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Luminor Bank AS today publishes its annual report for 2021. The bank boosted its business performance, increased net profits, and advanced its transformation as compared to last year.
During 2021, Luminor grew customer lending to both individuals and enterprises and increased substantially new lending volumes. It led developments in Baltic capital markets with innovative new issues and was the leading manager of Baltic corporate bonds. The bank improved its digital offering and introduced digital wallets including Apple Pay. Luminor streamlined its organisational design and continued its technological development, with a new agreement with Kyndryl and a new contract with Worldline to unify and upgrade the ATM network. In addition, the bank enhanced its risk framework, stepped up its ESG efforts and raised its ability to prevent financial crime.
Net profit for the year was 74.7 million EUR, up from 33.1 million EUR in 2020. This improvement was driven principally by an increase in net interest and net fee income, reduction in expenses, and net reversal of credit loss allowances. The bank’s return on equity improved to 4.6%, up from 2.0% in the previous year. Exceptional costs totalled 76.8 million EUR. Excluding these costs, return on equity would have been 8.7%. After payment of a 190 million EUR dividend in December, Luminor’s capital position remains strong with a CET 1 ratio above 20% at year end.
Luminor Bank CEO, Peter Bosek, said: ‘In January 2021 we initiated the next stage of our strategy, focused on serving our customers – individuals and enterprises resident in the Baltic countries - and business growth. We have work to do to realise our objectives fully, but I am encouraged by our progress through the year as our actions were rewarded increasingly with results. This progress has been made possible by our staff. They did a super job, often in difficult circumstances.
‘While COVID-19, rising price inflation, and consequences from the invasion of Ukraine are near-term challenges, our path for the year ahead is clear. As we support our customers, our staff, and the societies we serve, we have three priorities. First, to do more business with more customers – notably more mortgage and consumer lending and lending to SME customers - widen our product offering, and improve customer experience. Second, to raise our efficiency and enhance our IT operations. And third, to build our unique culture. We will maintain our strong financial standing, exercise prudent risk management, and fulfil our wider obligations.
Luminor’s 2021 annual report can be found here.