Data on the Latvian bank performance in October 2009
The Financial and Capital Market Commission (FCMC) has summarized data on the performance of the Latvian banks in October 2009.
Performance indicators of all Latvian banks complied with the regulatory requirements – the average liquidity ratio was at end-October was sound, namely, 57.4% (compared to 54.4% at end-September) (regulatory minimum – 30%). In October, while banks continued raising their capital, the capital adequacy ratio still remained high in the banking sector – 13.6% at end-October (regulatory minimum 8%). In ten months of 2009, the banks have strengthened capital base at minimum by 955 million lats – since the beginning of this year already 10 Latvian banks have increased their capital, including share capital by 478 million lats, subordinated capital by 221 million lats and reserve capital by 21 million lats.
In October, total deposits attracted by the banking sector grew by 0.5% or 48 million lats (while in September – contracted by 1% or 91 million lats), including the volume of non-resident deposits increased by 2.8% or 93 million lats, whereas the amount of resident deposits shrank by 0.8% or 46 million lats.
The Latvian banking sector assets have not changed significantly since end-September, i.e., increasing by 0.01% or 2 million lats, they totalled 21 581 million lats at end-October (compared to a decrease by 0.3% or 56 million lats in September). Though total bank loan portfolio in October contracted by 0.6% or 90 million lats, loan balance grew in four banks and three branches of foreign banks (total market share in banking sector loan portfolio constituted 8.1%).
By end of October the share of loans without past due payments constituted 73.5% of the total banking loans (at end-September – 74.8%). In October, the volume of loans more than 90 days past due rose by 3.2%, and their share in the banking loan portfolio amounted to 15% at end-October (at end-September – 14.5%). Loan loss provisions in the banking sector in October grew by 6.4%, or 82 million lats, totalling 1.4 billion lats. The volume of total loan loss provisions at end-October made up 8.6% of total bank loan portfolio (in September – 8.1%).
Ten Latvian banks (with market share of 15%) reported profit in the first ten months of 2009 earning a total of 18 million lats, however, the banking sector overall ended the period with a 643.2 million lats loss, mainly due to expenses on loan loss provisioning. In the above period, profit of the bank sector before provisions and tax accounted for 286 million lats (by 15.9% down from the respective period last year).
Head of Chairwoman’s Office
Financial and Capital Market Commission
Phone: (+371) 6777 4820