In 2020, Signet Bank completed the transformation of its business model, which was initiated in 2018. Over the course of these two years, the Group expanded its activities in the domestic market, focusing on servicing and financing local entrepreneurs and their businesses. As a result, the overall revenue of the Group in two years increased by 53%, while net profit grew 19 times, reaching EUR 1.4m in 2020.
Over the past two years, the share of business with clients from Latvia, EU and OECD member states has grown significantly and reached 68% of the total number of clients by the end of 2020 and 71% of the Signet Bank Group’s overall revenue.
Compared to 2018, the Group’s net interest income has increased by 61%, while net fee income – by 45%. Also, the overall revenue increased by 53%, while net profit increased 19 times.
Despite the challenging environment in the Latvian banking sector, as well as the macroeconomic turbulence caused by the COVID-19 pandemic in 2020, the Signet Bank Group had a successful year. Net fee income increased by 8% compared to 2019 (from EUR 4.6m to EUR 4.9m) and net interest income grew by 41% (from EUR 3.9m in 2019 to EUR 5.4m in 2020). The Group’s net profit increased by 48% to EUR 1.4m (compared to EUR 0.9m in 2019). Client deposits increased by EUR 20m (+13%), while the total amount of client assets under the Group’s management and administration reached EUR 1’046.5m.
At the end of 2020, the Signet Bank’s capital adequacy ratio was 18.42% (2019: 23.21%), with a liquidity ratio of 63.63% (2019: 67.59%).
Overall, 2020 was a good year for Signet Bank. We have demonstrated stable growth and increased business volumes in the local market through increase of number of clients, the volume of deposits and growing our domestic loan portfolio. We have started 2021 with great determination and see good opportunities to grow our private banking and investment banking business volumes, as well as having access to our clients’ capital, we can arrange syndicated financial transactions in the form of both loans and bond issues. In 2020, we clearly defined our environmental, social and governance (ESG) goals in our operational strategy and committed to gradually integrate sustainability considerations into the core of all activities, as well as to raise awareness of environmental, social and governance challenges and opportunities among employees, clients and partners.
Roberts Idelsons, Chairman of the Board at Signet Bank
During the course of business model transformation, lending has become very important element of Signet Bank’s strategy – over the past two years the Group has issued more than EUR 100m in new loans to both existing and new clients.
Bond underwriting business is an important activity of the Group with great potential for future growth and expansion. In 2020, in order to strengthen its offering to potential issuers, the Bank became a Certified Adviser on Nasdaq First North market in Latvia, which allows Signet Bank to guide growing Latvian companies through the Firth North application process and ensure their constant compliance with all market requirements.
In 2020, the Group arranged five issues of fixed income securities, helping clients raise more than EUR 20m in the stock market, which makes Signet Bank a prominent leader in this market segment in Latvia and also an important player in the Baltics. Since the beginning of 2021, the Bank has arranged two more landmark bond issues on the local market, raising EUR 20m for ELKO Group and EUR 30m for Mogo, thereby contributing to the development of the capital market in Latvia.
This year, 2021, the Group is committed to supporting local businesses with new financing and will continue its ongoing work to ensure that the bond issue as a fundraising product is more widely recognized among both existing and potential clients.
The bank was founded in 1992 as Latvijas Biznesa banka. Since 2013, it has focused its strategy on servicing entrepreneurs and their businesses, with an emphasis on high-quality capital maintenance and structured investment projects. Signet Bank’s majority shareholders are a group of Latvian and international investors, which includes SIA Hansalink, SIA Fin.lv, and Signet Acquisition III.