Banking results improve

2011-01-27
From wire reports

RIGA - The amount of new loans issued by Latvian commercial banks in the second half of 2010 reached 956.6 million lats (1.3 billion euros), the Financial and Capital Market Commission’s representative Anna Dravniece said, reports Nozare.lv. In December, the amount of new bank loans totaled 191 million lats, of which 127 million lats was provided for “development of the national economy,” 14.6 million lats to households, and the amount of loans to non-residents reached 49.5 million lats.
Although the loan portfolios of eight Latvian banks, including three foreign banks’ branches, increased in December, the amount of new loans in the banking sector remains smaller than the amount of loans repaid by bank clients as well as the amount of loans written off, said Dravniece.

The total market share of the banks whose loan portfolios increased in December is 11.6 percent of the total banks’ loan portfolio in Latvia.
For the full year 2010, the Latvian banking sector’s total losses amounted to 360.6 million lats, a drop of 53.4 percent from losses in 2009, when the banking sector lost 773.4 million lats.

Ten Latvian banks, including two foreign banks’ branches in Latvia, operated with a profit in 2010, earning 8.3 million lats total. The market share of the profitable banks is 15.6 percent of total banking sector assets.
Provisions for non-performing loans stood at almost 506 million lats at the end of 2009, which was the main reason for the banking sector’s total losses in Latvia in 2010. The banking sector’s profit before provisions and taxes was 143.5 million lats last year - 55.4 percent less than in 2009.

All Latvian bank operating indexes last December were in line with requirements; the banking sector’s liquidity increased in December to 67.9 percent, from 64.4 percent in November. The capital adequacy ratio also remained high - 14.9 percent at the end of December (15.2 percent at the end of November).

Fourteen Latvian banks increased their capital during 2010, by 324.4 million lats altogether.