AS “Development financial institution “Altum”” (“Altum”) in the six months of 2023, newly issued financial instruments amounted to 118 million euros, which is 12.2% less compared to the six months of 2022, says “Altum” in a statement to the “Nasdaq Riga” stock exchange.
Among them, loans in the amount of 55 million euros were issued in six months this year, which is 14.1% more. Guarantees were issued in the amount of 48 million euros, which is 31.8% less. Investments in risk capital funds amounted to nine million euros, which is a decrease of 3.3%, while transactions in the Land Fund amounted to six million euros, which is a decrease of 6.6%.
In the first half of the year, 2,369 new projects were financed, which is 26.7% less compared to the six months of 2022.
“Altum” explains the new decrease in the volume of transactions with the cautious and wait-and-see attitude of entrepreneurs and private individuals towards new investments and taking on credit obligations, which is affected by high inflation and the repeated increase of interest rates implemented by the European Central Bank in the first half of this year, in response to long-term high inflation.
The statement to the stock exchange states that the loan support program for mitigating the consequences of Russia’s military aggression in Ukraine showed a stable increase in the volume of new transactions by 8.5 million euros, and the loan support program for increasing the energy efficiency and sustainability of companies – by 6.2 million euros.
Similarly, there was an increase in the loan support program for large companies with a capital discount and the energy efficiency program of the Renewal and Resilience Mechanism (ANM) companies, in which the volumes of new transactions were small, increasing by 1.8 million euros, however, a faster increase in the volume of new transactions is expected in these programs in the following months .
In terms of customer segments, the volume of new transactions in the segments of farmers and small and medium enterprises (SMEs) and in the segment of large enterprises remained almost equal to the volume of the first half of 2022.
In a statement to the stock exchange, it is said that, in general, the good harvests of previous years strengthened the financial position of farmers, which allowed them to receive better lending conditions in banks, so the demand for such “Altum” support instruments as loans or Land Fund transactions was lower.
On the other hand, the volume of new transactions in the segment of SMEs and large companies has not increased under the influence of high interest rates, which motivated some entrepreneurs to significantly reduce their credit obligations and rely more on their own financing. On the other hand, other merchants cannot fully rely on their own financing due to the specifics of the industry, product or service, or the stage of the company’s life cycle, so they attract borrowed financing even in conditions of high interest rates, “Altum” explains.
On the other hand, the largest drop in the volume of new transactions was in the segment of private individuals, where new transactions in the multi-apartment energy efficiency (DME) program were 11.5 million euros less compared to the corresponding period of 2022.
The volume reduction was influenced by the implementation cycle of DME programs within the planning periods of the European Union, when the DME program of the previous planning period ends and a new, ANM-financed support program for the segment of apartment buildings has not yet started. “Altum” predicts that a slight increase in the volume of loans is expected in the following periods.
In the segment of private individuals, there is also a decrease of EUR 5.8 million in the housing guarantee program, and the reason for this decrease is the waiting attitude of the population regarding the assumption of credit obligations in the context of rapidly growing interest rates and high construction costs.
The statement to the stock exchange states that the drop in demand in the segment of individuals also explains the significant reduction in the total number of new transactions compared to the corresponding period of 2022. At the same time, in the segment of private individuals, “Altum” highlights the program of repairs of multi-apartment houses, which shows a stable and growing volume and whose offer is being expanded, which allows predicting an increase in demand.
“Altum’s gross portfolio of support instruments on June 30, 2023 was 1.055 billion euros, which is 0.9% less compared to December 31, 2022, of which the gross portfolio of financial instruments was 975 million euros, which is 1, 2% more than on December 31, 2022.
The portfolio of financial instruments at the end of June 2023 compared to the corresponding period of 2022 has shown a slight increase in all financial instruments and segments, except for the segment of SMEs and large companies. The volume of the portfolio of financial instruments is still affected by lower volumes of new transactions and amortization of the existing portfolio, especially in the Covid-19 support programs.
Among the segments, the largest increase was in the retail segment, where the slower amortization of the existing portfolio and smaller volumes continue to ensure a small but constant increase in the portfolio of this segment. The decline of the portfolio is still observed in the segment of SMEs and large companies, which is affected by the amortization of the portfolio of Covid-19 support instruments in both loan and guarantee support programs – by 23 million euros compared to December 31, 2022, despite increasing volumes of new transactions in the six months of 2023 in months.
“Altum” is a state-owned capital company that provides support to certain target groups in the form of financial instruments (loans, guarantees, investments in venture capital funds, etc.), within the framework of specific programs, supplementing it with non-financial support (consulting, mentoring), with the help of financial instruments of state support. as well as implementing other functions delegated by the state.
The Ministry of Finance holds 40% of Altum shares, the Ministry of Economy holds 30% shares and the Ministry of Agriculture holds 30% shares. “Altum” bonds are included in the list of debt securities of “Nasdaq Riga” stock exchange.
2023-07-31 16:38:09
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