In 1Q 2020, Signet Bank continued to increase business volumes and expand its client base in the local market, in line with the implementation of the bank’s long-term strategy of providing high quality services to high net worth and affluent clients, and to businesses owned by such clients.
As of 31 March 2020, 67% of the bank’s deposit base came from tax residents of Latvia and other EU/OECD member countries, while the share of local clients in the overall revenue of the Group reached 64%.
Overall client assets under management and administration reached 1.1 bn EUR.
The Group’s loan portfolio has increased by 15 % and new lending transactions in Latvia remain an important priority for Group’s development. The global spread of COVID-19 has had minimum financial effect on our business so far. We have ensured that large part of our employees are working remotely, while maintaining high quality of service for our clients. As the Bank’s proprietary investment portfolio is comprised almost entirely of high-quality bonds, we had only minor negative impact on our financial result from the recent turbulence in financial markets. Besides, we managed to add some positions to our investment portfolio at very attractive valuations.
In April 2020, the Group joined the Finance Latvia Association moratoriums, which enables legal entities and private persons facing short-term financial difficulties due to COVID-19 to defer their payments of loan principal. Despite the pandemic, situation we are not revising our plans for 2020, most importantly our aim to issue EUR 80mln in new loans and arrange financing through bond placements for our local clients.
Overall performance of the Group in 1Q 2020 was positive net fee income totalled EUR 1.1 mln (+24% vs 1Q 2019), while net interest income was EUR 1.3 mln (+47% vs 1Q 2019), and total operating income reached EUR 2.6 mln (+59 % vs 1Q 2019).
The Group continues to maintain a conservative risk profile: its capital adequacy ratio at the end of 1Q 2020 was 20 %, with a liquidity coverage ratio of 215%.
The Group continues to pay great attention to AML/CTPF compliance issues, constantly enhancing internal controls to be in line with the changing regulatory environment and best international practice. We are investing in IT and human resources to ensure that our risk management and controls are consistent with the chosen business model.
In 2020 Group has plans to expand and technologically improve products. In the coming months our clients will be able to test new features offered as part of servicing day-to-day operations and in investment management.
Bank management is satisfied with performance achieved in 1Q 2020 and has an optimistic outlook for the remainder of 2020.
Wishing all clients, employees and stakeholders to stay safe and healthy!
Chairman of the Management Board