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This year, 10 foreign banks or bank branches were operating profitably, and 5 were operating at a loss. The latter were dominated by restructuring, starting or ending their activities, the Bank of Lithuania reported.
In three months, banks made $ 129.5 million. 10.7 percent of net interest income. More than a year ago, net revenue from services and commissions remained almost unchanged at $ 55.8 million. euros
According to the LB report, banks were already feeling the effects of the slowdown in the economy caused by the coronavirus in the first quarter, which led to a deterioration in some of the banks’ financial indicators, including earnings. While deposits and loans grew in the first quarter, banks face challenges related to loans and declining income.
“The decisions of the Bank of Lithuania to strengthen the resilience of the banking sector in the face of possible shocks and recommendations have paid off: the banks have withstood the crisis well prepared, with solid capital reserves and liquidity. This is confirmed by the results of the stress tests of the banks. For our part, we quickly relaxed certain requirements so that banks can provide services to individuals and companies without additional restrictions, “said Jekaterina Govina, Director of the LAC Supervisory Authority.
In accordance with the recommendations of the Bank of Lithuania, the banks strengthened their resistance to potential losses by allocating last year’s profits to strengthen capital instead of paying dividends. In addition, they agreed to defer loan payments for up to 6 or 12 months without changing the terms or interest of the contract.
According to LB, with the beginning of the quarantine, the volume of new loans has decreased significantly, therefore, the loan portfolio and fees and interest income are likely to decrease this year. Furthermore, due to deferred loans, the actual situation of borrowers and their ability to repay loans will become clear later.
At the end of March, all banks met capital adequacy requirements, which increased from 19.9% to 22.8% during the quarter. The liquidity situation of the banks continued to be very good.
Bank deposits grew 1.7% during the quarter. to 25.4 billion Population deposits decreased slightly (0.1%), but this is not due to the coronavirus but to the seasonality observed for many years. During the year, the total deposit portfolio grew 13%. (11.7% of the population).
The net loan portfolio increased by LTL 133 million. up to EUR 20.6 billion (3.5% per year). Residents were very active on loans – their loans increased 1.9 percent. up to 10.3 billion. euros The value of mortgage loans only increased by 189 million. up to € 8.3 billion EUR (7.4% per year). The net worth of the corporate loan portfolio decreased by LTL 20 million during the quarter. euros
At the end of March, 10 banks and 8 branches of foreign banks had bank licenses. This year, three specialized banks began providing services: Revolut Bank, GF Bank and Fjord Bank.
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