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Share of foreign deposits in Latvian banks down to 20.5%

Photo: pixabay.com
Latvia’s banking sector has finished its self-cleansing process, dropping the far too risky foreign client segment in the process. Over the course of nearly a whole year, the share of foreign deposits in banks has been cut by nearly half: 20.5% in September as opposed to 39.7% a year prior, according to data from the Finance and Capital Market Commission.

FCMC notes that the foreign client segment has shown signs of stabilization.

«Looking at the changes with turnover of foreign clients’ money in the period of change, we have noticed that not only the volume of risky deposits, but also the size of payments made by foreign clients has declined. This is especially true for deposits made in US dollar,» as mentioned in the statement from the commission.

Payments in US dollar have declined more than ten times.

Payments had declined considerably in 2016, when NILLTFN risk reduction measures were enhanced. Compared to Q3 2015, payments in US dollar made to Latvian banks in the same period of this year have declined more than ten times, making euro the leading currency for deposits in the country.

According to FCM, the aforementioned events had made no negative impact on Latvia’s domestic deposits, which only continued growing in recent years. «With the reduction of new risks, Latvia’s banking sector now focuses more on EU and Eurozone clients. Latvia’s banking sector is currently dominated by domestic (80%) and European (10%) deposits,» FCMC reports.


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