TALLINN — Danske Bank declared a 118 million krooni (€7,5 million) profit in the first half of 2010 in Estonia, in Lithuania and Latvia the bank deep in the red according to results released this week.

Danske’s Estonian subsidiary Sampo Bank reached to profit in first six months this year, while a year ago the bank had to take 567 million krooni (€36.2 million) loss. The bank’s profit in the second quarter increased 64 million krooni to 91 million krooni (€5.8 million) from the first quarter of this year.

The second quarter’s turnover was 265 million krooni (€16.9 million), slightly better than in the first quarter. Compared to the first half of 2009, the turnover increased by 18 percent, but the operating costs decreased by 9 percent. The bank said that the income has reduced due the decrease of loan portfolio.

Aivar Rehe, CEO of Sampo Estonia said at the press release that the economy in Estonia has continued improving  in the second quarter.

“The positive sign was the export-based rise in economy, which is related to the recovery of foreign demand,” he said.

In Lithuania, Danske Bank ended up with a pre-tax loss of 4 million litas (€1.15 million). Danske Bank achieved strong growth in deposits mainly in the corporate and government sectors but lending remains limited because of the economic climate and high credit risk.

In Latvia, the bank lost 2.97 million lats (€4.2 million). In the first half of 2010, the bank’s total income fell 59 percent from the level in the corresponding period of 2009 to 1.3 million lats.

The result was expected and matches our forecasts. Raivis Kakānis, CEO of Danske Bank in Latvia explained in the report that the 51 percent decline in net interest income was the result of record-low interest rates, and lost interest income owing to an increase in non-performing loans.

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