Coop Pank's business results for 2024 were positively impacted by solid business volume growth - both the number of customers and the loan portfolio showed strong growth. The overall economic and interest rate environment had a negative impact on business results.
Over the year, the number of Coop Pank customers increased by 26,000 (+14%) and the number of active customers increased by 17,400 (+21%). Of the new customers, 23,000 were private customers and 3,000 were business customers. By the end of 2024, the number of Coop Pank customers reached 208,000, of which 99,400 were active customers.
By the end of 2024, deposits of Coop Pank reached 1.89 billion euros, increased by 164 million euros (+10%) over the year. Term deposits increased by 7% over the year and demand deposits by 15%. The bank's financing cost increased over the year from the level of 2.4% to the level of 3.3%. The market share of the bank's deposits increased from 6.0% to 6,1% over the year.
By the end of 2024, loan portfolio of Coop Pank reached 1.77 billion euros, increased by 283 million euros (+19%) over the year. Business loans and home loans made the biggest contribution to portfolio growth. Business loans portfolio increased by 129 million euros (+20%) and home loan portfolio increased by 121 million euros (+20%). Leasing portfolio increased by 24 million euros (+16%) and consumer finance portfolio increased by 9 million euro (+9%). The market share of the bank's loans increased from 6.0% to 6.3% over the year.
In 2024, the quality of the loan portfolio remained very good, despite of the changes in the economic environment. To cover possible loan losses, 4.6 million euros provisions were made in 2024 - that was 26% less than a year earlier. The cost ratio for credit risk decreased from 0.5% to 0.3%.
The net income of Coop Pank reached 81.9 million euros, decreased by 3.3 million euros (-4%) over the year. Net interest income decreased 3.7 million euros (-5%) over the year. Net service fee revenues decreased 0.5 million euros (-10%) over the year. The bank's operating cost reached 40.6 million euros, increased by 5.4 million euros (+16%) over the year. Personnel, IT and marketing costs continued to make up the largest part of operating costs.
Net profit of Coop Pank in 2024 was 32.2 million euros, decreased by 18% over the year. The bank's cost / income ratio increased from 41% to 50% over the year and the return on equity decreased from the level from 23.5% to 16.2% - similar level was also seen in 2022.
As of 31 December 2024, Coop Pank has 35,885 shareholders.
Results in Q4
In Q4 2024, the number of the bank's customers increased by 6,000 (+3%), of which 5,000 were private customers and 1000 were corporate customers. By the end of the year 2024, Coop Pank had 208,000 daily banking customers.
In Q4 2024, the volume of deposits increased by 47 million euros (+3%) and reached 1.89 billion euros by the end of the year. Over the quarter, the volume of demand deposits decreased by 14 million euros and the volume of term deposits increased by 61 million euros.
The bank's net loan portfolio increased by 113 million euros (+7%) over the quarter, reaching 1.77 billion euros by the end of the year. The volume of corporate loans increased by 73 million euros and the volume of home loans increased by 32 million euros. Consumer financing increased by 5 million euros and leasing by 4 million euros.
In Q4 2024, Coop Pank earned a profit of 6.4 million euros, which is 26% less than in Q3 and 24% less than in the same period last year. Quarterly profitability was negatively impacted primarily by the interest rate environment, which was partially offset by business volume growth.
Comments of the CEO of Coop Pank Margus Rink:
"To evaluate Coop Pank's activities and results in 2024, it is essential to consider the broader context. We operate in an environment shaped by rising base interest rates during 2022-2023, which resulted in decreased purchasing power, diminished corporate investment appetite, and a cooling economy. In 2024, we reached the bottom of the economic downturn, and gradually, signs began to emerge that set the stage for a cyclical turnaround: base interest rates are now declining, real wages have increased over recent quarters, tax changes have been fixed for the coming years, energy prices are stable, and entrepreneurs are dusting off business plans that were shelved.
Based on this context, Coop Pank's performance in 2024 was influenced by two factors. First - declining interest rates. This was an independent process beyond our control, which simultaneously significantly reduced both our interest income and interest expenses at the same time. Secondly, the growth of business volumes. This factor depended entirely on us. As a growth-focused bank, we worked hard and managed to increase business volumes (loan portfolio size, customer base) by approximately 19% during the year of economic downturn. This is 2-3 times higher than the overall Estonian banking market. This achievement is one we are proud of.
In 2024, our customer base grew by 26 000 (+14% YoY). Increasingly, account openings are followed by customers switching their primary banking relationship to Coop Pank. At the same time, this also represents our greatest challenge moving forward. Primary banking relationships bring growth in demand deposits and help lower financing costs. Currently, demand deposits constitute only one-third of our total deposits.
Coop Pank's loan portfolio grew by 283 million euros (+19% YoY) in 2024. Throughout the year, home loans and car leasing showed strong growth, indicating that demand for personal loans remained solid despite the challenging economic environment. Demand for business loans was low during the first half of the year. In the fall, demand emerged, and in the final months of the year, we achieved significant growth in the business loan portfolio. Demand for consumer loans remained weak throughout the year. The quality of the loan portfolio remained strong all year.
Coop Pank's net profit for 2024 amounted to 32,2 million euros, decreasing 8%. The decline in profit was primarily caused by the low-interest economic environment, which could not be offset by 19% growth in business volumes.
We adhered to our current dividend policy and distributed 25% of the consolidated group's 2023 pre-tax profit as dividends, amounting to a net total of 8.9 million euros (8.7 cents per share, nearly double the amount of the previous year. In addition, 2 million euros in income tax on dividends was paid. Over 98% of the dividends were paid into the accounts of Estonian individuals and companies. By the end of the year, Coop Pank had 35 885 shareholders.
