AB DNB Bankas, a member of Norway's largest financial services group, earned a net profit of LTL 13.3 million in the first three months of 2013 according to the preliminary unaudited data. The bank's net profit earned in the first quarter of 2012 was LTL 21.7 million. The results have been calculated in accordance with the International Financial Reporting Standards.
"The result we achieved in the first three months of the year was largely affected by several important factors – the planned in advance increase in operating expenses related to the upgrade of our banking systems and investments into IT technologies and falling market rates that touched historic lows affecting the banks’ net interest income. On the other hand, lower rates encouraged higher demand for new loans, mortgage credit, in particular, contributing positively to the bank’s loan portfolio growth. Moreover, the increasing number of customers and their activity had a positive impact on the deposit portfolio and income from the financial services. It is also important to note the further improvement of quality of our loan portfolio, i.e. the incurred loan losses have returned to the level below the average if we speak in terms of full economic cycle, "- said Bjornar Lund, CEO of AB DNB Bankas commenting of the results for the first quarter of 2013.
As of the end of March AB DNB Bankas had extended credits to individual and corporate customers worth LTL 8.92 billion, i.e. its net loan portfolio rose 3.0 percent year-on-year. The rise was mostly determines by increasing financing volumes to legal entities and higher demand for mortgage credits, particularly in Vilnius.
In line with an increasing number of customers and their funds, the deposit portfolio of AB DNB Bankas rose 11.5 percent year-on-year, i.e. up to LTL 5.96 billion. Thanks to the consistent implementation of the customer centric business model the number of customers increased by 64 thousand year-on-year. As of the end of March, AB DNB Bankas was providing comprehensive range of financial services to 795 thousand individual and corporate customers.
In the first three months of the year net income of AB DNB Bankas was LTL 86.7 million. The largest relative weight - 58.8 percent - in the operating income made the net interest income. Due to fall of the market interest rates the bank’s net interest income was 14.3 percent lower compared to the same period a year ago. Income for the services delivered to the customers increased 6.0 percent compared to the first quarter of the last year.
Operating and other expenses of the Bank amounted to LTL 71.98 million in the first three months of 2013. They increased by LTL 19 million compared to the corresponding period a year ago, the rise predetermined by higher costs related to implementation of modern banking systems that will build a solid technological basis for sustainable development in the long term perspective. Other operating costs of the bank decreased 2.4 percent compared with the same period last year
The Bank's assets increased 7.3 percent year-on-year and as of the end of March amounted to LTL 11.5 billion.
Due to proper risk management the bank met all prudential requirements of the Bank of Lithuania.
The Norwegian DNB financial group's operating results of Q1 2013 are available at www.dnb.no.
Information about AB DNB Bankas' six months results will be published on 11 July.
Making banking delightfully easy