Swedbank's profit in Latvia in the first half of this year amounted to 119 million euros, which is 10% less than in the same period last year, when the bank earned 131 million euros, representatives of the financial institution reported. The bank's net interest income in the first half of 2024 according to compared to the first half of last year increased by 12 million euros, and net commission income increased by 1 million euros. The volume of the bank's loan portfolio increased by 8%. Lending to households increased by 7%, while the loan portfolio of companies grew by 8%. In the second quarter, the volume of financing provided by Swedbank to individuals increased significantly, with the total portfolio of individuals reaching EUR 2.5 billion at the end of the reporting period. The consumer finance portion of the portfolio grew significantly and exceeded EUR 320 million. The areas of auto lending and consumer lending continue to grow particularly rapidly. The companies' total loan portfolio at the end of the second quarter amounted to 1.8 billion euros. This year there has been an increase in demand from companies to finance the implementation of sustainable solutions (solar power plants, energy efficiency solutions, etc.). The amount of funding provided for the use of renewable resources is also increasing – in the first half of the year, a total of 38 million euros were allocated for the construction of solar power plants. Deposits, compared to the same period last year, increased by 9%. Household deposits grew by 7%, while corporate deposits grew by 12%. According to bank representatives, the decline in profits is mainly due to the duty on compensation of interest on mortgage loans (19 million euros in the first half of this year). The bank's total expenses in the first half of the year amounted to 81 million euros (67 million in the first 6 months of last year). This year, 4 million euros of loan provisions were released (in the first half of last year, 2 million euros of reserves were created). “Although there are positive trends in the overall economy, the growth rate is relatively low, and companies’ demand for financing is more cautious than we would like,” said Lauris Mencis, Chairman of the Board of Swedbank Latvija. "Despite the manifold increase in the financing provided for sustainable development solutions, we still lag behind our neighbors in the Baltic region. In the private segment there is an increase in activity, which, compared to the first quarter, is visible both in loans issued and in significantly growing savings and investment volumes over a long period,” Mentzis noted.
