In 2009, BIGBANK AS continued generating a profit, adapting successfully to the
changing economic environment.
In November, BIGBANK was the first Estonian bank to open a branch in Finland.
Currently the branch offers term deposits in the Finnish market but the plans
for 2010 foresee supplementing the deposit offering with credit services and
expanding the office network in the region. In August 2009, BIGBANK
successfully entered the cross-border business by launching deposit
opportunities for German customers.
At the end of 2009, the consolidated loan portfolio totalled 2,053.582 million
kroons, a 10.3% decrease year-over-year, Estonia accounting for 47.1%, Latvia
for 40.6% and Lithuania for 12.3% of the total. The proportion of Estonia has
dropped by 3.3% while the proportions of Latvia and Lithuania have increased by
0.4% and 2.9% respectively.
In 2009, BIGBANK upheld its conservative liquidity management policy,
increasing the volume of liquid assets at banks to 551.113 million kroons or
19.8% of total assets against 479.392 million kroons and 16.5% at the end of
2008. During the year, BIGBANK used free funds to repurchase its international
bonds with a total nominal value of 600.673 million kroons that were originally
to be redeemed in 2011.
In the first quarter of 2009, BIGBANK refinanced bonds issued for the local
market by redeeming bonds and subordinated bonds of 156.459 million kroons and
issuing within the same period bonds of 93.880 million kroons redeemable in
2010 and subordinated bonds of 62.586 million kroons redeemable in 2015. Over
the year, BIGBANK redeemed bonds of 104.101 million kroons at maturity.
Deposits from customers surged to 1,173.213 million kroons compared with
630.612 million kroons at the end of 2008, and their geographic dispersion
increased.
At the year-end, the Group's liabilities comprised term deposits from customers
(55.7%), international bonds (32.5%), domestic bonds (4.5%), subordinated bonds
(5.8%), loans from credit institutions (0.5%) and other liabilities (1.0%).
The Group sustained profitable performance - consolidated net profit for 2009
amounted to 117.066 million kroons (2008: 144.770 million kroons). Interest
income for the year was 583.373 million kroons against 686.255 million kroons
for 2008. Interest expense decreased to 198.643 million kroons (2008: 248.342
million kroons). At the end of 2009, the average cost of interest-bearing
liabilities was 7.7% (2008: 9.6%).
Impairment allowances continued growing. At the year-end, impairment allowances
for loan and interest receivables totalled 409.015 million kroons compared with
210.781 million kroons at the end of 2008. Total impairment allowances
increased to 437.982 million kroons (including impairment allowances for loan
receivables of 342.829 million kroons, interest receivables of 66.186 million
kroons, other customer receivables of 13.198 million kroons and other assets of
15.769 million kroons). On the other hand, the portfolio of receivables overdue
for more than 90 days has decreased slightly. Further information on the
establishment of credit loss allowances is presented in the notes to the
consolidated financial statements.
In response to a decrease in the sales of loans, at the end of 2009 the Group
right-sized its sales network: the number of branch offices was reduced by 17
and the number of staff by 118. The restructuring was undertaken to maintain an
optimal and efficient sales structure as well as profitability of operations in
a challenging economic environment.
At the end of 2009, BIGBANK employed 394 people, including 168 in Estonia, 155
in Latvia, 69 in Lithuania and 2 in Finland. The year-end number of branch
offices was 28, including 10 in Estonia, 7 in Latvia and 10 in Lithuania and 1
in Finland.
In April 2009, the membership of the supervisory board of BIGBANK AS increased
as Raul Eamets was elected the sixth board member. The current members of the
supervisory board are Raul Eamets, Vahur Voll, Juhani Jaeger, Meelis Luht,
Linda Terras and Parvel Pruunsild (Chairman). The management board did not
change in 2009. The management board has four members - Ingo Põder, Veiko
Kandla, Kaido Saar and Targo Raus (Chairman). In 2009, the remuneration of the
parent company's management and the supervisory boards, including relevant
taxes, amounted to 4.844 million kroons and 0.941 million kroons respectively.
For further information please contact:
Targo Raus
Chairman of Management Board
targo.raus@bigbank.ee
Tel: +372 735 0923
