In the first three quarters of the year, Citadele Group continued to demonstrate stable growth and to upgrade customer service among private individuals as well as in the MSME and Corporate sectors. The Group’s net loan portfolio continued to grow and reached EUR 1,342 million – a 7% increase compared to September 2016.
In line with the Group’s strategy, Baltic private individual and SME segments contributed most to the growth. The amount of new loans granted by the Group’s banking entities in the first three quarters of 2017 was EUR 362 million, a 13% increase compared to the same period in 2016. For private individuals the amount of new loans granted was EUR 98 million, a 5% increase compared to the same period in 2016. For MSME and Corporate entities, EUR 260 million were granted – a 15% increase.
The Group’s client deposits grew by 2% compared to September 2016 and reached EUR 2.8 billion.
Citadele in Latvia
In Latvia, the net loan portfolio of Citadele Bank reached EUR 1,021 million. The amount of new loans granted by the bank in the first nine months of 2017 was EUR 200 million which was a 5% increase compared to the same period in 2016. For private individuals the amount of newly granted loans was EUR 69 million, a 7% decrease compared to the first nine months of 2016. For MSME and Corporate entities, the amount of newly granted loans grew by 12% and reached EUR 132 million.
Client deposits in Latvia increased to EUR 1.9 billion – an increase of 2%.
Citadele has made significant investments in new technologies. Citadele Bank was the first bank in the Baltics to introduce mobile payments. Beginning in September, payments using mobile phones were made available to people who use smartphones with an Android operating system (Samsung, HTC, Huawei etc.), representing approximately 80% of all phone users in Latvia. For users of smartphones with other operating systems, Citadele offers alternative mobile payment solutions – bracelets and stickers with near-field communication (NFC) technology. Currently, mobile payments using NFC technology are possible in over 15,000 places in Latvia where contactless payments are accepted. It is expected that by 2020 every payment terminal in Latvia will be fitted with contactless payment function.
Citadele in Lithuania
In Lithuania, the net loan portfolio was EUR 252 million. The Bank granted EUR 107 million in new loans in the first nine months of 2017, 12% more than in the same period a year ago. For private individuals the amount of newly granted loans was EUR 10 million, a 66% increase compared to the same period in 2016. For MSME and Corporate entities, the amount of newly granted loans was EUR 93 million, a 4% increase compared to the same period in 2016.
Client deposits in Lithuania grew by 13% and reached EUR 426 million.
Citadele in Estonia
In Estonia, the net loan portfolio continued to grow, reaching EUR 113 million, which is an increase of 22% compared to September 2016. The amount of new loans granted by the Bank in the first nine months of 2017 was EUR 54 million, a 68% increase compared with the same period in 2016. For private individuals the amount of newly granted loans in the first nine months of 2017 was EUR 20 million, which was a 40% increase compared with the same period in 2016. For MSME and Corporate entities, the amount of newly granted loans in the first nine months of 2017 was EUR 34 million, which was a 90% increase compared with the same period in 2016.
Client deposits in Estonia reached EUR 229 million, which was an increase of 23% compared to September 2016.
Citadele’s leasing
The Group’s leasing companies showed steady growth in their net leasing portfolios. The total Baltic net leasing portfolio reached EUR 157 million – a 4% increase compared to September 2016. This growth was driven primarily by the good performance of Latvian and Lithuanian leasing companies – the net leasing portfolio in Latvia grew by 12% and in Lithuania by 18%, reaching EUR 75 million and EUR 58 million respectively.
Other key indicators
The Citadele Group’s net profit for the first nine months of the year was EUR 2.6 million. The net result for 2017 was impacted by an expense of EUR 23.2 million, due to deferred tax asset write-off as a result of changes in Latvian tax legislation.
The Group’s net profit for the first nine months of 2017 before tax asset write-off was EUR 25.9 million compared to the net result for the same period in 2016 of EUR 25.2 million. The net result for the first nine months of 2016 was affected by the EUR 11.3 million gain on the sale of Citadele’s share in Visa Europe to Visa Inc, where the overall profit was EUR 36.6 million.
Disregarding the one-time tax asset write-off the Group continued to show good profitability, in the first nine months of 2017 reaching adjusted ROE of 13.5% (Bank: 10.0%) and adjusted ROA of 1.05% (Bank: 0.93%). Disregarding the one-time gain on the sale of Citadele’s share in Visa Europe to Visa Inc, in the same period in 2016 adjusted ROE was 14.4% (Bank 10.6%) and adjusted ROA was 1.10% (Bank: 0.95%).
Net interest income increased by 16% to EUR 55.8 million (Bank: EUR 41.8 million) as a result of growth in the yield and size of the Group’s Baltic loan portfolios. The Group’s net commission income decreased by 3% to EUR 27.1 million (Bank: EUR 17.0 million). The decrease was mainly driven by the Group’s activities in decreasing risk in USD-denominated transfers.
The Group’s asset quality continued to improve with non-performing loan ratio (NPL) ratio decreasing to 9.0% (Bank: 9.6%) as compared to 9.2% in September 2016. The Group’s capital adequacy ratio was at a high level, reaching 17.0%, an improvement compared to 13.8% in September 2016.
The Citadele Group is managed from Latvia, and its subsidiaries and branches operate in Latvia, Lithuania, Estonia and Switzerland. Citadele ensures transactions and card payments, loans, deposits, investments, asset management and leasing services, as well as a range of exclusive and unique products. Citadele’s vision is to become the best financial services provider in the Baltics for private customers and small and medium businesses.