Q3 2024 Siauliu Bankas AB Earnings Call Transcript
Key Points
- Bank of Siauliai AB (FRA:ZH5) reported a strong net profit of over EUR 20 million for the third quarter, contributing to a total of nearly EUR 64 million for the first nine months of 2024.
- The bank achieved an 18% year-on-year growth in its loan portfolio, driven by strong corporate lending and a significant increase in market share across all business segments.
- The bank revised its dividend payout policy to 50% and initiated share buyback programs, positively impacting its share price performance.
- The bank's digitalization efforts have been successful, with the introduction of an online bond subscription platform and strong performance in pension funds.
- The Lithuanian economy is performing well, with a projected GDP growth of 2.3% for the year, low inflation, and high consumer confidence, which benefits the bank's operations and growth prospects.
- Operating expenses decreased by 14% due to a one-off windfall tax in the previous quarter, but the overall cost environment remains inflationary.
- Impairment losses increased due to higher new lending volumes, impacting the bank's financials.
- Net interest income saw a slight decrease of 2% quarter-on-quarter, influenced by increased cost of funding.
- The bank's capital markets performance was weaker due to seasonal headwinds, affecting its overall financial results.
- The bank had to temporarily restrict new mortgage applications due to overwhelming demand, indicating potential capacity or risk management challenges.
Good day to investors and thank you for joining Siauliu Bankas webinar on the third quarter results. So today we have will be three presenters Tomas Varenbergas who is the head of Investment Management Division, and Donatas Savickas who is a strategy partner and myself [Vytautas Sinius] CEO of the bank.
So, let's just start with the presentation and we'll start with the key financial strategic highlights. So, I would say that the quarter was strong.
The profit generated net profit generated was in the range of 20 plus million EUR. So, with that, we reached almost EUR64 million net profit for nine months with a 15.4% of return on equity. Maintaining a rather stable efficiency, levels of a cost income ratio, 45.6% slightly better than our indications in the in the beginning of the year, the quarter traditionally will be slightly potentially higher with the cost. So this ratio will be I hope somewhere in between those two ranges.
We had a strong quarter on the new lending volume growth and it was mainly through the old
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