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
300%
Loan-to-deposit ratio
Growth Rates of Domestic and Foreign Client Deposits
25%
Introduction of tougher
AML/CFT requirements
250%
200%
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)
15%
5%
- 5%
- 15%
- 25%
- 35%
Weaker CIS economies
- 45%
- 55%
- 65%
2012
2013
2014
2015 2016 2017
2019 2020 2021
Annual growth rate of foreign client deposits (adjusted for exchange rate)
Annual growth rate of domestic non-financial private sector deposits
2018
Source: Bank of Latvia
Liabilities to foreign MFIS
(EUR bn)
18
16
14
12.4
12
10
10.8
8
16
14
16.4
12
10
8
6
6
st
4
3.2
4
2
2
0
0
2015
2016 2017
2018
2019
Q1 Q2
2020 2020 2020
Q3
Q4
Q1
Q2
Q3
2020 2021
2021
2021
Domestic
Foreign
Source: Bank of Latvial
16
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