Mortgage Bank Pursues Active Lending within Five State Aid Programmes
OREANDA-NEWS. July 20,
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As planned and in line with the law on the state budget for the year 2010, the equity capital of the Mortgage Bank was increased by 70,28 million lats in the first six months of 2010. The share capital of the Bank is 191,60 million lats, but the reserve capital - 2,063 million lats. As at 30 June 2010 the capital adequacy ratio of the Bank was 18.6%.
Rolands Panko - Board Chairman of the Mortgage Bank says: "The payment discipline of the customers improves alongside stabilisation of the economic situation. We expect that the stabilisation trend pertaining to late payers will become more distinct in the second half of the year. The increased capital base of the Bank enabled us to intensify the revaluation of the risk of the granted loans and accumulate provisions for insecure loans. At the same time we have also accumulated funds for repayment of the next syndicated loan due in August this year. We are glad that the volume of deposits with the Bank keeps rising since the Bank has managed to maintain high customer loyalty."
In the first six months the Bank built provisions for insecure assets in the amount of 49 million lats. As a result, the unaudited losses reached 46,77 million lats. As at 30 June 2010 the ratio of the accumulated provisions and loan portfolio of the Bank was - 15.8%. The Bank's profit before provisions and income tax was 2,3 million lats. As at 30 June the Bank's liquidity ratio was 117%.
In view of the fact that the loans of the aid programmes have a higher inherent risk, the ratio of the non-performing loans (overdue more than 90 days) is 23.3% at the Mortgage Bank. At the same time the Bank has drafted and improved over the time the procedure encompassing uniform standards and other solutions for the existing and potential late payers. In 2009 these solutions were applied to 772 loans. This year the amount of restructured loans keeps rising as in the first year-half of 2010 various solutions have been already applied to 543 loans. Carrying over of the principal, capitalisation of the interest or taking over of the assets of the collateral are the options used most frequently.
In the first six months of the year 2010 the gross assets of the Mortgage Bank amounted to 937,8 million lats, the gross loan portfolio - 657,2 million lats. The volume of deposits grew by 3% in the given period reaching 329,9 million lats.
"Moody's Investors Service Ltd" notched up future outlook for the Bank's long-term foreign currency deposits from negative to stable in the first half-year of 2010. The Mortgage Bank is assigned the following ratings: long-term foreign currency deposits Baa3, short-term foreign currency deposits - P3, financial strength rating - E+, mortgage bonds - Baa2.