Coop Pank AS Posts Strong Financial Results for January 2025

Summary of January 2025 Financial Results of Coop Pank

Coop Pank AS began the year 2025 on a strong note with a solid financial performance, continuing to expand steadily even as the economic environment shifted. The bank experienced robust growth in its customer base, deposits, and loan portfolio, which is a good sign for the remainder of the year.

Customer Growth and Engagement

In January 2025, Coop Pank added 1,900 net customers, bringing the total customer base to 209,500 at the end of the month. The active clients, however, decreased by 700 to 98,800. Despite this marginal decline, the bank's customer base has increased by 13% over the past year, indicating sustained interest and trust in its banking services.

Strong Growth in Customer Deposits

The overall customer deposits in the bank increased by 40 million euros, totaling 1.93 billion euros at the end of January. This was driven by deposits from both private and corporate customers:

Corporate customer deposits increased by 24 million euros.

Private customer deposits increased by 3 million euros.

International platform deposits received an inflow of 13 million euros.

Total Deposits Up by 11%

Over the past year, the total deposits in Coop Pank have grown by 11%, reflecting customers' strong trust in the financial sustainability of the bank and in its competitive interest rates.

Growth in Loan Portfolio

January also saw significant growth in the loan portfolio of Coop Pank, which grew by 9 million euros to 1.78 billion euros. The breakdown of the growth in loans is as follows:

Home loans expanded by 8 million euros.

Corporate loans grew by 2 million euros.

Leasing business recorded a slight growth of 0.1 million euros.

Consumer finance had a slight decrease of 0.3 million euros.

The total loan portfolio has increased by 18% over the last year, reflecting robust demand for home and corporate loans amidst economic uncertainty.

Loan Impairment and Financial Performance

The loan impairment cost in January stood at 0.1 million euros, a reasonable amount that indicates a stable credit risk environment.

Compared to January 2024:

Net income decreased by 5%.

Expenses increased by 4%.

Net profit amounted to 2.7 million euros, an 8% decrease from the same period last year.

Despite the slight decrease in net income and profit, Coop Pank remains profitable with a return on equity (ROE) of 15.2% and a cost-income ratio of 49%, an indication of good cost management.

Commentary from Coop Pank's CFO, Paavo Truu

Paavo Truu, Member of the Management Board and CFO of Coop Pank, commented on the bank's performance in January:

"Coop Pank has begun the year well with a profit of 2.7 million euros. This was driven, among other things, by the record business volume growth at the end of last year, which also served to increase revenue in January."

Truu also addressed the underlying economic trends that are affecting the banking sector:

Economic activity has picked up in private and business client segments.

The car leasing market remains sluggish due to uncertainty surrounding new car taxes introduced at the end of 2024.

The recent cut in interest rates by the European Central Bank (0.25 percentage points) is expected to continue, making borrowing cheaper while lowering term deposit interest rates.

Market Outlook for 2025

Looking ahead, Coop Pank expects:

Continued growth in home and business loans as the borrowing cost reduces.

Gradual re-entry into the car leasing sector by mid-2025 as the effect of the new car tax stabilizes.

Continued growth in customers, underpinned by competitive bank products and expanding financial services.

Conclusion

Despite minimal differences in profitability, Coop Pank AS has been strong and seen steady growth throughout January 2025. Underpinned by an expanding customer base, rising deposits, and a high-quality loan portfolio, the bank remains well-placed to navigate the evolving economic climate. As interest rates continue to adjust and market conditions evolve, Coop Pank will be well-placed to capitalize on emerging opportunities while delivering financial stability to customers and stakeholders.