) compared to the previous year.
- Receivables from customers increased by 317 million euros to 1.69 billion euros (+23%) compared to the previous year.
- Net interest income was 9.3 million euros in January. Compared to January of the previous year, there was an increase of 2.0 million euros (+27%).
- The volume of net loss allowances on loans and financial investments amounted to 2.5 million euros in January; compared to the same period last year, there was an increase of 1.0 million euros or 62%.
- The net profit for January was 3.2 million euros; compared to the same period in 2023, there was an increase of 0.2 million euros or 8%.
- Return on equity was 15.5% in January.
| Income statement, in thousands of euros | Jan 2023 | YTD23 | YTD22 | Difference YoY | |
| Total net operating income, incl. | 9,935 | 9,935 | 8,116 | 1,819 | +22% |
| Net interest income | 9,347 | 9,347 | 7,349 | 1,998 | +27% |
| Net fee and commission income | 722 | 722 | 662 | 60 | +9% |
| Total expenses, incl. | -3,821 | -3,821 | -3,288 | -533 | +16% |
| Salaries and associated charges | -2,214 | -2,214 | -1,898 | -317 | +17% |
| Administrative expenses | -1,025 | -1,025 | -1,054 | 29 | -3% |
| Profit before loss allowances | 6,114 | 6,114 | 4,828 | 1,285 | +27% |
| Net loss allowances on loans and financial investments | -2,507 | -2,507 | -1,550 | -957 | +62% |
| Income tax expense | -358 | -358 | -275 | -83 | +30% |
| Profit for the period from continuing operations | 3,248 | 3,248 | 3,003 | 245 | +8% |
| Loss before tax from discounted operations | 0 | 0 | 0 | 0 | |
| Profit for the period | 3,248 | 3,248 | 3,003 | 245 | +8% |
| Business volumes, in thousands of euros | Jan 2023 | YTD23 | YTD22 | Difference YoY | |
| Customer deposits and loans received | 2,002,513 | 2,002,513 | 1,445,100 | 557,413 | +39% |
| Loans to customers | 1,687,528 | 1,687,528 | 1,370,264 | 317,264 | +23% |
| Key figures | Jan 2023 | YTD23 | YTD22 | Difference YoY | |
| ROE | 15.5% | 15.5% | 16.8% | -1.3pp | |
| Cost / income ratio (C/I) | 38.5% | 38.5% | 40.5% | -2.0pp | |
| Net promoter score (NPS) | 57 | 57 | 56 | +1 | |
Bigbank AS (www.bigbank.eu) is an Estonian capital-based bank specialising in loans and deposits for private and business customers. In addition to operations in Estonia, the bank has branches in Finland, Sweden, Latvia, Lithuania, and Bulgaria and offers its products on a cross-border basis in Austria, Germany, and the Netherlands. Bigbank’s total assets exceed 2 billion euros.
Argo Kiltsmann
Member of the Management Board
Telephone: +372 5393 0833
Email: argo.kiltsmann@bigbank.ee
www.bigbank.ee
