Although the commercial banks in Estonia made a 444 million kroons loss in the first quarter of 2009, it still is not a cause for concern, estimated the Bank of Estonia, writes the National Broadcasting/LETA.
According to Jaak Tõrs, the head of the financial mediation department of the central bank, the first-quarter loss is relatively small in comparison to the banks' balance sheet volume of 250 billion kroons. "In order for the loss to cause problems for banks, the amount should reached dozens of billions of kroons," he noted.
Tõrs explained that in the first quarter, the banks' financial results were mostly affected by losses on loans. "The losses on loans that the customers have not paid back to the bank reach six billion kroons while the banks have already executed write-offs," he said.
According to the commercial banks, 1.5 billion kroons of this six billion kroons is the loan resources that the banks will probably not be able to get back from their customers.