SEB Estonia focused on new financing, grace periods, and green products in 2020

Today, SEB Group published its economic results for 2020. Information about the 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:
‘SEB adapted well to the difficult situation in 2020. The keywords of this active year were securing new financing, assisting clients in payment difficulties, and developing sustainable banking products.

1.5 billion euros in new loans

Last year, SEB financed new projects worth more than one billion euros for companies and nearly half a billion euros for private clients. Despite the economic downturn, clients’ loan demand remained at a good level, indicating that at every stage of the economic cycle there are households and companies that can and want to invest in their development.

Grace periods for 2,900 clients

In the first half of the year, supporting clients in payment difficulties was extremely important. Last year, a total of 2,400 private clients and 500 companies needed grace periods, but today almost all clients have restored their solvency and returned to normal life. However, there are a number of sectors, such as tourism, that still need support. Credit quality remained at a high level throughout the year, meaning that no increase in arrears is foreseen.

Deposits of private persons and companies grew by 18 percent

Due to the restrictions caused by the corona crisis, there were almost half as many office visits last year, and instead we provided loan or investment advice via video calls or solved the client’s problems through other digital channels. The activity of clients remained high, especially when growing buffers. Due to the uncertain times, the clients increased their deposits last year. The deposits of private clients in SEB grew by 13 percent over the year and the deposits of business clients by as much as 23 percent.

Development of sustainable products

As innovations, SEB introduced a number of green products last year, from bank cards made of environmentally friendly materials to financing electric cars, as well as funding companies’ sustainable projects with green loans. Activities related to environmental protection will continue to be important in the coming years, and we believe that they are become a driving force for growth. We offer our private and business clients assistance and support to ensure that the green turn would be economically successful for them and that Estonia would restore its growth in a new quality. In addition to the innovation centre located in Tallinn, we also opened a similar centre in Tartu last year to help entrepreneurs reshape their business models, with the aim of growing their business quickly and sustainably.

Revenues stable, expenses slightly increasing

The operating revenue of SEB in 2020 amounted to 173.8 million euros (173.5 million euros in 2019) and the operating expenditure 61.5 million euros (59.8 million euros in 2019). The increase in expenditure is due to one-off expenses, increased wage and IT costs, as well as the bank’s increased attention to employee health. As of last year, all SEB employees have additional health insurance in addition to the occupational pension. Last week, SEB was also named the most desirable employer in Estonia, which we are very pleased about.

SEB Estonia’s profit for 2020 amounting to 87.4 million euros

SEB’s profit last year was mostly influenced by the increase in reserves in case of loan losses should increase. Last year, we increased reserves by 11 million euros, while in 2019 we reduced loan loss provisions by 3.8 million euros. The reason why loan loss provisions have increased lies in the need to be prepared for the unexpected, although the credit quality itself has remained steadily good.

Due to the increase in reserves, the bank’s profit last year decreased by 13 percent and the units of SEB Estonia ended 2020 with the profit of 87.4 million euros. In 2019, the profit of the units of SEB Estonia was 100.4 million euros.
Thanks to strong financial results, extremely high capitalisation, and steadily good credit quality, the supervisory authorities allowed SEB to continue with its current dividend policy, and SEB Pank paid 100 million euros in dividends last year. In 2020, SEB paid 14 million euros in income tax (17.1 million euros in the same period of 2019).’

More information:
Silver Vohu
Head of the Marketing and Communications Division
SEB Pank

phone +372 665 5393
mobile +372 521 1170
address Tornimäe 2, 15010 Tallinn
email silver.vohu@seb.ee