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Monday 26.08.2019 | Name days: Tālija, Natālija, Broņislava, Broņislavs

Mancinskis: the amount of problematic credits stabilizes

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According to the Chief Executive of Swedbank Maris Mancinskis (Māris Mančinskis), together with increasing solvency, which is associated with the overall improvement of the economic situation, the amount of problematic credits is also stabilizing.

Mancinskis pointed out to the newspaper Telegraf that the borrowers have been previously divided in two groups – those who will never be able to repay loans, and those who will somehow manage to pay back the money.

In long-term perspective, no bank can operate if the level of losses, related to credits, is greater than 1% of the total sum of credits. During economic takeoff in 2006 – 2007, the credit losses were less than 1%, while in 2009 they exceeded 10%. The current task is to get this level below one percent, or, most preferably, to 0. 5% told Mancinskis.

«The situation is changing, if in the last year we regarded crediting more conservatively, then, at the moment, we are the ones that go to clients and offer the funding. These are, of course, perspective enterprises that mainly focus on export, and are stabile » informs Mancinskis.

According to Mancinskis forecasts, developments in Latvian economy after V and W type of scenario is unlikely in both cases, Latvia will rather experience long-term economic growth rate of 3.5 – 4% per year. The economic upturn will begin next year, yet in this year, there will still be a small downturn.

At the present moment, with the demand returning to its previous high level, it is possible to talk about the stabilisation of the European economy. The future development of Latvia’s economy alongside the increase in European demand is problematic, because, in order to obtain it, Latvia needs investment influx and rise in internal demand.

«The bad news is that the internal demand is not growing. The good news – the optimism of Latvia’s inhabitants rises, which should also lead to increase in demand. The reduction of unemployment is partly the reason of this optimism, but it is possible to concede that various economic changes have resulted in creation of hopeless unemployed strata – these are the people who will be unemployed for years, » stresses Mancinskis, adding that some of them are young people who lack the appropriate qualifications, as well as, people of preretirement age. It will be also difficult for those who work in humanitarian or creative field. As the economy grows, we may encounter a dilemma – whether to provide training for the inhabitants of Latvia or to import labour from abroad.


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  1. Latisha says:

    I’m out of leuage here. Too much brain power on display!

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