Extraordinary Financial Revenue Accounts for Estonian Banks’ Q3 Profit
25 October (BNS)
According to the Bank of Estonia, the banks operating in Estonia earned a total of 424 million euros net profit, of which 80 was extraordinary financial revenue from the sale of subsidiaries.
Swedbank AS, the Estonian subsidiary of the Swedish Swedbank Group, this year sold the shares of the Latvian and Lithuanian subsidiaries that belonged to it to the mother company of the group, Swedbank AB. According to the legal structure of Swedbank AS, the Latvian and Lithuanian units of Swedbank AS became subsidiaries of the mother company, Swedbank AB.
Contraction of loan discounts increased the net profit of the quarter by 7.8 million euros. Growth in the banks' operating profit was contributed to higher net interest revenue, as the level of the Euribor as well as loan activity increased slightly compared with the previous quarter, the central bank said.
According to the Bank of Estonia, the sum total of new loans issued in September was one of the biggest in the past three years; the turnover was 226 million euros in September. The considerable growth in new loans was mainly caused by a couple of major loan projects connected with real estate, the central bank said. Also companies of the manufacturing industry took more investment loans. The growth in companies' new loans has accelerated since spring 2011, arriving at nearly 30% in Q3.
27% more housing loans were taken in Q3 than at the same time in the year before. The sum total of housing loans issued during September grew to 54 million euros, the biggest loan turnover since the beginning of 2009.
Although the number of loans issued during the year grew during the month the balance of the loan contracted by 10 million euros in September due to Estonia companies' and private persons' loan repayments. Further loan activity, the Bank of Estonia said, was limited due to bigger risks of the external environment.
Growth in private persons' deposits on years accelerated to 15%. The deposits of companies and private period grew by 54 million euros to 7.7 billion euros in September.
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