Luminor's Latvian operation records €111.9mn profit in H1

By bne IntelliNews August 9, 2024

The Latvian operations of Estonia's Luminor Bank reported a profit of €111.9mn for the first half of 2024, reflecting a 1.3% decrease compared to the same period last year, according to its latest financial report, LETA, a Latvian newswire, and BNS, a pan-Baltic newswire, reported on August 8.

The Latvian branch of Luminor is the fourth largest bank in Latvia by assets. The US investment company Blackstone holds a controlling stake in Luminor.

Notably, in the second quarter, the bank's profit stood at €45.1 million, marking a 15.1% decline from April to June 2023.

Luminor generated a pre-tax profit of €60.5mn during the quarter, slightly below the same period last year. A decrease of €7.8mn in operating income, primarily due to reduced net other operating income, was partially offset by a €5.6 million reduction in administrative expenses, largely from cutting consultancy costs. However, IT-related expenses rose by 7.1% as the bank continued to enhance its systems and processes. Expected credit losses dropped by €4.4mn, while bank taxes and resolution fees increased by €3.9mn, mainly due to the temporary bank tax in Latvia. The profit for the period, €45.1mn, was 15.1% lower, influenced by changes to the Latvian corporate income tax law, which led to a nearly 70% rise in tax expenses.

The quality of the bank's loan book improved, with the gross carrying amount of loans experiencing significant credit risk and credit-impaired loans decreasing by €102.1mn over the quarter. Luminor's liquidity and capital positions remained strong, with a liquidity coverage ratio of 201.8%, twice the regulatory minimum.

Wojciech Sass, CEO of Luminor Bank, emphasised the bank’s focus on three key areas: improving the bank's value proposition for customers, streamlining IT for greater efficiency and customer benefit, and ensuring compliance with evolving regulatory requirements, LETA and BNS said.

Luminor is reportedly the target of two acquisition rivals at the moment: Hungary's OTP and Italy's UniCredit. However, Estonian media have written that OTP's potential bid might be blocked by Estonian regulators because of its continuing operations in Russia.

Related Articles

Swedbank Estonia CEO says Lithuania's bank taxes spooked investors' and foreign banks’ interest

Olavi Lepp, CEO of Swedbank’s Estonian branch, stated that Lithuania’s recently imposed temporary bank solidarity levy has dampened interest among new banks and foreign investors in the ... more

Citadele Bank profit in Baltics in H1 plummets 21% y/y to €50.9mn

Citadele, a pan-Baltic bank, reported a 21% decrease in net profit for the first half of 2024, totalling €50.9 million compared to €64.5 million in the same period last year, BNS, a Baltic ... more

Latvia’s Citadele bank issued €621mn in new loans for Baltics in H1, mulls IPO

Latvia’s Citadele Bank’s new financing for private, SME, and corporate customers in the region reached €621 million in the first half of 2024. This has contributed to an increase in Citadele's ... more

Dismiss