Šiaulių Bankas Group Results for the Year 2023
- Profit. Šiaulių Bankas Group achieved a record net profit of EUR 75.4 million last year.
- Dividends. Šiaulių Bankas Group intends to propose a distribution of nearly 43% of its 2023 net profit, or EUR 0.0485 dividend per share.
- Portfolio. Loan portfolio grew steadily by 11% year-on-year to over EUR 2.9 billion.
- Deposits. Client deposits grew by 14% year-on-year to reach almost EUR 3.2 billion by the end of 2023.
- Transaction. Šiaulių Bankas and Invalda INVL successfully completed the merger of their retail businesses.
- Strategy. Šiaulių Bankas has announced its 2024-2029 strategy, aspiring to become the best bank in Lithuania by 2029.
“In 2023, we achieved successful growth by strengthening our retail client business through a successful merger with INVL Retail and by sustaining steady levels of financing. To significantly reduce our environmental impact, we have joined the international SBTi initiative and committed to becoming a climate-neutral bank by 2050.
Last year established a robust groundwork for executing Šiaulių Bankas' updated 2024–2029 strategy, propelling us toward our aspiration of becoming the best bank in Lithuania” says Vytautas Sinius, CEO of Šiaulių Bankas.
Šiaulių Bankas Group generated an unaudited net profit of EUR 75.4 million in 2023, an increase of 12% compared to 2022. Operating profit before impairment and corporate tax amounted to EUR 111.0 million, a 30% increase compared to the previous year.
The net profit for Q4 2023 was EUR 9.7 million or 45% lower than in Q4 2022. The company's quarterly operating profit was significantly impacted by one-off costs of EUR 6.6 million associated with the retail business merger, windfall tax reallocation, and an increase in the minimum acquisition value of property, plant, and equipment (PPE).
The bank’s revenue from operating activities grew rapidly throughout the year. Compared to 2022, net interest income grew by 47% to EUR 156.9 million, while net fee and commission income grew by 8% to EUR 20.3 million.
The revision of the parameters for the calculation of provisions in the light of updated macroeconomic forecasts resulted in provisions of EUR 6.8 million in the last quarter and EUR 15.2 million for the year (provisions amounted to EUR 4.9 million in 2022). In 2023, the cost of risk (CoR) for the loan portfolio was 0.5% (0.2% in 2022).
Šiaulių Bankas maintained high operational efficiency – the cost-to-income ratio was 41.7%1 (43.4% in 20221) and return on equity – 15.5% (16.1% in 2022). Capital and liquidity position remains sound and regulatory requirements are met with the solid buffers – the liquidity coverage ratio (LCR) was 217%, and the capital adequacy ratio (CAR) was 20.7%2.
The Management Board of the Bank, in view of the successful year, the strong capital position and the foreseeable operating environment, intends to consider and submit for approval to the Bank’s Ordinary General Meeting of Shareholders a decision to pay a dividend of almost 43% of the net profit for 2023, i.e., EUR 0.0485 per share.
| Income Statement (€'m) | FY2023 | FY2022 | % ∆ | Q4'2023 | Q4'2022 | % ∆ |
| Net Interest Income | 156.9 | 106.8 | 47% | 40.8 | 31.7 | 29% |
| Net Fees & Commission Income | 20.3 | 18.7 | 8% | 5.7 | 4.7 | 21% |
| Other | 21.1 | 20.8 | 2% | 7.5 | 11.0 | (32%) |
| Total Revenue | 198.2 | 146.3 | 35% | 53.9 | 47.3 | 14% |
| Salaries and Related Expenses | (36.2) | (30.7) | 18% | (10.7) | (8.1) | 33% |
| Other Operating Expenses | (51.0) | (30.2) | 69% | (25.4) | (16.5) | 54% |
| Total Operating Expenses | (87.2) | (61.0) | 43% | (36.1) | (24.6) | 47% |
| Operating profit | 111.0 | 85.3 | 30% | 17.9 | 22.7 | (21%) |
| Allowance for Impairment Losses | (15.2) | (4.9) | 208% | (6.8) | (2.5) | 169% |
| Income Tax Expense | (20.4) | (12.9) | 58% | (1.4) | (2.6) | (49%) |
| Net Profit | 75.4 | 67.5 | 12% | 9.7 | 17.6 | (45%) |
| Balance Sheet Metrics (€'m) | Dec 2023 | Dec 2022 | % ∆ | |||
| Total Loans | 2,932 | 2,634 | 11% | |||
| Total Assets | 4,809 | 4,183 | 15% | |||
| Total Deposits | 3,178 | 2,799 | 14% | |||
| Total Equity | 543 | 443 | 23% | |||
| Assets under Management3 | 1,556.1 | 1,197.7 | 30% | |||
| Assets under Custody | 1,943.2 | 839.8 | 131% | |||
| Key Ratios | FY2023 | FY2022 | ∆ | |||
| NIM | 4.0% | 3.1% | +0.9pp | |||
| C/I Ratio1 | 41.7% | 43.4% | -1.7pp | |||
| RoE | 15.5% | 16.1% | -0.7pp | |||
| CoR | 0.5% | 0.2% | +0.3pp | |||
| CAR2 | 20.7% | 16.1% | +4.6pp |
Corporate and Private Client Financing
All financing segments experienced growth in 2023. The loan portfolio increased by 1% in Q4 2023 and by 11% year-on-year to over EUR 2.9 billion. Last year, EUR 1.35 billion worth of new credit agreements were signed, i.e., 12% less than in 2022.
