Today, SEB Group published its financial results for 2016
Information concerning the 2016 financial results is available at: www.sebgroup.com/ir
Allan Parik, Chairman of the Management Board of SEB Pank, provided the following comments on the results of SEB units in Estonia:
“Despite slow economic growth, 2016 was a successful year for the business and private clients of SEB. Growing revenues raised optimism for starting new projects, both in business as well as private life. A major challenge continuing to face the Estonian economy is the gap between productivity of businesses and salary growth. Sales revenue of non-financial companies increased by 1.7% in the first three quarters of the year; however, salaries rose by 7.6% in the same period. It seems that the process of adapting to higher labour costs has begun, as the unemployment rate increased to 7.5% in the third quarter. At the same time, the number of job vacancies is the highest since 2008.
Entrepreneurs need more profitable projects
In terms of the share of investments in GDP, Estonia is at the forefront of the European Union. Compared to foreign competitors, Estonian entrepreneurs spend most of their revenue on developing their company. At the same time, several smaller countries making fewer investments have managed to increase their productivity faster than us. So far the investments have been directed mainly into concrete and iron. In terms of investments into intellectual capital, we are currently ranked 18th in the European Union. If we want to increase our wealth faster, we need to be smarter with our investments. SEB’s main objective is to help our clients find new growth models, which would improve the profitability of their business. To do so, SEB is establishing a special innovation centre, which will be opening its doors this spring.
The capability of SEB’s large corporate clients to start new developments is high. The loan volume of large companies increased by 5% last year and deposits by 19%. The more optimistic attitude of entrepreneurs towards the future of our economy is also confirmed by conjuncture research. We are pleased by the fact that exports grew by almost four per cent last year. Foreign trade was supported by the improved situation in oil shale as well as in the electronics industry. However, a slowdown of exports in the core sectors of the Estonian economy – the timber and metals industry – is what raises concerns.
A favourable labour market increases the size of the population
Favourable conditions for employees on the labour market have triggered a very positive trend: For the second year in a row, the population of Estonia has increased, especially on the account of Estonians returning to their homeland. In two years, the size of the Estonian population has grown by more than 4500 people. Most likely, the growth of earnings will also remain high this year, increasing private consumption and the purchasing of new homes.
In 2016, SEB granted 26% more home loans than in 2015. Altogether, 6000 homes were purchased or renovated with our help. The loan portfolio of private individuals increased by 7% last year and deposits by 10%. Last year, SEB’s clients paid more attention to increasing their sense of security, having concluded more than 34,000 insurance contracts. In addition to the above, every tenth client received paperless service at a branch, meaning that all the necessary documents were signed and stored digitally.
SEB’s financial results for 2016
The units of SEB Estonia ended 2016 with a profit of EUR 84.7 million. SEB Estonia ended the year 2015 with a profit of EUR 75.0 million. The operating revenue of SEB Estonia for the year amounted to EUR 149.6 million (EUR 130.6 million in 2015) and its operating costs to EUR 61.2 million (EUR 57.3 million in 2015). In 2016, the bank decreased loan loss provisions by EUR 1.4 million (in 2015, the bank decreased the provisions by EUR 3.9 million).
SEB paid EUR 16.5 million in the form of different taxes to the state budget in 2016.
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