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Published: 2023-02-28 15:30:00 CET
Bigbank AS
Interim Management statement

Bigbank's Unaudited Financial Results for Q4 and 12 months of 2022

Bigbank’s gross loan portfolio increased by 452 million euros to a record-high 1.36 billion euros (+50%) in 2022. The home loan portfolio grew more than threefold, from 72 million euros at the end of 2021 to 225 million euros. The corporate loan portfolio more than doubled, rising from 228 million euros at the end of 2021 to 473 million euros. The consumer loan portfolio grew by 56 million euros to 659 million euros over the year.

The robust growth in the loan portfolio was supported by an increase in the deposit portfolio. The overall deposit portfolio grew by 469 million euros to 1.37 billion euros (+52%). Savings deposits showed the fastest annual growth, rising by 281 million euros (+82%) to 622 million euros. The term deposit portfolio increased by 189 million euros (34%) to 746 million euros.

Bigbank’s net profit was 12.5 million euros for Q4 (+24% year on year) and 33.7 million euros for the 12 months of 2022, which is 0.6 million euros (+2%) more than a year earlier.

Q4 profit before loss allowances and income tax was 17.4 million euros, and expenses on credit loss allowances amounted to 4.7 million euros.

Q4 net interest income grew by 6.5 million euros (+41%) year on year, amounting to 22.2 million euros. 12-month net interest income grew by 16.4 million euros (+24%) to 83.3 million euros.

The change in net interest income compared with 2021 was also affected by the correction of the accounting policies for contract fees and the costs directly attributable to obtaining contracts in Q3 2022. After the correction, contract fees are recognised using the effective interest method as appropriate for interest-like revenue. The costs directly attributable to obtaining contracts are capitalised and amortised over the terms of the underlying contracts. As a result of the restatement of financial information, interest income, retained earnings and loans to customers as of 31 December 2021 were reduced by 2.8 million euros.

The Group's investment property portfolio, which includes both agricultural land and commercial real estate, stood at 46.5 million euros at the year-end. Gain on the change in the fair value of investment properties was 6.2 million euros for the 12 months of 2022, a decrease of 0.2 million euros compared with 2021.

Russia’s war against Ukraine and the resulting geopolitical risks as well as the overall high inflation had only a limited impact in Q4. Associated risks have not materialised. Despite a fall in consumer confidence, the quality of the loan portfolio has not weakened. By the end of the quarter, the share of loans over 90 days past due was just 1.1% of the total portfolio.

Income statement, in thousands of eurosQ4 2022Q4 2021 
12M 202212M 2021 
Net interest income22 19915 73283 25166 893
Net fee and commission income1 9001 7597 4116 411
Net income (loss) on financial assets-610-150-795-321
Net other operating income-185-529-708-1 917
Total net operating income23 30416 81289 15971 066
Salaries and associated charges-6 023-5 127-21 304-17 700
Administrative expenses-4 373-4 084-16 997-14 263
Depreciation, amortisation and impairment-908-764-3 648-3 286
Other gains (losses)5 4237 3896 09611 623
Total expenses-5 881-2 586-35 853-23 626
Profit before loss allowances17 42314 22653 30647 440
Net loss allowances on loans and financial investments-4 707-3 403-15 451-11 391
Profit before income tax12 71610 82337 85536 049
Income tax expense176-787-3 532-2 955
Profit for the period from continuing operations12 89210 03634 32333 094
Loss from discontinued operations-41517-59012
Profit for the period12 47710 05333 73333 106

Statement of financial position, in thousands of euros31 Dec 202230 June 202231 Dec 2021
Cash and cash equivalents173 447141 163115 948
Debt securities at FVOCI19 21345 17145 256
Loans to customers1 349 8111 248 194893 463
Other assets103 918103 35793 686
Total assets1 646 3891 537 8851 148 353
Customer deposits and loans received1 376 9341 281 161934 840
Subordinated notes40 11340 04914 976
Other liabilities15 91217 52115 191
Total liabilities1 432 9591 338 731965 007
Equity213 430199 154183 346
Total liabilities and equity1 646 3891 537 8851 148 353

In December 2022, Bigbank launched its first credit card as the first step towards entering everyday banking. The card is currently available to our Estonian customers, but Bigbank will soon start offering it in its other markets as well.

In the fourth quarter, the management board of Bigbank AS adopted a decision to stop issuing new loans in the Bulgarian branch from November 1, 2022. The decision supports the new business strategy and helps achieve the expected return on capital. The Bulgarian branch will continue raising deposits and servicing its existing loan portfolio in Bulgaria.

Commentary by Martin Länts, chairman of the management board of Bigbank AS:

’In the past couple of years, the world and the global economy were affected by a health crisis. The year 2022, however, brought a completely different crisis – Russia’s full-scale war against Ukraine. Both I personally and the Bigbank Group firmly believe that any military aggression is unacceptable and that the sovereignty of nations must be respected. I hope with all my heart that the war will end soon, and that Europe will live in peace again.

The war in Ukraine unleashed an energy and commodity crisis, which in turn triggered a price increase. As a result, inflation surged, and consumer confidence dropped. To curb inflation, the European Central Bank started to raise its key interest rates: Euribor rose above 0% for the first time in years and bank loans became much more expensive in 2022. On the brighter side, banks began to raise deposit interest rates, offering depositors at least some protection against the soaring inflation.

Despite the challenging external environment, for Bigbank the year was also marked by numerous successes and great wins.

Bigbank’s loan portfolio crossed the billion-euro line on 18 March and the deposit portfolio followed suit on 23 March. Furthermore, Bigbank's net profit for 2022 extended to 33.7 million euros and return on equity was 17%. Along with strong financial performance, we made significant progress in our customer service, which is at least as important for us as financial results. Our Net Promoter Score (NPS) rose to an all-time high of 52 points.

I would like to thank the Bigbank team. I am deeply grateful for your dedication and passion to provide better banking services every day. We have won the hearts of our customers and this year we also won the hearts of public investors with a successful issue of bonds that are now listed on the Nasdaq Baltic bond list. I would also like to thank our customers and investors for their trust and our business partners for their continued support.’

Bigbank AS (www.bigbank.eu) is an Estonian capital-based bank specialising in loans and deposits for private and business customers. In addition to operations in Estonia, the bank has branches in Finland, Sweden, Latvia, Lithuania, and Bulgaria and offers its products on a cross-border basis in Austria, Germany, and the Netherlands. Bigbank’s total assets exceed 1.5 billion euros.

Argo Kiltsmann
Member of the Management Board
Telephone: +372 5393 0833
E-mail: argo.kiltsmann@bigbank.ee