Bigbank’s corporate loan portfolio has grown by a quarter
Since the beginning of this year, Bigbank’s total corporate loan portfolio in the Baltics has grown nearly by a quarter, or 24%, to 900 million euros, the Latvian Branch of Bigbank informs.
In the first eight months of this year, the amount of loans issued by Bigbank Group in the segment of legal entities exceeded the 500-million-euro mark, surpassing the total amount of loans issued in the full 2024.The amount of loans issued by the Latvian Branch of Bigbank between January and August this year was also larger than in the full 2024.
This year, Latvian commercial banks’ total corporate loan portfolio has been growing at twice the rate of household loans. According to the latest data from the Bank of Latvia, 6.25 billion euros worth of loans were issued to Latvian companies both in the public and private sectors by July this year. The amount of loans issued to legal entities by July grew by an estimated 11.1% from the end of last year. Loans to households, meanwhile, grew by an estimated 5.6% from December 2024 to 6.48 billion euros.
The growth of lending to legal entities by the Latvian Branch of Bigbank has been largely driven by Baltic cross-border projects, according to the bank’s representative. This year in Latvia, the bank has supported several projects of developers and investors from other Baltic states, including the construction of new apartment buildings in Riga, the development of new residential projects in smaller towns, new office, warehouse, retail and logistics complexes, co-living facilities in Riga, entertainment, sports and leisure complexes, as well as investments in the agricultural and forestry sectors.
Although corporate lending is a relatively new service provided by the Latvian Branch of Bigbank, in Latvia, it has shown fast growth over the past couple of years.
“In Bigbank’s case, the highest demand is for loans to new projects, intended for construction and reconstruction, however, long-term investment loans are also becoming increasingly popular,” says Mareks Grodskis, Head of Corporate Banking Unit at Bigbank’s Latvian Branch. “The bank also provides loans, for example, to finance working capital and offers support to farmers and foresters.”
The bank’s representative notes that when it comes to lending, Latvian banks are becoming more active and are more willing to take on more risk.
At the beginning of September, Bank of Latvia Governor Mārtiņš Kazāks confirmed the overall trend of bank lending growth in an interview with the public television program “Rīta Panorāma” (Morning Panorama), indicating that the lowest point in the bank lending circle is over.
Large universal banks tend to look for highly solvent clients capable of highest-level compliance with all their requirements. Smaller banks like Bigbank are often more flexible in that respect. “When we assess potential clients’ solvency, they are not necessary expected to have had excellent financial performance for several consecutive years. We rather look at the ‘big picture’, including operational financial data. When assessing solvency, it is necessary to look at long-term patterns,” explains the bank’s representative.
In Latvia, lending is often hampered by comparatively bigger red tape involving the approval of new development project’s documents by state or municipal authorities. As a positive example, the bank’s representative mentions Estonia where the process is often simpler.
Grodskis underlines that Bigbank is a cross-border cooperation bank.
“We have clients developing their business projects in two or even all three Baltic states. We also serve Lithuanian and Estonian entrepreneurs investing or doing business in Latvia. If a client who is already known in one of our neighboring countries comes to us, the process of preparing and submitting the necessary documents is much easier and the communication is smoother.”
“The Baltic Real Estate Leaders (BREL) Forum, which is well attended by both Baltic and non-Baltic entrepreneurs and investors, also promotes transnational cooperation,” says the bank’s representative. This year’s event will highlight topics such as future development opportunities for the Baltic region, investment for growth and future-proof development.
The Latvian Branch of Bigbank is one of the supporters of this year’s forum. “Our near-term goal is to become a universal bank. We are successfully developing and improving our lending products, and Bigbank current accounts will be made available soon. The team of the BREL Forum and we share a desire to make capital and resources needed for growth more accessible, so we greatly value this cooperation,” says the bank’s representative.
At the BREL Forum, awards will be presented in five categories: Developer of the Year, Project of the Year, Revitalization/Renovation Project of the Year, Environment Development Project of the Year, and Transaction of the Year.
The forum of the Baltic real estate leaders will take place on October 16 at the Hanzas perons venue in Riga.
