2025-04-25
At the end of 2024, the ranking of the largest banks in terms of assets changed. Household and corporate loans recorded the biggest growth over the year, while resident deposits rose at a much faster pace than in 2023. Banks significantly reduced the overall number of major incidents but remained the target of cyberattacks.
“Last year, the banking sector experienced rapid growth, expanding its credit portfolio at one of the fastest rates in the euro area. However, greater attention is needed to combat financial fraud, enhance cyber resilience and monitor the quality of loans,” says Simonas Krėpšta, Member of the Board of Lietuvos bankas.
At present, there are 19 banks, including 6 foreign bank branches, operating in Lithuania. At the end of 2024, Revolut Holdings Europe UAB emerged as the largest participant in the banking sector in terms of assets, driven by robust growth in other countries. Its asset value surpassed that of Swedbank, AB, which had been the largest bank for seven years (since late 2017).
The loan portfolio of banks operating in Lithuania grew at one of the highest rates in the euro area. In 2024 it grew by €4.2 billion (15.4%) to €31.7 billion. Loans to residents, which constituted the bulk of the portfolio (nearly 54%), increased by €2 billion (13.2%) to €17.0 billion. The housing loan portfolio widened by €1.1 billion (9%) to €12.7 billion, while that of consumer loans went up by €0.9 billion (43.7%) to stand at €3.0 billion. The portfolio of consumer loans to Lithuanian residents only grew by approximately 16%.
Almost a third of the total loan portfolio consisted of corporate loans. In 2024 it grew by €1.4 billion (12.6%) to nearly €13 billion. The bulk of the loans were granted to companies engaged in real estate (€0.43 billion), electricity, gas, steam and air-conditioning activities (€0.27 billion) and manufacturing (€0.2 billion).
The share of non-performing (bad) loans decreased by 0.11 percentage points to 0.90%. The volume of bad loans to businesses increased by €10.3 million to nearly €160 million (1.38% of commercial loans), while bad loans to households grew by €2.2 million to €186.2 million (1.09% of household loans).
In 2024, all deposits increased by a fifth to stand at €61.3 billion, but after eliminating the contribution of non-resident deposits, deposits went up by almost €3.3 billion (8.8%). A rise of €2.6 billion (11.9%) in household and public authority deposits (€0.44 billion, or 10.2%) had the biggest impact on the growth in deposits (after eliminating the contribution of non-resident deposits). Non-resident deposits, which increased by €7.25 billion, or 54.3%, year on year, accounted for €20.6 billion of total deposits.
Average interest rates on new term deposits paid by banks decreased from 3.5% to 2.7% last year but remained above the euro area average of 2.5%. Although over 2024 household time deposits went up by €1.9 billion (or 26%) to almost €9 billion, the share of time deposits in the household deposit portfolio increased marginally (3.7 percentage points) and accounted for 36% of household deposits. Current deposits of households (excluding the Revolut group) held with banks amounted to as much as €16.4 billion.
According to unaudited data, in 2024 banks earned a similar amount to the previous year, i.e. €1 billion of net profit, which is €31.4 million, or 3.2%, less than in 2023, when profits totalled nearly €990 million. It should be noted that the bank profitability indicator slightly decreased: return on equity fell from 23.56% to 20.19% year on year. Last year 14 banks and foreign bank branches were profitable, while 5 operated at a loss. The latter incurred a total loss of almost €12 million. The sustainability of the business model remains an issue for the smallest participants in the banking sector.
The solidarity contribution for 2024 will reach approximately €230 million. The total solidarity contribution for 2023–2025 may amount to around €590 million.
The capital adequacy ratio of banks went up from 20.04% to 21.39% (the benchmark is 8%), and the sector is well capitalised. Top-tier capital instruments dominate in the banks operating in Lithuania. Banks continued to meet liquidity requirements with a large margin. However, for some banks, increasing their capital remains a relevant issue.
One of the main challenges faced by banks last year was the fight against financial fraud and cyberattacks. Upon assessing the scale of financial fraud and its impact on the financial system, Lietuvos bankas submitted proposals to state institutions for a coordinated response to financial fraud at the national level.
During the year, banks faced 45 major payment-related incidents, a 34% decrease compared to 2023. System errors, external and cyber events were the main causes of the incidents. Lietuvos bankas urges banks to continuously enhance their cyber resilience.
Quarterly information about each bank’s key performance indicators and compliance with prudential requirements is available on Lietuvos bankas’ website.