Bigbank AS Shows Strong Loan Growth and Profit in October

Impressive Loan Portfolio Growth for Bigbank AS

Bigbank AS has experienced significant growth in its loan portfolio throughout the month of October, successfully surpassing 2.1 billion euros by the month’s end. The notable achievement of a 30 million euro increase in the home loan segment marks the highest monthly sales figure recorded for 2024 to date. This surge reaffirms Bigbank’s position in both the business and consumer loan markets, leading to an overall increase in its loan offerings.

Euribor Trends Impacting Loan Customers

Recent trends show a rapid decline in the Euribor rates, which saw the 6-month Euribor fall from approximately 3.1% at the beginning of October to below 2.9% by the month’s conclusion. It has been a considerable time since the 6-month Euribor was recorded below 3%—last seen in January 2023. While falling interest rates provide much-needed relief to customers with variable-rate loans, they concurrently result in reduced interest income for banks like Bigbank.

Impact on Deposit Strategies

Despite the declining Euribor, deposit interest rates continue to decrease, albeit at a slower rate. In light of these circumstances, clients are showing a growing interest in short-term fixed deposits which represents an increase in participation compared to prior months. Overall, the deposit portfolio enjoyed a robust increase of 83 million euros, marking the second best monthly result for the year 2024.

Steady Credit Quality Maintained

The credit quality of Bigbank's loan portfolio remains steady, reminiscent of levels witnessed in previous months. Any short-lived quality deterioration that occurred in the first quarter has been addressed, leading to a low ratio of non-performing loans across the overall portfolio. For October, the costs pertaining to loan and financial investment impairments were recorded at 1.9 million euros, which is below the average monthly costs for the year.

Solid Financial Results for October

For October, Bigbank AS reported a net profit of 2.6 million euros. While this reflects solid performance, it does indicate a decrease by 2.1 million euros compared to the cumulative results from the first ten months of the previous year. Key contributing factors to this decline include increased impairments on net loans and financial investments alongside higher payroll and income tax obligations. The corporate income tax instituted for credit institutions has notably influenced financial outcomes since the latter part of 2023.

Key Financial Figures for October

Among the crucial financial results for October 2024, the following highlights deserve attention:

• Customer deposits and loans reached 2.4 billion euros, marking a year-on-year increase of 27%.
• Total customer loans grew by 29% year-on-year, reaching an impressive 2.1 billion euros.
• Net interest income improved to 9.2 million euros in October, cumulating to 88.3 million euros over the first ten months, an increase of 7% compared to the last year.
• Loss allowances related to loans and financial investments totaled 21.3 million euros for the first ten months, a notable year-on-year increase of 27%.
• Return on equity stood at 11.6% during the month of October.

Income Statement Overview

Offering insight into the operating income, Bigbank’s income statement highlights the following:

• Total net operating income reached: 9,304 thousand euros for October.
• Net interest income recorded: 9,193 thousand euros, adding up to 88,283 thousand euros year-to-date (YTD).
• Expenses totaled: -4,201 thousand euros, which is an increase in operational efficiency with a year-on-year change of +2%.

Business Volumes Summary

The business volumes have also seen growth, with customer deposits and loans reaching significant figures compared to the previous year. Customer deposits totaled 2,357,577 thousand euros, revealing a 27% year-on-year increase. Similarly, loans to customers hit 2,103,649 thousand euros, showing a strong growth of 29%.

Outlook for Bigbank AS

Bigbank AS remains committed to maintaining its impressive growth trajectory while adapting to evolving market conditions. The bank’s total assets have risen to 2.7 billion euros by the end of October 2024, backed by an equity of 267.6 million euros. With operations in nine countries and a customer base exceeding 150,000, Bigbank is well-positioned for sustainable financial performance in the long term.

Contact Information

For more information on Bigbank AS, you can reach out to Argo Kiltsmann, a member of the management board, via the following:

Phone: +372 53 930 833
Email: Argo.Kiltsmann@bigbank.ee

Frequently Asked Questions

What were the key financial results for Bigbank in October 2024?

Bigbank reported a net profit of 2.6 million euros and saw significant growth in its loan portfolio and deposits.

How did the decline in Euribor affect Bigbank’s customers?

The decline in Euribor rates provided relief for customers with floating interest rates, but it also lowered the interest income for the bank.

What are some of the challenges Bigbank faced in October 2024?

Challenges included increased impairments and higher payroll and income tax expenses impacting net profit.

What is the current return on equity for Bigbank AS?

The return on equity stood at 11.6% for October 2024.

How has Bigbank adapted to changes in customer deposit preferences?

Bigbank noted an increase in interest among clients for short-term fixed deposits amidst changing interest rates.

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