In the third quarter of this year, “Bigbank” worked with a net profit of 11.8 million euros, which is 0.6 million euros or 5% less than in the corresponding period last year, the company informs.
Net profit for the first nine months of this year was 27.6 million euros, down from 29.4 million euros in the same period in 2023. However, a significant increase in the volume of transactions has been achieved, with the gross credit portfolio exceeding two billion euros, said Martins Lants, chairman of the board of “Bigbank”.
Stable and strategic growth of “Bigbank” continued in the third quarter of 2024, and this is confirmed by the latest data – the company’s gross loan portfolio exceeded two billion euros for the first time, reaching 2.1 billion euros.
Bigbank’s strategy is focused on solid growth in its home loan and business loan product lines, and this is reflected in the quarterly results. In the third quarter, our gross portfolio grew by EUR 158 million (+8%), which is the largest quarterly increase in Bigbank’s history. I would especially like to highlight the growth of the housing loan portfolio by EUR 78 million (+17%) compared to the quarter, its total amount reaching EUR 534 million,” said Lants.
The corporate loan portfolio increased by EUR 46 million (+7%) to EUR 703 million, while the consumer loan portfolio increased by EUR 36 million (+4%) to EUR 837 million.
Martins Lants especially emphasized that “Bigbank” is pleased with the stable increase in net interest income, despite the decrease in interest rates – they increased by 6% compared to the third quarter of last year, and in nine months, an increase of 9% was recorded on an annual basis. The group’s net interest income in the third quarter reached 27.7 million euros, while in the first nine months of the year the total net interest income was 79.1 million euros.
Regarding deposits, the term deposit portfolio showed a steady increase, increasing by EUR 86 million to EUR 1.25 billion (+7%) in the third quarter. The savings portfolio decreased by EUR 82 million to EUR 1.01 billion in the quarter. This is mainly due to the fact that the bank’s deposit customers continued to switch their short-term deposit products to 3- to 9-month term deposits in order to obtain an attractive interest rate over the chosen period. The group’s total deposit portfolio grew by EUR 11 million (+0.5%) during the quarter, and by EUR 484 million (+27%) year-on-year, reaching EUR 2.27 billion.
In the third quarter, the credit quality of the credit portfolio remained stable compared to the previous quarter. However, compared to the indicators of 2023, the quality of consumer and corporate loan portfolios slightly deteriorated, but this can be explained by the decline in quality in the first quarter of 2024. The quality of the home loan portfolio remains excellent.
Net provisions to cover possible loan losses and provision expenses amounted to 4.2 million euros. This is a significant decrease – by 2.1 million euros – compared to the previous quarter (6.3 million euros) and by 0.8 million euros compared to the third quarter of 2023 (five million euros).
The group’s income tax expenses increased by 0.6 million euros to 2.4 million euros compared to the corresponding quarter last year. This increase was facilitated by the introduction of income tax advance payments in Latvia at the end of 2023, which was reflected only in the indicators of the fourth quarter of 2023, but will affect all quarters in 2024.
Bigbank’s Third Quarter Update: The Good, The Bad, and the Cheeky
Welcome to the financial circus that is Bigbank! Grab your popcorn because in the third quarter of this year, the bank reported a net profit of 11.8 million euros. Now, that’s 0.6 million euros less than last year, which is a bit like ordering a massive pizza and finding someone’s had a nibble. It’s still a decent slice, but let’s just say, it could be juicier!
Over the first nine months of this year, the total net profit came down to 27.6 million euros, compared to 29.4 million euros during the same period last year. Who knew profits could be so *well-rounded*? However, don’t fret because our friend, Martins Lants (who apparently likes to hold court like a king in his boardroom), reassures us that a significant uptick in transaction volume has been achieved. I mean, it’s nice to know the bank is busy, even if the cash isn’t quite where it used to be!
Let’s talk growth – because who doesn’t love a good growth story? The company’s gross loan portfolio hopped over the two billion euro mark for the first time! Yes, you heard that right: 2.1 billion euros. Sounds impressive, doesn’t it? Like being the only one in the office on a Friday, just with a bit more *pizzazz*.
Lants further bragged about their strategy focused on home and business loans. Apparently, during the third quarter, the gross portfolio swelled by EUR 158 million—an 8% jump. That’s the largest quarterly increase in Bigbank’s history. Talk about a record! It’s like setting a world record for most cups of coffee drunk in a day, only a bit more financially responsible… I hope.
As for the housing loan portfolio? It ballooned by EUR 78 million, a cheeky 17% increase. Meanwhile, the corporate loan portfolio glided up by EUR 46 million and the consumer loan portfolio gained EUR 36 million. If they keep this up, we might just need to start calling the loan portfolios *bodybuilders*!
