The quarterly performance of Latvian cooperative credit unions for Q4 2010

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Riga, 11.02.2011

Press Release

On the quarterly performance of Latvian cooperative credit unions for Q4 2010

Financial and Capital Market Commission (the Commission) presents information on the performance of the Latvian cooperative credit unions for the fourth quarter of 2010.

In Q4 2010, cooperative credit unions succeeded in maintaining a high capital adequacy ratio, namely, 19.9% at end-December (compared with 21% at end-Q3 2010) (minimum capital adequacy requirement is 10%).

In 2010, credit unions earned a total of 146 thousand lats, i.e. by 154.4% more than in the previous year with profit of 57 thousand lats. In 2010, a half of all credit unions, 17, reported profit, earning a total of 163.3 thousand lats, while losses of rest 17 credit unions in total amounted to 17.6 thousand lats.

In Q4 2010, income from interest on loans issued to credit union members (71.5%) was the main source of credit union income, while major expenditure items for credit unions were made up by administrative expenses, expenses on provisions for doubtful debts as well as interest expenses on deposits, at the end of December constituting 40.3%, 27.9% and 22.4% of total expenditures, respectively.

In 2010, upon an increase in credit unions profit, also their profitability ratios grew and at end-December return on equity (ROE) was 10.8%, while return on assets (ROA) – 2.2% (compared to 2.7% and 0.6% at end-2009, respectively).

The core business of credit unions is lending to their members. The amount of credit union member loan balance increased since the beginning of 2010 by 120 thousand lats or 1.4% and at end-December totalled 8.6 million lats (as compared with 2009 when loan balance rose by 141 thousand lats, or 1.7%). At end-2010, 66.6% of the credit union loan portfolio was assessed as standard loans, 27.8% – as close watch loans and 5.8% – as total sum of substandard, doubtful and lost loans. Special loan loss provisions at the end of December were 5.8% of total credit union loan portfolio.

The main source of funds attracted by credit unions constituted member deposits and their stock grew by 1.5 million lats or 23.7% since the beginning of 2010 and at end-December reached almost 8 million lats (as compared with 2009, when the amount of deposits rose by 575 thousand lats, or 9.8%).

Please find the summary of credit unions’ performance in Q4 2010 on the Commission’s website at:; Statistics/Credit Unions/.

Anna Dravniece
Head of Office
Financial and Capital Market Commission
Phone: +371 6777 4800, email:

Prepared by:
Agnese Joela
Public Relations Specialist
Financial and Capital Market Commission’s Office
Phone: +371 67774808; email:


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