Unaudited financial results of Coop Pank for Q4 and 12 months of 2024
Coop Pank's business results for 2024 were positively impacted by solid business
volume growth - both the number of customers and the loan portfolio showed
strong growth. The overall economic and interest rate environment had a negative
impact on business results.
Over the year, the number of Coop Pank customers increased by 26,000 (+14%) and
the number of active customers increased by 17,400 (+21%). Of the new customers,
23,000 were private customers and 3,000 were business customers. By the end of
2024, the number of Coop Pank customers reached 208,000, of which 99,400 were
active customers.
By the end of 2024, deposits of Coop Pank reached 1.89 billion euros, increased
by 164 million euros (+10%) over the year. Term deposits increased by 7% over
the year and demand deposits by 15%. The bank's financing cost increased over
the year from the level of 2.4% to the level of 3.3%. The market share of the
bank's deposits increased from 6.0% to 6,1% over the year.
By the end of 2024, loan portfolio of Coop Pank reached 1.77 billion euros,
increased by 283 million euros (+19%) over the year. Business loans and home
loans made the biggest contribution to portfolio growth. Business loans
portfolio increased by 129 million euros (+20%) and home loan portfolio
increased by 121 million euros (+20%). Leasing portfolio increased by 24 million
euros (+16%) and consumer finance portfolio increased by 9 million euro (+9%).
The market share of the bank's loans increased from 6.0% to 6.3% over the year.
In 2024, the quality of the loan portfolio remained very good, despite of the
changes in the economic environment. To cover possible loan losses, 4.6 million
euros provisions were made in 2024 - that was 26% less than a year earlier. The
cost ratio for credit risk decreased from 0.5% to 0.3%.
The net income of Coop Pank reached 81.9 million euros, decreased by 3.3 million
euros (-4%) over the year. Net interest income decreased 3.7 million euros (-
5%) over the year. Net service fee revenues decreased 0.5 million euros (-10%)
over the year. The bank's operating cost reached 40.6 million euros, increased
by 5.4 million euros (+16%) over the year. Personnel, IT and marketing costs
continued to make up the largest part of operating costs.
Net profit of Coop Pank in 2024 was 32.2 million euros, decreased by 18% over
the year. The bank's cost / income ratio increased from 41% to 50% over the year
and the return on equity decreased from the level from 23.5% to 16.2% - similar
level was also seen in 2022.
As of 31 December 2024, Coop Pank has 35,885 shareholders.
Results in Q4
In Q4 2024, the number of the bank's customers increased by 6,000 (+3%), of
which 5,000 were private customers and 1000 were corporate customers. By the end
of the year 2024, Coop Pank had 208,000 daily banking customers.
In Q4 2024, the volume of deposits increased by 47 million euros (+3%) and
reached 1.89 billion euros by the end of the year. Over the quarter, the volume
of demand deposits decreased by 14 million euros and the volume of term deposits
increased by 61 million euros.
The bank's net loan portfolio increased by 113 million euros (+7%) over the
quarter, reaching 1.77 billion euros by the end of the year. The volume of
corporate loans increased by 73 million euros and the volume of home loans
increased by 32 million euros. Consumer financing increased by 5 million euros
and leasing by 4 million euros.
In Q4 2024, Coop Pank earned a profit of 6.4 million euros, which is 26% less
than in Q3 and 24% less than in the same period last year. Quarterly
profitability was negatively impacted primarily by the interest rate
environment, which was partially offset by business volume growth.
Comments of the CEO of Coop Pank Margus Rink:
"To evaluate Coop Pank's activities and results in 2024, it is essential to
consider the broader context. We operate in an environment shaped by rising base
interest rates during 2022-2023, which resulted in decreased purchasing power,
diminished corporate investment appetite, and a cooling economy. In 2024, we
reached the bottom of the economic downturn, and gradually, signs began to
emerge that set the stage for a cyclical turnaround: base interest rates are now
declining, real wages have increased over recent quarters, tax changes have been
fixed for the coming years, energy prices are stable, and entrepreneurs are
dusting off business plans that were shelved.
Based on this context, Coop Pank's performance in 2024 was influenced by two
factors. First - declining interest rates. This was an independent process
beyond our control, which simultaneously significantly reduced both our interest
income and interest expenses at the same time. Secondly, the growth of business
volumes. This factor depended entirely on us. As a growth-focused bank, we
worked hard and managed to increase business volumes (loan portfolio size,
customer base) by approximately 19% during the year of economic downturn. This
is 2-3 times higher than the overall Estonian banking market. This achievement
is one we are proud of.
In 2024, our customer base grew by 26 000 (+14% YoY). Increasingly, account
openings are followed by customers switching their primary banking relationship
to Coop Pank. At the same time, this also represents our greatest challenge
moving forward. Primary banking relationships bring growth in demand deposits
and help lower financing costs. Currently, demand deposits constitute only one-
third of our total deposits.
Coop Pank's loan portfolio grew by 283 million euros (+19% YoY) in 2024.
Throughout the year, home loans and car leasing showed strong growth, indicating
that demand for personal loans remained solid despite the challenging economic
environment. Demand for business loans was low during the first half of the
year. In the fall, demand emerged, and in the final months of the year, we
achieved significant growth in the business loan portfolio. Demand for consumer
loans remained weak throughout the year. The quality of the loan portfolio
remained strong all year.
Coop Pank's net profit for 2024 amounted to 32,2 million euros, decreasing 8%.
The decline in profit was primarily caused by the low-interest economic
environment, which could not be offset by 19% growth in business volumes.
We adhered to our current dividend policy and distributed 25% of the
consolidated group's 2023 pre-tax profit as dividends, amounting to a net total
of 8.9 million euros (8.7 cents per share, nearly double the amount of the
previous year. In addition, 2 million euros in income tax on dividends was paid.
