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Bank Industry Risk Analysis: Foreign Parents Offer Comfort To The Overheated Latvian Economy Mar 07
Standard & Poors, March 2007
Abstract
Strong macroeconomic growth dynamics, bringing Latvia close to economic convergence with EU peers The presence and market dominance of core subsidiaries of overseas parent banks The banking sector's good financial performance, which will be tested as competition increases Supervisory authorities have improved regulation and transparency Inflation and credit growth threatening Latvia's macroeconomic stability Mounting credit risk due to unprecedented credit expansion, high leverage, and exposure to a frothy real estate market Low banking sector capitalization Potential strain for some banks to access funding and liquidity in a stress scenario In a global context, Standard & Poor's Rating Services considers the Latvian Banking sector to be of higher-than-average risk, as denoted by its Bank Industry Country Risk Assessment (BICRA) ranking. The...
Companies mentioned in this report are: Latvia (Republic of),A/S Latvijas Krajbanka
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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