OREANDA-NEWS.  October 27, 2014. “Our financial results proceed hand in hand with the Lithuanian economy, which has demonstrated resilience and flexibility in a context of geopolitical risk and stagnation in the euro zone as well as Russia. Although export growth slowed in Q3, domestic demand remained a powerful engine for overall economic growth.

Despite the fact that the risk of larger geopolitical shockwaves remains, we expect that business and consumer confidence will normalize in the near term. This is also reflected in our bank clients’ behavior”, said Dovile Grigiene, Head of Swedbank Lithuania.

Swedbank Lithuania’s profit for the first nine months 2014 was 3 per cent up year-on-year and amounted to LTL 291m compared with LTL 283m for the same period 2013. The increase was mainly due to higher income which compensated for a rise in expenses. The ongoing conflict between Russia and Ukraine had no real impact on the financial result.

Loans and deposits
Lending volumes grew by 0.4 per cent year-on-year (LTL 57m). Although the corporate lending portfolio decreased by 2 per cent, new corporate sales were higher compared with the previous year. Signs of improvement in new household lending also became noticeable in Q3. The total loan portfolio amounted to LTL 13.9bn at the end of Q3 2014.

Deposits increased by 5 per cent (LTL 745m) year-on-year to LTL 15.1bn. Deposits from private customers grew by 9 per cent while corporate deposits decreased by 2 per cent in this period.

The loan-to-deposit ratio was 92 per cent compared with 96 per cent for the same period in 2013.

Credit quality
Net recoveries for the first nine months 2014 amounted to LTL 29m (LTL 34m Q1-3 2013). Swedbank is taking preventive measures to help its customers affected by current events in Russia and Ukraine. No spill-over effects have been observed as yet on business activity or our customers’ finances.

Gross impaired loans continued to decline and amounted to LTL 497m at the end of Q3 2014 (LTL 658m in Q3 2013). Credit quality strengthened through a gradual increase in new, lower risk lending.

Revenues and costs
Total income amounted to LTL 548m for the first nine months in 2014, representing an increase of 15 per cent year-on-year.

Net interest income grew by 16 per cent year-on-year and amounted to LTL 288m. Net commission income increased by 11 per cent (LTL 18m) year-on-year and reached LTL 189m. This growth was mainly driven by an increase in daily banking activity, especially in e-banking and bank cards usage.

Expenses increased by 5 per cent (LTL 11m) year-on-year and reached LTL 241m during the first nine months 2014. Increase in expenses is directly connected with preparation for euro. The cost/income ratio stood at 44.0 per cent.

Swedbank Lithuania will pay LTL 77m in taxes to the state budget for the period January – September 2014.