Non-audited financial results of the majority of Latvian banks for the first six months of 2009 have been summed up. According to these results, Rietumu Bank’s profit is the largest in the industry – the Bank’s net profit amounted to EUR 10 million (after taxes, impairment allowances, etc.).
As of 30 June 2009, Rietumu Bank’s assets amounted to EUR 1.5 billion, equity and reserves accounted for EUR 190 million. Rietumu Bank’s capital adequacy and liquidity ratios increased considerably having reached 15.7% and 48% respectively; both indicators substantially exceeded minimum international and the Financial and Capital Market Commission’s requirements (8% and 30% respectively).
Data provided by the Association of Latvian Commercial Banks show that the remaining major banks in Latvia experienced multimillion losses resulting this half-year.
Five largest Latvian banks by assets volume (Rietumu ranks No. 6 among all industry participants by this indicator) ended the first half-year with cumulative losses amounting to EUR 458 million.
As of the first six months of 2009, aggregate losses of Latvian banking sector reached nearly half-billion euro. Only 10 banks out of 27 ended the half-year with profit, while their total profit accounted for EUR 25 million (40% of which is earned by Rietumu Bank). More detailed information on Latvian banks’ financial results is available
here.
These financial results are mainly attributed to new impairment allowances and credit write-offs in the sector, since the largest losses rest with the industry participants that aggressively sold mortgage products, while their loan portfolios continued to grow dramatically during the last years. Total impairment allowances of the first five Latvian banks (solely) accounted for EUR 720 million. We forecast the size of new impairment allowances and write offs no less than EUR 1 billion in the second half of 2009.
The statistical data show eloquently that Rietumu Bank’s financial standing remains the best in the industry, owing to conservative credit policy and business diversification. The Bank steadily generates profit and has all necessary resources for further development and new project implementation.
At the same time, there were some positive changes in Latvia’s public finance. The country received a substantial part of international loan provided by the European Commission. The Government of Latvia and the International Monetary Fund’s delegates agreed on conditions of the subsequent IMF tranche. The Government of Latvia, in turn, had finally met requirements of the international creditors concerning reduction of state budget expenses and fiscal policy.
Rietumu Bank is grateful for all customers, whose trust and loyalty allow us to operate effectively and to make confident plans for the future! We will continue to publish and comment further financial information about Latvia.
Eleonora Gailisha Mass Media and Public Relations
Phone: +371-67020506
Fax: +371-67020563
E-mail:
[email protected]
