Jeļena Buraja comments on the trends in the Latvian financial market

28 December 2023, 10:30

Jeļena Buraja, Chairman of the Board at Rietumu Banka, shared insights with the news agency LETA, evaluating the main trends in the Latvian financial market this year and giving forecasts for the next year.

Jeļena Buraja emphasized that the Latvian banking sector in 2023 underwent significant transformations, which is the result of the specific banking strategies and objective external factors. Notably, several banks pivoted their business models, directing focus towards domestic markets, while withdrawing from foreign arenas. Consequently, intense competition emerged among banks, particularly in the segment of business clients.

The Chairman of the Board at Rietumu Banka noted: "The scale of projects a bank can finance is directly impacted by its size. For business entities aiming to attract resources for ambitious projects, partnering with credit institutions capable of funding large-scale initiatives becomes imperative. However, objectively, there’s scarcity of such partners withing the Latvian market. Concurrently, the demand for funding significant projects from corporate entities remains robust."

Jelena Buraja marked the consolidation of banks as a logical step, and predicted this trend to continue next year, as well as competition in the private customer service will intensify.

The Chairman of the Board at Rietumu Banka highlights the prevalent influence of high interest rates on the lending sector throughout the year. Corporate clients are actively seeking for opportunities to refinance existing liabilities and for investments in company’s capital, which allows to significantly raise funding. Preferably, they seek for credit institutions that, firstly, have such resources, and, secondly, want to delve into customer projects, evaluate every business detail and need, and offer tailor-made solutions. Considering that the central banks continue the policy of high base rates, this factor will affect the Latvian financial market next year as well.

Jeļena Buraja pointed out that even due to slowing down of inflation, maintaining the price level high does not contribute to the growth of deposit culture in Latvia; that Latvian banks focused on private mortgage lending will be significantly affected by amendments to the regulations on support for borrowers next year; that further improvement of internal control systems, the area of money laundering and prevention of terrorism and proliferation financing, compliance with and implementation of international sanctions will be among the most important factors in the focus of banks next year. Furthermore, she emphasized the escalating significance of implementing sustainability and ESG (Environmental, social, and governance) standards in the daily operations of banks.

The Chairman of the Board at Rietumu Banka evaluates the overall development level of the Latvian financial sector to be very high at the moment, acting to the best global standards and having great prospects for further development. Concurrently, the growth of Latvian banks will go along with the overall growth of the Latvian economy, and among the main factors can be mentioned the legal predictability and stability, the reduction of the bureaucratic burden, the fight against inflation and the shadow economy.

Read the full article (in Latvian language) here.


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