OREANDA-NEWS. July 29, 2014. “The first half of the year was marked by solid development and banks are willing to offer more loans. However, this is impeded somewhat by cautiousness on the part of businesses regarding their future plans.

Private customers are showing an increasing enthusiasm for home loans and we hope that the consideredchanges in the regulatory framework governing insolvency will not dampen these positive trends. In daily banking, customer habits continue to change and customers are increasingly choosing to make day-to-day transactions on their own via Internet Banking or over the phone. At the same time branches are increasingly becoming places to go for advice on more advanced services.” said Maris Mancinskis, CEO of Swedbank Latvia

Swedbank Latvia’s profit for H1 2014 amounted to EUR 59m against a profit of EUR 49m for H1 2013. This was due the release of provisions and decreased expenses.
 
Loans and deposits
The volume of new lending reached EUR 268m in H1 2014, yet demand remains weak among businesses. Credit portfolio amortization continues and the aggregate amount of loans at the end of the first half of the year stood at EUR 3 218m.
Whilst events in Russia and Ukraine have had no real impact on results, some customers have put investments and business expansion on hold for the moment.
The H1 2014 volume of mortgage new lending increased by 22 per cent YoY.
The H1 2014 volume of deposits increased by 12 per cent YoY. The deposit portfolio reached EUR 3 166 m by the end of Q2.
 
Credit quality
With the situation in the economy gradually improving, credit quality continued to improve in the first half of the year. The volume of impaired loans decreased and amounted to EUR 201 m at the end of H1 2014.
 
Revenue and costs
The amount of revenue in the first half of the year remained unchanged YoY, whereas expenses have shrunk by 4 per cent. The cost/income ratio stood at 38 per cent in H1 2014.
 
A shift in customer habits
In the light of changing customer habits, Swedbank Latvia is reshaping its operating model according to customer demands and increasing the accessibility to conducting day-to-day operations over the phone or the Internet, while branches are gradually turning into advisory centres.

After the euro changeover, customer payment habits have changed into using cards more often and for smaller amounts. Today, already 82% of customers say that paying by card is a daily habit which has replaced the use of cash. One fifth (19%) of the respondents in Swedbank’s survey confirm that in the last six months they’ve been paying by card more often than earlier.
 
Reputation leader
Newspaper Dienas Bizness and communication’s agency Porter Novelli announced annual “Reputation Top” results in June and Swedbank was once again found to have the best reputation in the financial sector and ranked 2nd among all companies in Latvia.