In 2024, we further expanded our role as contributors to society. While we have previously contributed the advancement of life in Estonia primarily through our extensive branch network and Coop stores' cash network, we have now begun directly supporting Estonia's defense capabilities with the innovative Kaardivägi client program. Additionally, Coop Pank became a major sponsor of both the national volleyball team and Estonian decathletes. Furthermore, in collaboration with the TalTech Arengufond, we started awarding scholarships.
Last year, a public discussion arose about teachers' workload and salaries. We responded quickly and started offering teachers mortgage loans on favorable terms, a program we are continuing this year. In collaboration with the Estonian startup Montonio Finance, we also launched the most competitive e-commerce payment solution for merchants.
Beginning of 2024, we secured a subordinated loan of 15 million euros to support the bank's growth strategy. This is a capital instrument classified as part of the bank's Tier 2 own funds.
Eesti Pank designated Coop Pank as a systemically important credit institution, justifying its decision by stating that the bank's significance in Estonia's financial system has steadily increased in recent years. The rating agency Moody's affirmed Coop Pank's Credit rating on the level Baa2 and raised outlook to positive. This confirms that the bank is trustworthy with solid capital base and high quality of the loan portfolio even in difficult times and has shown good profitability.
In November, on the proposal of Estonian Financial Supervision Authority, the European Central Bank granted to the bank an additional activity license enabling the issuance of covered bonds. The actual issuance, including the timing, volume, and other conditions, will be decided by the bank based on market conditions and the bank's financing needs.
Coop Pank's strategic goal is to increase its market share in Estonia to 10% by the beginning of 2027 and grow its loan portfolio to at least 2 billion euros. This will position us as the primary bank for more than one in ten Estonians - amounting to at least 150 000 active customers. Through business volume growth, the bank aims to operate with high efficiency (cost-to-income ratio below 50%) and deliver a solid return on equity (ROE of at least 15%).
I would like to thank all Coop Pank customers, shareholders, and employees for the year 2024. Our goal is to build Coop Pank into a success story for everyone: a success story for customers, shareholders, employees and society alike."
| Income statement, in th. of euros | Q4 2024 | Q3 2024 | Q4 2023 | 12M 2024 | 12M 2023 |
| Net interest income | 19 148 | 20 021 | 20 594 | 77 570 | 81 265 |
| Net fee and commission income | 1 303 | 1 040 | 1 489 | 4 358 | 4 847 |
| Net other income | -483 | 167 | -1 666 | -45 | -908 |
| Total net income | 19 968 | 21 228 | 20 415 | 81 883 | 85 204 |
| Payroll expenses | -6 007 | -6 138 | -5 495 | -23 411 | -20 234 |
| Marketing expenses | -788 | -593 | -912 | -2 690 | -2 587 |
| Rental and office expenses, depr. of tangible assets | -798 | -729 | -678 | -3 097 | -2 776 |
| IT expenses and depr. of intangible assets | -1 731 | -1 579 | -1 363 | -6 189 | -4 803 |
| Other operating expenses | -1 473 | -1 221 | -1 498 | -5 189 | -4 728 |
| Total operating expenses | -10 797 | -10 261 | -9 948 | -40 575 | -35 128 |
| Net profit before impairment losses | 9 171 | 10 967 | 10 468 | 41 306 | 50 076 |
| Impairment costs on financial assets | -1 821 | -1 022 | -1 148 | -4 643 | -6 302 |
| Net profit before income tax | 7 351 | 9 945 | 9 322 | 36 663 | 43 774 |
| Income tax expenses | -957 | -1 296 | -935 | -4 486 | -4 570 |
| Net profit for the period | 6 393 | 8 649 | 8 386 | 32 178 | 39 204 |
| Earnings per share, eur | 0,06 | 0,08 | 0,08 | 0,31 | 0,38 |
| Diluted earnings per share, eur | 0,06 | 0,08 | 0,08 | 0,31 | 0,38 |
| Statement of financial position, in th. of euros | 31.12.2024 | 30.09.2024 | 31.12.2023 |
| Cash and cash equivalents | 343 678 | 404 472 | 428 354 |
| Debt securities | 37 751 | 37 445 | 36 421 |
| Loans to customers | 1 774 118 | 1 661 152 | 1 490 873 |
| Other assets | 33 066 | 31 956 | 30 564 |
| Total assets | 2 188 614 | 2 135 025 | 1 986 212 |
| Customer deposits and loans received | 1 886 145 | 1 838 626 | 1 721 765 |
| Other liabilities | 27 683 | 28 026 | 28 435 |
| Subordinated debt | 63 148 | 63 410 | 50 187 |
| Total liabilities | 1 976 977 | 1 930 062 | 1 800 387 |
| Equity | 211 637 | 204 963 | 185 825 |
| Total liabilities and equity | 2 188 614 | 2 135 025 | 1 986 212 |
The reports of Coop Pank are accessible at: https://www.cooppank.ee/aruandlus.
Coop Pank will hold an Investor Webinar for the introduction of its financial results, which is scheduled at 09:00 on 13 February 2025. To participate, please register in advance via the following link: https://bit.ly/CP-veebiseminar-registreerimine-13-02-2025
The webinar will be recorded and posted on the company's website www.cooppank.ee and YouTube account.
Coop Pank, which is based on Estonian capital, is one of the five universal banks operating in Estonia. The bank has 208,000 everyday banking customers. Coop Pank aims to put the synergy generated by the interaction of retail business and banking to good use and to bring everyday banking services closer to people's homes. The strategic owner of the bank is the local retail chain Coop Estonia, which has a sales network of 320 stores.
Further information:
Margus Rink
Chief Executive Office
Email: margus.rink@cooppank.ee
