Bigbank's Unaudited Financial Results for Q4 and 12 months of 2022Bigbank’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 euros | Q4 2022 | Q4 2021
(Restated) | 12M 2022 | 12M 2021
(Restated) | | Net interest income | 22 199 | 15 732 | 83 251 | 66 893 | | Net fee and commission income | 1 900 | 1 759 | 7 411 | 6 411 | | Net income (loss) on financial assets | -610 | -150 | -795 | -321 | | Net other operating income | -185 | -529 | -708 | -1 917 | | Total net operating income | 23 304 | 16 812 | 89 159 | 71 066 | | 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) | 5 423 | 7 389 | 6 096 | 11 623 | | Total expenses | -5 881 | -2 586 | -35 853 | -23 626 | | Profit before loss allowances | 17 423 | 14 226 | 53 306 | 47 440 | | Net loss allowances on loans and financial investments | -4 707 | -3 403 | -15 451 | -11 391 | | Profit before income tax | 12 716 | 10 823 | 37 855 | 36 049 | | Income tax expense | 176 | -787 | -3 532 | -2 955 | | Profit for the period from continuing operations | 12 892 | 10 036 | 34 323 | 33 094 | | Loss from discontinued operations | -415 | 17 | -590 | 12 | | Profit for the period | 12 477 | 10 053 | 33 733 | 33 106 |
| Statement of financial position, in thousands of euros | 31 Dec 2022 | 30 June 2022 | 31 Dec 2021
(Restated) | | Cash and cash equivalents | 173 447 | 141 163 | 115 948 | | Debt securities at FVOCI | 19 213 | 45 171 | 45 256 | | Loans to customers | 1 349 811 | 1 248 194 | 893 463
| | Other assets | 103 918 | 103 357 | 93 686 | | Total assets | 1 646 389 | 1 537 885 | 1 148 353
| | Customer deposits and loans received | 1 376 934 | 1 281 161 | 934 840 | | Subordinated notes | 40 113 | 40 049 | 14 976 | | Other liabilities | 15 912 | 17 521 | 15 191 | | Total liabilities | 1 432 959 | 1 338 731 | 965 007 | | Equity | 213 430 | 199 154 | 183 346
| | Total liabilities and equity | 1 646 389 | 1 537 885 | 1 148 353
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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
www.bigbank.ee
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