Bank of Lithuania
2025-01-22
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In the third quarter of 2024, the Lithuanian banking sector was active in lending for both house purchase and consumption, with loan quality improving and capitalisation growing. 

“The banking sector has continued to grow sustainably. We expect competition in the housing loan sector to tighten from February this year. Then changes related to refinancing will come into force, which will allow households to manage their loans more efficiently and at lower cost,” says Simonas Krėpšta, Member of the Board of Lietuvos bankas.

The Lithuanian banking sector generated a net profit of €267.7 million in the third quarter of 2024 and €788 million in the nine months, up by 4.1% year on year (€757.5 million). 13 market participants operated profitably and 5 operated at a loss. The latter incurred a total loss of €7 million. 

The solidarity contribution for 2024 is projected to be around €240 million. It amounted to nearly €255 million for 2023. According to Lietuvos bankas’ estimates, the total temporary solidarity contribution for 2023–2025 could amount to around €580–590 million.

The interest income of banks for the nine months stood at €2.35 billion and rose by €629 million year on year (37%). Interest expenditure increased by €363 million (almost 2.5 times) to €620 million. Net interest income rose by €266 million (18%) to €1.73 billion. 

In the third quarter of 2024, the bank loan portfolio grew by €1 billion (3.6%) quarter on quarter to €30.3 billion. Loans to households accounted for the largest share of the portfolio (nearly 42%). They increased by €570 million (3.6%) to €16.4 billion over the quarter. The housing loan portfolio grew by €309 million (2.6%) to €12.4 billion, while that of consumer loans widened by €240.4 million (almost 10%) to €2.7 billion. 

Lending to businesses accounted for 31% of the total loan portfolio. In the third quarter, they grew by €429 million (3.7%) to €12.1 billion. The bulk of the loans were granted to companies operating in wholesale and retail trade (€201 million), real estate operations (€107 million) and manufacturing (€41 million). 

In the third quarter of 2024, total deposits grew by €2.8 billion (5.2%) to €55.5 billion, but, after eliminating the contribution of the Revolut Group (mainly active in other EU countries), they went up by nearly €1.1 billion (2.8%). The main contributor to this change was a €0.6 billion increase in corporate deposits.

As deposit rates stopped rising, the growth of the share of time and cumulative deposits in banks slowed down. Household time deposits increased by €294 million (or 3.5%) to €8.8 billion in the third quarter, accounting for 37.1% of the deposit portfolio. Current deposits of households amounted to €14.9 billion. 

Positive quarter-on-quarter changes in loan quality indicators were recorded. The share of non-performing (bad) loans went down by 0.10 percentage points to 0.94%. The volume of bad loans to businesses fell by €14.6 million to €152.3 million (1.4% of business loans), while bad loans to households decreased by €0.3 million to €203.9 million (1.3% of loans to households). 

The capital adequacy ratio of the banking sector increased from 20.53% to 21.32% (the benchmark is 8%) during the quarter, and the sector continued to be well capitalised. Top-tier capital instruments dominate in the banks operating in Lithuania. Banks continued to meet liquidity requirements with a large margin.
At present, there are 19 banks, including 6 foreign bank branches, operating in Lithuania. 

Quarterly information about each bank’s key performance indicators and compliance with prudential requirements is available on the website of Lietuvos bankas.