In a plot twist that would make any soap opera jealous, Lants gleefully announced that net interest income increased even with falling interest rates. It’s like someone turned on the charm—6% up from last year! In the third quarter alone, they pocketed 27.7 million euros. So, while profits might be on a diet, net interest income seems to be working out at the gym!
Now let’s look at deposits, shall we? They saw an increase of EUR 86 million in the term deposit portfolio. But wait— the savings portfolio took a tumble down the rabbit hole, dropping by EUR 82 million. What’s happening here? Apparently, customers are doing the long-term deposit cha-cha in search of attractive interest rates. It’s a dance move that leaves one part of the portfolio feeling a little lonely.
And don’t fret about credit quality! It remained stable compared to the previous quarter. Though, like a wise man once said, “Every rose has its thorn.” Consumer and corporate loan portfolios showed slight deterioration, but it’s nothing to cry about—especially since the home loan portfolio’s quality is still sparkling like new.
Just to sprinkle a little drama on top, net provisions for possible loan losses amounted to 4.2 million euros, which is a significant reduction. It’s as if they clipped the excess fat off their expenses, akin to a reality show contestant dramatically shedding pounds!
Finally, we bring a close with taxes—the government’s favorite topic, right? Income tax expenses went up by 0.6 million euros to 2.4 million euros. Just to keep us on our toes! Thank you, income tax advance payments!
So, in the grand show of Bigbank, things are looking stable and strategically spritely. A little dip here, a little rise there—much like my attempts at jogging. What’s clear is that while profits may be down, their strategy for growth appears to be more robust than a bouncer at a nightclub. Until next quarter, let’s keep our fingers crossed for even bigger numbers.
In the third quarter of this year, “Bigbank” reported a net profit of 11.8 million euros, indicating a decrease of 0.6 million euros, or 5%, compared to the same period last year, according to the company’s announcement.
Despite the decline in net profit for the first nine months of this year, which totaled 27.6 million euros down from 29.4 million euros during the same timeframe in 2023, the firm highlighted a notable surge in transaction volumes. Notably, the gross credit portfolio surpassed the significant milestone of two billion euros, as stated by Martins Lants, chairman of the board of “Bigbank”.
The continuous and strategic growth of “Bigbank” persisted through the third quarter of 2024, as underscored by recent data showing the company’s gross loan portfolio reached an all-time high, exceeding two billion euros and ultimately hitting 2.1 billion euros.
In alignment with its strategic focus on robust growth within home and business loan sectors, Bigbank’s quarterly results showcased a remarkable increase. The gross loan portfolio expanded by an impressive EUR 158 million (+8%), marking the largest quarterly growth in the bank’s history. Additionally, the housing loan portfolio experienced substantial growth of EUR 78 million (+17%), culminating in a total of EUR 534 million,” Lants emphasized.
Alongside housing loans, the corporate loan portfolio also exhibited growth, rising by EUR 46 million (+7%) to reach EUR 703 million. Meanwhile, the consumer loan portfolio increased by EUR 36 million (+4%), amounting to EUR 837 million.
Martins Lants expressed particular satisfaction regarding “Bigbank’s” consistent rise in net interest income. Even amidst declining interest rates, net interest income improved by 6% compared to the third quarter of the prior year, with a year-to-date increase of 9% noted. In the third quarter, the group’s net interest income equaled 27.7 million euros, while the total for the first nine months reached 79.1 million euros.
During the third quarter, the term deposit portfolio showed a steady increase, growing by EUR 86 million to €1.25 billion (+7%). However, the savings portfolio witnessed a downturn, decreasing by EUR 82 million to €1.01 billion during the same period. This shift is primarily attributed to deposit customers transitioning from short-term deposit products to 3- to 9-month term deposits in pursuit of more favorable interest rates. The group’s overall deposit portfolio saw a modest gain of EUR 11 million (+0.5%) during the quarter, but a more impressive year-on-year increase of EUR 484 million (+27%) brought the total to €2.27 billion.
In terms of credit quality, the overall portfolio maintained stability when compared to the previous quarter. Nevertheless, there was a slight decline in the quality of consumer and corporate loan portfolios relative to 2023 figures, largely due to quality dips observed in the first quarter of 2024. On a positive note, the home loan portfolio continues to demonstrate excellent quality.
Regarding provisions, the net allocations to cover potential loan losses amounted to 4.2 million euros, reflecting a significant decrease of 2.1 million euros compared to the preceding quarter’s 6.3 million euros and down by 0.8 million euros compared to the same quarter in 2023, which stood at five million euros.
