The volume of Bigbank’s loan portfolio grew by one-quarter in a single year (2020)
The volume of the loan portfolio of Estonian-owned Bigbank AS for the last year increased by 25.7%, reaching a record-breaking 578 million euros. The volume of the assets of the group increased to 758 million euros, i.e. 32%, mainly due to the increase in the loan portfolio. The profit for the previous year before the write-down of loans receivable was 35.4 million euros, which is 4.3 million euros more than in the previous year. The net profit for 2020 amounted to 21 million euros.
“The year 2020 was a successful year for us in spite of the difficult macroeconomic situation,” said Chairman of the Management Board of Bigbank Martin Länts. “The operating loan portfolio of the group increased significantly throughout 2020, exceeding half a million euros for the first time in the history of the bank. It must be noted that the rapid increase in the loan volume did not have a negative impact on the quality of the loan portfolio. The proportion of loans overdue by more than 90 days in the portfolio formed 3.2% of the portfolio by the end of the year and remained at the same level compared to the previous year.”
“In relation to the beginning of the health crisis at the end of the first quarter, we reviewed the plans for the entire group for 2020 and established new goals,” noted Länts. “When the emergency situation was established, our first aim was to focus on supporting our clients and we offered personal solutions to those facing solvency problems. Our next target was restoring our growth ambitions by continuing to provide financing solutions and new products to clients. In hindsight, we can state that the strategy we chose was correct, as customer satisfaction and the business results of the group improved notably during the year.”
According to Mr Länts, new banking products was a significant keyword for the previous year. “We were more active in product development than ever before, and our new products were received extremely well by clients,” said Länts. “Our new banking system Nest allowed us to rapidly react to the emergency situation as well as to the needs of the consumers and the market expectations of the previous year. The previous year was notable as we entered the Estonian home loan market where, in addition to the regular product with an annuity schedule, we started to offer a unique home loan with a specific schedule. Furthermore, we launched leasing products during the year for business clients in Estonia and Lithuania, savings products in Germany, Austria and the Netherlands, vehicle hire purchase in Finland and a new credit product with a renewing limit in Sweden,” noted Länts.
The loan and leasing portfolios and sales volumes of corporate banking continued to grow rapidly in 2020 in Estonia, Latvia and Lithuania. The sale of new loans grew by 84% during the year. “The main growth factors were the strengthening of the sales teams, the improvement of the terms and conditions for products and the financing of new client areas of activity – industry, manufacturing, agriculture and forestry. In addition to financing products for commercial and residential real estate, we brought to the market a new long-term investment loan for manufacturing companies and a loan with a term of up to 30 years for financing arable land,” said Länts.
Experts are anticipating the recovery of the economy in the subsequent year, but Bigbank’s own economic forecast concerning its home markets is even more optimistic. The group is planning to grow in all its home markets both in terms of existing products and by launching new products on the markets. Opening a new branch in Bulgaria will signify a major new step.
“The preparations for opening the branch have been ongoing throughout 2020 and we hope to conclude our first transactions in Bulgaria in the first half of the current year,” said Länts. “The initial products we will use for entering the Bulgarian market are digital consumer credit products aimed at private clients. We are also planning to add deposits in the near future. We have established the goal of becoming the most recommended bank providing digital financial services in Bulgaria in the next five years.”