Šiaulių Bankas Group results for the year 2021

• Šiaulių bankas Group earned unaudited net profit of EUR 55.2 million last year, or 28% more than in 2020
• The loan portfolio increased by 19% year-on-year to over EUR 2.1 billion
• The deposit portfolio grew by 14% to EUR 2.6 billion
• The mystery shopper research recognised Šiaulių bankas as the bank with the best customer service in Lithuania

Overview of Key Performance Indicators

“Compared to 2020, this year has been a successful one, and it seems that the economic situation is getting back on track, despite the still looming pandemic. Both corporate and private clients were actively interested in financing and looking for ways to invest their savings. Although the number of live consultations and cash transactions since the pandemic has not yet returned to normal levels, and the demand for remote servicing is increasing, we are pleased that we have chosen the strategy of staying closer to our clients and letting them choose how they want to be serviced. This has been recognised not only by international evaluators – after the results of the 2021 mystery shopper survey conducted by DIVE Lietuva were published, we regained the title of the bank with the best customer service and scored 100% in the quality score out of a possible 100,” said Vytautas Sinius, CEO of Šiaulių bankas.

Šiaulių bankas Group earned unaudited net profit of EUR 55.2 million in 2021 (28% more than in 2020). Net profit for the Q4 of 2021 was EUR 11.0 million (25% increase compared to Q4 2020). Net profit was slightly lower in the last quarter compared to Q1-Q3 2021, but excluding the impact of one-off and atypical gains in the first quarters and taking into account the fact that more operating expenses are traditionally recorded at the end of the year, Q4 is strong performance driven.

Due to the strong growth in lending volumes and client activeness, both net interest income and net service and commission income grew by 7% each and reached EUR 80.9 million and EUR 17.2 million respectively.

With no significant deterioration in credit quality and no upward trend in overdue loans observed throughout 2021, provisions of EUR 4.1 million were made during the year, compared to provisions of EUR 12.0 million in 2020, mainly taking into account the forecasted impact of COVID-19. The cost of risk (CoR) of the loan portfolio was 0.2% in 2021 (0.6% in 2020).

The Group’s cost/income ratio (excluding the impact of the client portfolio of SB draudimas) remained almost unchanged during the year and stood at 42.8% at year-end (42.9% in the previous year), while the ROE increased to 14.3% (12.7% in the previous year). The capital and liquidity position remains strong and prudential ratios are being met by a wide margin, with a liquidity coverage ratio (LCR) of 247%* and a capital adequacy ratio (CAR) of 17.75%*.

Overview of Business Segments

Corporate and Private Client Financing

With strong growth in both corporate and private client financing, the value of the loan portfolio increased by 3% in Q4 and by 19% to over EUR 2.1 billion in 2021. More than EUR 1.2 billion worth of new lending contracts were signed last year, 71% more than in 2020.

With business expectations remaining stable and growing investments, new business credit agreements worth almost EUR 0.7 billion were signed during the year (twice as much as in 2020) and EUR 200 million in the Q4 alone. While the business finance portfolio remained almost unchanged in Q4, it grew by 11% over the whole of last year to EUR 1.17 billion. The non-performing loan portfolio of business finance continues its downward trend, amounting to EUR 64 million at the end of the year (down by EUR 48 million, or 42% year-on-year).

Despite the ongoing pandemic, strong demand for private clients financing continued to be recorded, especially in the area of housing loans. With a continued high level of new applications, the mortgage portfolio grew by 10% in the fourth quarter and by 53% year-to-date to over EUR 454 million. The consumer finance portfolio grew by 4% in the Q4 and by 6% for the whole of 2021, reaching over EUR 170 million.

The Bank continues to focus on financing energy efficiency projects, with more than EUR 30 million of multi-apartment building modernisation contracts signed in the Q4 and EUR 127 million over the year (+56% year-on-year change). Together with the European Investment Bank (EIB) and other investors, a new EUR 275 million Multi-Apartment Building Modernisation Fund is nearing completion of the contracts signing process. The Fund is expected to start operations in the Q2 of this year.

Daily Banking

Last year, net service and commission income grew consistently each quarter to reach EUR 17.2 million, up 7% year-on-year. More than 15 thousand new private and corporate clients started using the Bank’s services in 2021, bringing the total number of clients to 326 thousand. The number of clients subscribing to service plans grew by 7% to 173 thousand.

The use of non-cash services continues to grow strongly, while cash transactions are decreasing. The population is increasingly using payment cards - the total number of payment cards issued grew by 25% year-on-year and reached 173 thousand.

Throughout the year, the Bank developed its digital channels in line with customer needs, expanding the number of services in the internet bank and the mobile application. The total number of e-channel users exceeded 218 thousand (+15% compared to 2020). The number of clients served remotely is also steadily increasing.

2021 was a year of recognition for the Bank: Šiaulių bankas won the 2021 Best Bank in Lithuania award in The Banker awards published by The Financial Times; earlier in the year, the Bank was recognised by the business and finance magazine Global Finance Magazine as the best, and then the safest, bank operating in Lithuania. The most important award was the results of the mystery shopper survey conducted by Dive Lietuva in December, which showed that the quality of Šiaulių bankas' customer service is of the highest level, and the aggregated scores of the individual categories amounted to 100% out of 100. Šiaulių bankas has won the position of the bank with the best customer service for the third time: in 2021, 2019 and 2018.

Savings and Investments

The deposit portfolio grew by 14% over the year (EUR 332 million) and exceeded EUR 2.6 billion. Demand deposits, which account for the bulk of the portfolio, grew by 27% or EUR 394 million, while the term deposit portfolio decreased by EUR 61 million (-7%). Clients are increasingly directing their savings towards the Bank’s investment products, with commission income from securities-related services reaching EUR 3.3 million for the year (66% increase compared to 2020). At the end of last year, in cooperation with SB draudimas, the Bank’s clients were offered a new long-term savings service - investment life insurance.

* - forecast data

Šiaulių bankas invites shareholders, investors, analysts and other stakeholders to join its financial results for the year 2021 and recent developments investor conference webinar scheduled on 2nd March 2022 at 4:00 PM (EET). The presentation will be held in English. For more information click here.