| 2011.04.05 10:20 |
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RIGA, April 4 (NOZARE.LV) - Latvia's banks have begun to write off loans in earnest, for instance, Latvian Mortgage and Land bank has written off loans worth LVL 57 million, the newspaper "Dienas Bizness" reports today. This amount includes LVL 14 million that the bank last year handed over to its subsidiary "Hipoteku bankas nekustama ipasuma agentura" (Mortgage Bank's Real Estate Agency), which deals with debt recovery and sale of foreclosed properties, explains the bank's head Rolands Panko. This year, Mortgage Bank plans to give its subsidiary loans worth another LVL 58.72 million, for which the bank has created provisions of LVL 27.8 million, which will also be written off. The total amount of loans written off by the banks the past two years is at least at LVL 84 million, unless some new loans are written off this year. This amount made up 13 percent of banks' total net loan portfolio at end-2009. In 2010, "Swedbank" and its subsidiaries wrote off loans worth LVL 147 million, and LVL 47.9 million in 2009. These figures made up 5.7 percent and 4.7 percent of the bank's loan portfolios in the respective years. "Provisions are the bank's evaluation of the situation at a given moment. To say that all the provisions will be written off would be "fortune-telling". The Latvian economy has gone through some extreme fluctuations, without the experience of past crises," notes "Swedbank" financial market management head in Latvia, Renars Rusis. In the meantime, "SEB banka" has written off loans worth under LVL 5 million, and the bank expects that the volume of loans that will be written off may increase - but not very much. Outgoing Latvian Commercial Banks' Association head Teodors Tverijons believes that banks will continue to write off loans this year and next, and that the total amount of such loans is hard to predict. By the end of last year, banks' total provisions for bad loans stood at LVL 1.6 billion. Nozare.lv
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