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Coop Pank continued to grow its loan and deposit portfolio

Estonian domestic bank Coop Pank continued to grow its loan and deposit portfolio in the third quarter, according to the bank's third quarter interim report. Margus Rink, Chairman of the Management Board, said that this confirms that Coop Pank will fulfill the promises given to investors.

In Q3 2020, the net loan portfolio of Coop Pank grew by EUR 40 million (+7%), reaching EUR 599 million. The home loans portfolio showed the fastest growth by increasing the volume by EUR 19 million (+9%). The business loans portfolio increased by EUR 14 million (+7%), leasing portfolio EUR 6 million (+7%) and the consumer finance portfolio EUR 1 million (+2%). Compared to Q3 2019, the total loan portfolio of Coop Pank has grown by EUR 181 million, i.e. 43%.

In Q3 2020, the volume of deposits in Coop Pank increased by EUR 73 million (+12%), reaching the total of EUR 688 million. The volume of bank’s demand deposits grew by EUR 34 million (+17%), of which EUR 26 million came from bank’s business clients and EUR 8 million from private individuals. Term deposits grew by EUR 39 million: EUR 17 million came from domestic companies, EUR 4 million came from private clients and EUR 18 million came via the international deposit-taking platform Raisin.

By the end of Q3 2020 we have reached 80,000 clients, number of clients have increased by 5,400, i.e. 7% over the quarter. The number of private clients with current account in the bank increased by 4,800 and the number of business clients by 600 over the quarter. The client base of Coop Pank increased 42%, i.e. by 24,000 clients, YoY.

In Q3 2020, Coop Pank’s net income was EUR 8 million, having grown 7% QoQ and 30% YoY. Operating expenses reached EUR 4.7 million, having increased by 9% QoQ and by 17% YoY. The bank's operating profit was EUR 3.3 million, growing by 5% QoQ and 56% YoY.

In Q3 2020, bank’s net profit was EUR 2 million, having grown 48% QoQ and 32% YoY.
In Q3 2020, the bank's cost / income ratio was 59% and ROE was 8.6%. As of 30 September, 2020, Coop Pank has 12,486 shareholders.

Margus Rink, Chairman of the Management Board of Coop Pank, noted that the results of the third quarter confirm that Coop's offer based on the integration of retail and banking is different in the market, creates value for consumers and helps the bank to grow its client base. “The growth of client base in both the retail and business segments has led to a rapid growth of domestic deposits,” said Rink and continued: “During the quarter, Coop Pank's deposits increased by 73 million euros, of which three quarters or 55 million euros were local deposits.”

Rink said, that the offer of domestic Coop Pank has brought more and more domestic companies to us to deposit their financial resources. “The volume of corporate deposits in the bank has almost doubled in a year. The share of the bank's demand deposits is also growing, which was 34% at the end of the third quarter, rising by 7% year-on-year. The increase in the share of domestic demand deposits enables to reduce the cost of financing, which decreased to 0.9%.”

Although restrictions on economic activity to prevent the spread of the coronavirus have eased, businesses and private individuals are still uncertain about the future. Businesses are cautious about making new investments, and individuals postpone purchasing decisions for larger durable goods. Nevertheless, Coop Pank has been able to continue to grow its loan portfolio and revenues. In the first 9 months of 2020, Coop Pank's loan portfolio grew by almost 181 million euros.

Most important highlight for Coop Pank in the third quarter was that at the end of August, the international rating agency Moody's gave us a stable investment grade rating of Baa2. The investment grade rating now also gives the Estonian state and local governments the opportunity to become a customer of Coop Pank and keep their financial resources in a domestic financial institution, where we pay the best interest on the market.

Coop Pank's reports can be found on Coop Pank's website, and a webinar presenting the third quarter's financial results can be viewed on the Nasdaq Baltic YouTube channel (the seminar was held in Estonian).