Deposit Portfolio Surges, Reflecting Increased Financial Confidence

Latvia’s deposit portfolio experienced substantial growth in 2024, reaching a total of EUR 23 billion.This represents an increase of EUR 2 billion compared to the previous year, signaling a heightened level of savings and financial security among Latvian residents. Term deposits accounted for 23% of this total,demonstrating a year-on-year rise of 2%.

Positive changes were observed last year in deposit habits, and this year’s data confirms that Latvian society is increasingly aware of long -term financial planning.This trend is a showing growing confidence in people’s confidence in thier future stability.

Uldis Cērps, Financial Industry Association

This surge in deposits coudl be attributed to several factors, including rising disposable incomes, increased financial literacy, and a general sense of optimism about the future economic outlook. According to a recent Eurostat report, the household savings rate in Latvia has been steadily increasing over the past five years, indicating a growing preference for saving among Latvian families.

Lending Activity Exceeds economic Growth, Driven by Investment

The loan portfolio of commercial banks also demonstrated positive momentum, reaching EUR 15.2 billion in 2024. This represents a 4.1% increase, or EUR 800 million, compared to the EUR 14.4 billion recorded in 2023. This growth in lending surpasses the overall economic growth rate,suggesting a strong appetite for investment and project implementation among both companies and individuals.

The increase in the amount of loans granted is positive – the increase in lending exceeds the overall economic growth rate.This indicates the desire of companies and residents to invest and implement projects, while continuing to borrow responsibly.

uldis Cērps, Financial Industry Association

Specifically, corporate loans constituted the majority (56%) of the total loan portfolio, while loans to individuals accounted for 41%. A significant portion (33%) of loans were allocated for home purchases or construction, reflecting the ongoing demand for housing in Latvia. This trend aligns with recent government initiatives aimed at promoting affordable housing and supporting first-time homebuyers.

Leasing Portfolio Demonstrates Steady Expansion

The leasing portfolio also experienced growth, reaching EUR 1.92 billion in 2024, up from EUR 1.82 billion at the end of 2023. Financial leasing accounted for the majority (62%) of these loans, indicating a preference for this type of financing among businesses and individuals.

Overall Financial Sector Health Remains Strong

The total assets of members of the Financial Sector Association reached EUR 28.8 billion at the end of 2024, underscoring the overall strength and stability of the Latvian financial sector.this positive performance across various financial indicators paints a promising picture for the future of the Latvian economy.