2014-12-10
Bank deposit portfolio for the first time exceeded LTL 50 billion limit; loans also hiked
The performance results of the nine months of 2014 show that the country’s banking system was profitable, while the bank deposit and loan portfolios grew modestly. This year banks will pay more attention to preparedness for euro adoption and improvement of operation efficiency, therefore their performance results were affected by one-off expenses.
The banking sector’s deposit portfolio in 2014 grew over three quarters by 5.7 per cent and reached a new record high — LTL 50.3 billion.
“The growth of deposits to a record-high level was due also to the fact that the residents and businesses, in preparing for the euro adoption, heard the call to avoid worries over the cash changeover early next year and and are depositing their funds in bank accounts. There money will be converted automatically and free of charge,” says Ingrida Šimonytė, Deputy Chair of the Board of the Bank of Lithuania.
For example, over the third quarter ATMs with cash deposit function and bank accounts brought in LTL 2.46 billion — compared to last year, more by about a third.
The assets managed by the bank sector over the nine months increased by 2.8 per cent and on 1 October 2014 amounted to LTL 79.8 billion. The development of the portfolio of loans granted to customers, making up the largest share of the banks’ assets, in the respective period amounted to 0.7 per cent and reached LTL 51.4 billion.
Over three quarters of 2014 banks earned an LTL 618.7 million income. This is 2 per cent more than in the respective period last year. Such a change was driven by the growth of the major sour of bank income — net interest income. Banks’ net interest income for nine months in 2014, compared to the same period last year, picked up by LTL 65 million (7.3%) — to LTL 954.6 million. Over the four quarters of 2014 the activities of six banks and six branches of foreign banks were profitable, while one bank and two foreign bank branches operated at a loss.
The new European requirements, which came into force at the beginning of the year, essentially changed and unified the bank operation supervision requirements in all of the European Union countries. Although these requirements are stricter than the previous ones, the prudential ratios of banks operating in Lithuania continued to significantly exceed the minimum required amounts. For example, on 1 October the bank system’s capital adequacy ratio was 20.7 per cent (required — 8%).
The Bank of Lithuania publishes information about each bank’s major performance indicators and compliance with prudential requirements. Information about foreign bank branches is only revealed on a consolidated basis, since their supervision is the responsibility of a competent institution supervising the bank which has established a branch. Detailed information about banking activities can be found in the review (72.7 KB download icon) and Q3 2014 bank indicator (46 KB download icon)and consolidated indicator (45.9 KB download icon)summary on the Bank of Lithuania website.