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Friday 17.11.2017 | Name days: Uga, Hugo, Uģis
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Banks earn 140.5 million LVL this year

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Latvia’s banking sector has concluded this year’s ten month period with a profit of 140.5 million LVL. 14 Latvian banks and four foreign bank branches worked with profit (the total market share of bank assets – 92.6%).

Banking sector’s October income before savings and taxes reached 245 million LVL, which is 27% more than there was in the same period of 2011. Compared to the same period of last year, banks’ most significant sources of income also continued to grow: clean interest income – by 4.6% and clean commission money – by 16.6%, according to operative information of the Finance and Capital market Commission.

Meanwhile, one of the most important sources of expenses – expenses on savings of risky loans, decreased by 27.3%.

In October, banking sector’s general credit portfolio’s size increased by a minimum (by 0.04%). The amount of loans issued to resident corporate clients increased by 0.2% during the month, growing in the fifth consecutive month, which was mostly affected by the allocation of new funding to energy industry. Meanwhile, the amount of loans issued to resident households continued to decrease (by 0.6%). The amount of loans issued to non-residents increased by 1.2% in October.

The banking sector issued new credits worth a total of 211.8 million LVL in October, including 78.1 million LVL – for the development of Latvian companies, 37.9 million LVL – for Latvian financial institutions, 16.7 million LVL – resident households and 77.7 million LVL – for non-residents. During the month, there were more loans issued for energy industry (34.9 million LVL), followed by service provision industry (8 million LVL), trading (7.8 million LVL), real estate transactions (6.4 million LVL) and agriculture (6.3 million LVL).

The proportion of loans delayed for longer than 90 days reached 11.9% in the end of October (12.0% in September). The proportion of such loans in the portfolio of resident households reached 15.9%, 10.1% in the resident corporate client credit portfolio. With the reduction of loans with delays to 30 days, the general proportion of delayed loans in the banking sector’s dropped from 19.8% to 18.7% within the month. Banks’ formed surplus for risky loans reached 1.01 billion LVL in the end of October, or 8.5% of the banks total credit portfolio (8.6% in the end of September).

Surplus of banks’ attracted deposits increased by 2.5% or 300 million LVL in October. The increase was significant for both resident and non-resident deposit surplus – 163 million LVL and 136 million LVL respectfully.

Banking sector’s profitability and capital sufficiency index remained on a high level. In October, banking sector profitability index was 59.7% (59.4% in September) and capital sufficiency index was 17.7% (minimum capital requirement – 8%).

Ref: 102.109.109.4970


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