Total loan portfolio up for a third consecutive month
The banking sector liquidity ratio at the end of August stood at 60.5% (compared to 59.2% at the end of July). Also the capital adequacy ratio remained high and was 17.3% at the end of August (minimum capital requirement – 8%), whereas tier 1 capital ratio was 14.9% (compared to 17.4% and 15%, respectively, at the end of July). Since the beginning of 2012, 11 banks had raised their capital in total by 68.1 million lats.
The banking sector ended the first eight months of 2012 with the profit of 105.9 million lats in total where 15 Latvian banks and four foreign bank branches (with market share of 92.7%) posted profit. By the end of August the banking sector achieved the profit of almost 190 million lats (before tax and provisions), i.e. up by 15.4% year-on-year. In comparison with eight months of previous year, most significant banking income items continued growing, i.e. net interest income by 6.6% and net fee and commission income by par 22.6%, whereas one of the most significant banking sector expenditure item – provisions for bad debts reduced by 18.6%.
In August, the banking deposit stock grew by 2.2%, or 251.6 million lats. Both resident and non-resident deposit stock increased, namely resident deposit stock by 2.8% or 163.3 million lats (an increase was mainly in governmental and non-financial institution deposits), and non-resident deposit stock – by 1.5% or 88.2 million lats (an increase mainly in financial institutions and households deposits).
The total banking loan portfolio has been increasing already for a third month in the row. In August, the loan portfolio grew by 0.2%, (including the balance of loans granted to corporate customers rose by 1%, while the balance of loans issued to households shrank by 0.6% and to non-residents decreased by 0.2%.
In August, new loans in the amount of 189.3million lats were issued in the banking sector, including 50.6 million lats were granted for the development of Latvian enterprises, 61.2 million lats – to the Latvian financial institutions, 18.1 million lats – to resident households, whereas 59 million lats – to non-residents. In the corporate segment, the major part of new loans were granted to the transport and storage sector (9.18 million lats), followed by power industry (9.16 million lats), trading sector (7.1 million lats), manufacturing industry (6.1 million lats) and agricultural sector (4.8 million lats). As for the household sector, two thirds of new loans in August were comprised of the loans issued for the purchase, reconstruction and/or repair of housing (12 million lats).
Share of overdue loans
The share of loans with more than 90 days overdue payments in the total loan portfolio at the end of August made up 12.3% (compared to 12.4% at the end of July). The share of such loans in resident household portfolio totalled 16.0%, whereas in the loan portfolio of resident corporate customers – 11.0%. Total share of the loans past due by the end of August made up 19.3% (compared to 19.9% at the end of July). The amount of bad loan provisions made by the banks at the end of August accounted for 1.05 billion lats, or 8.8% of total banking loan portfolio (compared to the end of July – 8.9%).
Please find the summary of the balance sheet statements of Latvian banks broken down by months on the Financial and Capital Market Commission’s website at www.fktk.lv/en; Statistics/Credit Institutions/Monthly Reports/.
For additional information:
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