May 2024 was the most successful month of the year so far for Bigbank. The growth of the loan portfolio was the largest of the year, and the deposit portfolio also continued to grow. The net profit of 4.0 million euros and a return on equity of 19.6% were the strongest indicators so far this year.
The loan portfolio grew by more than 55 million euros in a month, indicating that the strong results of April were followed by an even more successful May. The largest growth was seen in the home loan portfolio, with significant increases in Estonia, Latvia, and Lithuania. Considering the current state of the real estate market, it can be said that Bigbank's home loan offering is becoming increasingly attractive to a wider range of home loan seekers. There was also notable growth in business and consumer loan portfolios.
In May, the moderate decline in the Euribor that began in April continued. The market's expectation for the European Central Bank to lower interest rates deepened throughout May, which materialised at the beginning of June with a 0.25 percentage point reduction in base rates. This means that a moderate reduction in deposit interest rates is also evident in all Bigbank's deposit markets. From the perspective of Bigbank's deposit products, this meant that an increasing number of deposit clients are once again preferring term deposits over savings deposits in a declining interest rate environment, fixing a suitable interest rate for a longer period. Overall, this resulted in a notable growth in the term deposit portfolio and a slight decrease in the savings deposit portfolio. The deposit portfolio grew by over 26 million euros in May.
The positive trend in loan portfolio quality that began in April continued in May. In May, the amount of net loss allowances for loans and financial investments and provision expenses was 1.7 million euros, a significant decrease compared to the first quarter level. The proportion of non-performing loans in the total loan portfolio remains low.
May's net profit of 4.0 million euros is a strong result. Compared to the cumulative results of the first five months of last year, Bigbank's net profit has decreased by 2.2 million euros. The main factor is the growth of net loss allowances for loans and financial investments over the five months, but the increase in salary and income tax expenses also has a significant impact. The latter effect is mainly due to the income tax obligation imposed on credit institutions in Latvia, which has affected financial results since December 2023.
Bigbank's May 2024 financial results:
- Deposits from customers and loans received increased by 652 million euros year-on-year, reaching 2.2 billion euros (+42%).
- Loans to customers increased by 360 million euros year-on-year, reaching 1.8 billion euros (+24%).
- Net interest income was 9.5 million euros in May, totalling 44.7 million euros for the first five months of the year. Compared to the same period last year, the growth for the first five months was 6.3 million euros (+16%).
- Net loss allowances for loans and financial investments and provision expenses amounted to 12.2 million euros for the first five months of the year. Compared to the same period last year, this was an increase of 5.1 million euros or 72%.
- May's net profit was 4.0 million euros. The cumulative profit for the first five months was 13.4 million euros, decreasing by 2.2 million euros or 14% compared to the same period in 2023.
- Return on equity was 19.6% in May.
| Income statement, in thousands of euros | May 2024 | YTD24 | YTD23 | Difference YoY | |
| Total net operating income, incl. | 10,734 | 48,906 | 42,056 | 6,851 | +16% |
| Net interest income | 9,544 | 44,710 | 38,458 | 6,252 | +16% |
| Net fee and commission income | 751 | 3,652 | 3,334 | 318 | +10% |
| Total expenses, incl. | -4,300 | -20,721 | -17,335 | -3,386 | +20% |
| Salaries and associated charges | -2,168 | -10,902 | -9,610 | -1,292 | +13% |
| Administrative expenses | -1,434 | -6,377 | -6,026 | -351 | +6% |
| Profit before loss allowances | 6,435 | 28,186 | 24,721 | 3,465 | +14% |
| Net loss allowances on loans and financial investments and other provisions | -1,663 | -12,202 | -7,077 | -5,125 | +72% |
| Income tax expense | -723 | -2,615 | -1,957 | -658 | +34% |
| Profit for the period from continuing operations | 4,049 | 13,369 | 15,687 | -2,318 | -15% |
| Profit or loss before tax from discounted operations | 0 | 29 | -132 | 161 | |
| Profit for the period | 4,049 | 13,398 | 15,555 | -2,157 | -14% |
| Business volumes, in thousands of euros | May 2024 | YTD24 | YTD23 | Difference YoY | |
| Customer deposits and loans received | 2,216,907 | 2,216,907 | 1,564,651 | 652,256 | +42% |
| Loans to customers | 1,849,189 | 1,849,189 | 1,489,165 | 360,024 | +24% |
| Key figures | May 2024 | YTD24 | YTD23 | Difference YoY | |
| ROE | 19.6% | 13.0% | 17.1% | -4.1pp | |
| Cost / income ratio (C/I) | 40.1% | 42.4% | 41.2% | +1.1pp | |
| Net promoter score (NPS) | 57 | 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
E-mail: argo.kiltsmann@bigbank.ee
www.bigbank.ee
