DNB Lithuania, part of Norway's largest financial services group, earned a consolidated pre-tax profit of EUR 18.7 million (LTL 64.7 million) in full year 2014, up 29.4 percent from EUR 14.5 million (LTL 50.0 million) the year before due to further growth of business volumes in all major segments and focus on operating efficiency and quality of the loan portfolio.
Net profit of DNB Lithuania in full year 2014 rose 24 percent to EUR 16.4 million (LTL 56.5 million) from EUR 13.2 million (LTL 45.6 million) the year before. The result is preliminary and calculated in accordance with the International Financial Reporting Standards.
Commenting on the full year 2014 results Bjornar Lund, the president and the chairman of the management board of AB DNB Bankas, noted that all business areas performed well and DNB Lithuania fulfilled financial targets set for the year.
“We maintained a strong stand in the mortgage and consumer loans market, our loan portfolio to legal entiites outpaced the market growth and more than a third of the country’s start-up businesses registered last year chose us as their home bank. We earned more spending less despite higher expenses related to preparation of the bank’s information system for smooth transition to Lithuania’s the new currency euro. We are particularly pleased to see the number of our active customers increasing further reflecting our efforts to offer them effortless mobile solution and active development of self-service infrastructure for daily banking services. That also helped to scale down the amount of cash operations in braches and opened a possibility for us to spend more time on consulting customers on savings, credit and other higher value-added products and services. Looking ahead we believe that the Lithuanian economy will remain on the growth path providing us solid foothold for the sustainable and balanced growth this year in spite of geopolitical uncertainty that affects economic sentiment of both individual and corporate customers,” Bjornar Lund says.
Loans and deposits
DNB Lithuania new credits worth EUR 898 million ( LTL 3.1 billion) in 2014, i.e. EUR 192 million (LTL 663 million) more compared to the previous year. As a result the net loan portfolio rose 6.1 percent year-on-year to EUR 2.7 billion (LTL 9.5 billion). The loan portfolio to individuals rose 5.1 percent year-on-year to EUR 1.2 billion (LTL 4.3 billion) due to higher demand for mortgages and consumer lending. The loan portfolio to legal entities increased 7.1 percent within the period to EUR 1.5 billion (LTL 5.2 billion) due to the long-term constructive relationships and rising number of large corporates that chose DNB as their home bank.
The deposit portfolio rose 16.1 percent year-on-year to EUR 2.1 billion ( LTL 7.3 billion) as at the end of 2014. This resulted from the growth of number of customers and the euro introduction effect when many chose to deposit cash in the bank’s accounts ahead of introduction of Lithuania’s new currency euro. As at the end of the 2014 the Group was providing comprehensive range of financial services to 852 thousand individual and corporate customers, the factor contributing positively to the non-lending income growth.
The Group’s assets rose by 8.6 percent year-on-year and stood at EUR 3.8 billion (LTL 13.0 billion) as of 31 December 2014.
Income and costs
In 2014, the net income (net interest income, net fees and commission, net profit (loss) from operations with securities and derivatives, net foreign exchange result and other income) of DNB Bankas’ group made EUR 110.7million ( LTL 382.2 million). The largest relative weight – 59.7 percent – of the operating income fell on the net interest income, which increased 6.5 percent year-on-year to EUR 65.7 million (LTL 227.0 million). The net fees and commission income rose 3.5 percent year-on-year to EUR 28.4 million (LTL 97.9 million).
The focus on development of the self-service infrastructure for daily financial services and in parallel optimization of the customer service network helped the Group to increase further operating efficiency and reduce operating costs despite expenses related to the Euro introduction in Lithuania. As a result the Group’s operating and other expenses decreased 4.6 percent year-on-year in 2014 to EUR 86.2 million (LTL 297.7 million).
Due to proper risk management DNB Bankas’ group met all the prudential requirements of the Bank of Lithuania.
Please check the Norway’s DNB bank operating results for 2014 on www.dnb.no.
DNB Lithuania will present its consolidated results for the first quarter of the year on 30 April 2015.
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