Luminor Estonia, Latvia and Lithuania all delivered good profitability throughout 2018 and kept a good momentum.
“In 2018 we saw Luminor’s financial results remain stable in all three Baltic States and show profitability throughout the year,” said Erkki Raasuke, Luminor Bank CEO. “Overall Luminor’s deposit volumes in 2018 increased by 7.6%, and while customer lending volumes had a minor decrease of 1.7% compared to 2017, our loan to deposit ratio improved.”
During Q4 2018, Luminor continued to focus in all three countries on transformation processes and completing the cross-border merger, whereby starting from 2 January 2019 Luminor continued its operations through a registered entity in Estonia and its branches in Latvia and Lithuania.
According to Raasuke, the economic environment of the Baltic States is currently favourable, with healthy growth rates in GDP, almost full employment, balanced current accounts and healthy levels of saving rates and surplus budgets.
“This positive economic backdrop has supported our decision to accelerate the transformation Luminor is currently undergoing,” he explained. “In 2019 we will be actively implementing our transformation plan and an ambitious programme of upgrading our customers’ online experience, pressing ahead with IT and digital transformation and gaining operating efficiency. We are also adjusting our organisation to changing business needs, take down post-merger duplications and simplifying our operations.”
In 2019 Luminor will also continue with the Know Your Customer (KYC) enhancement programme in all three countries, emphasising regulatory compliance as a key priority and conducting its business with integrity.
Lithuania
The Q4 2018 net profit earned in Luminor Lithuania was 3.1 million euros, which was 16.7 million euros less compared to Q3 2018. This drop was mainly due to impairment losses on loans and higher IT and other administrative expenses during the quarter. Net interest income increased by 0.4% reaching 28 305 thousand euros and net commission income increased by 0.5% compared to Q3 2018.
“Positive Q4 results signal the right choice of our direction, and despite the biggest change in Baltic banking sector Luminor is going through, customers appreciate our proposals. Lending portfolio remained stable, while deposits grew by 17,6% in 2018. We are on the right track of implementing our target of growing private and business deposits – we recorded the improvement both”, said Andrius Načajus, manager of Lithuanian branch of Luminor.
Capital ratio of 17,9% mirrors good financial health of the bank, low ratio of provisions on bad loans in 2018 shows high quality of lending portfolio.
According to Načajus, last year received rating was one of the biggest incentives and evaluation of our improvements – they have strengthened the trust of business customers in Luminor’s services and confirmed our overall goals and direction, despite the ongoing changes, and paved the way for further transformation of the bank.
The Luminor Lithuania 2018 unaudited Q4 report is available here.
Consolidated audited results for Estonia, Latvia and Lithuania 2018 will be published by the end of March 2019.
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