The group’s income tax expenses saw an uptick of 0.6 million euros, amounting to 2.4 million euros compared to the corresponding quarter last year. This increase can be attributed to the implementation of income tax advance payments in Latvia at the end of 2023, which, while initially impacting only the indicators of the fourth quarter, will now affect every quarter in 2024.
Interview with Martins Lants, Chairman of the Board of Bigbank
Interviewer: Thank you for joining us today, Martins. Let’s dive right into it. Bigbank reported a net profit of 11.8 million euros for the third quarter, down 5% from last year. What do you attribute this decline to?
Martins Lants: Thank you for having me. The decrease in net profit is indeed something we’ve noted, but it’s essential to understand it within the context of increased operational activity and strategic investments we’ve made. While the profit numbers may suggest a slight dip, we’ve experienced substantial growth in our transaction volumes, which indicates a strong underlying business.
Interviewer: Speaking of growth, the gross credit portfolio has exceeded two billion euros for the first time, reaching 2.1 billion euros. Can you elaborate on this milestone?
Martins Lants: Absolutely! Crossing the two billion euro mark is a significant achievement for us—it’s a testament to our focused strategy on home and business loans. We’ve seen our gross loan portfolio grow by 158 million euros this quarter alone, which is the largest quarterly increase in our history. It’s thrilling to see our efforts pay off like this.
Interviewer: That is impressive! You mentioned a strong growth in the housing loan portfolio, which rose by 78 million euros. What factors do you think contributed to this increase?
Martins Lants: The main driver has been our competitive offering and the rising demand for housing in the current market. We’ve positioned our housing loan products attractively, and our customers are responding positively. A 17% increase compared to last quarter reflects that demand.
Interviewer: On a contrasting note, you’ve seen a decrease in the savings portfolio. What’s your take on that?
Martins Lants: Yes, we observed an 82 million euro decrease in the savings portfolio. This drop isn’t alarming; rather, it suggests that our customers are strategically switching to term deposits, seeking better interest rates over longer terms. Ultimately, this is a movement towards more secure, stable investment options as they look for value in a fluctuating market.
Interviewer: You also mentioned a consistent increase in net interest income, despite declining interest rates. How do you explain this paradox?
Martins Lants: It’s quite remarkable, isn’t it? Our net interest income rose 6% year-on-year due to our effective management of interest rate margins and enhanced customer engagement. We’ve been able to maintain a diverse portfolio that continues to yield positive results, even in a challenging interest rate environment.
Interviewer: Before we wrap up, can you provide an update on credit quality? How are you managing potential loan losses?
Martins Lants: The quality of our credit portfolio remains stable. While we did experience slight declines in consumer and corporate loan qualities compared to last year, it’s manageable. We’ve implemented robust risk management practices and reduced net provisions for potential loan losses significantly to 4.2 million euros this quarter. We’re confident in our strategy moving forward.
Interviewer: Thank you, Martins. Your insights certainly provide a clearer picture of Bigbank’s current standing and future direction. We look forward to seeing how your strategies unfold in the coming quarters!
Martins Lants: Thank you for having me. We appreciate the opportunity to share our progress and remain committed to delivering exceptional results.
What strategies has Bigbank employed to maintain this growth in net interest income?
Martins Lants: That’s a great question! The increase in net interest income, which rose by 6% compared to last year, is largely due to our diversified product offerings and prudent risk management practices. Even with the decline in interest rates, we’ve managed to optimize our pricing strategies and improve our operational efficiencies. We also focus on building long-term customer relationships, which helps us maintain a steady income stream from net interest, solidifying our position in the market.
Interviewer: It sounds like you’re navigating the current economic conditions quite adeptly. How are you addressing the slight deterioration in credit quality noted in the consumer and corporate loan portfolios?
Martins Lants: We definitely take credit quality seriously. The slight decline is something we’re monitoring closely. However, it’s important to contextualize these changes—much of it is attributed to fluctuations observed earlier this year. We have robust internal frameworks for risk assessment and are proactively addressing potential challenges. Our home loan portfolio continues to perform excellently, which provides a cushion against these fluctuations.
Interviewer: Lastly, with the income tax expenses increasing, how has that impacted your overall financial strategy going forward?
Martins Lants: The rise in income tax expenses is a factor we have to incorporate into our financial planning. The introduction of advance payments in Latvia does mean we need to adjust our forecasting models. While it’s a short-term challenge, we view it as an opportunity to streamline our operations and maximize our efficiency. Planning for these expenses allows us to remain agile and focused on growth while ensuring that we’re compliant with new regulations.
Interviewer: Thank you for your insights, Martins. It seems Bigbank is not only managing its current situation but also planning strategically for the future.
Martins Lants: Thank you for having me! We’re optimistic about the future and remain committed to our strategic goals. We believe in our capacity to navigate the changes ahead while providing value to our customers and stakeholders.