Latvian banks have the second highest profitability among EU member states, according to the latest European Commission survey about competition in the EU banking sector.
The survey shows that the profitability ratio of Latvian banks had been well above 40 percent in 2004, placing them second only to Irish banks, which boasted a ratio slightly above 50 percent.
An industry official told the Bizness & Baltija daily that loan margins in Latvia were higher than in most other European countries.
The profitability of Lithuanian banks was also quite high 's around 35 percent, while the survey did not give any figures for Estonia due to confidentiality reasons.
Cypriot credit institutions had the lowest profitability ratio (4 percent), while the average bank profitability ratio in the EU was slightly below 30 percent.
The survey concluded that the profitability of banks in the new EU member states had increased steeply since 2002. For example, back in 2002 the profitability of Latvian and Lithuanian banks was below 30 percent and 20 percent respectively.