Over 98% of the dividends were paid into the accounts of Estonian individuals
and companies. By the end of the year, Coop Pank had 35 885 shareholders.
In 2024, we further expanded our role as contributors to society. While we have
previously contributed the advancement of life in Estonia primarily through our
extensive branch network and Coop stores' cash network, we have now begun
directly supporting Estonia's defense capabilities with the innovative
Kaardivägi client program. Additionally, Coop Pank became a major sponsor of
both the national volleyball team and Estonian decathletes. Furthermore, in
collaboration with the TalTech Arengufond, we started awarding scholarships.
Last year, a public discussion arose about teachers' workload and salaries. We
responded quickly and started offering teachers mortgage loans on favorable
terms, a program we are continuing this year. In collaboration with the Estonian
startup Montonio Finance, we also launched the most competitive e-commerce
payment solution for merchants.
Beginning of 2024, we secured a subordinated loan of 15 million euros to support
the bank's growth strategy. This is a capital instrument classified as part of
the bank's Tier 2 own funds.
Eesti Pank designated Coop Pank as a systemically important credit institution,
justifying its decision by stating that the bank's significance in Estonia's
financial system has steadily increased in recent years. The rating agency
Moody's affirmed Coop Pank's Credit rating on the level Baa2 and raised outlook
to positive. This confirms that the bank is trustworthy with solid capital base
and high quality of the loan portfolio even in difficult times and has shown
good profitability.
In November, on the proposal of Estonian Financial Supervision Authority, the
European Central Bank granted to the bank an additional activity license
enabling the issuance of covered bonds. The actual issuance, including the
timing, volume, and other conditions, will be decided by the bank based on
market conditions and the bank's financing needs.
Coop Pank's strategic goal is to increase its market share in Estonia to 10% by
the beginning of 2027 and grow its loan portfolio to at least 2 billion euros.
This will position us as the primary bank for more than one in ten Estonians -
amounting to at least 150 000 active customers. Through business volume growth,
the bank aims to operate with high efficiency (cost-to-income ratio below 50%)
and deliver a solid return on equity (ROE of at least 15%).
I would like to thank all Coop Pank customers, shareholders, and employees for
the year 2024. Our goal is to build Coop Pank into a success story for everyone:
a success story for customers, shareholders, employees and society alike."
Income statement, in th. of euros Q4 2024 Q3 2024 Q4 2023 12M 2024 12M 2023
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Net interest income 19 148 20 021 20 594 77 570 81 265
Net fee and commission income 1 303 1 040 1 489 4 358 4 847
Net other income -483 167 -1 666 -45 -908
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Total net income 19 968 21 228 20 415 81 883 85 204
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Payroll expenses -6 007 -6 138 -5 495 -23 411 -20 234
Marketing expenses -788 -593 -912 -2 690 -2 587
Rental and office expenses, depr. of
tangible assets -798 -729 -678 -3 097 -2 776
IT expenses and depr. of intangible
assets -1 731 -1 579 -1 363 -6 189 -4 803
Other operating expenses -1 473 -1 221 -1 498 -5 189 -4 728
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Total operating expenses -10 797 -10 261 -9 948 -40 575 -35 128
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Net profit before impairment losses 9 171 10 967 10 468 41 306 50 076
Impairment costs on financial assets -1 821 -1 022 -1 148 -4 643 -6 302
Net profit before income tax 7 351 9 945 9 322 36 663 43 774
Income tax expenses -957 -1 296 -935 -4 486 -4 570
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Net profit for the period 6 393 8 649 8 386 32 178 39 204
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Earnings per share, eur 0,06 0,08 0,08 0,31 0,38
Diluted earnings per share, eur 0,06 0,08 0,08 0,31 0,38
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Statement of financial position, in th. of
euros 31.12.2024 30.09.2024 31.12.2023
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Cash and cash equivalents 343 678 404 472 428 354
Debt securities 37 751 37 445 36 421
Loans to customers 1 774 118 1 661 152 1 490 873
Other assets 33 066 31 956 30 564
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Total assets 2 188 614 2 135 025 1 986 212
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Customer deposits and loans received 1 886 145 1 838 626 1 721 765
Other liabilities 27 683 28 026 28 435
Subordinated debt 63 148 63 410 50 187
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Total liabilities 1 976 977 1 930 062 1 800 387
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Equity 211 637 204 963 185 825
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Total liabilities and equity 2 188 614 2 135 025 1 986 212
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The reports of Coop Pank are accessible at: https://www.cooppank.ee/aruandlus.
Coop Pank will hold an Investor Webinar for the introduction of its financial
results, which is scheduled at 09:00 on 13 February 2025. To participate, please
register in advance via the following link: https://bit.ly/CP-veebiseminar-
registreerimine-13-02-2025
The webinar will be recorded and posted on the company's website www.cooppank.ee
(https://www.globenewswire.com/Tracker?data=ysaYE2aduEcKrKAVh7DYM6LiE28UTJqD7xkd
SPeY2t-8glSNNf3zmGgGz59--m-ZGdW8mZfR_aEVv-L5dz38qQ==) and YouTube account
(https://www.youtube.com/@cooppank).
Coop Pank, which is based on Estonian capital, is one of the five universal
banks operating in Estonia. The bank has 208,000 everyday banking customers.
Coop Pank aims to put the synergy generated by the interaction of retail
business and banking to good use and to bring everyday banking services closer
to people's homes. The strategic owner of the bank is the local retail chain
Coop Estonia, which has a sales network of 320 stores.
Further information:
Margus Rink
Chief Executive Office
Email: [email protected]