Šiaulių Bankas Group results for 1H 2020
Šiaulių Bankas AB, company code 112025254, domicile address Tilžės st. 149, LT-76348 Šiauliai, Lithuania.
- Šiaulių Bankas Group earned EUR 20.9 million of unaudited net profit in the first half of this year
- The loan portfolio increased by EUR 88 million in the Q2 and reached EUR 1.76 billion which is by 16% more than a year ago
- While overcoming the pandemic challenges, the Group managed to provide all services to customers both - in customer service points and remotely, and offered support solutions to residents and businesses impacted by COVID-19
- Following the highest standards of corporate governance, two more independent members elected to the Bank’s Supervisory Council
Šiaulių Bankas Group earned EUR 20.9 million of unaudited net profit in the first half of this year (at the same time last year - EUR 27.8 million). Operating profit before impairment losses and income tax for the first six months of this year amounted to almost EUR 34 million, which is by 2% more than in the corresponding period last year.
Net interest income increased by 10% compared to the first half of 2019 and amounted to EUR 37.4 million. Net fee and commission income decreased moderately to EUR 7.7 million and was 8% less than in the first half of last year.
Mainly due to negative country’s macroeconomic outlook for this year, additional provisions of EUR 3.4 million were recognised for possible impairment losses making the half-year provisions in amount of EUR 8.3 million. The half-year cost-of-risk ratio (CoR) stood at 1.0%, although, according to the updated forecasts at the end of the first quarter, it was expected the annual ratio would reach 1.4%.
The efficiency of the Group's operations remains high - the cost / income ratio did not reach 37% at the end of June, and the return on equity exceeded 13%.
The capital and liquidity positions remain sound and prudential requirements are met with a large reserve - with a liquidity coverage ratio (LCR) of 223%* and a capital adequacy ratio (CAR) of 18.7%*.
Overview of Business Segments
Business and Private Clients Financing
The loan and finance lease portfolio totalled EUR 1.76 billion, which was by 5% more than at the end of Q1 and by 16% more than a year ago. In Q2, the growth of the loan portfolio was mainly influenced by increased activity in the housing loan market and the acquisition of the mortgage loan portfolio of private customers of the Lithuanian branch of Danske Bank A/S in amount of EUR 121 million. The mortgage loan portfolio reached EUR 247 million at the end of the half-year compared to EUR 65 million a year ago. Uncertainty caused by the pandemic reduced lending to business - the corporate loan portfolio decreased by 2% during the quarter to EUR 1.12 billion. The Bank was one of the first in the market to provide loans under state business aid programmes to the companies facing financial challenges caused by the COVID-19 pandemic. From the start of quarantine till the end of the aid programmes, loans amounting to EUR 46.5 million were signed with more than 500 companies. The issuance of these loans will have a positive effect on commission income.