Luminor finished 2019 in a strong position to support its customers and prepare for future growth
Luminor Bank AS today published its 2019 Annual Report. The bank ended 2019 with a significantly improved funding position. Luminor is ready to support customers in the current extraordinary times and to foster future growth.
At the close of 2019, Luminor’s loan-to-deposit ratio stood at 99.9 %, down from 126.5% in 2018. The deposit portfolio increased by 12.9%. Our focused efforts towards asset quality resulted in a 37% reduction in the non-performing loan portfolio over the year. Pension assets under management increased by 20%. In light of significant investments and one-off costs related to the group transformation, combined with a reduction in net loans following efforts to close the funding gap, and the review of lending portfolios, net profit for 2019 was EUR 54 million.
One of the highlights of 2019 was the completion of the acquisition of a majority stake in the bank by a consortium led by funds managed by Blackstone. Nordea and DNB each retain a 20% equity stake in Luminor and continue to support the bank with long-term funding, expertise and representation in the Supervisory Council.
Throughout 2019, Luminor continued to make significant progress in reaching a fully independent funding structure, having further expanded the bank’s investor base with the issue of the second public senior unsecured bond for the amount of 300 million euros. Luminor also received a license from the European Central Bank at the end of 2019 to issue covered bonds. On March 4 this year, Luminor issued the first covered bond from the Baltic region, raising a total of EUR 500 million.
We continue to make good progress in building out independent payment infrastructure and information systems. We have completed the carve-out of SEPA payment flows and are making significant progress in establishing an independent correspondent banking network.
Luminor remains steadfastly committed to the prevention of money laundering and terrorist financing. Fighting financial crime is of the utmost importance, and the priority is to continuously improve our proficiency in monitoring and detecting cases of attempted money laundering or suspicious activity.
Luminor Bank CEO, Erkki Raasuke, said that having ended 2019 with a strong financial standing, Luminor fully intends to utilise that position to support the bank’s customers through the current challenges faced due to the spread of COVID-19. “Luminor is an important part of the Baltic economy and we will continue to offer banking services to our current and any potential customers in these extraordinary times. The business is stronger and more nimble following our transformation programme, and we are well positioned for growth and are able to adapt quickly to the changing circumstances in order to serve our colleagues and customers.”
Luminor is proactively monitoring the developments of COVID-19, and first and foremost, our priority is the health and well-being of all our colleagues and customers.
Luminor is the third-largest provider of financial services in the Baltics, with 940,000 clients, 2,500 employees, and market shares of 16.6% in deposits and 18.7% in lending as of the end of the year of 2019.
Total shareholders’ equity amounts to EUR 1.6 billion, and Luminor is capitalised with a CET1 ratio of 19.7 %.