| Emitents | Latvijas Hipotēku un zemes banka, VAS |
| Veids | Finanšu pārskati |
| Valoda | EN |
| Statuss | Publicēts |
| Versija | |
| Datums | 2011-02-10 17:20:41 |
| Versijas komentārs | |
| Teksts |
Mortgage Bank’s Activities in 2010 Pave Way for
Further Growth
Targeted implementation of the state aid programmes and
phasing-out of the commercial segment’s activities pursued by the
state-owned JSC “Mortgage and Land Bank of Latvia” (Mortgage Bank)
in 2010 paved the way for transformation into a promotional
financial institution. In 2010 the Mortgage Bank, as commissioned
by government, launched three new state aid programmes expanding
availability of promotional instruments for growth of the small and
medium enterprises (SME) and farmers.
In 2010 the Mortgage Bank has committed new loans for
the total amount of 116.7 mln lats. By taking on higher risk
associated with implementation of the state aid programmes the
Mortgage Bank has invested 65.2 mln lats in business start-ups and
development boosting the development loans’ portfolio to 244.5 mln
lats that accounts for 41% of the total loan
portfolio.
Also in 2010, without assistance of state, the Mortgage
Bank repaid syndicated and other long-term inter bank borrowings in
the amount of 173.7 mln lats, retaining high liquidity ratio that
considerably exceeded the statutory minimum imposed by the
Financial and Capital Market Commission.
Rolands Paņko – Board Chairman of
Mortgage Bank:
“Due to the increased lending risk resulting from the
global financial crisis the banking sector in general and also
Mortgage Bank continued to accumulate extra provisions for insecure
loans in 2010. The reinforced capital base of the Mortgage Bank
enabled it to reassess the risk of the granted loans and accumulate
adequate provisions. In 2010 76.8 mln lats were channelled for
accumulation of provisions.
We expect that aftermath of crisis will not affect the
operational results of the bank in 2011 and growth will gradually
return. The Mortgage Bank has closed January of 2011 with profit of
1.1 mln lats. In view of the provisions accumulated already in 2009
and 2010 provisioning will be considerably reduced. Overall
stabilisation of the economic situation and improvement of payment
discipline of the customers give ground for optimistic
outlook.
The priorities for this year are successful
implementation of the state aid programmes and transformation
solutions as approved by government. Due to prudent financial
policy of the bank we are ready to prepay all remaining syndicated
loans in near future.”
Operational Results
In 2010 Mortgage Bank’s profit before provisions and
taxes amounted to 9 mln lats. Also in 2010 due to the global
financial crisis the Mortgage Bank proceeded with accumulation of
provisions and channelled for this purpose 76.8 mln lats. As a
result of accumulation of provisions the Bank closed year 2010 with
67.9 mln lats in losses that was by 22% less than forecasted. As at
31 December 2010 the ratio of the Bank’s accumulated provisions and
loan portfolio was 15.6%. In January 2011 the Mortgage Bank had
worked with 1.1 mln lats profit.
Number of Customers
In 2010 the Mortgage Bank recorded a rise in the number
of corporate customers. Despite phasing-out of the commercial
activities the number of retail customers remained unchanged
attesting to high customer confidence.
Deposits
In 2010the volume of term deposits with Mortgage Bank increased both in corporate and retail customers’ sections. Within the reporting year the deposits have grown by 36.9 mln lats reaching 363.6 mln lats. Assets
In 2010 the gross assets of the Mortgage Bank decreased
by 158.4 mln lats or 16% falling to 808.2 mln lats attributed to
repayment of the syndicated and other long-term inter bank
borrowings in the amount of 173.7 mln lats without financial
assistance of the state. As at 31 December the loan portfolio was
594.2 mln lats formed by development loans’ portfolio – 244.5 mln
lats and commercial loans’ portfolio – 349.7 mln lats
Capital Adequacy and Liquidity
According to the law on the state budget for 2010 the
equity capital of the Mortgage Bank was increased by 70.28 mln
lats. The Mortgage Bank maintains constantly high capital adequacy
and liquidity ratios that considerably exceed the statutory minimum
defined in the Credit Institution Law. As at 31 December the
capital adequacy ratio was 16.7% (minimum 8%), but liquidity ratio
– 84.8% (minimum 30%).
Implementation of State Aid Programmes
In 2010 the Mortgage Bank proceeded with implementation
of five state aid programmes. The Programme for Improvement of
Competitiveness of Businesses has granted loans for 146.7 mln lats.
The European Social Fund’s programme "Support to Self-employment
and Business Start-ups" has financed 267 projects of business
start-ups for 3.8 mln lats, trained more than 600 new
entrepreneurs. The financing of the Micro-lending Programme for
Small and Medium Enterprises amounting to 0.56 mln lats is fully
consumed and bank keeps granting micro-loans from the repaid funds.
Also in 2010 the SME Growth Programme and Programme for Working
Capital Loans to Farmers were launched the former having granted
loans for the total amount of 8.9 mln lats, but the latter - 200
loans totalling to 7.5 mln lats. In summer 2010 by getting involved
in the distribution of the resources of the Credit Fund the bank
continued financing of agricultural investments. In 2010 the Credit
Fund’s resources were allocated to 3 projects totalling to 1.4 mln
lats.
In view of the high demand for micro loans the Mortgage
Bank in co-operation with the Ministry of Finance is developing a
new micro-lending programme within the framework of Latvian – Swiss
co-operation project. The programme will be launched in the
3rd quarter of 2011.
Ratings
The beginning of 2010 was marked with a positive
assessment of the economic development potential of Latvia
acknowledged also by Standard & Poor’s Rating Services
andMoody’s Investors Service Ltdthrough upgrading the
credit rating outlook of Latvia to stable from
negative. The Mortgage Bank is assigned the
following ratings: long-term foreign currency deposits Baa3,
short-term foreign currency deposits P3, financial strength
rating E+, rating of mortgage bonds
Baa2.
The Mortgage Bank was established in 1993. Its
priorities are support to small and medium enterprises and
promotion of economic activity in all regions of Latvia. The
Mortgage Bank offers state aid target programmes for various needs
of entrepreneurs, like business investment loans, working capital
loans as well as loans for starting a business.
For more information contact:
Please find attached Mortgage and Land bank of Latvia
Annual Report for the year ended 31 December 2010.
Sandra Eglīte
PR Officer of Mortgage Bank
telephone: +371 67774244, +371
26577810
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