English Estonian
Published: 2022-02-10 07:00:00 CET
Coop Pank
Annual Financial Report

Unaudited financial results of Coop Pank for Q4 and 12 months of 2021

In 2021, Coop Pank increased its business volumes by 40% for the fifth consecutive year.

By the end of 2021, the number of Coop Pank's customers reached 114,600, over the year the number of customers increased by 27,000 (+32%). For comparison: 5,000 new customers were gained in 2017, 9,000 in 2018, 19,000 in 2019 and 23,000 in 2020. In 2021, the number of private customers increased by 25,400 and the number of corporate customers by 2,500.

Deposits of Coop Pank reached 1,1 billion euros by the end of 2021, increased by 341 million euros (+45%) over the year. Demand deposits grew by 71% over the year and term deposits by 27%. Due to the increase in the share of domestic deposits in the portfolio, including demand deposits, the bank's financing costs decreased to 0.7%. The market share of the bank's deposits increased from 3.2% to 4% over the year.

Loan portfolio of Coop Pank reached 953 million euros by the end of 2021, increased by 283 million euros (+42%) over the year. Of all the business lines, the greatest growth was shown by corporate loan portfolio and home loan portfolio: the corporate loan portfolio increased by 166 million euros (+ 64%) and the home loan portfolio by 102 million euros (39%). The leasing portfolio increased by 14 million (+17%) and the consumer finance portfolio increased by 1 million euro (+1%). The market share of the bank's loans increased from 3,4% to 4,4%over the year.

In 2021, the quality of the loan portfolio remained very good. To cover possible loan losses, 2.5 million euros provisions were made in 2021. The cost ratio for credit risk was 0.3%, while in 2020 it was 0.8%.

The income of Coop Pank reached 39 million euros, increased by 8 million euros (+26%) over the year. The largest contribution to revenue growth was made by net interest income, which increased by 7.2 million euros (+25%) over the year. Net fees and commission income also showed very good growth, increased by 1 million euros (+47%) over the year. The bank's operating cost reached 22 million euros, increased by 3.7 million euros (+19%) over the year. The biggest impact to the operating cost was the increase of IT-related expenses, which increased by 1 million (+41%), while personnel expenses increased by 1.4 million euros (+13%) over the year.

Net profit of Coop Pank in 2021 was 13.5 million euros, increased by 85% over the year. The bank's cost / income ratio fell from 60% to 57% over the year and the return on equity rose from 7.8% to 12.9%.

As of 31 December 2021, Coop Pank has 27,799 shareholders, over the year the number of shareholders increased by 14,932.

Results in Q4

In Q4 2021, the number of the bank’s customers increased by 7,000, of which 6,200 were private customers and 800 were corporate customers. By the end of the year 2021, Coop Pank had 114,600 daily banking customers.

The volume of deposits increased by 112 million euros (+11%), in Q4 2021 and reached 1.1 billion euros by the end of the year. Over the quarter, the volume of demand deposits increased by 61 million euros and the volume of term deposits by 51 million euros. Local term deposits from private and corporate customers increased by 67 million euros, while deposits from international deposit platforms decreased by 16 million euros.

The bank's net loan portfolio grew by 99 million euros (+12%) over the quarter, reaching 953 million euros by the end of the year. The volume of corporate loans increased by 60 million euros, the volume of home loans by 29 million euros, leasing by 6 million euros and consumer financing by 4 million euros.

In Q4 2021, Coop Pank earned a profit of 3.3 million euros, which is 23% less than in Q3 and 36% more than in the same period last year. The quarterly profitability was mostly affected by provisions made due to the growth of the loan portfolio.

Comments of the CEO of Coop Pank Margus Rink:

“2021 was a year of recovery and very rapid growth in the Estonian economy: GDP and wages showed growth, consumer confidence was good and unemployment rate dropped. Estonia's GDP growth has been one of the fastest in Europe and has even grown compared to 2019, which was before the pandemic. At the same time, in 2021 we were accompanied by a continuing health crisis, with rapidly rising real estate prices, supply chain problems, which led to the limited availability of new cars and other equipment, the second pillar pension funds entry into the market and multiple times increased energy prices.

In these constantly changing circumstances, Coop Pank has been able to successfully implement its growth strategy with rapid action and flexibility, growing its business volumes by an average of 40% per year for the fifth year in a row. Coop Pank's footprint is growing in the Estonian economy, in the local banking market and in people's daily lives.

At the beginning of 2021, we launched the first subordinated bonds of Coop Pank, with which we raised 10 million euros of capital for growth.

In order, to offer our customers best banking experience, we renewed our daily banking offer in the spring, eliminating payment service fees, launching a free banking plan package and innovative insurance solutions such as monthly paid COVID-19 travel insurance and adding free purchase insurance to all Coop Pank's private customers bank cards.

