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Banking Sector

Commercial Banks in Latvia: Key Indicators

The number of commercial banks operating in Latvia exceeds twenty, which ensures a good choice in banking services. A number of foreign investors, including FöreningsSparbanken, SEB (Sweden), Nord/LB (Germany), Nordea (Finland) and Vereins- und Westbank (Germany) together constitute approximately 80% of the commercial bank capital in the country, bringing additional stability and customer reliability to the Latvian market. Only 8-10 banks operate as full-range banking service providers to both private and corporate customers. All the others have positioned themselves in certain niche markets with specialised services. In addition to an extensive network of ATM terminals, a number of banks also provide Internet banking and/or mobile banking services to their customers. The most popular brands of credit/payment cards in Latvia are Visa/Visa Electron and MasterCard/Maestro, however, most internationally used cards are accepted by banks and ATMs in Latvia. Additional corporate business services provided by commercial banks in Latvia include mergers & acquisitions, business advisory and privatisation advisory.

Number of Banks

  1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Number of banks* 61 55 40 33 32 28 24 22 23 23 23 23
Including:
banks 61 55 39 32 31 27 23 21 22 22 22 22
branches of foreign banks 0 0 1 1 1 1 1 1 1 1 1 1
Number of bank branches 145 207 192 190 178 183 160 184 193 199 ** **
Staff - - - 7500 8414 8230 7786 7863 7943 8240 8895 **
Number of customer accounts, ’000 - - - - - 1387 1298 1397 1651 2041 2207 **
Number of payment cards, ’000 - - - - - 207 328 635 893 1022 1176 **
Number of ATM’s - - - - - 238 374 643 791 842 868 **
Number of POSs - - - - - 3390 4462 5381 6908 8326 10268 **
* Number of banks in 1990 — 6; in 1991 — 16; in 1992 — 50
** no information
— no data

Banking legislation

The legislative framework for banking in Latvia meets the EU requirements in full, and, in some areas, local legislative requirements are even more rigorous. The International Accounting Standards (IAS) have been fully introduced; banks’ annual reports are prepared in accordance with IAS and audited by internationally recognised auditing firms. Practical supervision of the banking sector is very tight and bank inspections are conducted more frequently than in the EU member states.

The principal relevant Law on Credit Institutions (in force since October 24, 1995) has been amended on several occasions. The regulations of the Financial and Capital Market Commission and the Bank of Latvia, complementing the provisions of this law, are binding on all credit institutions. The whole set of regulations for measuring the performance of credit institutions and for report submission procedure are in place and fully conform to the EU standards.

Indices of bank activities in the 1’st quarter of 2004

Assets of commercial banks as of 31.03.2004, LVL thou*

Nr. Name of Bank 31.03.2004 Change compared to 31.12.2003
+ / - %
1. Parex Bank 1 092 210.0 39 715.4 103.8
2. Hansabanka 963 457.5 13 816.9 101.5
3. Unibank of Latvia 930 469.0 49 784.5 105.7
4. Rietumu banka 466 757.7 10 805.0 102.4
5. Aizkraukles Bank 286 194.9 32 167.1 112.7
6. Nordea Bank Finland Latvia Branch 284 876.8 24 071.7 109.2
7. LATEKO banka 280 837.8 13 208.7 104.9
8. NORD/LB Latvija 246 035.8 27 725.5 112.7
9. Mortgage and Land Bank of Latvia 243 794.8 7 510.6 103.2
10. Baltic Transit Bank 179 894.9 17 437.4 110.7
11. Latvian Savings Bank 173 892.2 -16 244.6 91.5
12. Vereinsbank Riga 173 260.3 23 476.7 115.7
13. Ogres komercbanka 156 947.9 17 630.5 112.7
14. Latvian Trade Bank 156 368.1 21 867.8 116.3
15. Multibank 118 039.8 -1 433.3 98.8
16. Trasta komercbanka 62 039.2 8 639.1 116.2
17. Latvian Business Bank 44 627.7 23 503.7 211.3
18. Paritate Bank 39 210.8 5 496.5 116.3
19. Baltic International Bank 38 391.8 1 020.8 102.7
20. VEF Bank 37 941.2 4 015.8 111.8
21. Komercbanka Baltikums 32 420.0 1 629.6 105.3
22. Maras Bank 26 549.0 1 405.7 105.6
23. Regionala investiciju banka 12 305.3 2 583.8 126.6
Total 6 046 522.5 329 835.1 105.8

* Bank assets presented at gross value

Capital and reserves of commercial banks as of 31.03.2004, LVL thou

Nr. Name of Bank 31.03.2004 Change compared to 31.12.2003
+ / - %
1. Parex Bank 108 922.9 2 955.7 102.8
2. Unibank of Latvia 86 887.9 3 825.7 104.6
3. Hansabanka 84 191.0 4 612.1 105.8
4. Rietumu banka 31 975.6 772.3 102.5
5. Aizkraukles Bank 26 052.8 623.8 102.5
6. Mortgage and Land Bank of Latvia 24 084.2 18.4 100.1
7. NORD/LB Latvija 22 970.1 -300.1 98.7
8. Vereinsbank Riga 15 469.6 -687.5 95.7
9. LATEKO banka 13 619.8 1 299.9 110.6
10. Latvian Savings Bank 11 691.8 -48.1 99.6
11. Baltic Transit Bank 11 371.9 317.5 102.9
12. Latvian Business Bank 7 196.7 80.4 101.1
13. Multibank 6 540.6 240.8 103.8
14. Baltic International Bank 6 389.6 786.0 114.0
15. Latvian Trade Bank 5 667.2 429.4 108.2
16. Komercbanka Baltikums 5 292.5 -166.6 96.9
17. Maras Bank 4 989.2 -91.9 98.2
18. Trasta komercbanka 4 765.3 59.0 101.3
19. VEF Bank 4 538.3 164.8 103.8
20. Ogres komercbanka 4 507.1 159.3 103.7
21. Paritate Bank 4 480.9 150.1 103.5
22. Regionala investiciju banka 3 859.8 35.2 100.9
23. Nordea Bank Finland Latvia Branch * - -
Total 497 949.2 15 974.9 103.3

