During six months SEB Latvia grants to companies 418 million EUR in new financing

During first six months of 2018 SEB bank has issued to companies in Latvia new financing of 418 million EUR. It is an increase by 27% in comparison with the first half of 2017 when companies received new financing of 328 million EUR.

72% (300 million EUR) of the new financing to companies issued this year was granted to large companies with annual turnover exceeding 20 million EUR. Small and medium-sized companies have received new loans of 118 million EUR.

Ints Krasts, board member of SEB Latvia: "Latvia's economy has picked up its pace, which is visible in the latest GDP figures. Companies and investors are looking for good opportunities to expand, increasing the demand for financing. Most of industries and companies are in a very favourable situation, however some industries, for instance, construction, have challenges to address. In first half of this year we have seen a higher activity in corporate mergers and acquisitions. Meanwhile, estimates of company value and commercial real estate value have reached considerable levels, pushing down the expected returns on investment.

Companies are facing two main challenges in delivering on the demand. Firstly - limited production capacities. This indicates a necessity to improve efficiency and invest in innovative solutions. Secondly - almost all companies are concerned about availability of workforce. This encourages to consider available alternatives: process automation, standardization, maybe a completely different process of production or client service? Maybe a better motivation for the existing employees? We have seen cases where, with appropriate changes in processes, dividing salaries for three positions among two employees it is possible to reach better results than with three averagely-compensated employees."

In total, SEB Latvia has issued new loans to more than 2500 Latvian companies during the first six months. It is an increase by 5% in comparison with first half of 2017 when roughly 2400 companies received new loans.

May has been the most active month in terms of lending, when SEB signed more than 500 credit contracts worth more than 76 million EUR.

According to Finance Latvia Association, by the end of Q1 2018 SEB Latvia had the second largest corporate loan portfolio among all commercial banks in Latvia: 1.73 billion EUR or 20% of all loans to companies issued in Latvia.

The total amount of new lending granted by SEB to private individuals and companies during first six months of 2018 reached 508 million EUR, which is by 23% more than last year.