In Q3 2020, the net loan portfolio of Coop Pank grew by EUR 40 million (+7%),
reaching EUR 599 million. The home loans portfolio showed the fastest growth by
increasing the volume by EUR 19 million (+9%). The business loans portfolio
increased by EUR 14 million (+7%), leasing portfolio EUR 6 million (+7%) and the
consumer finance portfolio EUR 1 million (+2%). Compared to Q3 2019, the total
loan portfolio of Coop Pank has grown by EUR 181 million, i.e. 43%.
In Q3 2020, the volume of deposits in Coop Pank increased by EUR 73 million
(+12%), reaching the total of EUR 688 million. The volume of bank's demand
deposits grew by EUR 34 million (+17%), of which EUR 26 million came from bank's
business clients and EUR 8 million from private individuals. Term deposits grew
by EUR 39 million: EUR 17 million came from domestic companies, EUR 4 million
came from private clients and EUR 18 million came via the international deposit-
taking platform Raisin. Coop Pank deposit portfolio has increased by EUR 210
million or 44% YoY. By the end of Q3, the share of client demand deposits has
increased from 27% to 34% YoY. Bank's financing cost did decrease over the
quarter from 1% to 0,9%.
In Q3 2020, the overdue loan portfolio of Coop Pank was at the level of 6%. In
nine months, the bank has made impairment of EUR 4.1 million to the loan
portfolio, including EUR 1.1 million has made due to the effect of the
coronavirus to economic environment. There was no additional impairments made in
relation to coronavirus in Q3.
By the end of Q3 2020 we have reached 80,000 clients, number of clients have
increased by 5,400, i.e. 7% over the quarter. The number of private clients with
current account in the bank increased by 4,800 and the number of business
clients by 600 over the quarter. The client base of Coop Pank increased 42%,
i.e. by 24,000 clients YoY.
In Q3 2020, Coop Pank's net income was EUR 8 million, having grown 7% QoQ and
30% YoY. Operating expenses reached EUR 4.7 million, having increased by 9% QoQ
and by 17% YoY. The bank's operating profit was EUR 3.3 million, growing by 5%
QoQ and 56% YoY.
In Q3 2020, bank's net profit was EUR 2 million, having grown 48% QoQ and 32%
YoY. In Q3 2020, the bank's cost / income ratio was 59% and ROE was 8.6%.
As of 30 September, 2020, Coop Pank has 12,486 shareholders, 85 shareholders
having joined over the quarter.
Margus Rink, Chairman of the Management Board of Coop Pank, comments the
results:
"The results of the third quarter confirm that Coop's offer based on the
integration of retail and banking is differentiated in the market, creates value
for consumers and helps the bank to grow its client base. The growth of
customer-base in both the retail and business segments has led to a rapid growth
of domestic deposits. During the quarter, Coop Pank's deposits increased by 73
million euros, of which three quarters or 55 million euros were local deposits.
In an environment of low interest rates and an uncertain economic situation,
companies maintain liquidity buffers and seek returns for them. The offer of
Coop Pank has brought more and more domestic companies to us to deposit their
financial resources. The volume of corporate deposits in the bank has almost
doubled in a year. The share of the bank's demand deposits is also growing,
which was 34% at the end of the third quarter, rising by 7% year-on-year. The
increase in the share of domestic demand deposits enables to reduce the cost of
financing, which decreased to 0.9%.
Although restrictions on economic activity to prevent the spread of the
coronavirus have eased, businesses and private individuals are still uncertain
about the future. Businesses are cautious about making new investments, and
individuals postpone purchasing decisions for larger durable goods. According to
Eesti Pank, in the first eight months of this year, new sales of loans and
leasing (excluding consumer financing) have decreased by 21% compared to the
previous year. The decline in the demand for corporate financing, which has
fallen by 25% over the same period, is particularly noticeable. Nevertheless,
Coop Pank has been able to continue to grow its loan portfolio and revenues. In
the first 9 months of 2020, Coop Pank's loan portfolio grew by almost 181
million euros.
Growing net interest income due to higher business volumes and declining
financing costs through the growth of domestic demand deposits are helping to
make the bank more efficient and create greater value for shareholders. The
bank's cost-income ratio has declined from 66% in the third quarter of last year
to 59% this year. The return on equity is lower than a year ago, but it is due
to the increased equity supported by the public offering of the bank's shares.
Compared to the second quarter of this year, the return on equity has increased
by 2.7% to 8.6%.
The quality of Coop Pank's loan portfolio remains stable. The share of overdue
contracts remains at 6% level. The volume of the loan portfolio on payment leave
related to the coronavirus has decreased from 52 million euros in May to 31
million euros at the end of September. We can see that businesses and private
individuals are doing well in servicing their obligations and extending payment
holidays is minimal.
Most important highlight for Coop Pank in the third quarter was that at the end
of August, the international rating agency Moody's gave us a stable investment
grade rating of Baa2. The investment grade rating now also gives the Estonian
state and local governments the opportunity to become a customer of Coop Pank
and keep their financial resources in a domestic financial institution, where we
pay the best interest on the market.
In the third quarter, the successful development of a new internet-based car
dealership is worth highlighting: in addition to new Shkoda models, we
supplemented the car dealer's selection with new KIA models in August.
