Chairman of the FCMC Santa Purgaile
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In Latvia, development in the small banking segment would be faster, as currently the growth or decline of the banking sector is fully determined by the four largest banks, said Santa Purgaile, Chairman of the Financial and Capital Market Commission (FCMC).
“Of course, we can say that numerically we have a lot of banks. At the same time, most of them are relatively small banks, and tectonic changes in the market are still determined by the four largest players. Growth or decline in the market depends entirely on this big four, “said Purgaile.
She pointed out that the FCMC would also like the development of the small banking segment to accelerate, to consolidate, to enter a larger shareholder with greater ambitions, rather than just natural growth of about one percent each year, as this would create more competition for the big four.
“So far we have nothing on the table to say that we see such a perspective, but we hope for it,” said Purgaile.
She also noted that it is not that investors would not be interested in small Latvian banks.
“It simply came to our notice then. However, it must be taken into account that these banks have gone through their second wave of rebirth, but the question is whether they have also taken off. If investors do not see this rise, then there is probably a lack of confidence that this rise will be achieved after the change in the ownership structure. Being able to demonstrate it not only on paper but also in life is very important. Of course, the COVID-19 crisis is not helping now, as the market has slowed down and this has affected banks’ plans to grow their operating portfolios. Therefore, at the moment, we mostly see small banks redistributing the market among themselves, taking something from the big ones. Yes, there are some large lending projects in small banks, but they are still only a few, “said the head of the FCMC.
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