Net profit of the Estonian unit of Swedbank in the second quarter of 2013 amounted to 42.2 million euros, 8 percent less than in the second quarter of 2012.
The decline was mainly a result of lower net interest income.
Lending volumes of Swedbank Estonia increased by 2.8 percent year-on-year and by 0.5 percent over the first quarter of 2013. The growth occurred primarily in corporate lending. At the same time stabilization of household lending volumes was observed in the second quarter and the whole private loan portfolio increased for the first time since the third quarter of 2008. Swedbank's market share in lending in Estonia was 39.8 percent as on May 31, the same as at the end of 2012.
Deposits increased by 3.3 percent year-on-year and by 1.9 percent over the end of the first quarter of 2013. Both corporate and private customer deposits in Estonia displayed growth in annual comparison. Swedbank Estonia's market share for deposits was 45.2 percent as on May 31, compared with 44.9 percent in the fourth quarter of 2012. The loan to deposit ratio was 112 percent, remaining unchanged since the final quarter of 2012.
Net recoveries went down by 4.1 million euros in the second quarter, compared to the 2.8 million euro decrease last year. Net recoveries dwindled in the portfolios of both corporate and private customers. Impaired loans continued to decline in the second quarter. These loans amounted to 209 million euros compared with 322 million euros at the end of the second quarter of 2012.
Risk weighted assets declined by 178 million euros in the second quarter to 4,432 million euros. The portfolio risk profile improved through better risk grades.
Year-on-year, revenues decreased by 8 percent in the second quarter. This decrease was mainly due to lower net interest income, or lower base rates, which decreased by 12 percent compared to the second quarter of 2012. Net commission income for the second quarter increased by 10 percent year-on-year, driven by higher commission income from payment services as a result of increasing client activity and higher turnover of the retail business.
The number of active clients increased by 6,000 year-on-year, reaching 799,000 or two thirds of Estonia's population.