Profit of Latvian financial institutions in eight months – 93 million euros / Article / LSM.lv

Head of the Financial and Capital Market Commission Santa PurgaileLinda Zalane00:00 / 01:11

–Santa Purgaile, head of the Financial and Capital Market Commission (FCMC), noted that the decline in financial institutions’ profits was not surprising, given the fact that the Covid-19 pandemic was difficult to predict how deep the economic crisis would be.

According to her, the banks have overcome these economic shocks with honor.

Banks were cautious at the start of the pandemic and made various provisions for potentially bad loans in the first and second quarters, but the health of financial institutions is now good. The resilience of banks to the shock to the economy is stable, according to the head of the FCMC.

“We asked banks not to withdraw last year’s dividends when the crisis started, and in principle all banks and insurers have heeded our call, capitalized on last year’s profits, resulting in much stronger capital, which will also help banks potentially deal with the consequences if there are still some shocks in the economy to follow. In the summer, with our participation, the banks introduced moratoriums, in fact, the banks restructured their customers, who could potentially get into some difficulties (..), “said Purgaile.

CONTEXT:

At the end of March this year, the FCMC issued call on credit institutions to review their dividends cost policy and, in the current context of the business and economic impact of Covid-19, refrain from paying dividends with a view to continuing to provide credit as well as to absorb potential losses in the future.