Swedbank expects overdue loans in Latvia to peak in 2010
18.11.2009, 14:39Swedbank, the largest bank in the Baltic states, expects growth in overdue loans to Latvian clients to peak next year as unemployment growth levels off, reports Bloomberg.
“We see Latvian overdue loans still growing, but at a much lower pace than in the first half of this year,” Maris Mancinskis, Swedbank’s Latvian head, said in an interview in Riga yesterday. For personal lending, “growth in overdue loans will still increase next year because of the growth in unemployment, but it will peak probably next year and then start coming down.”
Latvia turned to the European Commission and International Monetary Fund last year for a 7.5 billion euro loan after house prices slumped, credit froze, and Parex, its second-biggest bank, failed after a run on deposits. Swedbank controlled 25 percent of the Latvian lending market in the third quarter. The bank’s impaired loans in the country rose more than sevenfold to $11.2 billion in the year through September.
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Swedbank will this week open the Institute of Private Finance in Riga to educate Latvians on how to manage their personal finances, Mancinskis said in the interview at Swedbank’s Latvian headquarters in Riga. The institute will advise individuals on borrowing, payments and savings, he said.
“We overestimated the financial knowledge situation of the people in the Baltics, and some found ways to borrow more and spend more, and we now want to educate the general public on how to manage costs and how to understand and analyze their finances better,” Mancinskis said. Swedbank will also start similar institutes in Estonia and Lithuania modeled on the one that has existed in Sweden for several decades, he added.