Results of the Šiaulių Bankas Group for the year 2021
The Šiaulių bankas group achieved an unaudited net profit of 55.2 million euros last year, which is 28% more than in 2020
Loan portfolio grew 19% year-on-year to over €2.1 billion
The deposit portfolio increased by 14% to EUR 2.6 billion
Research on mystery shoppers recognized Šiaulių bankas as the bank with the best customer service in Lithuania
Overview of key performance indicators
“Compared to 2020, this year has been a success, and it seems that the economic situation is recovering, despite the still looming pandemic. Businesses and individuals were actively interested in financing and looking for ways to invest their savings. Although the number of live consultations and cash transactions since the pandemic has not yet returned to normal levels and the demand for remote services is increasing, we are happy to have chosen the strategy of staying closer to our customers and let them choose how they want to be served. This has been recognized not only by international assessors – after the publication of the results of the 2021 mystery shopper survey conducted by DIVE Lietuva, we regained the title of the bank with the best customer service and obtained 100% in the quality score out of a possible 100,” said Vytautas Sinius, CEO of Šiaulių bankas.
The Šiaulių bankas group achieved an unaudited net profit of 55.2 million euros in 2021 (28% more than in 2020). Net profit for the fourth quarter of 2021 amounted to €11.0 million (25% increase compared to the fourth quarter of 2020). Net profit was slightly lower in the last quarter compared to Q1-Q3 2021, but excluding the impact of one-time and atypical gains in the first quarter and taking into account that more operating expenses are traditionally recorded at the end of the year, the fourth quarter is strongly performance driven.
Driven by strong growth in loan volumes and client activity, net interest income and net service and fee income increased by 7% each to EUR 80.9 million respectively and EUR 17.2 million.
In the absence of a significant deterioration in credit quality and the absence of an upward trend in delinquent loans observed throughout 2021, provisions of €4.1 million have been made during the course of the year. year, compared to provisions of €12.0 million in 2020, mainly considering the expected impact of COVID-19. The cost of risk (CoR) of the loan portfolio is 0.2% in 2021 (0.6% in 2020).
The Group’s cost/income ratio (excluding the impact of the SB draudimas client portfolio) remained almost unchanged during the year and stood at 42.8% at the end of the year (42.9% the previous year ), while ROE increased to 14.3% (12.7% the previous year). The capital and liquidity position remains solid and the prudential ratios are largely respected, with a liquidity coverage ratio (LCR) of 247%* and a solvency ratio (CAR) of 17.75%*.
Overview of business areas
Financing for businesses and individuals
With strong growth in corporate and personal financing, the value of the loan portfolio increased by 3% in the fourth quarter and by 19% to reach more than 2.1 billion euros in 2021. More than 1.2 billion euros of new loan contracts were signed last year, 71% more than in 2020.
While business expectations remain stable and investments increase, almost 0.7 billion euros of new business credit agreements were signed during the year (twice as many as in 2020) and 200 million euros in the fourth quarter alone. While the corporate finance portfolio remained almost unchanged in the fourth quarter, it increased by 11% over the whole of last year to reach 1.17 billion euros. The corporate finance non-performing loan portfolio continues its downward trend, amounting to €64 million at the end of the year (down €48 million, or 42% year-on-year on the other).
Despite the continuation of the pandemic, strong demand for financing from private customers continued to be recorded, particularly in the area of housing loans. With a still high level of new applications, the mortgage portfolio increased by 10% in the fourth quarter and by 53% since the beginning of the year to reach more than 454 million euros. The consumer credit portfolio grew by 4% in the fourth quarter and by 6% for the whole of 2021, reaching more than 170 million euros.
The Bank continues to focus on the financing of energy efficiency projects, with more than 30 million euros in modernization contracts for apartment buildings signed in the fourth quarter and 127 million euros over the year (+56% variation over one year). Together with the European Investment Bank (EIB) and other investors, a new EUR 275 million apartment building modernization fund is about to complete the contract signing process. The Fund is expected to start operations in the second quarter of this year.
Daily banking services
Last year, net income from services and commissions increased steadily each quarter to reach 17.2 million euros, up 7% year-on-year. More than 15,000 new private and corporate customers started using the Bank’s services in 2021, bringing the total number of customers to 326,000. The number of customers subscribing to service packages increased by 7% to reach 173,000 .
The use of non-cash services continues to grow strongly, while cash transactions decline. The population is increasingly using payment cards – the total number of payment cards issued increased by 25% year-on-year to 173,000.
Throughout the year, the Bank developed its digital channels according to customer needs, expanding the number of Internet banking and mobile application services. The total number of online channel users exceeded 218,000 (+15% compared to 2020). The number of customers served remotely is also constantly increasing.
2021 was a year of recognition for the Bank: Šiaulių bankas won the award for Best Bank in Lithuania 2021 as part of The Banker awards published by the Financial Times; earlier in the year, the bank was recognized by the business and financial magazine Global Finance Magazine as the best and then the safest bank operating in Lithuania. The most important award was the results of the mystery shopper survey conducted by Dive Lietuva in December, which showed that the quality of customer service from Šiaulių bankas is of the highest level, and the aggregated scores of the different categories s amounted to 100% out of 100. Šiaulių bankas won the position of bank offering the best customer service for the third time: in 2021, 2019 and 2018.
Savings and investments
The deposit portfolio increased by 14% over the year (332 million euros) and exceeded 2.6 billion euros. Sight deposits, which represent the bulk of the portfolio, increased by 27% or EUR 394 million, while the term deposit portfolio decreased by EUR 61 million (-7%). Clients are increasingly directing their savings towards the Bank’s investment products, with commission income from securities-related services reaching €3.3 million for the year (66% increase compared to 2020) . At the end of last year, in cooperation with SB draudimas, Bank customers were offered a new long-term savings service – investment life insurance.
* – forecast data
Šiaulių bankas invites shareholders, investors, analysts and other stakeholders to join its financial results for the year 2021 and the investor conference webinar on recent developments scheduled for March 2, 2022 at 4:00 p.m. (EET). The presentation will be in English. For more information click here.
Donatas Savickas, CFO
+370 41 595 602, [email protected]