Banks, Estonia, Financial Services

Differently from the loan portfolio, the deposits held at SEB have increased by 18% in the yearly comparison, of which private individual deposits have increased by 14% and corporate deposits by 20%.

"The business activity of companies that was rapidly increasing at the beginning of the year started to decrease in the third quarter. The financial standing of the companies is strong, but at the moment, readiness to launch new business projects is lower than a couple of quarters ago. One can see that security is swiftly decreasing on the main export markets of Estonia, which will surely affect Estonian exporters in the coming quarters. At the moment, the business of exporters is still thriving and the preparedness of the companies established in Estonia to cope with a new crisis is remarkably better than in 2007. There was an opportune moment in the third quarter to lock in loan interests, and many big companies used it. The cool-down of the activity of the private sector has been compensated for by the government and government-invested enterprises. In addition, lending activity in the agricultural sector has been above average," Riho Unt described the overall ecomnomic situation in Estonia.

While the corporate customer market rather stabilized in the previous quarter, the private customer market is showing rather important behavioral changes, SEB Pank Board Chairman stated.

"The use of ATMs has decreased by seven per cent in one year, while there are 18% more card transactions than a year ago. In addition, cash deposits using ATMs have considerably increased, even more than 30% in one year, and thus SEB has almost doubled its network of cash deposit ATMs. As almost all cash transactions are carried out using machines, then it has become increasingly important for SEB to have a well-functioning and extensive network of ATMs. This was also the reason SEB decided to proceed with the joint ATM network project, as we believe that a larger network of ATMs is useful for the customers of SEB and cooperation in the field of banking helps to reduce inefficiency in the society," Unt noted.

"The decreasing number of cash transactions helps the [SEB] bank offices to focus more on the advising of the customers and on more substantive transactions. Reducing technical work in offices helps to apply new innovative ideas. For example, at the beginning of the next year, we are planning a transfer to a paper-free organisation of work in several offices. Using mobile devices for organizing everyday finances has rapidly increased. Over 40% of new phones sold are smartphones and this is also reflected in the growth of popularity of mobile banking – there are four times as many users than at the beginning of the year. Loan demand of private individuals remains at a relatively low level: in total, nearly 1200 housing loans are given in Estonia in a month, which is three times less than five years ago," the SEB Estonian unit's head noted.

As reported, SEB Estonian units saw their net profit grow by 64.8% in the third quarter to 23.9 million euros.

SEB's operating income reached 32.9 million euros (31.2 mln in the third quarter of 2010) and operating expenses 16.1 million euros (17.4 mln in the third quarter of 2010). Loan loss allocations were reduced by 6-9 million euros (0.7 million euros a year ago).

SEB loan and leasing portfolio fell by two% in a year and deposits grew 18%.