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Despite the existing uncertainty, Luminor Bank AS has continued increasing its business volume in the second quarter of this year. In the last quarter, the bank published the first sustainability report, committing to achieve zero level of greenhouse gas emissions.
The net profit of Luminor Bank in the second quarter reached 29.4 million euros, compared to 21.5 million euros in the respective period last year. The profit increase was facilitated by the increase in revenue – the bank increased its income from interest and commission fees, and also reduced its expenses by 21%. The bank's aligned return on equity increased to 9.6%, compared to 7.1% in the respective period last year. Luminor retains a strong capital position, and equity Tier 1 and the overall capital indicator was 21.3% at the end of the quarter.
“The second quarter is notable with the fact that Luminor published its first sustainability report, even more strengthening our commitment to follow the climate neutrality goals and create as little impact on the environment as possible with our operations. Similar as in the first quarter, we continued to feel the impact of the war in Ukraine our operation and supported our customers to ensure that the complicated geopolitical and economic situation affects their businesses as little as possible. The business environment has gone through major challenges also in the past; however, despite the rising inflation and electricity prices, approximately every fourth small and medium company plans to expand its business this year. The bank's results of the second quarter show that companies continued using financing opportunities for their development,” tells Kerli Vares, the Head of Luminor in Latvia. “At the same time, the number of active customers increased in the second quarter of this year, and we continue to observe increasing interest of customers in digital services, especially making payments using digital wallets Google Pay and Apple Pay. Despite the global challenges, the interest of residents in housing loans remained high, and the volume of loans issued by Luminor in Latvia in the second quarter of this year remained at the same level as last year. Looking to the nearest future, we cannot surely predict, how the economic situation will develop, but we will support our customers in their decisions.”
The geopolitical and economic consequences of the war in Ukraine continued to affect the operation of Luminor in the second quarter of this year. The bank worked actively to ensure continuity of servicing of our customers in the Baltic states – individuals and businesses –, and also supported our employees and their family members. Adapting our operations to the new situation, Luminor improved the business indicators, raised efficiency and net profit, compared to the second quarter of the previous year. Luminor confirmed that the bank has no direct exposure to companies domiciled in Russia, Belarus, or Ukraine.
Despite the challenging circumstances, the bank supported its customers, increasing the volume of loans issued to individuals and businesses. The bank also published its first sustainability report and environmental, social responsibility and management objectives, committing to achieve zero level of greenhouse gas emissions by 2050. On 1 July, the bank completed the acquisition transaction of the Baltics leading e-commerce payment service provider Maksekeskus.
“The priority of Luminor in the second quarter was provision of services to its customers, support to employees, their family members and those most affected by the impact after the invasion of Ukraine. Despite the challenges that await us in the future, the economic growth perspectives of the Baltic region are strong. Also, the current position, path of development and future ambitions of Luminor are clear. During this time of uncertainty, we will put every effort to support our customers. I hope that Luminor will extend its field of operation even more efficiently, attracting more individuals and businesses on the local markets. By achieving this goal, we will retain our strong financial position, carry out prudent risk management, and will fulfil more extensive obligations towards our key stakeholders,” states Peter Bosek, the Chairman of the Board of Luminor Bank.
The report of Q2 2022 of Luminor in English is available here.