Banks, Financial Services, Latvia, Loan
International Internet Magazine. Baltic States news & analytics
Friday, 29.03.2024, 08:58
Swedbank: healthy demand for loans resumes in Latvia
“Low interest rates, export growth and improving consumer confidence are
the main factors affecting lending. Although the amortization of older loans is
still in the final stage, new amount of new loans is growing as healthy demand
for loans is resuming,” Rubenis said, adding that in 2018 lending growth will
depend on public sentiment and economic developments.
Insufficient income transparency still remains the main obstacle impeding
lending growth, the Swedbank executive said, noting that promoting “white” or
legal business is therefore an important long-term objective. Rubenis also
praised the government’s decision not to charge income tax on reinvested
profit. He mentioned Estonia’s example, saying that the practice improved
companies’ balance sheets and consequently also their borrowing power.
Rubenis also indicated that demand for loans in the segment of small and
medium-sized enterprises was on the rise already.
“We have increased lending to the segment of medium-sized enterprises by 30%,
while lending to small enterprises in the first nine months of 2017 grew by 53%
against 2016. The strongest demand has been recorded in the agricultural
sector, followed by trade, manufacturing, real estate and construction,”
Rubenis said.
The Swedbank Latvia CEO said that
export growth has also been fueling lending. “Trends show that clients need
financing for their working capital. Demand for such loans has grown
significantly from last year. We expect these trends to continue and the effect
of EU funding to increase in the following years,” the head of Swedbank Latvia
said.