Danske Bank Latvia’s core financial results

“Despite a challenging market, we have achieved a satisfactory result in 2016. Looking back at Latvia’s economy in 2016, we see that the industries most dependent on EU funds, such as construction and road building, saw large declines last year,” says Raivis Kakānis, CEO of Danske Bank Latvia. “Many companies in these industries had to restructure their activities and begin to plan new ways of working when EU funds are no longer available. In general, the year was good for the Latvian economy, although growth was not substantial. Latvian companies continued to invest in efficiency, technology and competitiveness. The bank also contributed to this trend, increasing credit to the corporate sector by 22% in 2016. We expect this trend to continue as rising labour costs will put pressure on their competitiveness.”

• Profit before impairment charges: EUR 3.5 million, up 10% from the level in 2015
• Net profit: EUR 4.2 million, up 18%
• Total income: EUR 8.3 million, up 11%
• Loans: EUR 299 million, up 22%
• Deposits: EUR 269 million, up 62%

CORE BANKING, LATVIA 1 (EUR millions)

 12m 2016

 12m 2015 

Index
16/15

Net interest income 6.1 5.3 114
Net fee income 2.0 2.0 101
Net trading income 0.2 0.1 164
Other income 0 0 100
Total income 8.3 7.5 111
Operating expenses (4.8) (4.3) 112
Profit before loan impairment charges 3.5 3.2 110
Loan impairment charges 0.7 (0) -
Profit before tax 4.2 3.2 134
Tax - 0.4 -
Net profit for the period 4.2 3.6 118
Loans (end of period) 299.4 244.6 122

Deposits (end of period)

268.9 165.8 162
Net profit / average allocated capital (%) 9.5 12.1 -
Cost/income ratio (%) 57.9 57.4 -

1 The activities related to corporate customers and associated private individuals are reported as core activities. Activities related to other personal customers are not reported in this press release. Full results are presented in the Danske Bank Group financial report, consolidated Baltic results.

Financial results for core banking in 2016 vs 2015
In 2016, Danske Bank Latvia’s profit before impairment charges for core activities rose 10% to EUR 3.5 million (against EUR 3.2 million a year before). The net profit increased 18% to EUR 4.2 million (EUR 3.6 million).
 

As a result of growing business volumes, total income rose 11% to EUR 8.3 million. Net interest income grew 14% to EUR 6.1 million. Net fee income stood at EUR 2.0 million.

The bank’s expenses grew 12% from the level in 2015 to EUR 4.8 million. Because of the sale of our retail business, a larger share of expenses is now allocated to the bank’s core activities. At the same time, the bank has improved its internal processes, so we now expect lower expense growth.

The bank’s deposit portfolio grew 62% to EUR 268.9 million, with increases in deposits from both institutional and corporate customers.

The loan portfolio for core segment customers rose 22% to EUR 299.4 million.

Danske Bank is committed to continuing to increase its business banking volume in Latvia. We pursue this by offering customers sophisticated advice and tailor-made financing solutions. We also focus on the efficient use of capital in order to compete successfully and provide the best offerings to our customers.

Danske Bank Group’s financial results
Danske Bank today announced its financial results for 2016. Further information is available at danskebank.com/reports.

Danske Bank Latvia serves corporate and private banking customers.

Danske Bank Latvia has earned recognition for its responsible operations and was ranked in the Bronze category in the Sustainability Index 2016.

Danske Bank Latvia is part of Danske Bank Group.

Danske Bank is a Nordic universal bank with strong regional roots and bridges to the rest of the world. We serve more than 3.4 million personal, business and institutional customers, and in addition to banking services, we offer life insurance and pension, mortgage credit, wealth management, real estate and leasing services and products.

Our vision is to be recognised as the most trusted financial partner. We are driven by a desire to make important financial decisions and daily banking easy, and our aim is to create long-term value for our customers and investors and the societies we are a part of.

Danske Bank is headquartered in Copenhagen and is listed on Nasdaq Copenhagen.

www.danskebank.com

Media contact
Ieva Zauere
Head of Communications
Danske Bank Latvia
Tel.: +371 2 948 5726
ieva.zauere@danskebank.lv