Latvia's Economic Response to Covid-19
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
300%
250%
200%
Loan-to-deposit ratio
Growth Rates of Domestic and Foreign Client Deposits
25%
Introduction of tougher
AML/CFT requirements
15%
150%
100%
50%
0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Domestic
Total
Source: Bank of Latvia
Deposits (EUR bn)
5%
- 5%
- 15%
- 25%
- 35%
- 45%
Weaker CIS economies
- 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
2021
Source: Bank of Latvia
Liabilities to foreign MFIS
(EUR bn)
18
16
14
12.4
12
10
10.8
8
14
15.4
12
10
8
6
16
115
6
st
4
4
3.3
2
2
0
0
2015 2016 2017 2018 Q1
Domestic
Q2 Q3 Q4 Q1 Q2
2019 2018 2019 2019 2020 2020
.-Foreign
Q3 Q4 Jan
2020 2020 2021
Source: Bank of Latvia
17
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: Bank of Latvia
Liabilities to foreign MFIS
incl. parent banksView entire presentation