From 1(st) of July, Coop Pank will allow its customers to make instant payments
of up to 100,000 euros, and Eesti Pank's statistics published in September shows
that 96% of domestic interbank payments initiated by Coop Pank's customers were
instant payments in August. With this, we were the bank with the largest share
of instant payments in Estonia in August.
Our renewed credit card was also completed in July, with several good benefits
that make it the most flexible credit card on the market. In the third quarter,
we also made it significantly more convenient for our customers to open an
additional account: if previously customers had to visit the office, now it is
possible to open an additional account quickly and easily in the Internet bank.
In July, the Supervisory Board of Coop Pank decided to supplement the Management
Board of the Bank by one member, whose area of ??responsibility will be retail
banking. The new Management Board has five members and, in addition to the
Chairman of the Management Board, includes the Chief Financial Officer, the Risk
Manager, the Head of Corporate Banking and the Head of Retail Banking.
In summary, it can be said that the bank's results for the first 9 months of
2020 fully correspond to the plan made at the beginning of this year, and we are
moving in the schedule of meeting the three-year strategic goals announced
during IPO of Coop Pank in 2019. As a local bank, we see in the market as our
advantage that we can make financing decisions quickly and are more flexible. We
will continue to pursue a distinctive strategy based on the integration of
retail and banking."
Income statement, in
thousands of euros Q3 2020 Q2 2020 9M 2020 Q3 2019 9M 2019
-------------------------------------------------------------------------------
Net interest income 7 353 6 852 20 563 5 431 14 870
Net fee and commission
income 558 477 1 557 540 1 697
Net other income 77 135 450 159 396
-------------------------------------------------------------------------------
Total net income 7 988 7 464 22 570 6 130 16 963
-------------------------------------------------------------------------------
Payroll expenses -2 844 -2 603 -8 109 -2 567 -7 169
Marketing expenses -168 -201 -595 -198 -688
Rental and office
expenses, depreciation of
tangible assets -557 -552 -1 672 -627 -1 381
IT expenses and
depreciation of intangible
assets -632 -565 -1 687 -221 -1 057
Other operating expenses -525 -434 -1 461 -426 -1 331
-------------------------------------------------------------------------------
Total operating expenses -4 726 -4 355 -13 524 -4 039 -11 626
-------------------------------------------------------------------------------
Net profit before
impairment losses 3 262 3 109 9 046 2 091 5 337
Impairment losses on
financial assets -1 139 -1 721 -4 074 -572 -1 393
Net profit before income
tax 2 123 1 388 4 972 1 519 3 944
Income tax expenses -111 -26 -137 0 0
-------------------------------------------------------------------------------
Net profit for the
financial year 2 012 1 362 4 835 1 519 3 944
-------------------------------------------------------------------------------
Basic earnings per share
(in euros) 0.02 0.01 0.05 0.02 0.07
Diluted earnings per share
(in euros) 0.02 0.01 0.05 0.02 0.06
Statement of financial
position, in thousands of
euros 30.09.2020 30.06.2020 31.12.2019 30.09.2019
------------------------------------------------------------------------
Cash and cash equivalents 168 984 133 905 122 295 105 533
Debt securities 3 084 3 682 4 061 4 114
Loans to customers 599 213 559 295 460 460 417 907
Other assets 26 179 24 948 24 486 23 744
------------------------------------------------------------------------
Total assets 797 460 721 830 611 302 551 298
------------------------------------------------------------------------
Customer deposits and
loans received 688 116 615 153 506 531 477 826
Other liabilities 7 978 7 381 8 356 9 015
Subordinated debt 7 111 7 064 7 064 7 111
------------------------------------------------------------------------
Total liabilities 703 205 629 598 521 951 493 952
------------------------------------------------------------------------
Equity 94 255 92 232 89 351 57 346
------------------------------------------------------------------------
Total liabilities and
equity 797 460 721 830 611 302 551 298
------------------------------------------------------------------------
The reports of Coop Pank are available at: https://www.cooppank.ee/en/reporting
Coop Pank will organise a webinar on 21 October, 2020 at 09:00 AM, to present
the financial results of Q3 2020. For participation, please register in advance
at:
https://attendee.gotowebinar.com/register/3808463495017686540
(https://www.globenewswire.com/Tracker?data=s65Xdwcl7pR96TkMUmg3yNJwXqs-
1otI7TkYIXwS8uXhkh7S8aTPsd2bajOXY8wE6RCceDQWMPOjmK7kmLvbcIhG5uxW8RMyHpvUgINHLwey
4ZLQN5KpmuCAVWvRbz8_WpOF7CiWBstFtlgxYos5k3bXVkIH9XKUaVZW8lnIoDP_PDIxMejmZH6aUka7
DJQREHFx8wkvXu5okUqOcUSFtw==)
The webinar will be recorded and published on the company's website
www.cooppank.ee (http://www.cooppank.ee) as well as on the Nasdaq Baltic
youtube.com channel.
Coop Pank, based on Estonian capital, is one of the five universal banks
operating in Estonia. The bank has 80,000 daily banking clients. 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 shareholder of the bank is the domestic retail chain Coop Eesti,
comprising of 330 stores.
Additional information:
Kerli Lõhmus
CFO
Phone: +372 669 0902
E-mail: kerli.lohmus@cooppank.ee (mailto:kerli.lohmus@cooppank.ee)
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