Banks, Direct Speech, Financial Services, Latvia, Loan, Markets and Companies

The amount of newly-issued loans to companies and private persons have increased about 90 percent, compared with the first quarter last year. This is good news for both Swedbank and the economy of Latvia, the bank's CEO stressed.

"The majority of newly-issued loans were given to companies. It shows that the companies are starting to make investments again. This is a positive thing, as the lack of investments or low volume of investments is the main challenge for Latvia's economy," explained Mancinskis.

Last year, Swedbank hoped that loan volumes would significantly grow, however, the investment activity last year declined. There were two reasons for this – the low economic growth in eurozone and the Russian-Ukrainian conflict, including the crisis in Russia, as Russia was a target market for many Latvian enterprises, the bank's head said.

Mancinskis indicated that eurozone's economic activity is beginning to improve, adding that Swedbank has no limits regarding loans. "On the contrary, we have clearly stated that we would gladly issue EUR 1 billion in loans if companies were ready to accept this money," said Mancinskis. Asked why companies are not ready to do so, Mancinskis said that a large number of them do not comply with the necessary requirements.

"There are various factors, but the main one is the 'gray' economy. No significant changes have occurred, unfortunately. Every company should figure out what it actually wants to do – either exist in the 'gray' zone, pay salaries "under the table", and report negative capital, [..] or work in the long-term, record their financial activities, report excellent results, and thus receive funding," said Mancinskis.