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Introduction & Market Context
Artea bankas AB (VSE:ROE1L) presented its third quarter 2025 financial results on October 30, revealing a 16% quarter-on-quarter increase in net profit amid a stabilizing interest rate environment. The Lithuanian bank continues to operate in a favorable macroeconomic landscape, with Lithuania’s economic growth outpacing many European peers.
According to the presentation, Lithuania’s economy is expected to grow by 3.3% in 2025 and 3.5% in 2026, significantly outperforming the Eurozone average. The country’s credit market remains among the most dynamic in the EU, with Lithuania leading the region with 15.7% annual loan portfolio growth.
As shown in the following chart highlighting key financial metrics, Artea achieved an adjusted net profit of €19.5 million for the quarter, translating to a 13.5% return on equity:
Quarterly Performance Highlights
Artea bankas reported a net profit of €16.5 million for Q3 2025, representing a 16% increase from the previous quarter. On an adjusted basis, net profit reached €19.5 million, up 11% quarter-on-quarter. This performance slightly differs from the earnings call transcript, which mentioned a net profit of €20 million, though both sources confirm the 13.5% return on equity figure.
Total revenue increased by 7% quarter-on-quarter to €54.4 million, driven by a 6% growth in net interest income and a 15% increase in other income. Operating expenses rose by 6% to €34.7 million, resulting in an operating profit of €19.7 million, up 7% from the previous quarter.
The detailed financial performance is illustrated in the following table:
Net interest income, which accounts for approximately 66% of total revenue, increased by 6% quarter-on-quarter to €35.9 million. This growth came despite the challenging interest rate environment, with the bank noting that its net interest margin has stabilized after previous pressure.
As shown in the following chart, Artea has been actively managing its cost of funding to offset the impact of lower asset yields:
Strategic Initiatives
Artea bankas highlighted several strategic initiatives aimed at enhancing brand awareness, optimizing costs, and improving shareholder returns. A notable development is the bank’s new partnership with Kauno Žalgiris, Lithuania’s most popular basketball team, which aims to increase brand visibility and attract younger, higher-value retail customers.
The bank has also launched a comprehensive cost-cutting program for 2025-2026, focusing on management board changes, operational structure optimization, and review of non-core initiatives. These measures are designed to improve cost efficiency through structural and strategic changes.
The following slide outlines the key components of the cost-cutting initiatives:
Additionally, Artea has resumed share buybacks following ECB approval on September 23, 2025, demonstrating its commitment to enhancing shareholder value. The bank maintains a minimum dividend payout ratio of 50% and targets a long-term ROE of over 17% and total shareholder return exceeding 20%.
The bank’s approach to shareholder returns is illustrated in this chart showing the steady increase in book value per share (BVPS):
Detailed Financial Analysis
Artea’s loan book grew by 8% year-on-year to €3,719 million, with the main growth areas being corporate and mortgage segments. Corporate loans expanded by 7% year-on-year, while private client loans grew by 13% year-on-year.
The bank’s deposit base increased by 15% year-on-year to €3,756 million, providing stable funding for loan growth. The total cost of funding continued to decline, primarily driven by lower deposit costs.
Asset quality remained strong, with a cost of risk of 0.15% and declining impairment losses. The bank attributed this to the strong macroeconomic environment and disciplined underwriting practices.
As shown in the following slide, net fee and commission income increased by 8% year-on-year, with strong performance from the asset management and renovation segments:
The bank’s capital position remains robust, with a CET1 ratio of 17.0%, well above regulatory requirements. This strong capital base supports the bank’s growth ambitions while allowing for generous shareholder returns.
Forward-Looking Statements
Looking ahead, Artea bankas identified several positive factors that could support future growth. These include lower interest rates, a cyclical economic upturn, record inflows of EU funds, and upcoming reforms to Lithuania’s pension system and responsible lending regulations.
The bank also highlighted Lithuania’s planned record defense spending for 2026, which could create additional business opportunities. The country’s shift toward high value-added services, particularly in the ICT sector (which grew 42.1% in real terms from 2022 H1 to 2025 H1), aligns with Artea’s focus on corporate clients in strategic growth sectors.
In its concluding remarks, Artea emphasized its commitment to maintaining stable operating expenses, optimizing costs, and delivering strong returns to shareholders:
Artea bankas shares (VSE:ROE1L) closed at €0.81 on October 29, 2025, unchanged from the previous day’s close. The stock has traded between €0.79 and €1.01 over the past 52 weeks, according to market data.
Full presentation:
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