In the first half of 2010, Banking Activities Lithuania’s profit before loan impairment charges was LTL 28m (against a result of LTL -2m for the first half of 2009). Loan impairment charges of LTL 32m (LTL 203m), caused mainly by an adjustment of the prices of collateralised assets, reduced the pre-tax result to a loss of LTL -4m (LTL -205m).

Total income increased 76% over the level in the same period of 2009. Operating expenses were down 14% from the level in the first half of 2009. The increase in income and the decrease in costs improved the cost/income ratio, which stood at 51.7% for H1 2010.

Danske Bankas achieved strong growth in deposits (mainly in the corporate and government sectors), an increase of 58% above the year-earlier figure. The loan/deposit ratio improved from 292% to 164% as of June 30, 2010. Loan portfolio fell 11% below the level a year ago. Lending was limited because of the economic climate and high credit risk.

“Our actions are focused on the four cornerstones of the Danske Bank Group: customers, credit, costs and capital,” says Gintautas Galvanauskas, CEO of Danske Bankas. “Cost optimisation measures launched in the second half of 2009 resulted in cost savings of 14% in the first half of 2010. We have managed to increase our customer base by 9% and substantially improve our loan/deposit ratio during the year. Prudent credit operations and continual quality improvements in the lending portfolio are the main objectives for us in 2010.”