The profit of banks operating in Latvia in the first quarter of this year, compared to the corresponding period of the previous year, has significantly decreased, according to the data compiled by the Financial Industry Association.
The profit of the banks belonging to the association has reached 24.97 million euros, which is by 53.2% less than a year ago, while the total profit of the banking sector has reached 24.5 million euros, which is by 42.5 million euros or 63.4% less than a year ago.
In the first quarter, the TOP 5 of the most profitable banks changed, dropping the Luminor Bank branch in Latvia, for which data are not available, while Citadele banka was at the bottom of the top due to losses.
The decrease in Swedbank’s profit was influenced by the creation of larger loan provisions, as well as higher expenses. “The measures taken to contain the global pandemic have a negative impact on the Latvian economy and are reflected in our performance. Although the loan portfolio has grown significantly over the year, economic uncertainty has forced us to build up credit reserves that reduce bank profits. Strong capitalization and sustainable credit policy, allows us to provide support to customers and the rest of society at a time when we are all facing unforeseen difficulties – since the beginning of the emergency, more than 4,000 customers have used the opportunity to defer loan principal payments. availability and distribution of state guarantee instruments, as well as support to organizations that solve acute problems, “emphasizes Reinis Rubenis, Head of Swedbank Latvija.
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