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Latvian central bank sees profit contract in 2014

Xinhua, March 12, 2015 Adjust font size:

The annual profit of the Bank of Latvia contracted 37.7 percent year-on-year to 36.8 million euros (38.8 million U.S. dollars) in 2014, the central bank said in its financial statement released Wednesday.

As required by law, 65 percent of the Latvian central bank's 2014 profit, or 23.9 million euros, will be appropriated to the state budget, while the rest will be added to the Bank of Latvia's reserve capital.

The Bank of Latvia's net interest income dropped 7.3 percent year-on-year to 38.9 million euros in 2014. It decreased by 3.1 million euros from 2013, mostly on account of shrinking securities yields which remained at a low, the Latvian central bank said, adding that last year's revenue was generated mostly from debt securities, which amounted to 45.3 million euros, according to the central bank's financial statement.

The Latvian central bank's gains from financial operations in 2014 were 52.2 million euros less than a year before.

The Bank of Latvia Council decided to put aside 14.8 million euros in provisions for market and credit risks, as well as credit risks associated with investment management transactions.

"The Bank of Latvia's future financial performance will be mostly affected by the monetary policy pursued by the Eurosystem, as well as by interest rate developments in the financial markets of the euro area and the United States since the Bank of Latvia is exposed to interest rate risk," the bank said in the statement.

The Bank of Latvia reported the equivalent of 59 million euros in its 2013 profit.(1 euro = 1.05 U.S. dollars) Endit