The period of record-high profits of banks will not remain for a long time, said deputy governor of the Bank of Latvia, former head of the Finance and Capital Market Commission Santa Purgaile in an interview to TV3 programme 900 seconds.
At the same time, Purgaile predicts this year banks will likely show much higher profit indexes when compared with previous years.
She also said the condition for the up in profits are special, and they appeared over a short period of time, when,
after a rapid rise of Euribor rate, banks started gaining additional revenue.
Deputy governor of the Bank of Latvia also explained that banks gain record-high profits because under the new Euribor rate, loan loans quickly reprice.
At the same time, Purgaile mentioned that banks are also gradually increasing deposit rates. “The faster deposit rates go up, the faster the difference or the profit portion equalise,” said the vice-governor of the Bank of Latvia.
She also mentioned that the Bank of Latvia wants to see these “super profits” invested into new financial technologies that would make financial services cheaper, more accessible and more convenient. “Now is the time for a breakthrough in technological development,” said Purgaile.
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