Banking sector: term deposits and profits grew, quality of loans remained stable

As a result of changes in financing conditions and uncertainty about the outlook for economic growth, the growth of the bank loan portfolio was the lowest over the past two years. The quality of bank lending remained stable, while bank profits and interest income continued to accelerate, stated the Bank of Lithuania.

“Against the backdrop of rising interest rates, bank profits have significantly increased, as has been predicted. Another important news is that, as deposit interest rates have started to rise, residents increasingly direct their funds to term deposits,” says Simonas Krėpšta, member of the Board of the Bank of Lithuania.

The banking sector earned a profit of EUR 258.4 million in the first quarter of 2023, almost 2.6 times more compared to the corresponding period in 2022, when profits amounted to nearly EUR 100 million.