Analytics, Banks, Deposits, Financial Services, Latvia
International Internet Magazine. Baltic States news & analytics
Friday, 26.04.2024, 18:32
Share of domestic and EU deposits at Latvian banks rose to 91% in 2018
The change of the Latvian banking sector’s business approach
and focus, which was launched in 2016 at the regulator’s instructions, is now
in the finishing phase. A number of complex measures that were implemented in
2018 substantially changed the Latvian banks’ client base and enabled the
launch of new business strategies, which basically provide for concentration on
serving domestic and EU clients.
In 2018, domestic and EU deposits dominated in the Latvian
banks, reaching 91% of all deposits held by the banks. Of this money, 80% had
been deposited by Latvia’s residents, 11% by residents of other EU member
states and 9 % by clients from other countries.
At the end of 2018, the share of non-resident deposits was
20.3%, down from 20.5% in the third quarter of the year, while domestic
deposits have continued to grow steadily in recent years, reaching EUR 13
bn by the end of last year.
As the banks have been giving their non-resident business,
the share of foreigners’ deposits has dwindled from 53% in 2015 to around 20%,
the FCMC said, adding that the process was already stabilizing.
The euro has established its position as the dominating currency in bank payments in Latvia. In comparison with 2014, foreign clients’ payments with US dollars have shrunk more than 20 times, hitting the all-time low in the two last quarters of 2018.
FCMC chairman Peters Putnins noted that the business environment had changed as money of domestic origin was now dominating in the market.