SEB Grupp published the economic results for Q3 2015

Today, SEB Grupp published the economic results for Q3 2015. Information about the results is available here: www.sebgroup.com/ir

Allan Parik, Chairman of the Management Board of SEB Pank, commented on the results of SEB units in Estonia, as follows:

In the third quarter economic life has been moderately positive, yet recovery is still fragile. Not much has changed in the main trends: internal consumption and trade grew, while exports and industrial production have been in regression in the past months. While the fast growth of internal consumption seems to raise caution in the context of the falling exports figures, looking at salaries and wages explains it. Smaller labour taxes and increased family benefits have also contributed to the growth of income. Households’ increased consumption is justified by the fact that Estonians’ savings accounts are still growing steadily while the increase in loan volume has been moderate.

The relative strength of the Estonian economy in the outside environment, which is searching for stability, has not gone unnoticed. We are sensing foreign investors’ increased interest in making investments in Estonia. This trend is reinforced by recent major real estate investments, but interest in contributing to the growth of Estonia extends wider than just the real estate sector. With its stable and developed economy, Estonia is still offering interesting and potentially profitable investment opportunities.

Estonia’s core sectors are doing well

Manufacturing of metal products, as well as the timber and furniture industry, have displayed steady growth this year. These are very important sectors for Estonia, engaging a large number of people and companies. We have monitored the developments concerning the Estonian timber and furniture industry and helped many companies in this field to make important investments to raise the sector’s competitiveness. With the Estonian forest resource and competent workforce, we have something to offer the world.

Russian sanctions have become the new norm. As a whole, Estonian entrepreneurs have adapted to the situation well and have been successful in finding new markets and partners. The situation continues to be worse in agriculture, where producers are being pressured strongly by the low prices in the dairy industry. Those who are also growing grains in addition to dairying are in a better situation. This year’s good crop yields have helped to balance the continued low prices in the dairy sector. As a bank, we have tried to compromise with those entrepreneurs facing difficulties, because we believe that agriculture has potential in Estonia in the long term.

From a longer perspective, the search for increased efficiency and further consolidation is foreseen in the business sector. SEB’s survey among financial managers indicates increased readiness to make investments. They are also expected to take happen when the external demand recovers. The growth of investments can in turn have an impact on the labour market, where machine work is taking the place of humans more and more often. Unemployment seems to have bottomed out at this point.

Balanced consumption and savings of private clients

Increased income and benefits and decreased labour taxes have supported the financial strength of households. This improvement of finances does not affect only the wealthy – savings have increased equally in all income groups. As of the end of September, the private loan portfolio grew by 4.2 percent when compared to the same period last year, while deposits have grown 6.6 percent in the aforementioned time period. The summer was active in terms of the home loan market – in July banks issued home loans in the amount of 89 million euros, which is the highest figure this year, with the usual monthly volume being around 80 million.

The relevance and popularity of electronic channels in using our products and services is growing steadily. Besides the Internet Bank, the volumes of our Contact Centre have also increased by 10 percent this year. Clients of SEB Eesti can use many services which are unique in the world. It is possible, for example, to make transactions at one of our branches so that all documents are saved digitally to the client’s Internet Bank, meaning the bank is not left with a stack of papers as is normally the case.

Economic results of SEB strong and steady

The units of SEB Estonia finished Q3 2015 with a profit of EUR 17.4 million. SEB finished Q3 2014 with a profit of EUR 15.6 million. In the third quarter, the operating profit of SEB Estonia amounted to EUR 33.4 million (EUR 33.3 million in the third quarter of 2014) and operating costs amounted to EUR 14.8 million (EUR 15.1 million in the third quarter of 2014). In Q3 2015, the bank increased loan loss provisions by EUR 1.2 million (in the same period of 2014, the bank decreased the provisions by EUR 2.6 million).


For more information, contact:

Kristi Jänes
Project Manager for Communication
Marketing and Communications Division
SEB
Tornimäe 2, 15010 Tallinn
Phone +372 665 5399
Mobile +372 5569 0616
E-mail kristi.janes@seb.ee
www.seb.ee