Bigbank's loan portfolio also grew significantly in July, with a monthly increase of 71 million, which is a record for this year. The largest monthly growth was seen separately in the business loan and home loan portfolios. The strong growth figures in both business lines indicate that despite the still weak general economic situation in Estonia, Bigbank's loan offerings are very attractive to both private home buyers and business clients. The consumer loan portfolio also showed solid growth, falling just short of the strong May result in the monthly comparison.
In July, the pace of Euribor's decline accelerated – by the end of the month, the 6-month Euribor fell below 3.6%, which is the lowest interest rate since May 2023. For most business and home loan clients, this means continued relief in interest payments, while for Bigbank, it results in reduced interest income. On the deposit side, this means a reduction in deposit interest rates for clients, especially noticeable in the decline of interest rates on 1-year and longer-term deposits. In Bigbank's deposit portfolio, the trend that started in the second quarter continues, where an increasing number of deposit clients prefer short-term fixed deposits in a declining interest rate environment over long-term fixed deposits and savings deposits. Overall, this resulted in growth in the fixed deposit portfolio and a decrease in the savings deposit portfolio. The total deposit portfolio decreased by 18 million euros in July.
The credit quality of the loan portfolio did not deteriorate in July. The volume of impairments and provisions for loans and financial investments amounted to 1.7 million euros, which is a significant decrease compared to the average level of the first half of the year. The proportion of non-performing loans in the total loan portfolio remains low.
July's net profit of 3.4 million euros is a satisfactory result. Compared to the cumulative results of the first seven months of last year, Bigbank's net profit has decreased by 1.5 million euros. The main factors contributing to this decline have been the increase in net loss allowances for loans and financial investments and provision expenses, but the rise in salary and income tax expenses has also had a significant impact. The latter is primarily due to the income tax obligation imposed on credit institutions in Latvia, which has affected financial results since December 2023.
Bigbank's financial results for July 2024:
- Deposits from customers and loans received increased by 585 million euros year-on-year, reaching 2.2 billion euros (+35%).
- Loans to customers increased by 429 million euros year-on-year, reaching 2.0 billion euros (+28%).
- Net interest income was 9.2 million euros in July, totalling 60.6 million euros for the first seven months of the year. Compared to the same period last year, the growth for the first seven months was 5.2 million euros (+9%).
- Net loss allowances for loans and financial investments and provision expenses amounted to 16.9 million euros for the first 7 months of the year. Compared to the same period last year, this was an increase of 6.7 million euros or 65%.
- July’s net profit was 3.4 million euros. The cumulative profit for the first seven months was 19.2 million euros, decreasing by 1.5 million euros or 7% compared to the same period in 2023.
- Return on equity was 15.9% in July.
| Income statement, in thousands of euros | July 2024 | YTD24 | YTD23 | Difference YoY | |
| Total net operating income, incl. | 9,783 | 66,818 | 60,568 | 6,250 | +10% |
| Net interest income | 9,183 | 60,556 | 55,362 | 5,194 | +9% |
| Net fee and commission income | 774 | 5,182 | 4,709 | 473 | +10% |
| Total expenses, incl. | -3,952 | -26,822 | -26,124 | -697 | +3% |
| Salaries and associated charges | -2,310 | -15,073 | -13,652 | -1,421 | +10% |
| Administrative expenses | -933 | -6,887 | -8,431 | 1,544 | -18% |
| Profit before loss allowances | 5,831 | 39,996 | 34,444 | 5,553 | +16% |
| Net loss allowances on loans and financial investments and other provisions | -1,720 | -16,932 | -10,270 | -6,662 | +65% |
| Income tax expense | -727 | -3,859 | -2,846 | -1,013 | +36% |
| Profit for the period from continuing operations | 3,384 | 19,205 | 21,328 | -2,123 | -10% |
| Profit or loss before tax from discounted operations | 0 | 29 | -617 | 646 | |
| Profit for the period | 3,384 | 19,234 | 20,710 | -1,476 | -7% |
| Business volumes, in thousands of euros | July 2024 | YTD24 | YTD23 | Difference YoY | |
| Customer deposits and loans received | 2,245,878 | 2,245,878 | 1,660,907 | 584,972 | +35% |
| Loans to customers | 1,973,363 | 1,973,363 | 1,544,178 | 429,185 | +28% |
| Key figures | July 2024 | YTD24 | YTD23 | Difference YoY | |
| ROE | 15.9% | 13.2% | 17.1% | -3.9pp | |
| Cost / income ratio (C/I) | 40.4% | 40.1% | 43.1% | -3.0pp | |
| Net promoter score (NPS) | 48 | 58 | 57 | +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 2,5 billion euros.
Argo Kiltsmann
Member of the Management Board
Telephone: +372 5393 0833
Email: argo.kiltsmann@bigbank.ee
www.bigbank.ee
