Banks, Financial Services, Latvia

As reported, the losses from the basic activity of SEB Group in Latvia in the second quarter were LVL 6.6 million, which is four times less than in the first three months of the year, when losses reached LVL 24 million.

The bank's president did not rush to predict that the bank's losses would definitely be smaller in the third quarter, but allowed that with the reduced need to accumulate reserves, the third quarter could be better than the second.

"There is always the temptation to simplify things and hope for a quick solution to anything we are involved in. From a global perspective, there is still a high level of uncertainty in the economy. Whether you like it or not, strict measures are being implemented in Latvia's economy, for example, through salary and workforce cuts, we see that exports have exceeded imports for several months now; however, the level of uncertainty around the world is still very high. Southern European countries managed to deal with a huge level of debt, the world believed that the stronger European countries would support the weakest; however, now we can read about problems in the U.S., where economic growth is smaller than expected and the markets are reacting. This means that things will become more difficult for our exporters," said Ozols, discussing the risks that could influence the bank's activities.

"In autumn 2009, when making our business development plans, the outlook was comparatively gloomy. At present we can say that the losses we have suffered from our credit portfolio have been less than we had predicted. Our plan for the second quarter looked similar to the results of the first, assuming that things would continue as they had been going, but already now we can see that the third quarter is going better than the second. At the same time, we believe that all of 2011 will also present a certain dose of challenge. As the crisis passes and the economy returns to growth, our large losses will move off into the past and stay there," notes the SEB banka president.

In his view, the important thing is not just the "end figures", but also how the business platform is created and what revenue there is from basic activities. In the second quarter, "SEB banka" earned LVL 19.5 million from its basic activity, which, according to Ozols, means that the bank has been able to protect its ability to make profit through the crisis.