Banks, Estonia, Financial Services

"The banks' quarterly results have been mostly affected by the loan provisions that are bigger than during the earlier quarters," commented the head of the financial policy sub-division of the Bank of Estonia Jana Kask.

She explained that the banks have different practices in making write-offs and one must keep in mind the write-offs made locally – in the Estonian units of the banks – as well as those on the parent bank's group level towards the entire portfolio of the subsidiary banks. "Taking into account the relatively large profits earned by the banks during the previous years that mostly were maintained in the banks' reserves, the banks have created solid buffers to handle the losses," said Kask.

According to her, the remarkable developments in the first quarter of this year are that in addition to major provisions, the banks' first-quarter results were also significantly affected by the decline in net revenue on interest rates.