Published: 2021-02-11 07:00:00 CET
Coop Pank
Annual Financial Report

Unaudited financial results of Coop Pank for Q4 and 12 months of 2020

In 2020, Coop Pank increased its business volumes by 40% for the fourth consecutive year.

Number of the bank’s customers at the end of 2020 was 86,700 – an increase of 23,000 customers, i.e. 36% over the year. For comparison: 5,000 new customers were gained in 2017, 9,000 in 2018 and 19,000 in 2019. In 2020, the number of private customers increased by 21,000 and the number of corporate customers by 2,000.

Loan portfolio of Coop Pank increased to 671 million euros in 2020 – an increase of 210 million euros, i.e. 46%, over the year. Business loan and home loan portfolios increased the most with 64% and 47%, respectively. Leasing portfolio increased by 30% and consumer finance by 11%. Market share of the bank’s loans at the end of 2020 was 3.4%, an increase of 1 percentage point over the year.

Quality of the loan portfolio remained stable irrespective of the corona crisis and the solvency of customers who used the grace period, has recovered. Provisions of 4.8 million euros were formed in 2020 as cover for potential loan losses. Credit risk cost ratio was 0.8%, compared to 0.5% in 2019. Increase in impairment costs derived from significant increase in portfolio as well as the impact of the economic environment.

Deposits of Coop Pank amounted to 758 million euros as at the end of 2020 – an increase of 251 million euros, i.e. 50%, over the year. Demand deposits grew by 99% over the year and term deposits by 29%. As the share of demand deposits in total deposits increased from 30% to 39% over the year, the bank’s financing costs decreased from 1.0% to 0.9%. Market share of the bank’s deposits increased from 2.6% to 3.2%.

Profit earned by Coop Pank in 2020 amounted to 7.3 million euros, an increase of 31% over the year. Annual increase in the bank’s income was 31%. Largest contribution to revenue growth came from net interest income, which increased by 37% over the year. Annual increase in the bank’s operating costs was 16%. Increase in IT expenses and personnel expenses had the biggest impact, as they grew by 63% and 12%, respectively, over the year.

Return on equity of the bank was 7.8% and the cost-income ratio decreased from 69% to 60%.

Results in Q4

Number of the bank’s customers increased by 6,800, i.e. 9%, in Q4 2020. 6,200 of them were private customers and 600 were corporate customers. Coop Pank had 86,700 daily banking customers as at year end.

The bank’s net loan portfolio increased by 71 million euros, i.e. 12%, in the quarter and amounted to 671 million euros by year end. Business loans increased by 43 million euros, home loans by 24 million euros, leasing by 3 million euros and consumer finance by 2 million euros.

Deposits increased by 70 million euros in the quarter, i.e. 10%, and amounted to 758 million euros by year end. 70 million euros increase in demand deposits can be considered significant. Local term deposits of private and corporate customers grew by 39 million euros whilst deposits raised from international platforms decreased by the same amount.

Profit earned by the bank in Q4 2020 was 2.4 million euros, which is 20% more than in Q3 and 53% more than in the same period last year.

Comments of the CEO of Coop Pank Margus Rink:

“Coop Pank has been operating on Estonian banking market for four years. We’ve been implementing a growth strategy in these years and increased our business volumes by 40% a year on average. We feel that our footprint in Estonian economy is growing.

The crisis that broke out in the beginning of the year cast doubt on our growth opportunities in 2020. However, increase in our business volumes slowed down only in March and April, and recovered in May. In spring and summer, our strategy as a local Estonian bank led to particularly good results: our market share of new home loans and corporate financing in this period was 10%. Despite extraordinary nature of last year our branches remained open and we didn’t ask our customers to make appointments for visiting us. Our account managers continued communicating with customers from their home offices using digital channels. All in all, we can say that we want to grow and took advantage of the opportunity that presented itself.

Our biggest concern in the year was fear for preservation of jobs and solvency of our customers. We offered our customers grace periods to prevent insolvency, which many of them used. At the start of the crisis we also formed additional provisions in light of possible loan losses. Fortunately, real life turned out to be better than we feared. In second half of the year grace periods given to customers started to end and occasionally customers ended these periods early. We ended 2020 with lower rate of overdue loans than the year before.

