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Banking Sector in Latvia Current Trends and Forecasts for 2012 9 March 2012

Banking Sector in Latvia Current Trends and Forecasts for 2012 9 March 2012. Key indicators of banking sector. Total assets to GDP (as at December 2011)*. Banking sector – total banking assets exceed Latvian GDP by more than 50% (above CEE average).

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Banking Sector in Latvia Current Trends and Forecasts for 2012 9 March 2012

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  1. Banking Sector in Latvia Current Trends and Forecasts for 2012 9 March 2012

  2. Key indicators of banking sector Total assets to GDP (as at December 2011)* Banking sector –total banking assets exceed Latvian GDP by more than 50% (above CEE average) Source: Source: ECB, Eurostat, * if GDP for 2011 not yet available, GDP data for the period 3Q2010-3Q2011 used

  3. Key indicators of banking sector Loans and deposits to domestic residents to GDP High loan-to-deposits ratio in LV banking sector due to access of major players to cheap funding of their parent companies (mainly, Nordic financial groups) Historically, significant market share of non-resident deposits in LV banking system Loan market growth potential (still below EU average) Source: Source: ECB, Eurostat, * if GDP for 2011 not yet available, GDP data for the period 3Q2010-3Q2011 used

  4. Banking sector overview Total assets (LVL m) Source: The Association of Commercial Banks of Latvia

  5. Banking sector overview Total deposits (LVL m) Source: Financial Capital Market Commission

  6. Banking sector - overview Total loans (LVL m) 16 589 15 429 14 916 14 334 13 171 10 873 Residents – 87%; Non-residents – 13% Source: Financial Capital Market Commission

  7. Banking sector - overview New lending in 2011 (YTD, LVL m) Source: Financial Capital Market Commission

  8. Banking sector - overview Interest rates

  9. Banking sector - overview Profit (LVL m) Krajbanka losses continue to influence banking sector results, and in January 2012 banking sector finished with LVL 1.7m losses Source: Financial Capital Market Commission

  10. Banking sector - future Banking sector: Forecast Amount outstanding, end of period, mln nat. currency Source: Financial Capital Market Commission, CAM calculations

  11. Banking sector - future Major challenges To be ready to support economy when it starts to recover Regulatory requirements and additional capital requirements may restrict banking activities

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