Foreigners can withdraw 4.6 billion euro from banks

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Ludmila Voevoda, a member of the Council of the Financial and Capital Market Commission (FCMC), Director of the Department of Regulatory Requirements and Statistics, stated at a meeting of the Saeima Commission on Public Expenditures and Audits on Tuesday,

that foreign deposits in Latvian banks could significantly decrease to 24% by the end of 2018. But if the frozen deposits of ABLV Bank were not returned, then the reduction of deposits would be up to 19%. In comparison, in 2015 it was 53%. At the end of March 2018, the amount of foreign deposits attracted by Latvian banks was 5.899 billion euros or 32.5% of total deposits attracted by Latvian banks.

With a reduction to 19%, Latvian banks may lose 4.6 billion euros.

For the period of January and March, foreigners withdrew from Latvian banks deposits of 2.185 billion euros.

According to Ms Voevoda, this year would be problematic for a number of banks in terms of preserving profitability and adapting the business model to new conditions.

According to Deputy Chairman of the FCMC Gunta Razane, at the end of April, the balance of the accounts of the so-called shell companies has declined by 38% in comparison with the beginning of the year – to 1.5 billion euros. 40% of foreign deposits in Latvia belong to clients from EU countries and only 18% to clients from third countries.

We remind that banks offer new business strategies to the FCMC, and in autumn the commission will analyze them and give their answers.

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