In the second quarter (2Q) of 2020, Signet Bank continued to implement its long-term strategy of providing high quality services to high net worth and affluent clients, and to businesses owned by such clients.
The global spread of coronavirus COVID-19 has had minimum impact on the activities of the Group. In June, most of the employees returned to work in the Group’s office. 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.
New lending transactions remain an important priority for the Group’s development – during the first half (1H) of the year the Group’s loan portfolio increased by 15%. The total volume of the Group’s newly granted loans in 1H 2020 amounted to EUR 36 mln.
Despite the pandemic situation, we do not intend to review the Group’s plans for 2020 regarding our intention to issue EUR 80 mln in new loans and arrange financing through bond placements for our local clients.
During the first six months of 2020, the overall performance of the Group was positive – net fee income amounted to EUR 2.2 mln (+11% compared to 1H 2019), while net interest income was EUR 2.5 mln (+53% compared to 1H 2019), and operating income reached EUR 5.6 mln (+59% compared to 1H 2019). The Group’s profit amounted to EUR 1.1 mln, which is EUR 0.9 mln more than in 1H 2019. The Group continues to maintain a conservative risk profile: its capital adequacy ratio at the end of the second quarter was 18%, with a liquidity coverage ratio of 195%.
In accordance with the plan for 2020, the Group expands and technologically improves the offered product range. In May 2020, Signet Bank launched instant payment services to clients, becoming the fourth bank in Latvia to provide this service.
In May 2020, in order to enhance the range of its investment products, Signet Asset Management Latvia IPS, which is part of the Group, registered an investment fund Signet Bond Fund that enables clients to invest in a diversified bond portfolio. This product is of particular interest to clients with relatively small investable funds, who are willing to make conservative investments in a diversified bonds portfolio. The Group plans launch of additional new products aimed at corporate clientele in 2H 2020.
The Bank’s management is satisfied with performance achieved in 1H 2020 and is optimistic about the future. Wishing all our clients, employees and stakeholders to stay safe and healthy!
Chairman of the Management Board