Banks in Latvia are well prepared to overcome the COVID-19 crisis, chairperson of the Finance and Capital Market Commission (FKTK) Santa Purgaile has said.
“Banks are in financially good health to overcome this crisis,” said the head of FKTK, adding that banks were strong and their liquidity was good.
At the same time, Purgaile admitted that the COVID-19 crisis affected banking activities. In the first half-year banks were proactively assessing their credit portfolios, generating additional savings. On top of that, banks responded to FKTK’s invitation and did not pay out dividends from last year’s profits, strengthening their capital in the process.
“COVID-19 will undoubtedly leave a mark,” said Purgaile.
She also noted that among the former non-resident banks, which were still in the process of transformation, it would be best to perform consolidation to ensure they were able to work actively.
“We do not want the number of banks in Latvia to go down – it is not our objective. But we can also see that, and this is especially true for banks in the middle of the so-called transformation process, it is worth considering merging and resource consolidation, so that they are able to operate more actively to issue loans and assist the national economy,” said Purgaile.
At the same time, FKTK head admits that among the former non-resident banks there are also banks that are in the process of active and successful transformation. (BNN/Business World Magazine)