Martins Bicevskis

Earnings of the banking sector were 78.5 million LVL (after taxes) in the first half year of 2012. Meanwhile, the State budget received 15.2 million LVL from taxes collected from banks. Interest rate income and commission money formed most of the banking sector’s profits.

Latvian banks have worked successfully, even though the situation in Europe and the world makes us plan ahead for possible risks in the future. However, in an overall assessment, Latvia’s financial sector is relatively safe, compared to Southern European banks. Therefore, since Scandinavian and Latvian banks have little or no investments in problematic country bonds or other investment types in banks, they are some of the best capitalized banks in Europe along with Swiss and English banks.

«The first half of 2012 shows that we learned our lesson during the crisis. Bank credit policy has been reviewed and a credit portfolio of much better quality is now being offered. Banks have enough financial resources and they are ready to give credits for both profitable business projects and household needs,»- says President of Association of Latvian Banks Martins Bicevskis.

«Generally speaking, Latvian banks are sufficiently stable, especially within local market, given the general recovery of state economy and increasing growth rates of different industries. External risks create concerns about the future,»- says the association’s President.

This year’s issued bank credits formed 60.4% of all banking sector activities. The next largest asset position belongs to claims against credit institutions (17.7%) and securities (12.1%).

The total volume of bank assets was 19.8 million LVL in June 2012, which is a 4.3% decrease, compared with last year’s period.

Deposits form the largest proportion in bank passive structure – 11.6 billion LVL or 58.6% from all passives. Bank capital and reserves are on the third largest place among passives – 1.8 billion LVL or 9.1% from the total number of assets. Bank capital and reserves increased by 226 million LVL or 14.3% in this period of 2012.

Ref: 102.109.109.3094