Guntars Krols

Latvia has potential in developing the banking sector – investors are interested in starting business and purchasing one of the currently working banks in Latvia, notes audit, tax, transactions and consultancies partner of Ernst & Young Guntars Kols.

The interest for Latvia’s banking sector stems mostly from the East, even though some Western players also consider at our market. Potential investors are not so much interested in the domestic market as they are in the banking sector. They see Latvia as a checkpoint to work across the borders, says the expert.

Krols admits that global and European banks are currently experiencing a process of restructuring and change of strategy. Banks’ strategies in regard to the Baltics and Latvia are diametrically opposite.

“Latvia definitely has potential in its banking sector. There are plenty of components that would allow the industry to develop successfully. There can be economic growth in this sector. There is competence – thousands of people that have once worked or are currently employed at banks. They are a resource that can be used for a fairly rapid development of this industry,” – says Krols.

He noted that a relatively strong banking sector and banking services provides an additional export industry for Latvia, with risks of course. It is good though that our neighbouring clients – companies and individuals – praise Latvia as a region, where they gladly use banking services.

When asked whether some other bank would be interested in coming to Latvia’s market, Krols admitted that there is an interest to start a business in Latvia and to purchase some of the currently active banks. This business would not include local residents or local companies. It would most likely be a non-residents’ business, which is very risky and needs to be properly monitored. “Many see this opportunity as potential. The banking sector has many strong players, and banking services here have a known quality standard. There is and will be interest in this business,” – said the Ernst & Young partner.

Krols predicted that there could be some new players in the insurance industry in Latvia in the future.

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