Altogether there are over 27 banks in Latvia.
2 SEB banka
3 Nordea Bank Finland Latvia Branch
4 DnB NORD Banka
5 ABLV Bank
6 Rietumu Banka
7 Citadele banka
8 Latvijas Hipoteku un zemes banka
9 Latvijas Krajbanka*
10 UniCredit Bank
11 NORVIK BANKA
12 Danske Bank Latvia branch
14 TRASTA KOMERCBANKA
15 LTB Bank
16 Baltic International Bank
17 Regionala investiciju banka
18 Baltikums Bank
19 GE Money Bank
20 SMP Bank
21 BIGBANK Latvia Branch
22 Eesti Krediidipank Latvia Branch
23 Latvijas pasta banka
24 Banka SNORAS Latvia Branch*
25 Svenska Handelsbanken AB Latvia Branch
26 Allied Irish Banks Latvia Branch
27 Latvijas Biznesa banka
28 Skandinaviska Enskilda Banken Riga branch
The banking sector in Latvia is strongly integrated in the European banking system, with the European Union banks accounting for 61% of all assets and 70% of the total loan portfolio.
The amount of guaranteed deposits has been increased to EUR 50’000.
Major sources of bank financing are liabilities to banks (42% of total assets), mainly to the parent banks (31% of total assets), and deposits (42% of total assets).
The ability and willingness of foreign parent banks to finance their subsidiaries and banks in Latvia arise no doubts. In 2008, the amount of funding attracted from parent banks increased by 21% or 1.2 billion lats compared to 2007.
JSC “PAREX BANKA”
The government of Latvia has acquired majority stake (84.83%) in JSC “Parex banka” in order to ensure stability in the financial system of Latvia. The decision followed a sharp drop in deposits of the bank, and rapid deterioration in liquidity and capital adequacy ratios.
Currently the situation in the bank has stabilized; the number of deposits has increased in January.
The government has supported the provision of State guarantee for the roll-
Parex banka’s proposal to the syndicated lenders envisages the following loan repayment schedule: 20% of the principal amount are scheduled for repayment by March 2009 with the remaining sum to be split in two payments – 50% in February 2010 followed by 30% in January 2012.
Despite economic downturn, the main performance ratios of commercial banks have remained satisfactory in 2008:
1) assets have increased by 6%;
2) the loan portfolio has increased by 11.2%, with an increase for households by 7% and for enterprises by 13.1% (in previous 5 years loan portfolio grew by 37-
3) deposits have decreased slightly in 2008 -
4) the liquidity indicator of the banking sector decreased slightly during 2008 -
5) the average capital adequacy ratio of the banking sector at the end 2008 was 11.8% (12.6% at the beginning of 2008), which is well-
Due to an increase in expenses related to provisions and costs of funding, profitability of banks has plummeted considerably – by 79%. In total, 16 banks and 1 branch of a foreign bank ended the reporting year with profit, while remaining 5 banks and 4 branches of foreign banks reported loss.
The regulator of Latvian financial markets (Financial and Capital Market Commission) monitors the market and checks performance of all the commercial banks on daily basis. In order to avert the situation that loan loss provisions for some banks could be insufficient, the regulator recurrently inspects banks and, if needed, requires increasing the amount of provisions.