In 2017 Citadele reached its highest capital adequacy ratio since the Group’s founding, in addition to improving asset quality. The Group’s net profit (before exceptional items) in 2017 was EUR 31.5 million. Last year Citadele also invested more than EUR 3 million in innovative technology solutions and the digitalization of products and services, according to the Citadele Group’s financial review for 2017.
“In 2017, Citadele reached its highest capital adequacy ratio since the Group’s founding. I am thankful to all our wonderful employees who collectively delivered this result as a team by investing their time, energy and resources into the Group’s long-term development. The results of 2017’s operations show the stable development of the Citadele Group in all business sectors and its powerful position in the Latvian financial sector, as well as its large potential for growth in the Baltic market overall. It is the result of purposeful work on developing the bank’s services, improving customer service, and strengthening the bank’s relevant systems,” says Citadele bank’s Chairman of the Management Board Guntis Beļavskis.
2017’s financial results demonstrate that the Citadele Group works with a high capital position, while the Group’s Capital Adequacy Ratio (CAR) in 2017 continued to rise, reaching 18.4%, up from 16.5% at the end of December 2016.
The Group also continued to generate stable profitability, with year-end adjusted RoE at 11.9% and adjusted RoA at 0.94% when excluding exceptional items. Citadele has consistently maintained these high profit indicators and stand as one of the most stable and reliable institutions in the market.
The Group’s net profit (before exceptional items) in 2017 was EUR 31.5 million. This result excludes the Bank’s EUR 23.2 million deferred tax asset write-off, which occurred as a result of changes in Latvian tax legislation and did not adversely impact the Group’s capital. Furthermore, Citadele anticipates that this recently implemented tax reform will have a positive impact on the Group’s net profit starting from 2018. On an as reported basis, the Group’s net profit was EUR 16.0 million.
In 2017, Citadele continued working with a large liquidity reserve, supported by continued strength in client deposits that reached EUR 2.88 billion at year end. Deposit increases were visible in the retail private sector that saw 5% growth, but in particular in the SMEs sector and corporate clients sector that saw 21% and 32% growth, respectively.
The net loan portfolio for Citadele grew by 7% to EUR 1.33 billion in 2017, predominantly driven by the Group’s core strategy to promote lending to Baltic retail and SME clients. At the same time, asset quality also improved, with the Group’s non-performing loan (NPL) ratio decreasing to 8.3%, down from 9.9% at the end of 2016.
Last year Citadele invested more than EUR 3 million in innovation development
Citadele bank’s Chairman of the Management Board Guntis Beļavskis:
“We want to become the Baltic leader in digital banking services and e-payments. Therefore, in 2017, we invested more than EUR 3 million in innovative solutions and digitalization of products and services. These improvements included mobile payments, new functionalities in the bank’s mobile banking application, improvements to the internet bank, and an automated credit scoring process for lending.
We were the first bank in the Baltics to introduce payments by smartphone, bracelets and stickers as well as being the first bank to introduce touchscreen ATMs. We also completed 11 updates to the Citadele mobile banking app and 8 updates to the internet bank. Citadele was also the first bank in Latvia to join the Bank of Latvia instant-payment system and we continue to see the development of digital channels as the future of banking services.
Thanks in large part to our innovative efforts and enhanced customer service, we continue to build on our active client base throughout the Baltics. Furthermore, in 2017, one of the leading customer service evaluation firms in Central and Eastern Europe, Dive, acknowledged Citadele as the bank with the best customer service in Latvia and Lithuania.
I’m excited as ever by Citadele’s development potential. The Group has made further investments in several areas of the bank’s operations so that Citadele’s development in the Baltics continues to be even stronger and more stable in the coming years.”
Since the beginning of 2017, Citadele began issuing contactless payment cards in order to create a suitable infrastructure for mobile payments in Latvia. In cooperation with global payments company Visa, Citadele has also launched a new X credit card for clients in Latvia.
Moody’s Investors Service increased Citadele’s long-term credit rating by two notches (from B1 to Ba2) during 2017, and has maintained its positive outlook.
Citadele in Latvia
In 2017, Citadele bank’s loan portfolio in Latvia reached 1 billion Euro. Last year, Citadele in Latvia issued a total of EUR 266 million in loans. Of this, 89 million was issued in loans to private customers, while EUR 177 million was issued to businesses.
Client deposits in Latvia last year grew by 4%, reaching EUR 1.97 billion.
Citadele in Lithuania
Citadele’s loan portfolio in Lithuania reached EUR 255 million. In total, over the course of 2017, Citadele clients in Lithuania were issued with loans of EUR 142 million. Of this, 13 million was issued to private customers, while EUR 129 million was issued to businesses.
Client deposits in Lithuania grew by 8%, reaching EUR 453 million.
Citadele in Estonia
Citadele’s loan portfolio in Estonia reached EUR 112 million. In 2017, Citadele in Estonia issued loans totalling EUR 64 million. Of this, 26 million was issued to private customers, while EUR 38 million was issued to businesses.
Client deposits in Citadele bank in Estonia in 2017 were EUR 179 million.
The leasing companies included in the Group demonstrated stable growth in their portfolios. The total net Baltic leasing portfolio reached EUR 159 million, showing a growth of 5% compared with 2016. This growth was encouraged by the successful operations of the Latvian and Lithuanian leasing companies. The net leasing portfolio in Latvia grew by 13% compared with 2016, reaching EUR 76 million. The leasing portfolio in Lithuania grew by 19%, reaching EUR 62 million.
Citadele’s goal is to become the “primary choice bank” for private customers and small- and medium-sized businesses throughout the Baltics, in addition to continuing to improve products and services for clients in the corporate and private capital management sectors. The Citadele Group is managed from Latvia, with subsidiaries and branches in Latvia, Lithuania, Estonia and Switzerland. Citadele provides transactions and card payments, loans, deposits, investments, active management and leasing services, as well as a range of exclusive, unique products.