Citadele Bank

Citadele Bank 1st quarter 2023 results

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  • In Q1 2023, the bank issued EUR 190 million in new financing to support Baltic private, SME and corporate customers.
  • The deposit base remained stable at EUR 3 938 million as of 31 March 2023.
  • The bank’s active customers reached an all-time high of 374 thousand active clients as of 31 March 2023, a 3% growth year over year.
  • The European Central Bank (ECB) has concluded the Asset Quality Review (AQR) of Citadele. The results of ECB's exercise highlight the quality of Citadele’s asset base and risk underwriting. CET1 ratio post-AQR is 16.03% (pre-AQR ratio being 16.31%). 
  • Citadele introduced insurance products category in the bank's mobile app, starting with accident insurance.
  • The bank’s e-commerce checkout solution Klix exceeded 1000 merchants with 3.5 million transactions processed.

“Despite the continuous global political and economic turmoil including several bank failures in USA and Europe, Citadele position is as strong as ever, further supported by a good start of the year. This gives us the opportunity to continue the support to our clients, grow our customer base and develop new digital solutions for easier everyday banking and successful business. This quarter we have launched a new and easier way to secure yourself with insurance products in Citadele mobile app. This comes as a fulfilment of promise – easier access, more options and personalization for every customer" says Johan Akerblom (Johan Åkerblom), Citadele CEO.

Good start of the year

We focused on supporting our customers – local individuals and companies in the Baltic countries by offering viable solutions for client challenges brought upon uncertainties in global economy.

The European Central Bank's decision to continue interest rate increase, which directly affects Euribor, has been reflected in the bank's earnings but we also see that the increasing rates are starting to affect client behaviour. This together with global uncertainties, has translated in a decrease in loan demand from certain sector, e.g. in the real estate sector we have seen large investment projects being put on hold. However, Q1 marked increase from the energy sector, where there is a lot of interest in the development of solar and wind parks. From Citadele's point of view, this is a positive trend, considering the EU's climate neutrality goals. To help fulfil these goals Citadele plans to increase issued green financing in 2023.
Citadele has raised interest rates on deposits several times during the quarter and will continue to monitor situation to adjust rates.

The bank continued to support the business community with financing for growth and expansion. New financing to customers reached EUR 190 million in Q1 2023, vs 297 million in Q1 2022. The total loan book as of 31 March 2023 was EUR 2,918 million, 2% lower vs. the year-end 2022.

Overall, the financial standing of banks clients is reassuring, and portfolio quality remained good and the NPL ratio stood at 3.0% as of 31 March 2023, vs. 2.7% at the end of 2022.

In Q1 2023 operating income from continuous operations reached EUR 52.0 million, 37% growth year over year. Net profit from continuous operations reached EUR 26.0 million in Q1 2023, which translated into 21.5% return on equity.

Customer deposits slightly decreased by 2% vs. the year end 2022 and constituted EUR 3,938 million as of 31 March 2023. Loan-to-deposit ratio was 74% as of 31 March 2023. 
Citadele continues to operate with more than adequate capital and liquidity ratios: CAR (including period’s result, excluding EUR 20.0 million proposed dividends) was 20.7% and LCR of 169% as of 31 March 2023.

ECB AQR Results confirms Citadele’s solid asset quality, capitalisation and risk management

ECB has concluded the Asset Quality Review (AQR) of  Citadele. The results of ECB's exercise highlight the quality of Citadele’s asset base and risk underwriting.
CET1 ratio post-AQR is 16.03% (pre-AQR ratio being 16.31%). A bank’s CET1 ratio is a key measure of its financial soundness.

The direct supervision by the ECB and its assessments means additional stability for Citadele and its customers in this challenging time. A good capital quality assessment shows the health of the bank's loan portfolio, which is especially important during economic turmoil. Thanks to the positive evaluation, we will be able to leverage our strong financial position for the benefit of our customers.

Innovations and development

In Q1 2023, Citadele has introduced Insurance products category in the bank's mobile app. Accident insurance is the first insurance type that the bank offers to purchase in a fully automated way, and it is planned to offer other types of insurance in the future. Insurance services are provided by Citadele Group company CBL Life. By adding this function to the mobile app, Citadele takes the next step in the evolution of banking services by expanding the range of subscription-based services. 

Factoring product digitalization is now complete and new digital proposition is now available to customers in Latvia, Lithuania and Estonia.

Klix, the bank’s e-commerce checkout solution, exceeded 1000 merchants. During Q1 2023 3.5 million transactions were processed with total value of EUR 129 million.

Growing client base

The bank continues to attract new clients and we are proud that a record number of active customers trust us with their financial service needs – reaching 374 thousand clients as of 31 March 2023, 3% growth year over year. The number of active Mobile App users was 234 thousand, a 11% increase year over year.

Sale of Swiss subsidiary

In January 2022 AS Citadele banka announced that it has entered into a binding agreement with Trusted Novus Bank Limited regarding 100% sale of its Swiss subsidiary - Kaleido Privatbank AG. The closing of the transaction was expected by year end 2022. Long stop date has been extended and closing is still pending subject to regulatory approvals.

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