Portrait of an Ascending Sovereign Credit
Domestic loans are mainly funded by domestic deposits
Lending is the core banking product in the domestic market. Parent bank funding has been replaced with domestic deposits
Loan-to-deposit ratio
300%
250%
200%
150%
100%
50%
0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Domestic
Total
Source: Bank of Latvia
16
14
12.4
12
10
10.8
8
6
Deposits (EUR bn)
Growth Rates of Domestic and Foreign Client Deposits
25%
15%
Introduction of tougher
AML/CFT requirements
5%
- 5%
- 15%
- 25%
- 35%
Weaker CIS economies
- 45%
- 55%
- 65%
2012
2013
2014
2015
2016
2017
2018
2019
2020
Annual growth rate of foreign client deposits (adjusted for exchange rate)
Annual growth rate of domestic non-financial private sector deposits
Source: Bank of Latvia
Liabilities to foreign MFIS
(EUR bn)
16
115
14
14.0
12
10
8
6
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
4
3.2
3.3
3.5
3.4
3.2
3.2
3.2
3.5
st
4
•
2
2
0
0
2015 2016 2017
Q1 Q2
2018 2019
Q3 Q4 Q1 Q2
Q4 Q1 Q2
2018 2018 2019 2018 2019 2019 2020 2020
Q3
Domestic
.-Foreign
Source: Bank of Latvia
17
Source: Bank of Latvia
Liabilities to foreign MFIS
incl. parent banksView entire presentation