AS “Citadele banka” 1st Quarter 2022 Financial Results

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  • Strong financial performance with net profit (Baltics) reaching EUR 12.7 million in Q1 2022, which translated into 12.8% return on equity, in a quarter marked by the war in Ukraine.
  • Stable underlying asset quality, with expected credit losses of 90 basis points, mainly driven by macro provisions.
  • On the back of attractive digital solutions and services the bank’s active customers reached an all-time high of 363 thousand active clients as of 31 March 2022, 5% growth y-o-y.
  • During the first quarter the bank issued EUR 297 million in new financing to support Baltic private, SME and corporate customers.
  • The deposit base remained stable and Baltic deposits constituted EUR 3,566 million as of 31 March 2022, or 97% from total deposits.
  • The Bank continues to operate on the back of adequate capital and liquidity ratios. Group’s CAR, transitional (including period’s result) was 18.7% and LCR of 205% as of 31 March 2022.

The first quarter of the year was dominated by Russia’s invasion into Ukraine. Citadele stands with the international community in condemning Russia’s actions. Our thoughts go out to everyone affected by the war. We are closely following the developments and taking actions to the best of our abilities to care for our employees and customers and also support refugees arriving in the Baltic states. Despite the uncertainty, we deliver a strong first quarter both financially and operationally.

EUR 297 million issued in new financing to Baltic private, SME and corporate customers

We have continued to support the business community with financing for growth and expansion. New financing to our customers reached EUR 297 million in Q1 2022, remaining flat q-o-q. The total loan book as of 31 March 2022 was EUR 2,772 million, 3% higher vs. the year end 2021.

Due to uncertainty related to higher energy prices and the war in Ukraine followed by worsening of macro-economic forecasts, net credit losses in amount of EUR 6.1 million were recognised in Q1 2022 to reflect underlying cost of risk. Overall, the financial standing of our clients is reassuring, and portfolio quality continued to improve and the NPL ratio stood at 3.1% as of 31 March 2022, vs. 3.3% at the end of 2021.

Recent events in Ukraine and Russian sanctions

Citadele is closely monitoring the situation in Ukraine, business continuity is high on agenda  and the bank is holding regular meetings to ensure full coordination. All new laws, policies and sanctions, including sanctions imposed on Russia, are implemented diligently. Citadele’s focus is the Baltic region and there is no direct exposure to Russia, Belarus or Ukraine. As of today, Citadele has not experienced any material impact from the recent events in Ukraine or from Russian sanctions. The indirect impact from these events is monitored, as Citadele’s clients and the economy is adjusting to the new situation.

Ukrainian citizens can open account and make payments free of charge

Ukrainian citizens are welcome to Citadele branches in Latvia, Lithuania or Estonia to apply for the opening of a bank account for free of charge. The bank also offers payments to Ukrainian accounts free of commissions.

Citadele customers can support people of Ukraine in the form of X REWARDS points of the Citadele loyalty program. Our clients have donated more than 9 million X REWARDS points and Citadele has doubled the amount. Total donation for Ukrainians support constituted 75 000 euros. Donation to the aid of Ukraine is organised in cooperation with the Latvian Samaritan's Association and used for providing food, medical and other supplies.

Innovations and development

In Q1 2022 Citadele continued its digitalisation strategy. Digital onboarding for SMEs was introduced in Lithuania, having previously been available in Latvia. The bank now offers the possibility for private clients to apply for Mortgage loan or Leasing via Citadele mobile app in Latvia and Lithuania. In addition to already existing Buy Now Pay Later option through Klix for  e-commerce checkouts, this option was also made available to Citadele merchants in physical stores.

Growing client base

The bank continues to attract new clients and we are proud for the trust we get from a record number of active customers – reaching 363 thousand clients as of 31 March 2022, 5% growth y-o-y. The number of active Mobile App users was 207 thousand, a 28% increase y-o-y.

Strong financial results and further focus on core activities in the Baltics

Strong financial performance with Baltic operations net profit reaching EUR 12.7 million in Q1 2022, which translated into 12.8% return on equity.

In January 2022, Citadele has entered into a binding agreement with Trusted Novus Bank Limited regarding the sale of its Swiss subsidiary - Kaleido Privatbank AG. Trusted Novus Bank Limited will acquire 100% of Kaleido Privatbank AG. The closing of the acquisition is expected by the year end 2022, subject to regulatory approvals. As of 31 March 2022, Kaleido Privatbank AG is presented as discontinued operations.

Citadele continues to operate with adequate capital and liquidity ratios: CAR, transitional (including period’s result) of 18.7% and LCR of 205% as of 31 March 2022.

The deposit base remained stable and Baltic deposits constituted EUR 3,566 million as of 31 March 2022, or 97% from total deposits. Loan-to-deposit ratio was 75% as of 31 March 2022, compared to 71% as of the year end 2021.

Citadele signs the UN principles for responsible banking

Citadele is committed to integrate sustainability throughout all our business operations. Our sustainability strategy is in line with the UN Principles for Responsible Banking - creating a long-term value and contributing to greener and more inclusive future for all our stakeholders. By signing the principles, we have joined the world’s largest global banking community focusing on sustainable finance, and we look forward to work and achieve the Paris Agreement on Climate Change and UN Sustainable Development Goals.