The Council of Latvijas Banka has approved Latvijas Banka's financial statements for 2021 which state that Latvijas Banka's profit earned in 2021 was 20.9 million euro.
Pursuant to the Law on Latvijas Banka, Latvijas Banka's annual financial statements for 2021were audited by independent external auditors recommended by the Governing Council of the European Central Bank and approved by the Council of the European Union. Latvijas Banka has received an unqualified auditors' opinion on its financial statements for 2021 from the auditing company SIA ERNST & YOUNG BALTIC.
Pursuant to the Law on Latvijas Banka, 70% or 14.6 million euro of Latvijas Banka's profit for 2021 will be appropriated to the central government budget; the rest of the profit will be transferred to the reserve capital of Latvijas Banka.
Over the last five years, Latvijas Banka's aggregate profit has reached 113.2 million euro, with 78 million euro appropriated to the central government revenue.
Latvijas Banka experienced numerous significant developments in 2021. A new and modern Law on Latvijas Banka was drawn up and adopted. It stipulates how the central bank and the current financial market supervisor – the Financial and Capital Market Commission (FCMC) – will operate as a single institution from 1 January 2023. The preliminary steps towards the merger of Latvijas Banka and the FCMC were already taken in 2021 when the central bank's management model was also substantially changed through a transition to a single-tier top level management and dissolving the central bank's Board.
Latvijas Banka carried out significant work in its business areas, e.g. it continued the development of the instant payment infrastructure via the introduction of modern and innovative technological solutions and attracting new financial markets to the existing ones in the private sector as well as public players (the Treasury) at the beginning of 2022.
Throughout the year, the volume and value of instant payments processed via the instant payment service increased 1.6 and 2.5 times respectively (the volume and value of the processed instant payments were 18.4 million and 6.3 billion euro respectively), with up to 100 thousand instant payments processed on certain days. In late 2021, the number of registered instant links stood at 609 000 (almost twice as many as a year ago).
As regards cash, an important historical agreement on continued access to cash within the ATM network was reached with the financial sector, thus contributing to public security. Latvijas Banka will also continue to pay close attention to this issue, ensuring freedom of choice for the public when making payments. The introduction of a new type of money – the digital euro – will facilitate the above freedom of choice. Active work is underway on this project that also involves representatives of the Latvian financial technology sector.
The Sustainability Strategy of Latvijas Banka has been developed. The management system of the implementation of the bank's common strategy was improved, capacity building for data processing continued through extensive staff training on modern data processing tools as well as by launching several data processing automation pilot projects.
The attached infographics reflect several significant activities carried out by Latvijas Banka in 2021.
In late February 2022, Russia's attack on Ukraine shook the region and the global financial world. Latvijas Banka, in cooperation with the Latvian financial sector, has implemented measures to enhance security and resilience to risks of both the payment systems maintained by Latvijas Banka and the infrastructure for cash payments.
The year 2022 will be very intense and diverse for Latvijas Banka in anticipation of its centenary. This involves addressing monetary policy issues, the implementation of the measures aimed at the improvement of payment systems, drawing up a new long-term development strategy of Latvijas Banka, while continuing active preparations for a successful merger with the FCMC.
"Our objective is to ensure the merger of both institutions in such a way that these significant changes get introduced smoothly and seamlessly on 1 January 2023. We will also continue to work vigorously in the traditional fields of activity by increasingly introducing innovative payment opportunities and instant payments in daily lives of businesses and households, ensuring access to cash across the entire territory of Latvia, developing economic research, including also a wider use of the new type of statistical data – data on card-based payments – in the analysis of economic developments, thus helping those implementing the economic policy take better informed decisions," stresses Mārtiņš Kazāks, Governor of Latvijas Banka.