RIGA - Swedbank, formerly Hansabank announced that it may have to cut staff, amid growing concerns over the level of it's exposure to U.S. toxic debt.
However bank executives still defended the company's performance.
Chairman of the board, Swedbank Latvia, Maris Avotins announced that the bank will consider letting go of 10 percent of their employees next year.
"To maintain efficiency and to make profit in hard times, we will probably revise the number of employees we need…..we want to be the best employer in a market situation that is not growing," Avotins said.
Letting go of 10 percent of the overall staff would leave 200 employees without work.
Chairman of the board of Swedbank Latvia, Maris Avotins maintained that the performance results show that the company's health is good.
"One thing is our own capital and how much the owners have contributed as well as how much the bank itself has earned. If our own capital is big enough, we can sail through any turbulent waters," Avotins told Diena daily newspaper saying that the capital sufficiency figure has risen from 9-10 percent in 2006.
Avotins went on to say that the bank had no problems with liquidity with access to capital of 600 million lats (854 million euros), twice as much as its two closest rivals combined.
"The amount of our liquid assets is nearly as big as demand deposits. From this point of view, the bank's liquidity is one of the best we have ever had," Avotins said. Kristine Jakubovska, press secretary for Latvia's Swedbank, told The Baltic Times that rumors about a crisis were groundless.
"Swedbank is the most profitable enterprise in Latvia. This is shown by statistics and the numbers don't lie. We're continuing to grow," she said.
Avotins said one of the most important things for any bank is profitability in the long run, and Latvia's Swedbank boasted one of the highest revenue to expenditure ratios.
One of the bank's basic objectives, he said, was to remain just as efficient during the current phase of economic slowdown as during a phase of fast economic growth.
"It is important to follow the size of the capital which is like a buffer absorbing unexpected things, the amount of profit that provides security in the long-term, and liquidity," Avotins said.
According to Avotins, bad loans which are more than 90 days overdue make 0.91 percent of the total loans issued by Latvia's Swedbank, much lower than the industry average of 2.6 percent.
"If this figure grows then even in the worst case they can reach 3-4 percent, but no more than that," Avotins said.
Latvia's Swedbank, which belongs to Sweden's Swedbank, is the largest Latvian bank by assets, loan portfolio and a number of other indicators.
