August was a successful month for Bigbank. The loan portfolio surpassed 2 billion euros for the first time, and the home loan portfolio exceeded the 500 million euro mark. The consumer loan portfolio also demonstrated solid growth, while the business loan portfolio decreased by approximately 3 million euros compared to the end of July.
In August, the rapid decline of Euribor continued, with the 6-month Euribor falling below 3.4% by the end of the month, marking the lowest interest rate since April 2023. This reflects ongoing trends that have persisted for several quarters. The declining Euribor brings relief to loan clients with floating interest rates but results in lower interest income for banks. At the same time, deposit interest rates are also decreasing, although not at the same pace as Euribor. On the deposit side, the trend of customers seeking short-term fixed deposits continues, with many looking to lock in favourable rates for at least three to six months. Long-term term deposits and savings deposits, which offer less attractive interest rates, have become less popular. Overall, this resulted in growth in Bigbank's term deposit portfolio and a decrease in the savings deposit portfolio. The total deposit portfolio shrank by 7 million euros in August.
Encouraging developments have occurred in the credit quality of the loan portfolio. The cost of impairments and provisions for loans and financial investments amounted to 1.4 million euros, the lowest monthly figure for 2024. The proportion of non-performing loans in the total loan portfolio remains low.
August's net profit of 4.2 million euros was the strongest result this year. Compared to the cumulative results for the first eight months of last year, Bigbank's net profit has decreased by 0.6 million euros. The primary factors contributing to this decline have been the increase in net loss allowances for loans and financial investments and provision expenses. Additionally, the rise in salary and income tax expenses has played a significant role, driven mainly by the income tax obligation imposed on credit institutions in Latvia, which has impacted financial results since December 2023.
Bigbank's financial results for August 2024:
- Deposits from customers and loans received increased by 488 million euros year-on-year, reaching 2.2 billion euros (+28%).
- Loans to customers increased by 431 million euros year-on-year, reaching 2.0 billion euros (+27%).
- Net interest income was 9.4 million euros in August, totalling 69.9 million euros for the first eight months of the year. Compared to the same period last year, the growth for the first eight months was 5.7 million euros (+9%).
- Net loss allowances for loans and financial investments and provision expenses amounted to 18.3 million euros for the first eight months of the year. Compared to the same period last year, this was an increase of 6.5 million euros or 55%.
- August's net profit was 4.2 million euros. The cumulative profit for the first eight months was 23.4 million euros, decreasing by 0.6 million euros or 2% compared to the same period in 2023.
| Income statement, in thousands of euros | Aug 2024 | YTD24 | YTD23 | Difference YoY | |
| Total net operating income, incl. | 10,359 | 77,177 | 70,011 | 7,166 | +10% |
| Net interest income | 9,375 | 69,931 | 64,266 | 5,665 | +9% |
| Net fee and commission income | 746 | 5,929 | 5,407 | 522 | +10% |
| Total expenses, incl. | -3,904 | -30,726 | -30,226 | -500 | +2% |
| Salaries and associated charges | -2,214 | -17,287 | -15,632 | -1,655 | +11% |
| Administrative expenses | -975 | -7,862 | -9,886 | 2,023 | -20% |
| Profit before loss allowances | 6,455 | 46,451 | 39,784 | 6,667 | +17% |
| Net loss allowances on loans and financial investments and other provisions | -1,414 | -18,346 | -11,854 | -6,492 | +55% |
| Income tax expense | -875 | -4,734 | -3,328 | -1,406 | +42% |
| Profit for the period from continuing operations | 4,166 | 23,371 | 24,603 | -1,231 | -5% |
| Profit or loss before tax from discounted operations | 0 | 29 | -617 | 646 | |
| Profit for the period | 4,166 | 23,400 | 23,985 | -585 | -2% |
| Business volumes, in thousands of euros | Aug 2024 | YTD24 | YTD23 | Difference YoY | |
| Customer deposits and loans received | 2,238,741 | 2,238,741 | 1,750,965 | 487,776 | +28% |
| Loans to customers | 2,005,507 | 2,005,507 | 1,574,730 | 430,777 | +27% |
| Key figures | Aug 2024 | YTD24 | YTD23 | Difference YoY | |
| ROE | 19.3% | 15.9% | 17.1% | -1.2pp | |
| Cost / income ratio (C/I) | 37.7% | 39.8% | 43.2% | -3.4pp | |
| Net promoter score (NPS) | 50 | 56 | 58 | -2 | |
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
