OREANDA-NEWS. March 05, 2011. A severe financial crisis in Latvia led to moratorium on lending – credit facilities were not available even for undoubtedly successful projects, reported the press-centre of Rietumu.

According to the Bank’s CEO Alexander Pankov, Rietumu is among the first banks in the region to resume lending to businesses in the Baltics, Russia and Europe.

- So far Rietumu was rather cautious in lending. Why have you decided to change your lending policy?

The impression that we extend few credit facilities appeared on the background of uncontrolled lending. However, if you look closely on our credit portfolio, currently amounting to LVL 500 million, you will see that it demonstrated a solid growth a year ago, two years ago and 5 years ago. It was growing steadily, and during all these years a major attention was given to loan quality rather than quantity.

Today we intend to shoot forward and place free funds to our advantage.

Speaking about Latvia – here we are ready to finance comparatively small projects – from EUR 1 million. As concerns other markets, considering these markets size – the amount of the credit facilities could be significantly larger.

- Which business sector is your priority in terms of lending?

We have developed a special offer for wholesale lending of non-bank financial institutions, such as companies involved in leasing of vehicles, industrial equipment and cars; as well as consumer lending companies. We are ready to extend financing to companies incorporated also beyond Latvia.

We consider to be very attractive projects in such areas as transit, logistics, energy and trading. Since we also see a huge potential in Latvian harbours in Riga, Liepaja, Ventspils, Rietumu intends to actively develop trade financing services.

For a long time we have been working closely with consumer lending companies. These are mainly companies with local capital, successfully operating in our economic circumstances. We have a clear understanding of their business and have an extensive experience in mutual cooperation.

Rietumu also has financed leasing companies in Russia, Belarus and the Ukraine.

- Talking about business, isn’t it too risky to incur debts?

For businesses it’s high time to realize their development plans. The competition level today is below average. On the other hand, there is a strong need for additional resources.

Another important factor: uniquely low interest rates on loans in USD and EUR, stemming from historically low prime rates on the global markets.
 
- The economic situation in Latvia is dramatic. Doesn’t it give you concerns that lending in such circumstances is too risky?

For us it is of crucial importance to evaluate the project quality, its management level as well as the ability of the borrower to pay back the loan.

A business, which is capable of conclusively demonstrating its product, services and target market, may expect to get a credit facility in our Bank.

- Most probably other banks will also seek customers among real business. Are you ready to beat the competitors?

Certainly we are not alone. Other banks are also interested in funding attractive projects. Therefore, the fight for “good” borrowers will be sharper. But we are prepared for this.

- Why Rietumu lending is attractive for foreign businessmen?

Rietumu – is a European bank with impeccable international reputation, integrity and strict confidentiality. Our attractive interest rates coupled with top quality services, efficiency and absence of language and cultural barriers are among our benefits.  

- How much funds is Rietumu planning to extend this year?

Rietumu does not intend to give out endless amounts of money. I might mention EUR 100, or EUR 200, or EUR 300 million, and all these numbers are quite realistic. We aspire to ensure a healthy growth of our credit portfolio, and regard the situation, when the credit portfolio constitutes half of the attracted funds, pretty reasonable.