In 2021 the earnings of the Bank of Latvia reached EUR 20.908 million, which is 21.5% less when compared to 2020, as reported by representatives of the Bank of Latvia.
70% of last year’s earning or EUR 14.6 million were transferred to state enterprises and the remaining amount – the reserve capital of the Bank of Latvia. In the last five years the earnings of the Bank of Latvia have reached EUR 113.2 million of which EUR 78 million have been transferred to state enterprises.
At the end of the year the total investment portfolio of the Bank of Latvia accounted for EUR 6.2 billion. The Bank of Latvia mainly invests financial assets into bonds issued by EU member states and the US, asset-backed debt securities and high quality debt securities issued by banks and corporations, government debt securities of developing countries and shares of companies included in stock indices of developed and developing countries.
In the 2021 financial account Bank of Latvia governor Mārtiņš Kazāks stressed that
last year the central bank managed to accomplish many important tasks, as well as commence a number of operations to help form a stronger financial sector in the future.
The Saeima contributed by passing a new and modern Law on the Bank of Latvia, which includes regulations, according to which the central bank is to be merged with the supervisor of the country’s financial sector – Finance and Capital Market Commission (FKTK) from 1 January 2023 onward. Preparations for the merge of FKTK and the Bank of Latvia commenced in 2021.
Major changes were enacted to the central bank’s management model, ending management by board and transitioning to a single high-level management. This way the bank managed to maintain its policy for efficient and strong operations of the central bank using minimal resources.
The Bank of Latvia has accomplished many important tasks, including development of flash transaction infrastructure, adoption of modern and innovative technological solutions and reaching out to new financial market players at the start of 2022.
In regards to cash and, the central bank has accomplished an important historic agreement with the financial sector on the preservation of accessibility of cash.
The Bank of Latvia will continue monitoring this situation to ensure residents have the freedom of choice when it comes to payment methods. This will be promoted using a new form of money – digital euro. All Eurozone member states are working on the project actively. Representatives of Latvia’s financial technologies sector are involved as well, representatives of the Bank of Latvia say.
Kazāks said sustainability affairs play a more important role. On the Eurozone level it will be pushed forward using the review of the monetary policy strategy, including there the factors related to climate change. On a national level the Bank of Latvia adopted the strategy of longevity, which outlines directions for longevity and development – a sustainable monetary policy, financial system, money circulation, management of external reserves and other financial investments.
The Bank of Latvia admits that this year it is necessary to overcome challenges of the monetary policy and execute preparations for successful integration of FKTK.
The goal is ensuring integration of both institutions.
The Bank of Latvia will adopt new and innovative payment opportunities for entrepreneurs and residents. The central bank will continue developing economic confidence and promote use of statistical data – data linked to payment cards – in the analysis of developments of the national economy to assist economic policy makers make smarter decisions, stresses Kazāks.
In 2020 the Bank of Latvia gained earnings of EUR 26.646 million.
Bank of Latvia earnings in 2021 reach EUR 20.908 million
