BlueOrange Bank develops new lines of business in 2017

The Bank’s audited annual report on financial activities in 2017 was published on 20 April 2018. It confirms that the year 2017 was closed with profit of EUR 4.8 million and bank has been successful in its operations.

Last year, the bank underwent significant changes, becoming an international financial platform that offers services to a much broader clientele. The bank adjusted its business model and expanded the market where it offers services. Timed to the introduction of new products and services, in January the bank began to operate under a new brand, BlueOrange, and in autumn it registered with the new trade name AS BlueOrange Bank (previous name – Baltikums Bank).

According to audited data, the year 2017 was closed with profit of EUR 4.8 million. The bank’s income from operating activities during the reporting period constituted EUR 36.9 million. Its equity increased by 2 % year on year, reaching EUR 60 million. Total assets (including assets under management) increased by EUR 18.1 million, reached EUR 692 million by the end of 2017.

The bank’s core financial performance indicators are strong: its liquidity ratio at the end of 2017 equalled 76.61%, its capital adequacy 18.68%, with return on equity (ROE) of 8.09% and return on assets (ROA) of 0.75%.

The volume of BlueOrange Bank lending grew significantly during the year: the total loan portfolio and credit obligations reached EUR 214.4 million at the end of 2017, posting a 26% improvement. Loans worth EUR 84.3 million were issued during the year, with nearly half (EUR 38.3 M) invested in the national economy of Latvia, facilitating the growth of local businesses.

Last year, the bank invested substantial resources and assets in expanding the range of products and services available to entrepreneurs and retail clients in Latvia. The number of BlueOrange Bank clients increased by 61%.

Client portfolio management was very successful, where weighted average yield after fees totalled 18.39% for the 12 months of 2017. The amount of assets under management in client portfolios increased by 38 % year-on-year.

For the convenience of clients, a new Client Support Centre was opened in Old Riga, supplementing the bank’s extensive online communication with clients with in-person service.

Late in 2017, BlueOrange Bank started working with a major fintech company in Germany, attracting significant numbers of retail clients from Germany and Austria. Within the last few months of 2017, this brought a total of EUR 38.5 million in deposits to the bank.

Over 1 million euros were invested in the bank’s technological development projects last year. BlueOrange Bank was among the first few banks in Latvia to release its API in 2017 – an interface with the bank’s systems that attract high-tech businesses as partners. Likewise, the BlueOrange Internet Bank was optimised with expanded functionality, and a large volume of the bank’s internal processes are now automated.

BlueOrange Bank paid a lot of attention to mitigating risks and enhancing security standards: internal controls are being improved, and work is ongoing to accommodate the growing client base and new regulations.

In 2017, the bank launched, and is currently implementing a number of ongoing internal control system enhancement initiatives and activities that will develop its business and ensure effectiveness in detecting suspicious transactions. The bank has expanded relevant staff and maintains continuous training and professional development activities. Crucial compliance initiatives were launched in 2017 and are slated for completion in 2018: in cooperation with US partners, two automated monitoring systems will be implemented for client transaction monitoring and detection of suspicious transaction indicators. The bank’s new business model has manifested in fewer clients from high-risk geographical regions, with substantially higher numbers of domestic and Western European clients. This process will continue in 2018.

Further in 2018, the bank will develop state of the art technological platforms, introduce new high-tech services and modernise existing solutions. In the 1st quarter of 2018, BlueOrange Bank installed the first five ATMs in Latvia that accept contactless cards.

Last year, BlueOrange Bank proved that it can offer innovative, convenient solutions to its clients while adhering to high standards of banking security and service quality.

Events in the first few months of 2018 on the Latvian financial market affirmed the timing and reasoning of the decision to change the business model that bank management had adopted two years ago. This year, considering increased reputational risk throughout the banking sector of Latvia, the bank will continue to focus particular attention on every aspect of security, maintaining its status as a stable, sustainable banking institution for servicing individuals and business clients.