Decrease in overdue loans continues in July

30.08.2013
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Press Release
28.08.2013

Decrease in overdue loans continues in July

In July, the amount of loans with more than 90 days overdue payments continued diminishing according to the Financial and Capital Market Commission (FCMC) data on banking performance and their share in the total banking loan portfolio was 10.2% at the end of month, where the resident household loan portfolio made up 14.1%, resident corporate loan portfolio was 8.5%, but non-resident loan portfolio constituted 6.3%. Also, the total share of the past due loans in the banking sector loan portfolio had shrunk and was 17.5% at the end of July (compared to 18.5% at the end of June).

The banking sector overall in the first seven months of 2013 posted a profit of  92.9 million lats, i.e. up by 3.3% from the respective period last year (90 million lats). By the end of July, 15 Latvian banks and five foreign bank branches reported profits (with banking sector market share of 93.6%).

The banking sector liquidity and capitalization ratios retained high levels. At the end of July, the liquidity ratio of the banking sector was 65.7% (compared to 64.9% at the end of June)1, whereas capital adequacy ratio was 18.6%2, but the tier 1 capital ratio3 – 16.6% (18.6% and 16.7%, respectively, at the end of June).

In July, the banking sector deposit stock grew by 1.1%, or 142 million lats, where non-resident deposit stock – by 2.7%, or 170.1 million lats, whereas the resident deposit stock diminished by 0.4% or 28.1 million lats (mostly deposits by government and central administrative authorities shrank while deposits by non-financial institutions increased).

Total banking sector loan portfolio had not changed significantly in July, growing by 0.01% or 1.1 million lats over a month. Resident loan balance contracted by 0.3% (including loans to households – by 0.6%, to financial institutions – by 1.6%, while corporate loan portfolio remained unchanged), but non-resident loan balance increased by 2.4% over a month.

In July, 191.4 million lats were granted in new loans in the banking sector, where
36.0 million lats – to the Latvian corporate customers, 39.1 million lats – to the Latvian financial institutions, 18.9 million lats – to resident households, 95.8 million lats – to non-resident customers.

Summary of balance sheet statements of Latvian banks broken down by months is available on the Financial and Capital Market Commission’s website at www.fktk.lv Statistics/Credit Institutions/Monthly Reports/.

Minimum liquidity requirement – 30%.
2  Minimum capital requirement – 8%.
3  Only the highest quality capital elements are included in the tier 1 own funds: paid-up share capital and reserves, as well as retained earnings of previous year.

Further information:
Marija Makareviča
Public Relations Specialist
Communications Division
Financial and Capital Market Commission
tel.:+371 67774808; email: marija.makarevica@fktk.lv

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