RIGA - The number of loans issued to individuals has swelled by 55.5 percent during the first nine months of 2004, whereas individual deposits have grown by just 20.5 percent, reported the Finance and Capital Market Commission, Latvia's market supervision authority.
The volume of loans increased by 420.60 million lats (620.36 million euros) during this period to 1.17 billion lats. Out of Latvia's total bank loans, individual loans rose from 25.3 percent at the end of 2003 to 29.3 percent by the end of September.
Individual-made deposits reached 1.32 billion lats before Oct. 1, up by 225.96 million lats over nine months.
In all, Latvia's banks made loans in the amount of 4.02 billion lats, an increase of 1.02 billion lats or 34.1 percent from the end of 2003. Deposits reached 4.81 billion lats, up by 29.2 percent or 1.08 billion lats year-on-year.
The Bank of Latvia has voiced concerns over the rapid growth in lending due to macroeconomic risks. As a result, the central bank has raised the refinancing rate, increased the norm of mandatory provisions and has called on the government to pursue a tighter fiscal policy.
At the end of September Latvia had 23 banks.
