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

BC, Riga, 27.12.2017.Print version
Healthy demand for loans is resuming in Latvia, Reinis Rubenis, CEO of Swedbank Latvia, told LETA.

“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.






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