Every year, increasingly more customers join us and start using Coop Pank as their main bank, which means that they have their monthly cash receipts paid into accounts in our bank and use our payment solutions. This trend has another positive aspect: the share of local demand resources increases, which reduces financing costs of the bank and makes it possible to offer better loan interest to customers.

In August, international rating agency Moody’s assigned Coop Pank investment-grade rating of Baa2 with a stable outlook. This step created opportunity for major businesses, state and local authorities to become customers of Coop Pank and keep their money in a local financial institution where interest paid on deposits is the best on the market. Inflow of deposits of corporate customers increased significantly after the rating was assigned. Deposits of corporate customers increased by 131% and deposits of private customers grew by 26% over the year.

While implementing our growth strategy, it has always been important to have profitable growth. 2020 was the first year when we saw that we were getting close to the critical level, i.e. the economies of scale, in our business volumes, which guarantees improvement of efficiency indicators. The bank’s income grew twice as fast as its expenses and cost-income ratio decreased significantly.

Coop Pank had approximately 13,000 shareholders as at 31 December 2020. The bank has approximately 2,000 new shareholders in addition to the ones who participated in initial public offering of the bank’s shares. We are grateful for their trust.

In 2021, we will continue with the strategy that has brought us success so far. We want to grow, we are proactive and we are looking for solutions that fit into our customers lives and/or businesses. We have promised our owners that by the end of 2022, Coop Pank will have at least 100,000 customers, our loan portfolio will be at least 1 billion euros, our financing costs will decrease to 0.7%, our cost-income ratio will drop to 50% and return on equity will increase to 15%. Our team does everything in its power to keep this promise.”

Income statement, in thousands of euros Q4 2020 Q3 2020 Q4 2019 12M 2020 12M 2019
Net interest income 7 808 7 353 5 819 28 371 20 689
Net fee and commission income 540 558 675 2 097 2 372
Net other income 171 77 262 621 658
Total net income 8 519 7 988 6 756 31 089 23 719
Payroll expenses -2 976 -2 844 -2 710 -11 085 -9 880
Marketing expenses -350 -168 -317 -945 -1 006
Rental and office expenses, depreciation of tangible assets -539 -557 -550 -2 211 -1 931
IT expenses and depreciation of intangible assets -767 -632 -444 -2 454 -1 501
Other operating expenses -640 -525 -614 -2 101 -1 943
Total operating expenses -5 272 -4 726 -4 635 -18 796 -16 261
Net profit before impairment losses 3 247 3 262 2 121 12 293 7 458
Impairment costs on financial assets -715 -1 139 -538 -4 789 -1 931
Net profit before income tax 2 532 2 123 1 583 7 504 5 527
Income tax expenses -108 -111 0 -245 0
Net profit for the financial year 2 424 2 012 1 583 7 259 5 527
Basic earnings per share (in euros) 0.03 0.02 0.02 0.08 0.09
Diluted earnings per share (in euros) 0.03 0.02 0.03 0.08 0.09

Statement of financial position, in thousands of euros 31.12.2020 30.09.2020 31.12.2019
Cash and cash equivalents 170 750 168 984 122 295
Debt securities 3 011 3 084 4 061
Loans to customers 670 593 599 213 460 460
Other assets 25 555 26 179 24 486
Total assets 869 909 797 460 611 302
Customer deposits and loans received 757 835 688 116 506 531
Other liabilities 7 443 7 978 8 356
Subordinated debt 7 064 7 111 7 064
Total liabilities 772 342 703 205 521 951
Equity 97 567 94 255 89 351
Total liabilities and equity 869 909 797 460 611 302

The reports of Coop Pank are accessible at:

Coop Pank will hold an Investor Webinar for the introduction of its financial results, which is scheduled at 10:00 on 11 February 2021. In order to participate, please register in advance via the following link:

The webinar will be recorded and posted on the company’s website as well as on the account of Nasdaq Baltic.

Coop Pank, which is based on Estonian capital, is one of the five universal banks operating in Estonia. The bank has 86,700 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:
Kerli Lõhmus
Chief Financial Officer
Telephone: +372 669 0902


Interim report_12m 2020_EN.pdf
Coop Pank 2020 results_EN.pdf