Profit of the first half of 2010 before loan impairment charges of Danske Bank A/S Lithuania branch is 28m LTL

These are the financial results of the banking activities of the Danske Bank Group in Lithuania (Danske Bankas and Danske Lizingas UAB). Danske Bankas and Danske Lizingas UAB have been part of the Danske Bank Group since February 2007.

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.”