Deposits in Latvian banks decrease 11% in first quarter

The Association of Latvian Commercial Banks (ALCB) has produced a summary of the financial trends in the banking sector during the first quarter of 2018 - a period of considerable developments caused by the collapse of ABLV bank and a subsequent scramble to clean up the non-resident banks. As a result, there are some eye-catching statistics among the data.

Total deposits in the Latvian banking sector were EUR 18.1 billion as of March 31, 2018. The portfolio has decreased by 11% (EUR 2.2 billion) in the 1st quarter of 2018.

"The decrease was mainly observed in the corporates segment, which is mainly due to the ongoing changes in the business model of a number of banks embarked upon a number of years ago and accelerated further in recent months," the ALCB said, referring to the move away from large-scale non-resident deposits.

Rietumu bank saw its deposits decrease by a staggering 36% in the first quarter of the year.

At the same time the value of assets held by the banks was down by EUR 2.7 billion or -9% in the 1st quarter 2018 and now stand at EUR 25.7 billion.

The biggest drop in assets was recorded at Rietumu bank, which has seen its assets drop by 27% in 3 months.

Total capital of the Latvian banking sector reached EUR 3.1 billion as of 31st March 2018. Total capital decreased by EUR -0.1 billion or -3% in the 1st quarter 2018. The biggest loser was Norvik bank which saw a capital decrease of more than 30% percent in the first quarter.

New loan issuance increased by 4% compared to the 1st quarter of 2017, reaching 546 million euros, though that amount also includes refinancing.

"Compared with previous years, the index’s results in 2017 show stable growth, in particular reflecting the growing desire of the part of banks to lend (+13%), and the ability (+7%) and desire (+8%) of borrowers to take out loans. However, banks’ ability to lend has fallen slightly (-5%), because of structural changes within the sector," the ALCB said. 

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Total profits of commercial banks in Latvia in the 1st quarter of 2018 was EUR 91 million, which is EUR 14 million less (-13%) compared to the results of the 1st quarter of 2017.

The three most profitable banks in the 1st quarter 2018 were Swedbank (EUR 32 million), Rietumu bank (EUR 16 million) and SEB bank (EUR 12 million). 

The biggest losses were racked up by Norvik bank (EUR -0.9 million), Baltic International Bank (EUR -0.7 million) and PrivatBank (EUR -0.6 million).

You can read a detailed breakdown of the banks' performance (with some very telling graphs) at the ALCB website or in the attachment to this story.

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