Banks, EU – Baltic States, Financial Services, Good for Business, Latvia

In 2016, the Latvian banking sector generated EUR 453.7 mln in aggregate profit, which was a 9.1% increase against 2015 when the banking sector's profit was EUR 415.9 mln.

The banks' return on equity (ROE), the ratio measuring the return generated on shareholders' equity, grew last year to 14.3%. By comparison, the Latvian banks' ROE was 12.5 percent in 2015 and 11.1% in 2014.

The banks' profitability growth last year, however, was basically ensured by income earned by selling shares in Visa Europe payment card company. Excluding this effect, the Latvian banks' 2016 profit would have been EUR 335 mln, down 19.5% from 2015, and their ROE would have been 10.4%. Nevertheless, a 10.4% ROE is still above the EU average.

All 16 Latvian banks and three Latvian branches of foreign banks that aggregate assets of which made up about 98 percent of the banking sector's total assets closed 2016 with profit. The above 16 banks and the three branches of foreign banks earned EUR 466 mln in aggregate profit last year.