Banks are continuing to be very willing to provide business financing, Citadele Leasing CEO Girts Glazers has declared. Mr Glazers is also co-chair of the Lending Committee of the Finance Latvia Association, and he was speaking  at the conference “Balanced regulation for sustainable development,” which was hosted on Friday by the Public Utilities Commission.

The banking association representative said that lending represents the bulk of bank revenues and that banks continue to be willing to provide business financing.

Mr Glazers added that Latvia has the sixth fastest corporate lending growth among European countries and that the overall growth rate of the loan portfolio is 9%.

He noted that financing is based on a company’s creditworthiness which, in turn, is established on the basis of the company’s historical financial performance and future cashflow. Banks also look at customer numbers, long-term trends, as well as the likelihood that customer numbers will increase.

Repayment schedules are tailored to the company’s investment plans, and in most cases, legal maturities will normally expire in ten years’ time. Banks also take into account corporate management and shareholders, risk management in the company, relations with counterparties, transparency and other criteria, Glazers explained.

He went on to say that lower inflation has allowed the European Central Bank to cut interest rates by 1.75%, with the EURIBOR rate down, as well. Market forecasts suggest that base rates might fall below 2% by year’s end, although forecasts are always malleable.

This means that a lower interest rate environment can ease financing costs, especially for investment and development projects, Mr Glazers concluded.

Source: BNS

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