Bad loans keep banks in red

  • 2010-06-30
  • From wire reports

RIGA - Latvian commercial banks’ total losses amounted to 207 million lats (295.7 million euros) at the end of May, mostly because of provisions for bad loans, according to preliminary data at the Financial and Capital Market Commission, reports The banking sector’s earnings before interest and taxes were 48.9 million lats.

In the first five months of this year, six Latvian banks and one foreign bank’s branch in Latvia operated with a profit, 4.7 million lats altogether. These banks’ total market share, in terms of assets, is 10.3 percent.
Bank provisions for bad loans increased 2 percent, or 32.3 million lats, to 10.9 percent of the banks’ total loan portfolio. In April, such provisions had increased 2.3 percent, or 35.4 million lats, to 10.6 percent of the banks’ total loan portfolio.
By the end of May, the share of delinquent loans with loan payments up to 90 days overdue decreased by 6.6 percent, however, the share of delinquent loans with loan payments 90 days and more overdue increased 3.8 percent, and their proportions in the banks’ total loan portfolio made up 8.7 percent and 19 percent respectively, compared to 9.4 percent and 18.3 percent in April.

Latvian banks’ assets dropped 0.5 percent, or 108.2 million lats in May, to 21.4 billion lats at the end of May. May was the first month since January 2009 that the total loan portfolio of Latvian banks increased, by 0.2 percent or 27.6 million lats, reaching 15 billion lats at the end of May.

Loan portfolios of 13 Latvian and three foreign banks’ branches in Latvia increased in May - these sixteen banks’ total market share of the Latvian banking sector portfolio is 60 percent. The banking sector’s average liquidity in May was 63.5 percent, whereas the capital adequacy ratio was 14.4 percent (67.3 percent and 14.5 percent respectively in April). Since the beginning of this year, eight banks have increased their share capital, by 148.8 million lats in total.