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Friday 17.11.2017 | Name days: Uga, Hugo, Uģis
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Banks' losses top 360.6 million lats in 2010

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU

The banking sector total loss amounted to 360.6 million lats in 2010, which is 53.4% less than in 2009 with the losses of 773.4 million lats, according to Financial and Capital Market Commission published information.

The banking sector profit (before provisioning and tax) formed 143.5 million lats or 55.4% less than a year ago (banking sector interest income of 2010 dropped due to both shrinking loan portfolio and smaller interest rates). Provisions for bad debts (nearly 506 million lats in late December) contributed a great deal to the total losses hitting 360.6 million lats in 2010, which is 53.4% less than in 2009 with the losses of 773.4 million lats. Ten Latvian banks made 8.3 million lats profit in 2010, including two foreign banks branches (the market share in the total banking sector assets – 15.6%).

All Latvian banks performance indicators have remained high, complying with the regulations. The banking sector liquidity ratio grew in December, reaching 67.9% at the end of it (64.4% in late November). 14 Latvian banks increased their equity by 324.4 million lats in total, including fixed capital (by 278.8 million lats), subordinated capital (by 20.7 million lats) and reserve capital (by 24.8 million lats). Bank deposits saw a 5.3% surge in December 2010, reaching 11.1 billion lats at the end of the month, including a 202 million lats or 3.2% increase in the resident deposit stock  and 356 million lats or 8.3% in the non-resident deposit stock. The total number of deposits has surged 1.6 billion lats or 16.3% since the beginning of the year.

The banking sector newly issued loans totalled 191 million lats in December 2010, including 127 million lats for the Latvian national economy development, 14.6 million for households and 49.5 million lats were granted to non-residents. Regarding the second quarter of 2010 the newly issued loans comprised 956.6 million lats. Eight Latvian banks, including three foreign banks branches loan portfolios grew in December (with the total market share in the banking sector loan portfolio – 11.6%). However the number of newly issued loans still falls below the repaid ones and the ones written off by banks. Thus the loan portfolio kept shrinking in December (by 1.1% or 160 million lats), including loan balance for both the resident corporate loans and resident household loans, by 0.5% and 2.3% respectively. Since the beginning of the year the amount of loans with more than 90 days overdue payments keeps shrinking already for the fourth consecutive month.

With the stabilization of loan quality, the total amount of loan loss provisioning has been dropping since August already, resulting in 2% drop in December or 32 million lats, totalling 1.6 billion lats or 11.3% of the total banks credit portfolio (11.4% in late November).


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