Šiauliu Bankas Group Results for the Year 2024

Bank of Siauliai AB

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• Financial targets. Šiauliu Bankas Group demonstrated strong performance and successfully achieved all its financial targets for 2024, delivering on its guidance
• Profit. Šiauliu Bankas Group earned a record net profit of €78.8 million
• Loan portfolio. The loan portfolio grew by 17% year-on-year to over €3.4 billion
• Deposits. The deposit portfolio grew by 12% over the year to almost €3.6 billion at the end of 2024
• Fee & commission income. Net fee and commission income grew by 44% year-on-year to over €29 million
• Dividends. Šiauliu Bankas Group intends to propose a distribution of 50% of its 2024 net profit, or €0.061 dividend per share
• Share buybacks. Will allocate up to 5% of the 2024 net profit for own share buybacks
• Rebranding. A rebranding of Šiauliu Bankas will be proposed for the upcoming shareholders' meeting

"In 2024, we have successfully integrated INVL's retail business into Šiauliu Bankas Group, updated our long-term vision and strategy, and initiated a business transformation that we believe will bring greater value to our customers, shareholders, and society.

While launching strategic projects such as the replacement of the core banking platform and rebranding preparation, we maintained high profitability and service quality, effectively managing risk and costs.

The successful implementation of our first international bond issuances and the updated dividend policy demonstrate our commitment to efficient capital utilization and delivering high returns to shareholders during the transformation period," says Vytautas Sinius, CEO of Šiauliu Bankas.

Šiauliu Bankas Group earned an unaudited net profit of €78.8 million in 2024 which is 5% more than in 2023. Operating profit before allowance for impairment losses and income tax amounted to €107.3 million, a 3% decrease compared to operating profit of €111.0 million in 2023.

Net interest income grew by 2% year-on-year to €160.2 million, while net fee and commission income grew by 44% to over €29 million. The latter increased 11% in the last quarter of 2024 alone, compared to Q3 2024.

All loan book segments grew during the year, with the total loan portfolio increasing by 17% (€503 million) to €3.43 billion. New credit agreements worth €1.5 billion were signed during the year, 14% more than in 2023 (€1.3 billion).

The quality of the loan portfolio remains strong, with provisions of €11.3 million made in 2024, €4 million less than in 2023. The Cost of Risk (CoR) of the loan portfolio for year 2024 was 0.35% (0.54% for the 2023).

The deposit portfolio grew by 12% since the beginning of the year (€383 million) and exceeded €3.5 billion at the end of the year. The amount of term deposits grew by 22% (€348 million) to over €1.9 billion during the year and their share in the total deposit portfolio increased by 5 percentage points to 54%.

The bank's capital structure was enhanced by an additional issue of Tier 1 (AT1) bonds of €50 million in the fourth quarter. All issuances made in 2024 have significantly strengthened and diversified the capital base, which allows for continued rapid growth while ensuring high returns for investors.

The Bank’s Management Board, taking into the account the updated dividend policy, the bank’s strong performance in 2024, its robust capital position, and the favourable outlook for the operating environment, has decided to propose a dividend of 50% of the 2024 net profit (€0.061 per share) for approval at the Bank’s Annual General Meeting.

Šiauliu Bankas has repurchased own shares worth €10.2 million and is planning to continue with buyback programmes, in line with the existing the European Central Bank's (ECB's) authorisation granted on 15th August 2024. The bank will also propose to allocate up to 5% of its 2024 net profit for the share buybacks for the capital reduction purpose, and to grant shares as part of the deferred variable remuneration for the employees of the Šiauliu Bankas Group.

The group's cost/income ratio (C/I) was 49.0%¹ (41.2%¹ in 2023) and the return on equity (RoE) was 14.0% (15.5% in 2023) at the end of the year. The capital and liquidity position remained strong and prudential ratios are being met by a wide margin. The capital adequacy ratio (CAR) stood at 22.8%² and the liquidity coverage ratio (LCR) at 232%².

Overview of Business Segments

Corporate Client Segment

Šiauliu Bankas has significantly increased the volume of corporate financing over the year – in 12 months new corporate financing agreements worth of €960 million were signed in 2024, 29% increase compared to previous year. In the 2024 the portfolio has grown by 20% (€308 million) to over €1.8 billion. Growth has been well-diversified across several strategic sectors, including manufacturing, retail, and renewable energy. A favourable business environment has encouraged investment and created additional opportunities for expansion.

Šiauliu Bankas continued its commitments to promote sustainability and signed amendments to the Pre-financing and Contingent loan agreements with the European Investment Bank (EIB) concluded in 2016 to increase the Bank's investment up to €255 million from €195 million – to finance the modernization programme of multi-apartment buildings in Lithuania.

Private Client Segment

In 2024, Šiauliu Bankas has successfully implemented key strategic initiatives that strengthened its market position and ensured sustainable growth. The successful integration of INVL retail business was a major accomplishment, which enabled the bank to expand its service offering and provide customers with even more opportunities. The implementation of new core banking platform is on track, promising a greater efficiency and an improves customer experience.

To strengthen its image and further meet the expectations of its customers, Šiauliu Bankas has also started preparations for the rebranding. A rebranding of Šiauliu Bankas will be proposed for the upcoming shareholders' meeting.

The volume of new mortgage contracts in 2024 increased by 21% year-on-year to €213 million. In 2024 the mortgage portfolio has grown by 17% (€136 million) reaching €0.9 billion. The volume of new consumer loan contracts increased by 5% year-on-year to €232 million. Since the beginning of 2024, the consumer loan portfolio has grown by 19% (€57 million) to over €0.35 billion.

Investment Client Segment

The bank has remained active in the local corporate bond market, originating €42 million in corporate bonds across 10 issuances for its clients in Q4 2024. Total corporate bond issuance for the year reached €227 million. According to Nasdaq Baltics, Šiauliu Bankas is leading security issuer in Lithuania and the Baltic States and maintains the largest share of securities trading on the Lithuanian stock exchange.

Šiauliu Bankas demonstrated strong performance in asset management business in 2024. Client assets under management (AuM) reached €1.46 billion and grew by €277 million year-on-year. Growth was driven by new client investment flows and investment performance. In 2024, Šiauliu Bankas asset management company, earned €164.4 million for Tier II pension fund clients and €19.8 million for Tier III clients. In total, the profit generated for clients during the year was €184.2 million.

SB Alternative Investment Fund III, providing new investment opportunities for Lithuanian retail investors, has enjoyed a successful launch, attracting over €6 million in 2024. Distribution of units of the investment fund is ongoing.

The Life Insurance segment also showed steady growth, Risk Under Management (RUM) reaching EUR 1.7 billion in the fourth quarter, EUR 174 million more than a year ago.

¹ after eliminating the impact of the client portfolio of SB Draudimas
² preliminary data
³ includes Asset Management and Modernisation Funds AuM

Šiauliu Bankas invites shareholders, investors, analysts and all interested parties to a webinar presentation of the financial results and highlights for the 2024. The webinar will start on 27 February 2025 at 8.30 am (EET). The webinar will be held in English. Please register here. Please find attached the information that will be presented at the webinar.

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Additional information:
Tomas Varenbergas
Head of Investment Management Division
tomas.varenbergas@sb.lt

Attachments

• Siauliu Bankas Q4`24 earnings results presentation
• _2024-4Q EN FINAL