Bigbank’s loan portfolio grew, expanding by 97 million euros (+6%) in Q3 and by 259 million euros (+19%) during the nine months, increasing to a record 1.6 billion euros. The home loan portfolio grew by 38 million euros (+14%) to 307 million euros, the corporate loan portfolio increased by 29 million euros (+5%) to 579 million euros and the consumer loan portfolio grew by 27 million euros (+4%) to 720 million euros during the quarter. Compared to the end of Q3 2022, the gross loan portfolio increased by 360 million euros (+29%).
The quality of the loan portfolio remained high in Q3 with just 1.6% of loans over 90 days past due at the reporting date.
The deposit portfolio grew by 184 million euros (+12%) during the quarter and by 415 million euros (30%) during the nine months, increasing to 1.8 billion euros. The term deposit portfolio increased by 42 million euros (+5%) to 919 million euros and the savings deposit portfolio grew by 142 million euros (+20%) to 863 million euros during the nine months in 2023. Compared to the end of the third quarter of 2022, i.e., 12 months, the Group's deposit portfolio grew by a total of 538 million euros (+43%).
The net profit for the nine months of 2023 was 29.4 million euros, representing a year-on-year growth of 8.1 million euros (+38%). The net profit of 12.4 million euros in the third quarter of 2023 was 73% higher than the profit of the same period last year, which was 7.2 million euros.
Profit before loss allowances and income tax for the nine months of 2023 was 48.1 million euros, up by 12.2 million euros on the same period last year. Expenses on credit loss allowances in the same period were 14.0 million euros. Due to significant growth in the loan portfolio, expenses on credit loss allowances increased by 3.3 million euros (+30%) compared to the first nine months of 2022.
The Group’s net interest income for the first nine months of 2023 was 72.8 million euros, which is 11.7 million euros (+19%) more than a year earlier, when the figure was 61.1 million euros. Net interest income for the third quarter was 26.1 million euros, 4.7 million euros higher than in the same period in 2022.
The Group's investment property portfolio, which includes both agricultural land and commercial real estate, stood at 45.5 million euros at the end of Q3. There Group did not conduct any transactions with investment properties during the quarter.
| Income statement, in thousands of euros | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 |
| Net interest income | 26,090 | 21,310 | 72,790 | 61,052 |
| Net fee and commission income | 2,097 | 1,891 | 6,116 | 5,511 |
| Net income (loss) on financial assets | 3,965 | 135 | 4,976 | -185 |
| Net other operating income | -1,033 | -344 | -1,686 | -523 |
| Total net operating income | 31,119 | 22,992 | 82,196 | 65,855 |
| Salaries and associated charges | -6,072 | -5,103 | -17,687 | -15,281 |
| Administrative expenses | -3,845 | -4,564 | -11,158 | -12,624 |
| Depreciation, amortisation and impairment | -2,001 | -944 | -4,361 | -2,740 |
| Other gains (losses) | 79 | 804 | -882 | 673 |
| Total expenses | -11,839 | -9,807 | -34,088 | -29,972 |
| Profit before loss allowances | 19,280 | 13,185 | 48,108 | 35,883 |
| Net loss allowances on loans and financial investments | -5,023 | -4,186 | -13,985 | -10,744 |
| Profit before income tax | 14,257 | 8,999 | 34,123 | 25,139 |
| Income tax expense | -1,887 | -1,946 | -4,169 | -3,708 |
| Profit for the period from continuing operations | 12,370 | 7,053 | 29,954 | 21,431 |
| Loss from discontinued operations | 61 | 141 | -557 | -175 |
| Profit for the period | 12,431 | 7,194 | 29,397 | 21,256 |
| Statement of financial position, in thousands of euros | 30 Sept 2023 | 31 June 2023 | 31 Dec 2022 | 30 Sept 2022 |
| Cash and cash equivalents | 406,837 | 297,194 | 173,447 | 141,163 |
| Debt securities at FVOCI | 14,942 | 14,877 | 19,213 | 45,171 |
| Loans to customers | 1,608,720 | 1,512,110 | 1,349,811 | 1,248,194 |
| Other assets | 88,709 | 91,116 | 103,918 | 103,357 |
| Total assets | 2,119,208 | 1,915,297 | 1,646,389 | 1,537,885 |
| Customer deposits and loans received | 1,791,581 | 1,607,328 | 1,376,934 | 1,281,161 |
| Subordinated notes | 71,490 | 66,014 | 40,113 | 40,049 |
| Other liabilities | 18,909 | 17,066 | 15,912 | 17,521 |
| Total liabilities | 1,881,980 | 1,690,408 | 1,432,959 | 1,338,731 |
| Equity | 237,228 | 224,889 | 213,430 | 199,154 |
| Total liabilities and equity | 2,119,208 | 1,915,297 | 1,646,389 | 1,537,885 |
Comment by the Bigbank Chairman of the Management Board Martin Länts:
"The results of the third quarter and 9 months mean a solid continuation of the growth rate for Bigbank - the volume of the Group's assets exceeded 2 billion euros for the first time.
Among the factors of the economic environment, the relative stabilisation of interest rates at a high level had the greatest impact on the Group's results in the third quarter. This means that compared to the third quarter of a year ago, the interest income of Euribor-related loans has increased significantly, but in a quarterly perspective, the growth has slowed down.
Corporate banking posted strong performance in the third quarter, supported by the high quality and growth of the loan portfolio as well as net gain on the revaluation of the underlying assets of investment loans with special features (loans with the features of a hybrid instrument). The segment’s third-quarter profit before tax was 9.0 million euros and loan portfolio grew by 29 million euros (+5%) to 579 million euros during the quarter. The profit figure includes net gain on the revaluation of the underlying assets of loans with the features of a hybrid instrument, which amounted to 3.7 million euros. Net gain on the revaluation of the underlying assets of loans with the features of a hybrid instrument is calculated once a year based on growth in the market value of the customers’ investment properties and the agreed profit-sharing rate. Depending on the changes in the market value of the investment properties, the value of the underlying assets may also decrease in subsequent periods, but the bank does not compensate customers for the decrease in the value of the underlying assets to an extent exceeding the gain recorded in previous periods.
Competition for customer deposits intensified, and deposit interest rate growth continued to rise faster than Euribor in the third quarter. Bigbank has traditionally been the provider of the best interest rates for depositors in its operating markets, which is also confirmed by the 30% growth of our deposit portfolio during this year. We successfully expanded our product range by launching the savings deposit in the Estonian market this fall, and now we offer both savings deposits and fixed-term deposits to both private and business customers.
In addition to regular business, we continued to raise capital in the third quarter of 2023. In August, Bigbank again issued bonds qualifying as additional own funds (AT1 capital) in a private placement by which we raised 5.1 million euros of additional capital. The included own funds will help implement our growth plans in home and business loans and cover additional capital requirements arising from the macroeconomic situation. I am grateful to all investors for their trust."
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
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