Latvia Economic and Fiscal Outlook

BANKS HAVE AMPLE LIQUIDITY RESERVES AND HIGH CAPITALIZATION Banking sector is largely funded by domestic deposits; ample capital buffers provide good shock absorption capacity Domestic loan-to-deposit ratio 110% 100% 90% 80% 70% 60% 30% 25% 20% 15% 76% 10% 5% Total capital ratio Average Liquidity Coverage Ratio stands at 320% 0% 2019 2020 50% 2018 2019 2020 2021 2022 27 Source: Bank of Latvia Latvia 25.0% Sweden EU/EEA Minimum requirement 2021 2022 Latvia (FCMC FINREP) Minimum requirement Sweden (EBA*) EU/European Economic Area (EBA*) * Data for Sweden and European Union (EU)/European Economic Area (EEA) are European Banking Authority (EBA) sample of largest institutions, for Latvia FINREP data of all institutions are used Source: Financial and Capital Market Commission (FCMC), European Banking Authority (EBA) Risk Dashboard, Bank of Latvia calculations

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