In the summer, we celebrated the growth of our customer base to 100,000 customers. This was one of the five strategic goals that we promised to achieve by the end of 2022 at the latest, and that we had met a year and a half earlier. We also see that in 2021, the activity of our customers increased: more and more people and businesses across Estonia use our services on daily basis and call us their home bank. As a result, domestic demand deposits grew during the year, and we continued to reduce the more expensive term deposits attracted through international deposit platforms. This also allowed us to meet the second target a year earlier then we promised: the bank's funding costs fell to 0.7%.

The growing local deposit portfolio and reduced financing costs allow us to participate more and more actively in the corporate and retail loan market. We ended the year with a loan portfolio of 953 million euros and we are very close to fulfilling the third promise made to investors: a loan portfolio of 1 billion euros by the end of 2022.

The continued growth in business volumes has led to the expected economies of scale, which means that Coop Pank’s revenues are growing faster than expenses. The quality of our loan portfolio was the best in five years: the share of the debt portfolio reached only 2%. As a result, our key performance indicators improved over the year: profit rose to 13.5 million euros, cost / income ratio fell to 57% and return on equity rose to 12.9% level.

Our good performance in 2021 was also reflected in the share price and growing number of shareholders. The number of the Coop Pank's shareholders has more than doubled in a year and we are currently the third listed company in Estonia by the number of shareholders.

In addition to our customers and shareholders, last year we also delighted our employees by moving the bank's head office to the newly built and modern Skyon business building in Maakri business district in Tallinn. Here works over 80% of Coop Pank's more than 300 employees. The new high-capacity, LEED-certified headquarters will support our continued ambition for growth and sustainability, including reducing our carbon footprint.

In 2021, we met all our goals and promises to our investors, and we will continue with the strategy that has brought us success, but from now on we do it with even greater ambition. Over the next five years, more precisely by the beginning of 2027, our strategic goal is to increase the Coop Pank's market share in Estonia to 10% and loan portfolio approximately to 2 billion euros, and thus reach a position where every tenth Estonian settles at Coop Pank – that is, at least 150,000 settled customers. As a result of increasing business volumes, the bank aims to achieve better efficiency (cost-income ratio less than 50%) and to offer shareholders a higher return on equity (ROE at least 15%).”

Income statement, in thousands of eurosQ4 2021Q3 2021Q4 202012M 202112M 2020
Net interest income9 8249 3457 80835 53828 371
Net fee and commission income9027525403 0852 097
Net other income-50230171615621
Total net income10 67610 3278 51939 23831 089
Payroll expenses-3 182-3 364-2 976-12 490-11 085
Marketing expenses-332-296-350-1 247-945
Rental and office expenses, depreciation of tangible assets-980-667-539-2 802-2 211
IT expenses and depreciation of intangible assets-1 013-893-767-3 455-2 454
Other operating expenses-698-568-640-2 459-2 101
Total operating expenses-6 205-5 788-5 272-22 453-18 796
Net profit before impairment losses4 4714 5393 24716 78512 293
Impairment costs on financial assets-963-10-715-2 497-4 789
Net profit before income tax3 5084 5292 53214 2887 504
Income tax expenses-213-227-108-825-245
Net profit for the financial year3 2954 3022 42413 4637 259
Basic earnings per share (in euros)0,040,050,030,150,08
Diluted earnings per share (in euros)0,040,050,030,150,08
      
      
Statement of financial position, in thousands of euros31.12.202130.09.202131.12.2020  
Cash and cash equivalents252 799239 735170 750  
Debt securities5 9323 5733 011  
Loans to customers953 396854 234670 593  
Other assets29 84932 96525 555  
Total assets1 241 9761 130 507869 909  
Customer deposits and loans received1 098 746986 777757 835  
Other liabilities14 42318 2337 443  
Subordinated debt17 06417 1117 064  
Total liabilities1 130 2331 022 121772 342  
Equity111 743108 38697 567  
Total liabilities and equity1 241 9761 130 507869 909  
      

The reports of Coop Pank are accessible at: https://www.cooppank.ee/aruandlus.

Coop Pank will hold an Investor Webinar for the introduction of its financial results, which is scheduled at 11:00 on 10 February 2022. To participate, please register in advance via the following link: https://zoom.us/webinar/register/WN_MAwRZHFmRNqWtNG0Sq02aA

The webinar will be recorded and posted on the company’s website www.cooppank.ee and YouTube account.

Coop Pank, which is based on Estonian capital, is one of the five universal banks operating in Estonia. The bank has 114,600 everyday banking customers. Coop Pank aims to put the synergy generated by the interaction of retail business and banking to good use and to bring everyday banking services closer to people’s homes. The strategic owner of the bank is the local retail chain Coop Estonia, which has a sales network of 330 stores.

Further information:
Margus Rink
Chief Executive Office
Email: margus.rink@cooppank.ee

Attachments



Coop Pank 2021-12_EN.pdf
Coop Pank 2021 tulemused_EN.pdf
Interim report_12m 2021_EN.pdf