Update on the banking sector performance in Latvia: April 2010
Financial and Capital Market Commission has prepared recent data on Latvia’s banking sector performance for April 2010.
In April, overall performance of all banks complied with regulatory requirements; liquidity ratio in the banking sector increased and was 67.3% at end-April (compared to 62.8% at end-March). Capital adequacy ratio also rose and by end-April was 14.5% (14.2% at end-March). As from the beginning of 2010, six banks increased their capital by the total of 127.6 million lats and at end-April paid-up share capital in the banking sector accounted for 1.7 billion lats (13 Latvian banks increased their capital in total by 998.2 million lats in 2009).
At the end of April, the amount of deposits in Latvia’s banking sector amounted to 10.1 billion lats, i.e. by 3.1% or 301.8 million lats up from the end of March. April is the first month when deposit stock in the banking sector hit the pre-crisis level in Latvia, namely, September 2008, already for a second month in a row showing a positive deposit stock annual growth rate, i.e. 3.6% (end-March – 1.3%). In April, both the amount of resident deposits (by 1.1% or 65.2 million lats, including corporate and private person deposit stocks) and non-resident deposits increased (by 6.6% or 236.6 million lats).
In April, banking assets grew by 0.4%, or 92.8 million lats, and by end-April totalled 21.5 billion lats. Total loan portfolio of banking sector shrank by 1.1%, or 166 million lats, and at end-April amounted to 15 billion lats, where resident household loan balance contracted slightly slower than resident corporate loan balance, i.e. by 0.4% and 0.6%, respectively. Meanwhile loan portfolios of seven Latvian banks and two foreign bank branches increased in April (making up 11.8% of total market share in the banking sector loan portfolio).
By end-April, of total loans 72.3% were without payment delays (at end-March – 72.5%). In April, the amount of loans with more than 90 days overdue payments grew by 1.2% and their share in the banking loan portfolio made up 18.3% at end-April (end-March – 17.9%).
In April, loan loss provisions in the banking sector overall increased by 2.3%, or 35.4 million lats (in March – by 11.9% or 166 million lats), totalling 1.6 billion lats, or 10.6% of total banking portfolio (at end-March – 10.3%).
In the first four months of 2010, seven banks in Latvia and one branch of foreign bank posted profit (covering 12.5% of total banking sector assets) and earned a total of 4.2 million lats, however, the banking sector overall reported a 176.5 million lats loss at end-April mainly because of expenses on loan loss provisioning. The banking sector’s profit (before provisioning and tax) amounted to 37.9 million lats at end-April.
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