2012-05-03
The profit of banks operating in Lithuania in the first quarter of this year declined year on year by 43.2 per cent to LTL 144.6 million. The largest impact on this change of profit was made by provisions for bad loans.
“The rise in bank profit last year was determined by the reduction of provisions for bad loans due to a better than expected situation of borrowers. In the first quarter of this year, an apposite trend was observed – new provisions exceeded the decline of earlier formed provisions and this reduced the banking system’s profit”, Mr Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania, commented bank results.
Bank assets declined in the first three months of this year by 2.3 per cent to LTL 77.1 billion.
The loan portfolio decreased over the first three months of 2012 by 0.6 per cent to LTL 53.6 billion. Loans were repaid by both private enterprises and natural persons and the amount of loans granted to them declined by 0.7 per cent and 0.8 per cent respectively.
“The data for the first quarter support the forecast that it is not worth to expect a pronounced growth in the volume of loans this year, however, it is also too early to surrender hope to end this year with an increase in the loan portfolio”, said Mr. Vasiliauskas.
Deposit statistics are more optimistic. The growth of 0.2 per cent was observed in the first quarter. The preliminary data for April suggest a further growth in confidence in the banking system.
After the strengthening of the reserve capital by a contribution of AB bankas “Finasta” shareholder in the first quarter of this year, all banks of the country complied with capital adequacy, liquidity and all other prudential requirements.