The Citadele group's loan portfolio reached EUR 1.23 billion in the first half of this year, a yearly increase of 14%, which was significantly higher than the average growth rate in the banking sector.
This growth reflects Citadele's new strategy of being active small and medium business lenders in the Baltics, as well as leading the personal loans sector in Latvia and Lithuania.
Citadele has granted EUR 57.7 million in loans to businesses in the first half of this year, which was by 19% more than in the first half of last year. Citadele has mostly granted loans to small and medium businesses - granting EUR 28.3 million, which was by 57% more than over the respective period previous year. Altogether, Citadele's credit portfolio in the small and medium business sector increased by 15% compared to the previous year.
Citadele Chairman of the Board Guntis Beļavskis: “This year we started our product series "Support Loans," which has been custom-created for the needs of small and medium businesses of various fields. For example, businesses and farmers with these new products are able to receive microloans up to 20,000 Euro based on the client's cash flow and without the need to secure the loan with property.”
“Meanwhile, in personal loans, we have rejected a single interest rate - we are giving the public the chance to receive an individual offer whose interest rate is based on the specific person's financial discipline. In the first half of this year, following the common practice in the rest of the world, we developed a new tool - a credit rating, which gives anyone the chance to evaluate their credit ability using the internet," says Guntis Beļavskis.
By developing its activity in Lithuania and Estonia, Citadele's loan portfolio increased by 19% and 54% respectively over a year. The quality of the group's credit portfolio continued to improve. At the end of June the non-performing loan (NPL) indicator fell to 9.6%, compared with 12% a year ago.
Over a year, clients' deposits in the group's banks have increased by 14% or 340 million - at the end of June the total deposit portfolio reached EUR 2.75 billion. Total deposits exceeded total loans issued by more than two times, ensuring high liquidity indicators.
AS “Bank Citadele” group had a profit of EUR 25.4 million in the first half of the year which was 70% higher than during the same period of 2015. Profit was significantly increased through the sale of Citadele's share in "Visa Europe" to "Visa Inc" for EUR 11.3 million.
Operating income of the Citadele group in the first half of the year was EUR 70.6 Euro, which was 29% higher than in the first half of 2015. Administrative costs in the first half of the year were EUR 36.6 million, which was 3.8 million Euro more than last year. The growth strategy of the Citadele group is to continue to invest in its employees and in creating new jobs, as well as investing in new, convenient, everyday solutions for clients and in more stable and secure systems.
Under the influence of negative market interest rates, the net interest margin of the Citadele group decreased; however, thanks to our growing loan portfolio, net interest income in the first half of the year reached EUR 31.1 million which was an increase of 5% compared with the same period in 2015. The group's net income from commission in the first half of the year grew up to EUR 18.3 million, which was 6% more than a year ago.
Citadele's decision to ensure growth and its continued efforts to improve customer service has gained recognition. In June, the prestigious magazine Euromoney's 2016 survey Euromoney Awards of Excellence recognised the changes at Citadele as the best in the Central and Eastern Europe banking sector. (“Central and Eastern Europe’s Best Bank Transformation”). “Restructured, recapitalised and renewed – Citadele can no longer be seen as the unsuccessful lender which was left over after the influential collapse of Parex. Citadele is now in a good place from which to serve Latvia’s economic recovery," said a statement by the magazine.