Citadele Group has earned the highest profit in its history. The Group closed the year 2014 with an audited profit of 32.4 million euros, 138% more than in 2013, and the bank posted audited profits of 29.2 million euros, exceeding the 2013 result by 91%.
„In 2014 Citadele reached the best results since its very beginnings. During four years Citadele, the company which started its operation in 2010 in the red, has become one of the banks with the highest earning capacity in Latvia, one of the most active lenders to the Latvian economy, a stable employer and taxpayer,” says Klāvs Vasks, the Chairman of Citadele banka’s Supervisory Board.
He underlines that “Citadele has consistently managed from year to year to boost its earning capacity and competitive edge. From investment in Citadele’s creation the Latvian state has derived 758 million euros for crediting the economy, over 69 million euros by virtue of tax paid by the bank. Citadele has repaid the state the entire liquidity support in the amount of 203.66 million euros and in addition interest payments of 46.32 million euros on the state aid. Citadele’s development into a strong market player in the Latvian banking sector makes competition in the financial segment even tougher, thus providing more favourable financial offers for the population and entrepreneurs in Latvia and the Baltics”.
„Citadele under various circumstances has been the only bank being able to lend a helping hand to Latvian entrepreneurs and population in critical and tough moments: it was the only bank capable of arranging the disbursement of deposits to Latvijas Krājbanka’s clients within a few days; it was the first bank in the Baltics joining the non-recourse loan program for mortgage borrowers; Citadele was the first bank issuing mortgage loans guaranteed by the state for families with children to buy a dwelling under the state support programme. Citadele is the company which has been recognised as the best governed state-owned company in the Baltics,” says K. Vasks.
„The bank’s Supervisory Board conveys its gratitude to the bank’s employees and management for their excellent performance, the bank’s clients, stakeholders, Latvian taxpayers and the state for their trust and contribution in the stabilisation of the Latvian financial system, thus laying stable foundations for the bank’s successful growth in the future.
Given the hard work dedicated to the bank’s development the Supervisory Board is satisfied that the state has managed to find respectable international investors who will be able to raise Citadele’s development to an even higher level and make it the national champion in the Latvian banking sector in terms of its quality and product diversity. Citadele is on its way to comprehensive growth opportunities,” says Klāvs Vasks.
Information on Citadele’s performance in 2014
Guntis Beļavskis, CEO of Citadele banka, said: “In 2014, we continued a targeted development of Citadele Group in Latvia, Lithuania and Estonia as well as in Switzerland. The audited results of Citadele Group revealed that in 2014 both the bank and Citadele Group had a strong tendency towards growth in all core business segments – retail banking, corporate services and wealth management”.
He informed that “during the previous year, the amount of the loans granted to SME, corporate and private customers increased. The amount of customer deposits, the number of payment cards issued, and the customer activity have also increased. At the same time, Citadele Group has been able to improve the quality of both its loan portfolio and services. This work has resulted in growing interest income.”
During the reporting year, the number of the payment cards issued by Citadele in Latvia increased by 3% and the volume of card transactions increased from 40% to 42%. This was facilitated by the fact that Latvia had joined the euro zone.
17,000 new private individuals and almost 3,000 corporate clients have signed up for Citadele. A considerable growth was also reached in Lithuania and Estonia where more than 9,000 new clients have chosen Citadele.
“Notwithstanding that the total loan portfolio of the banking sector in 2014 decreased in Latvia, Citadele is one of those banks who managed to increase its loan portfolio,” noted Guntis Beļavskis. In 2014, the loans issued to companies and private individuals by Citadele Group increased up to 1.08 billion euros (by the bank – up to 941.3 million euros or by 2%).
Customer deposits in Citadele Group showed a significant growth of 12% reaching 2.52 billion euros (the bank’s customer deposits grew by 5% reaching 1.95 billion euros).
The profit being unprecedented, Citadele Group’s average ROE improved considerably as well – from 9.8% in 2013 to 20.2% in 2014 (the bank’s – from 11.1% to 18.5%).
As at 31 December 2014, the total assets of Citadele Group amounted to 2.85 billion euros, 12% more than in 2013 (the bank’s assets increased by 9% comparing to 2013 and reached 2.33 billion euros).
During the previous year, net interest income of the Citadele Group increased by 13% reaching 62.5 million euros (the bank’s net interest income increased by 15% reaching 52.1 million euros). Such a growth was mainly fostered by the increase in the loans issued and by enhancing the quality of the customer portfolio.
Guntis Beļavskis added: “Taking into account the forthcoming change in the bank’s shareholder structure, we are very positive about the future prospects of Citadele Group. Together with the future owners of the bank we have a shared vision of the bank’s growth – to develop Citadele as the national leader in terms of the quality and diversity of products offered in the banking sector in Latvia.
We have already carried out certain preparations and implemented various projects, including IT upgrades, enabling Citadele to implement and offering to its customers new solutions of banking services and enhancing the service quality.”
According to the data for 2014 presented by the Association of the Commercial Banks of Latvia, Citadele ranks third by the number of active customers (272.9 thousand). Citadele also ranks third by the number of payment cards and fifth among all banks in Latvia in terms of deposits and sixth in terms of total assets. Citadele also owns the third largest ATM network in Latvia. According to unaudited data on 2014 profits summarised by the Association of the Commercial Banks of Latvia, in terms of earning capacity Citadele ranks fourth in Latvia, second among the banks focussing on domestic clients.
About Citadele banka
Citadele is a domestic Latvian bank which offers banking, financial and asset management services. The principal market of operation for Citadele Group is the Baltic states: Latvia, Lithuania and Estonia. Citadele banka is the only cooperation partner of American Express® in Latvia and Lithuania that possesses the right to issue American Express payment cards. In 2012, Citadele banka received the highest evaluation and was recognized as the best governed state-owned enterprise in the Baltic states according to the study conducted by the Baltic Corporate Management Institute. VAS Privatizācijas aģentūra owns 75% minus one of Citadele banka’s shares, while 25% plus one share is owned by the European Bank for Reconstruction and Development.
On 5 November 2014, the bank’s shareholder VAS Privatizācijas aģentūra signed an agreement on the sale of 75% of the shares of Citadele banka to a group of thirteen respectable international investors represented by the investment company Ripplewood Advisors LLC. It is expected that the transaction will be completed in April 2015 as soon as the approval from the Financial and Capital Market Commission of Latvia, the banking supervisors of Lithuania and Switzerland, and the European Central Bank is received. The other shareholder – the European Bank for Reconstruction and Development (EBRD) – is planning to retain its stake (25% of the shares).