Luminor reported growth in lending to individuals, reduced expenses, and improved loan book quality in 3Q24, while maintaining strong liquidity and capital positions. In October, Moody’s upgraded Luminor’s rating to A2.

Luminor generated a profit after tax of 55.0 million EUR in the quarter as compared to 64.9 million EUR in the same period last year. Profit before tax was virtually unchanged at 67.7 million EUR.

The bank recorded a cost to income ratio of 50.0% and generated an annualised return on equity of 13.1%. The quality of the bank’s loan book improved. Non-performing loans reduced by 10.1 million to 1.9% of gross loans, driven by repayments and cures.

Luminor continued to improve its customer journey and offering which supported an increase in new customer numbers. Luminor launched instant payments in Estonia and streamlined online onboarding process in Lithuania. The third quarter saw increased customer interest in the bank’s flagship Luminor Black Visa card.

In Retail Banking, enhancements made to customer offering led to growth in customer lending. Corporate Banking saw continued demand for investment in the renewable energy sector albeit overall demand for new credit was subdued. Luminor continued to promote financing to SMEs facilitated by the European Investment Bank with one of the aims to support the green transition of the Baltic economies with a targeted campaign, and further deals were completed under the scheme.

Luminor’s liquidity and capital positions remained strong with a Liquidity Coverage ratio of 192.1% at quarter end and Common Equity Tier 1, Tier 1 and Total Capital Ratios of 21.1%, an increase of 1.1%-points. In October, the bank issued its inaugural Tier 2 capital security, a 200 million EUR 11-year subordinated bond and Moody’s upgraded their long-term senior unsecured rating of Luminor to A2.

Wojciech Sass, Luminor Bank Chief Executive, said:

‘While our home markets of Estonia, Latvia, and Lithuania grew modestly in the past quarter, through the considerable efforts of our employees, we grew our lending to individuals, and enhanced the quality of our loan book. Our focus remains on improving our value proposition for our customers, streamlining our IT for the benefit of our customers, and being compliant with the changing regulatory requirements. We will continue to work to become more efficient and grow our lending in line with customer demand.’

Luminor Q3 2024 Report is available here.