2026-07-14
In the first quarter of this year, banks operating in Lithuania actively extended loans to households and businesses. The loan portfolio was dominated by real estate; deposits from non-residents increased, while those from Lithuanian residents decreased due to seasonal factors.
“The quarterly results show continued interest in housing loans. We see that competition in the housing loan segment is gradually increasing, but it is still dominated by three housing loan lenders. The banking sector remains financially resilient, as evidenced by the quality of its loan portfolio, which is among the best in the European Union,” says Julita Varanauskienė, Deputy Chair of the Board of Lietuvos bankas.
Demand for housing loans increased
In the first quarter, the banks’ loan portfolio grew by €1.5 billion (3.8%), reaching €40.3 billion. Housing loans accounted for the largest share of this growth. Loan quality indicators remain strong; Lithuania ranks among the European Union (EU) countries whose banks hold the lowest proportion of non-performing (bad) loans in their portfolios.
Lending to households increased by €0.9 billion (4.3%) and reached €21.2 billion. Housing loans rose by €0.5 billion (3.5%) to €15.1 billion.
The consumer loan portfolio increased by €0.2 billion (5.5%), reaching €4.3 billion. However, most of these loans were granted to non-residents of Lithuania.
The corporate loan portfolio increased during the quarter by €0.2 billion (1.4%) to €14.8 billion. Enterprises operating in real estate (28.5%), wholesale and retail trade (16.1%), and manufacturing (11.8%) account for the largest share of financing in the non-financial corporation sector.
Deposit growth expected
At the end of the first quarter, banks held €84.6 billion in deposits, which increased during the first quarter by €5.7 billion (7.3%). Deposits of non-residents increased by €4.4 billion (12.8%), reaching nearly €38.5 billion. Deposits of Lithuanian residents decreased due to seasonal factors by €0.1 billion (0.4%) to €26.8 billion. However, deposits of Lithuanian residents are projected to grow significantly this year. This is attributed to funds that residents who have withdrawn from the second pension pillar scheme will direct to banks.
Profitability trends vary
Lithuania currently has 19 banks, 6 of which are branches of foreign banks. Starting from the beginning of the year, RATO bankas launched operations, while PayRay Bank ceased operations on its own initiative. The sector’s total assets exceeded the €100 billion mark. During the quarter, the market share of Revolut Holdings Europe, UAB rose by 2.8 percentage points to 40.4%. The share of Swedbank, AB accounted for 21.9% of the market; followed by SEB bankas, AB with 16.4% and Artea bankas, AB with 5.8%.
In the first quarter, the Lithuanian banking sector’s profit amounted to €282 million, which is 5.5% more than during the same period in 2025 (€267 million). 14 banks and branches of foreign banks operated profitably, while six operated at a loss. The latter collectively incurred a loss of €2.8 million.
This development in profit was further driven by the Revolut Group’s active operations in various EU countries, which resulted in €21.3 million (44%) more in profit. The combined profit of the three largest banks (excluding the Revolut Group) increased by €4 million (2.4%) compared to the first quarter of 2025, reaching €174 million. The combined profit of the nine less significant banks decreased by €1.8 million (47%) to €2.0 million, while the combined profit of the six foreign bank branches decreased by €8.8 million (19.3%) to €36.9 million.
Due to the rapid growth in assets, banks’ profitability indicators continued to decline, with return on equity standing at the end of the first quarter at 16.28% (compared to 18.79% a year ago) and return on assets – at 1.16% (compared to 1.42% a year ago). The efficiency indicator, which reflects the cost-to-income ratio, stood at 43.57%, having improved by 1.33 percentage points over the year. The profitability and efficiency indicators of banks of lesser significance are weaker than those of banks of greater significance.
It is essential to strengthen the resilience of information systems
In the first quarter of this year, banks reported seven major incidents related to information technology, one of which was of a cyber nature.
In response to information regarding the capabilities and threats related to next-generation artificial intelligence tools, Lietuvos bankas urged banks to fundamentally review the security strategies, processes, and measures of their information systems and to transition from a reactive model to a more automated, real-time management approach.
Information on each bank’s key performance indicators and compliance with prudential requirements is published quarterly on the website of Lietuvos bankas.
Banking activity reviews are published here.