Banks, Financial Services, Latvia, Loan

International Internet Magazine. Baltic States news & analytics Tuesday, 16.10.2018, 02:49

Bank of Latvia: lending to grow at very moderate pace in 2018

BC, Riga, 02.01.2018.Print version
Lending will continue to grow at a very moderate pace and will not be among the main drivers of economic growth next year, Bank of Latvia economist Vilnis Purvins said in his commentary at the central bank's analytical website macroeconomics.lv, cites LETA.

The domestic loan portfolio expanded by 0.3% in November, with the loan portfolio of non-financial corporations increasing by 0.8% and loans to households for house purchase edging up by 0.1%. Although in November new loans to both non-financial corporations and households were larger year-on-year, they fell behind the levels recorded in October 2017.

 

Domestic deposits with banks expanded by 1.8% in November, including increases of 1.7% and 1% in corporate and household deposits respectively, with their annual growth rates being 4.7% and 8%.

 

"The fact that strengthening of the economy supports and is likely to stimulate accumulation of savings also next year is a positive factor both supporting financial sector stability and developing economic growth potential. Despite favorable financing conditions provided by the central bank, lending growth is rather weak. Next year lending will continue to develop on a very moderate path and will not be among the main drivers of economic growth; nevertheless, some growth is expected both in corporate lending (in the real estate and construction sectors in particular) and loans to households for house purchase and consumer loans," Purvins said.

 

According to the information from the Bank of Latvia, aggregate value of the Latvian banks' domestic loan portfolio was EUR 12.45 billion at the end of November 2017, while domestic deposits totaled EUR 11.293 billion.






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