Commercial bank deposits as of 31.03.2004, LVL thou

Nr. Name of Bank 31.03.2004 Change compared to 31.12.2003
+ / - %
1. Parex Bank 817 153.2 24 100.9 103.0
2. Hansabanka 621 711.8 28 409.2 104.8
3. Unibank of Latvia 509 693.0 34 308.4 107.2
4. Rietumu banka 412 194.3 7 446.2 101.8
5. Aizkraukles Bank 243 358.9 22 880.4 110.4
6. LATEKO banka 200 011.4 -3 964.2 98.1
7. Baltic Transit Bank 141 057.2 33 501.3 131.1
8. Mortgage and Land Bank of Latvia 135 686.0 4 941.1 103.8
9. Latvian Savings Bank 135 119.3 -6 637.7 95.3
10. Ogres komercbanka 127 912.9 18 358.6 116.8
11. Latvian Trade Bank 127 797.2 14 236.2 112.5
12. Multibank 106 405.4 -1 459.2 98.6
13. NORD/LB Latvija 100 565.2 9 946.6 111.0
14. Nordea Bank Finland Latvia Branch 89 274.4 11 080.2 114.2
15. Trasta komercbanka 53 255.8 15 095.8 139.6
16. Paritate Bank 30 261.3 10 847.0 155.9
17. VEF Bank 26 078.5 -176.9 99.3
18. Baltic International Bank 25 870.8 782.2 103.1
19. Vereinsbank Riga 25 316.6 6 373.6 133.6
20. Latvian Business Bank 22 250.8 12 219.9 221.8
21. Maras Bank 14 116.5 582.6 104.3
22. Komercbanka Baltikums 11 372.6 -697.2 94.2
23. Regionala investiciju banka 4 721.8 1 721.8 157.4
Total 3 981 184.7 243 896.8 106.5

Loans issued by commercial banks as of 31.03.2004, LVL thou

Nr. Name of Bank 31.03.2004 Change compared to 31.12.2003
+ / - %
1. Unibank of Latvia 738 042.0 50 443.0 107.3
2. Hansabanka 694 646.4 54 369.0 108.5
3. Parex Bank 532 382.5 67 301.5 114.5
4. Nordea Bank Finland Latvia Branch 240 816.3 22 847.1 110.5
5. Mortgage and Land Bank of Latvia 204 814.8 13 215.6 106.9
6. NORD/LB Latvija 183 346.5 25 598.9 116.2
7. Rietumu banka 146 775.3 11 308.5 108.3
8. Vereinsbank Riga 142 788.0 18 590.2 115.0
9. Latvian Savings Bank 101 915.2 4 075.2 104.2
10. Aizkraukles Bank 84 585.2 18 324.6 127.7
11. Baltic Transit Bank 65 402.9 -367.1 99.4
12. LATEKO banka 48 784.0 7 685.7 118.7
13. Maras Bank 22 890.5 1 833.8 108.7
14. Multibank 21 908.1 4 969.8 129.3
15. Baltic International Bank 14 879.6 -322.8 97.9
16. Komercbanka Baltikums 13 549.5 -1 371.0 90.8
17. VEF Bank 9 982.4 -682.9 93.6
18. Trasta komercbanka 9 959.3 -4 283.0 69.9
19. Latvian Business Bank 7 354.1 1 387.7 123.3
20. Ogres komercbanka 6 726.6 -102.5 98.5
21. Paritate Bank 1 917.2 -713.1 72.9
22. Regionala investiciju banka 1 235.3 -101.1 92.4
23. Latvian Trade Bank 247.4 -14.8 94.3
Total 3 294 949.1 293 992.2 109.8

* The capital of Nordea Bank Finland Latvia Branch is not segregated
- no data

Bank assets, LVL mln

  1997 1998 1999 2000 2001 2002 2003
Cash and deposits with the Bank of Latvia 141.8 159.2 184.8 170.3 203.9 255.5 257.4
Due from credit institutions 490.0 316.9 439.9 764.2 835.9 1116.2 1326.5
Loans 501.6 732.6 850.5 1086.7 1635.7 2125.1 3001.0
Bonds and other fixed income securities 339.4 237.8 307.9 477.5 561.7 693.6 877.5
Shares and other non-fixed income securities 86.8 66.6 21.4 34.3 31.5 30.5 19.7
Investments in subsidiaries and associates 8.2 9.0 9.8 9.3 19.1 26.1 36.2
Fixed assets and intangible assets 81.2 92.0 99.3 112.6 123.8 124.5 135.4
Other assets 21.8 50.0 30.1 24.5 20.6 28.4 36.2
Deferred expenses and accrued income 19.9 21.6 18.5 19.1 26.2 22.7 26.8
Assets, total 1690.7 1685.7 1962.2 2698.5 3458.5 4422.5 5716.7

Sources: Association of Latvian Commercial Banks.