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Bank of Lithuania sees increased business interest in credit union services

The Bank of Lithuania reports that in 2022 in the second quarter, credit unions continued to lend actively, especially to companies, which had a favorable effect on the performance of this sector.

“The credit union sector is making a profit, there is a trend to offer more business services. However, due to geopolitical tension and its negative impact on the economy, due to rising resource prices energy sources, it is necessary to carefully manage credit risk and strengthen capital,” says Renata Bagdonienė, Director of Bank of Lithuania’s Banking and Insurance Company Supervision Department.

in 2022 in the first half of the year, the credit union sector earned 5.2 million EUR profit – 53 credit unions earned 5.3 million EUR. Profit EUR, 6 – known 0.1 million. Euro loss. This is due to the increase in loans and the recovery of loan impairment charges. The largest share of income (82%) was interest income. Compared to the corresponding period last year, credit unions gained 20%. plus net interest and 17 percent. more net income from services and commissions.

Deposits in credit unions amounted to 927.5 million. Eur: term loans – 678.4 million. EUR (increased by EUR 10.7 million or 1.6%), open-ended loans – 249.1 million. EUR (decrease of EUR 10.4 million or 4%). In particular, term deposits of legal entities increased (15.4%).

in 2022 at the end of the first semester, the credit unions had granted 875 million Loans in EUR: 632 million EUR – for residents and 243 million EUR – for companies. During the quarter, the net value of loans granted increased by 46.6 million. EUR, i.e. 5.6%. Loans to individuals increased by 20.3 million. EUR, or 3.3%, and loans to legal entities – 26.3 million. EUR, i.e. 12.2%. During the period under review, the share of clients more than two months in arrears with their loan repayments decreased slightly, but the share of non-performing loans increased slightly.

Unlike a year ago, credit union assets grew 2.6%. and amounted to EUR 1.1 billion, or 2.3%. banking sector assets. This was largely due to increased borrowing from central credit unions and growth in term deposits.

The registered capital increased by 0.5 million. EUR and amounted to almost 65 million euros. EUR. Sustainable equity, which can cover losses incurred by the credit union, increased to 63.7 million. EUR and accounted for 98 percent. seed capital.

All credit unions, both central and individual, met all operational risk limitation requirements. In addition to providing financial services to their members, central credit unions monitored and controlled the risks they assumed and backed up their liquidity when necessary.

Currently, there are three credit union groups operating in Lithuania – Central Credit Union of Lithuania (LCKU) group, which unites 44 credit unions, United Central Credit Union (JCKU) group, which unites 11 credit unions and 4 credit unions in reorganization – a total of 59 credit unions with 167.4 thousand members. In addition to the head office, the credit union offered services in 77 other structural units across the country.

The Bank of Lithuania publicly publishes information on the key performance indicators of each credit union for the year and each quarter, as well as the implementation of operational risk limitation regulations. The latest credit union performance indicators are available here.

Source: The Delfi





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