Riga, 27.07.2009
Press Release
On Latvian banks’ problem loans
Information on problem loans (restructured loans, loans with modified principal amount or interest repayment terms and loans in work-out process) collected by the Financial and Capital Market Commission (FCMC) shows that, when banks focus on clients in financial difficulty, the amount of such loans soared up by 36.6% in 2Q 2009 (incl. loans granted to legal persons by 35.1% and to private persons – by 39.4%) and amounted to 3.1 billion lats at end June, or 19.7% of total loan portfolio (compared to 14.1% at end March), incl. restructured loans, 69%, and loans in work-out process, 31%.
In 2Q 2009 total number of problem loans grew by 10.4 thousand and at end of June amounted to 49.2 thousand (incl. loans to legal persons – 5.6 thousand, and to natural persons – 43.6 thousand), or 3.7% of total loans (compared to 2.9% at end March), incl. private persons, 3.4%, and legal persons, 8.7%. The greater part of total problem loans (63.4%) were in a work-out process.
Of total problem loans, at end of June 66% (or 2.1 billion lats) were loans granted to legal persons, while 89% were loans to natural persons.
An average amount of a problem loan granted to legal persons at end of June was 369.4 thousand lats, but to natural persons, 24.6 thousand lats (compared to 376.4 thousand lats and 22.2 thousand lats, respectively, at end March).
The loans secured with a mortgage constituted the major category of problem loans (83.6%) at end June 2009 (compared to 83% at end March).
Agnese Joela
Public Relations Specialist
Chairwoman’s Office
Financial and Capital Market Commission
Phone: (+371) 6777 4808
Email: Agnese.Joela@fktk.lv