SEB Bank Group in Lithuania announcing its first half-year 2019 operating result

In the first half-year of 2019, the net value of the SEB Bank Group’s loan and lease portfolio increased by 6 per cent (excluding a one-off deal in 2018) up to EUR 6.3 billion. SEB Bank’s deposit portfolio (including deposits of financial institutions) increased by 15 per cent and was worth EUR 6.5 billion (of which EUR 4 billion are the population’s deposits).

Comment by Raimondas Kvedaras, Chairman of the Management Board and CEO of SEB Bank

Despite the forecasted approach of a downturn in economic development, in Q2 Lithuanian economy also maintained a sufficiently fast growth rate. Annual average wage growth was only slightly slower, compared to that in Q1, however, it was well above the inflation in the country, and the unemployment rate dropped even more.

Growing real incomes and the population’s still high expectations about the future have had a positive impact on both the residential property market and retail trade sector. Over the first half-year of 2019, the amount issued by SEB Bank in new loans to businesses was EUR 792 million, which is nearly as much as over a relevant period a year ago, excluding a one-off deal (EUR 798 million). The main borrowers included trade, manufacture, service (including transport) and real estate sector companies. Their share within the country’s total corporate customer credit portfolio accounted for 77 per cent in the first half-year of 2019.

Borrowing volumes remain sustainable also in the segment of private individual customers. Over the first half-year of the current year, SEB Bank issued a total of EUR 225 million to private individuals in mortgage, consumer and other loans – nearly as much as over a relevant period a year ago (EUR 223 million). Stable financial situation has also enabled the population to better project their financial security – as compared to a relevant period in 2018, in the first half-year of the current year the population’s deposits with our bank grew by 12 per cent.

Even though the downturn in the economic development of the main export partners is signalling that nearest-term economic growth in Lithuania will be also slower, in our view, the country’s current economic standing is well balanced and prepared for any potentially adverse external economic challenges.

The first half-year of 2019 was also marked by several new solutions that we have provided to our customers. With effect from May 2019, SEB Bank customers are offered the service of instant payments in euro to accounts with other banks. In 2019, SEB Bank was the first in Lithuania to launch the instant payment crediting service, and today, according to our estimates, nearly a third of all funds transfer transactions initiated and received by SEB Bank customers are executed using this particular method.   Instant payments enable to transfer funds up to EUR 15 thousand to accounts of the EU and EEA countries banks, which accept such payments, instantaneously 24 hours a day including weekends and public holidays.

At the beginning of the year, there was a launch of new pillar II pension funds based on life-cycle strategy – their risk will gradually decrease, as the fund participants will approach their age of retirement. It will ensure that pension fund participants will save for their retirement in a fund with relevant eligible risk. The first half-year of 2019 has also been very successful for equity and bond markets, determining high returns of the new pension funds. Taking into account the return on investments and new contributions of the participants, within the six-month period an increase in the average assets of a pillar II pension fund participant was EUR 349, and since the beginning of the year an increase in the customer assets under the management of “SEB investicijų valdymas” was EUR 96 million, making more than EUR 1.2 billion in total.

This year, SEB Innovations Centre and its Fast Business Growth Programme aimed at supporting small and medium enterprises to develop innovative solutions and plan business development mark their second year of operation. This year, the third generation of trainees – 13 SMEs – have completed their training course. A free-of-charge three-month-long course arranged twice a year (in spring and in autumn) is aimed at supporting enterprises through innovations to increase their business volumes not in percentage, but in several times.  

Key operating data
• In the first half-year 2019, unaudited net profit earned by SEB Bank was EUR 60.1 million (EUR 50.5 year-on-year), and that of SEB Bank Group was EUR 58.6 million (EUR 51.6 year-on-year).
• SEB Bank Group’s first half-year 2019 income was EUR 110.1 million (EUR 97.3 million year-on-year).
• As at 30 June 2019, SEB Bank’s deposit portfolio was EUR 6.5 billion (EUR 5.6 billion year-on-year).
• As at 30 June 2019, net worth of SEB Bank Group’s credit and lease portfolio was EUR 6.3 billion (EUR 6.2 billion year-on-year). Credit quality remained good.
• As at 30 June 2019, SEB Bank Group’s equity was worth EUR 725 million (EUR 717 million year-on-year).
• As at 30 June 2019, SEB Bank Group’s assets made EUR 8.0 billion (EUR 7.4 billion year-on-year).
• Over the first half-year of 2019, contributions to the state budget by the SEB Group companies operating in Lithuania were more than EUR 31 million in different taxes.
• At the end of the first half-year of 2019, the number of active users of the SEB Internet Bank was more than 560 thousand. Nearly 280 thousand had downloaded SEB app, and nearly 270 thousand – Smart-ID app.
• An increase in the number of payments by cards issued by SEB Bank over the first half-year of 2019 was 17 per cent year-on-year. At the close of the first half-year of 2019, payments by card as compared to payments in cash accounted for 48 per cent of the total value of payments, whereas relevant share was nearly 44 per cent year-on-year.
• Over the first half-year of 2019, more than 7 thousand remote advisory meetings were held for private individual and corporate customers.
• More than 90 per cent of POS terminals within SEB Bank’s network at the points of sale are already equipped with contactless payment functionality.
• SEB Bank customers could use a free-of-charge limit assigned according to their service plan at the same terms (i.e. without paying cash disbursement fee to SEB Bank) withdrawing cash at any ATM in Lithuania or at any ATM all over the world. Also, at about 1,200 other points of sale they could withdraw cash free-of-charge when paying for goods and services by card (cash thus withdrawn is not included in the cash withdrawal limit).
• At the close of the first half-year of 2019, SEB Bank had 29 sub-branches in Lithuania, most of them functioning as financial advisory units, where daily cash transactions are performed in self-service areas.