Banks, Financial Services, Latvia, Loan

Last year lending to companies rose by 34 % from 2015, reaching EUR 1.795 bln.

At the end of this year the amount of new loans might reach EUR 2 bln. Karlis Danevics, SEB Banka board member, said that this is quite an optimistic forecast, assuming that more active absorption of the EU funds will start in the second half of this year, and companies might be promoted to invest in development and borrow for implementation of development projects.

However, the first two months of this year have been slower and less active than expected in respect of lending, he said.

Sanda Liepina, the board chairwoman of the Latvian Association of Commercial Banks, said that the expected lending to companies at EUR 2 bln a year would be just 40% of the actual lending capacity the banks can ensure.

Liepina also mentioned several tasks that should be done to promote more active lending. These include improvement of company capitalization, reduction of shadow economy, improvement of judicial environment and investigation of economic crimes, broader use of digital solutions in exchange of data with the state, and others.

As reported, the aggregate bank loan portfolio in Latvia stood at EUR 15.129 bln at the end of 2016, up 3.1% from late 2015. The aggregate loan portfolio included EUR 9.439 bln in corporate loans and EUR 5.581 bln in personal loans, of which EUR 4.402 bln were housing loans.