Business lending volumes remained stable at the end of the year, with new business loan agreements signed for EUR 740 million during the year, or 11% less than in 2022. The corporate lending portfolio remained stable over the last quarter and grew by 6% year-on-year to EUR 1.47 billion.
Despite the increase in base interest rates and continued uncertainty, Šiaulių Bankas expanded its mortgage financing portfolio, which increased by 3% in the quarter and by 17% since the beginning of the year, reaching almost EUR 0.8 billion. Throughout the year, new mortgage agreements were signed for EUR 175 million, i.e., 32% less than in 2022.
Slower domestic consumption and a more cautious attitude of the population towards borrowing for consumption and purchases led to decelerated portfolio growth by the end of the year. The consumer financing portfolio expanded by 2% in Q4 2023 and by 29% for the whole of 2023, reaching almost EUR 300 million. In total, EUR 220 million worth of consumer credit agreements were signed during the year, or 17% more than in 2022.
The bank continues to play an active role in financing energy efficiency projects, particularly through the renovation of multi-apartment buildings in Lithuania. In the last quarter of 2023, a significant milestone was reached – the amount of multi-apartment building renovation financing agreements signed on behalf of Šiaulių Bankas exceeded EUR 1 billion. Progress on establishing of the second modernisation fund SB Modernizavimo Fondas, worth EUR 200 million, has also gained momentum. The fund is expected to finance renovation of around 300 multi-apartment buildings and should commence operations in March 2024.
As a pioneer of securitisation in Lithuania, Šiaulių Bankas continues to actively use the experience gained not only in the establishment of the second multi-apartment building modernisation fund, but also in the use of synthetic securitisation for other loan products, thus meeting the bank’s objectives of efficient use of capital.
Daily Banking
In Q4 2023, 7,100 new private and business clients started using the bank’s services, and since the beginning of the year, more than 30 thousand have joined the bank. The number of active clients of Šiaulių Bankas at the end of the year exceeded 180 thousand. Following the merger with INVL Retail, the total number of clients of Šiaulių Bankas Group, including clients of SB Asset Management, SB Draudimas and SB Lizingas, now exceeds 500,000.
Throughout 2023, Šiaulių Bankas placed great emphasis on digitisation and new more convenient smart solutions. In response to client needs, the bank has enhanced digital channels as well as services in the Internet Bank and mobile app.
The bank continues to provide the highest quality of customer service. In a mystery shopper survey conducted by Dive Lietuva in 2023, the bank received the maximum score for the quality of customer service, both in person at branches and over the phone.
Saving and Investing
Seeing the increased demand from clients to protect their savings against inflation, we have been offering our clients some of the highest interest rates on term deposits among the major banks in Lithuania all year round. The term deposits grew by 68% year-on-year to EUR 634 million. The total deposits held by clients grew by 5% or EUR 152 million in Q4 2023 and by 14% or EUR 379 million year-on-year, reaching almost EUR 3.2 billion at the end of the year.
Šiaulių Bankas asset management company, SB Asset Management, generated over EUR 100 million in net investment returns for its second-pillar pension fund participants in 2023. The clients’ assets in the second-pillar pension funds exceeded EUR 1 billion at the beginning of 2024. The clients’ assets in our third-pillar pension funds amounted to EUR 122 million at the end of 2023. The company was the largest in Lithuania in terms of assets under management in the third-pillar pension funds, with a 42% market share.
In the last quarter alone, clients invested over EUR 50 million in the 13 corporate bond placements facilitated by the bank. In total, clients invested over EUR 100 million in bond issues last year. The assets under custody at the bank doubled in 2023, reaching EUR 2 billion by year-end.
1 After eliminating the impact of the client portfolio of SB Draudimas
2 Preliminary data
3 SB Asset Management started operations on 1st December, 2023
Šiaulių Bankas invites shareholders, investors, analysts, and other stakeholders to join the presentation of financial results and current events of 2023 at a webinar scheduled on 29 February 2024 at 4:00 PM (EET). The presentation will be held in English. For more information, click .
Additional information:
Donatas Savickas, CFO
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