Luminor Estonia, Latvia and Lithuania have all delivered solid profitability in the third quarter (Q3), benefiting from positive developments in the Baltic economy. Luminor’s commercial momentum has remained strong.
During the Q3, Luminor continued to focus on transformation processes, acquiring credit rating and entering into a strategic partnership deal with a private equity firm Blackstone.
“The third quarter for Luminor was marked by many significant events and milestones that gained momentum. Blackstone led consortium to acquire 60% majority stake in Luminor through a corporate partnership, first-time deposit rating Baa1 assigned by Moody´s Investor Service, followed by a senior unsecured inaugural bond issuance in the amount of 350 million EUR. The scale of the investment proves that Luminor’s financial profile is strong and that Luminor is an intriguing investment case for both Baltic and international investors. This all comes close to one year after we kicked off, developed a new strategy and set new priorities for the future,” said Erkki Raasuke, Luminor Group CEO.
The reputation of the financial sector in the Baltics has unfortunately been negatively impacted by the recent anti-money laundering findings and accusations.
“It is crucial that we take a clear stance about our responsibilities and future actions, establish full transparency in everything we do and keep a truly high business conduct in focus. It is also our strategic choice that our customer base is around 98% Nordic and Baltic, and we have tightened the measures to strengthen management of compliance risks and support a stronger risk awareness culture,” explained Raasuke.
In Q3, Luminor Estonia continued a solid growth in all business segments and performs in line with its targets and expectations. In Q3, Luminor Estonia reported a net profit of 7.1 million euros. Net interest margin remained stable at 1.8%. Net fees and commission income from both corporate and household clients increased 3% in Q3 2018 compared to Q2 2018.
“In Q3, Luminor Estonia continued a stable growth in all business segments. Our financial position is strong and we have a clear focus on empowering our growing customer base through our products and customer service,” said Gunnar Toomemets, Country Manager of Luminor Estonia.
Luminor Estonia focused on improving the customer experience through transformation processes aiming to become a fully digital financial ecosystem.
“Innovation is happening in Luminor every day. Our drive to keep getting better led to a steady stream of improvements. We have automated and digitized our customer service and a majority of the meetings with our clients and active client communication now goes through remote channels. It is encouraging to see our efforts reflected so positively,” explained Toomemets.
Q3 ended with positive notes for Luminor Estonia, and was marked with Luminor Estonia Pension Funds 10th anniversary and very strong results. By the end of Q3 2018, assets under management had reached 329 million EUR increasing by 3.5% compared to Q2 2018.
Luminor Estonia Q3 interim report is available here.
Luminor corporate communications manager