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Head of ‘SEB banka’: banks’ ability to issue loans is currently very high

The ability of banks to issue loans is currently very high, in an interview with LETA admitted “SEB Ieva Tetere, Chairman of the Board of.

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“What we are seeing in Latvia now is that banks have the opportunity to finance, they are able to provide resources. Most of the banks did not pay dividends for last year. Strengthened their ability to support the economy. (..) Thus, the financial sector prepared very well and It seems to me that currently the ability of banks to issue loans is very high, banks feel very safe and strong in terms of both liquidity and capital adequacy, so the rates are low enough, “said Tetere.

She also noted that there have always been companies that find it easy to obtain bank loans because they have their own capital, good governance, secured cash flow from which the loan will be repaid, and there are smaller entrepreneurs who have and will continue to find it more difficult to obtain. bank loans because the company is small, does not have a stable cash flow, lacks its own capital and participation in the project, but in these cases it is definitely necessary to look for other solutions – either look at one of the “Development Financial Institutions”high“” guarantees, a private investor must be sought who can invest in capital, and venture capital is available.

“We have to look for other options. There is a different solution for each of these stories, and there is always a good reason why banks did not subscribe to these risks in a particular case,” Tetere added.

At the same time, she admitted that in demand for loans this year, March and April were very quiet months, including in the retail segment in April the desire to borrow, buy a new home, the car had shrunk about three times. In June, compared to the corresponding month in previous years, activity was 70%, indicating that activity has gradually returned.

“Looking at the bank’s results, the total loan portfolio has even grown. This is due both to the financing of individual large companies and to the fact that we have been able to maintain a stable loan portfolio in the medium-sized segment. Overall, new financing increased by 69% in the first half. “Entrepreneurs say it is clear that many development projects are being slowed down and paused. There is such a wait-and-see attitude.

She also noted that this global pandemic crisis is different from previous crises, as industries are very different. There are some that are growing very much right now and are seizing the opportunity to expand or acquire new businesses, but there are industries that have been drastically affected and have not had the opportunity to transform or offer something new, such as tourism, hotels. At the same time, many construction companies are very satisfied as the projects continue. Other companies have also streamlined their logistics chains as a result of the crisis. “There are both very positive stories and very difficult situations,” said the head of SEB banka.

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