BlueOrange and other local capital banks state their readiness to increase lending volumes to entrepreneurs.

On October 9, a media breakfast organised by the Committee for Strategic Development of the Finance Latvia Association was held on the topic of the role of local capital banks in the financial market and their contribution to the state economy.

The media breakfast was attended by the member of the Council of the Finance Latvia Association, Chairman of the Board of BlueOrange Bank Dmitrijs Latisevs, Co-Chairman of the Committee for Strategic Development of the Finance Latvia Association, Chairman of the Board of Baltic International Bank Viktors Bolbats and Chairman of the Board of Signet Bank Roberts Idelsons.

During the event, the member of the Council of Finance Latvia Association, the chairman of the Board of BlueOrange Bank Dmitrijs Latisevs emphasised that the transformation of local capital banks is believed to have occurred.

“Local capital banks have introduced significant changes in their businesses in a very short time-frame, having realised cardinal changes with clearly defined new business goals. Each bank has found its niche in the financial market, and the banks have clearly demonstrated their ability to successfully cater both businessmen and individuals from Latvia and European countries. Local banks create healthy competition in the market, which is beneficial to entrepreneurs,” noted D. Latisevs.

Co-Chairman of the Committee for Strategic Development, Chairman of the Board of Baltic International Bank Viktors Bolbats accentuated the high demand for services of local capital banks, both domestically and internationally. He emphasised the ability of local capital banks to contribute to the state economy with lending capacity of €220 million in 2020.

“Local capital banks play a significant role in the economy of Latvia. Operating in the local business environment allows those banks to understand the needs of society and businessmen by maintaining a close link to the national economy. These banks focus on maintaining values in the long term, are responsible, predictable and at the same time flexible, since in many cases local capital banks are able to look at business opportunities outside standards, have more time to go into details and understand the needs of individual customers,” V. Bolbats described the advantages of local capital banks.

Meanwhile, Chairman of the Board of Signet Bank Roberts Idelsons noted: “Current changes in the financial sector should be considered as a normal process of evolution which undeniably contributes to the restoration of the international reputation of the financial system of Latvia. As a result of these processes, the economy of Latvia benefits from additional financing opportunities, long-term predictability and increased competition in the financial sector.”

In addition, the participants of the media breakfast noted that in 2018 a huge amount of work was done on reducing the risks: in line with current requirements, banks have completely abandoned high-risk clients and have invested significant funds in client due diligence procedures.

The need for a qualitative discussion on the revision of the regulatory requirements to ensure sustainable growth of the new business models of local capital banks was highlighted.
“In order to promote access to financial and banking services for local entrepreneurs, it is very important to continue a high-quality dialogue between banks and the regulator on the future supervisory principles and methodologies,” stressed R. Idelsons.

The participants of the media breakfast agreed that local capital banks are strong market participants that provide financing to local enterprises. Their role is expected to increase and strengthen in the future, contributing significantly to the development of the national economy. An active dialogue between local capital banks and the Finance Latvia Association and State institutions strengthens the stability and reputation of the banking sector of Latvia.