Bigbank’s Unaudited Financial Results for Q2 2023
Bigbank’s loan portfolio grew by 89 million euros (+6%) in Q2 and by 162 million euros (+12%) in H1, increasing to a record 1.5 billion euros. The home loan portfolio grew by 23 million euros (+9%) to 269 million euros, the corporate loan portfolio increased by 37 million euros (+7%) to 550 million euros and the consumer loan portfolio grew by 19 million euros (+3%) to 693 million euros during the quarter. Compared to Q2 2022, the gross loan portfolio increased by 390 million euros (+35%).
The quality of the loan portfolio remained high in Q2 with just 1.3% of loans over 90 days past due at the reporting date.
The deposit portfolio grew by 100 million euros (+7%) during the quarter and by 231 million euros (17%) during the half year, increasing to 1.6 billion euros. Compared to H1 2022, the deposit portfolio grew by 430 million euros (+37%). The term deposit portfolio increased by 136 million euros (+18%) to 877 million euros and the savings deposit portfolio grew by 94 million euros (+15%) to 721 million euros in H1 2023.
Bigbank earned a net profit of 17.0 million euros in H1 2023, which is 2.9 million euros (+21%) more than in H1 2022 when net profit was 14.1 million euros. Net profit for Q2 2023 was 7.4 million euros, which is 4% less than a year earlier when Bigbank delivered a net profit of 7.7 million euros.
Profit before loss allowances and income tax for H1 was 28.9 million euros, up 6.2 million euros on the same period last year. Expenses on credit loss allowances in the same period were 9.0 million euros. Due to significant growth in the loan portfolio, expenses on loss allowances increased by 2.4 million euros (+36%) compared to H1 2022.
Net interest income for H1 was 46.7 million euros, exceeding the figure for the same period in 2022 (39.7 million euros) by 7.0 million euros. Net interest income for Q2 was 24.2 million euros, which is 3.6 million euros higher than in Q2 2022.
The Group’s investment property portfolio, which includes both agricultural land and commercial real estate, stood at 45.5 million euros at the end of the quarter. Compared to the end of Q1, the investment property portfolio decreased by 1.0 million euros.
| Income statement, in thousands of euros | Q2 2023 | Q2 2022 | 6M 2023 | 6M 2022 |
| Net interest income | 24,181 | 20,623 | 46,700 | 39,742 |
| Net fee and commission income | 2,046 | 1,841 | 4,019 | 3,620 |
| Net income (loss) on financial assets | 439 | -210 | 1,011 | -320 |
| Net other operating income | -536 | -86 | -653 | -178 |
| Total net operating income | 26,130 | 22,168 | 51,077 | 42,864 |
| Salaries and associated charges | -5,963 | -5,252 | -11,615 | -10,179 |
| Administrative expenses | -3,790 | -4,175 | -7,313 | -8,060 |
| Depreciation, amortisation and impairment | -1,347 | -915 | -2,360 | -1,796 |
| Other gains (losses) | -966 | -121 | -961 | -131 |
| Total expenses | -12,066 | -10,463 | -22,249 | -20,166 |
| Profit before loss allowances | 14,064 | 11,705 | 28,828 | 22,698 |
| Net loss allowances on loans and financial investments | -5,053 | -2,795 | -8,962 | -6,558 |
| Profit before income tax | 9,011 | 8,910 | 19,866 | 16,140 |
| Income tax expense | -1,169 | -993 | -2,282 | -1,762 |
| Profit for the period from continuing operations | 7,842 | 7,917 | 17,584 | 14,378 |
| Loss from discontinued operations | -497 | -239 | -618 | -316 |
| Profit for the period | 7,345 | 7,678 | 16,966 | 14,062 |
| Statement of financial position, in thousands of euros | 30 June 2023 | 31 March 2023 | 31 Dec 2022 | 30 June 2022 |
| Cash and cash equivalents | 297,194 | 258,316 | 173,447 | 173,611 |
| Debt securities at FVOCI | 14,877 | 18,531 | 19,213 | 46,065 |
| Loans to customers | 1,512,110 | 1,422,702 | 1,349,811 | 1,114,146 |
| Other assets | 91,116 | 104,985 | 103,918 | 101,584 |
| Total assets | 1,915,297 | 1,804,534 | 1,646,389 | 1,435,406 |
| Customer deposits and loans received | 1,607,328 | 1,507,115 | 1,376,934 | 1,204,918 |
| Subordinated notes | 66,014 | 62,908 | 40,113 | 20,023 |
| Other liabilities | 17,066 | 17,310 | 15,912 | 17,449 |
| Total liabilities | 1,690,408 | 1,587,333 | 1,432,959 | 1,242,390 |
| Equity | 224,889 | 217,201 | 213,430 | 193,016 |
| Total liabilities and equity | 1,915,297 | 1,804,534 | 1,646,389 | 1,435,406 |
Commentary by Martin Länts, chairman of the management board of Bigbank AS:
“Despite the uncertainties in the external environment and the ongoing rise in interest rates, Bigbank delivered excellent financial results and strong growth in the loan and deposit portfolios in the first half of 2023. The loan portfolio grew vigorously across all product categories and the deposit portfolio expanded as anticipated, supported by our policy of leading the way in paying fair deposit interest.
Sales of corporate loans and leases in the second quarter extended to 101 million euros with sales of corporate loans increasing by 83% compared to the first quarter. There has also been a notable change in the sales structure. While a year earlier corporate loans were mostly taken for housing development, this year the largest share of corporate loans has been taken to build production or warehouse facilities for own use and to develop commercial real estate in order to earn long-term income.
In addition to successful sales of corporate loans and leases, there is a positive trend in the sales of home loans. A continuously growing home loan portfolio reflects that customers trust us as reliable partners in financing their homes and confirms that we have been able to offer them better terms than our competitors.
The financing of Bigbank’s operations in the second quarter was supported by the issue of bonds qualifying as additional own funds (AT1 capital) in a private placement by which we raised 3.39 million euros of additional capital. I am deeply grateful to all our investors for their trust and support.
Bigbank passed an important milestone in the second quarter – in May we relocated our head office to a new building at Narva mnt 11 in Tallinn, which also houses the Estonian National Library. We hope that the spacious and modern new premises will provide our people with additional motivation to continue contributing to Bigbank’s growth plans.”
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 1.9 billion euros.
Argo Kiltsmann
Member of the Management Board
Telephone: +372 5393 0833
Email: [email protected]
www.bigbank.ee
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