Luminor completes fourth quarter with a strong platform for growth following completion of technology transformation programme

Luminor Bank AS today publishes its interim report for the fourth quarter of 2020. The bank has completed its technology transformation and enters 2021 with a strong financial position to support its customers through the evolving pandemic.

Deposits from customers increased by 713 million EUR to 11.8 billion EUR in the fourth quarter, leading to a loan‑to‑deposit ratio of 80% at quarter end. The portfolio of non‑performing loans stood at 3.2% of net loans, which is the bank’s lowest ever ratio. Net profit in the fourth quarter was 18.6 million EUR, an increase of 14.6 million EUR compared to the same quarter of last year.

Luminor’s funding efficiency was improved further by the issuance of a 300 million EUR bond and concurrent repurchase of 250 million EUR of an existing security due in 2021.

In December, the European Investment Bank (EIB) and the European Investment Fund (EIF) issued Luminor a guarantee to support additional lending of at least 660 million EUR to small and medium-sized enterprises and mid‑caps in the Baltics to help mitigate the impact of COVID‑19. Luminor is the first bank in the Baltics to receive such a guarantee structure.

In the fourth quarter, Luminor completed the technology carve‑out from its former parent banks. Following the migration of Luminor customers to our common banking platforms in Latvia and Lithuania earlier in the year, Estonian customers were migrated to the new banking platform in November. In addition, Luminor announced a five‑year agreement with IBM in January 2021 that will enable Luminor to accelerate its digital transformation and further strengthen its security and regulatory compliance processes.

Luminor is committed to preventing and detecting money laundering and financial crime and has continued to invest in our human and technological capabilities, and to review our systems and processes in the fourth quarter.

Luminor Bank CEO, Peter Bosek, said:

“The Baltic economies have proven to be very resilient through the pandemic and are well equipped to face future challenges. We will continue to use our strong financial standing for the benefit of our customers to ensure that Luminor is a trusted banking partner for individuals and businesses throughout the Baltics.

After completing our technology carve‑out, we are ready to start the next stage of our transformation which focuses on increasing customer satisfaction, digital development and ensuing growth.

Since the joining the company, I have been impressed with the commitment and drive that my new colleagues have shown to build a strong local bank for local customers and I look forward to leading Luminor as we begin executing the next phase of our strategy.”

Luminor is the third‑largest provider of financial services in the Baltics, with some 900 000 clients, over 2300 employees. In the Baltic region, it has a market share of 16.1% in deposits and 17.2% in lending as at the end of December 2020. Luminor has total shareholders’ equity of 1.7 billion EUR and it is capitalised with a CET1 ratio of 22.4%.  

Luminor Q4 2020 report can be found here.