31.01.2020 | Estimated 3 minutes reading time | Print this article

Country portrait: Save interests in Latvia

Raisin.ie lists a new partner bank for Ireland and welcomes BlueOrange Bank from the emerging industrial country Latvia. BlueOrange offers attractive interest rates and gives reason enough to take a closer look at the Latvian market and the country from the Baltic States.

With 0.65% AER on one-year time deposits, BlueOrange Bank currently offers one of the most attractive interest rate in Europe. The cooperation with Raisin started in October of 2017, before which BlueOrange bank had offered its services predominantly to wealthy customers and companies in Latvia.

Short introduction to BlueOrange Bank

The former Baltikums Bank AS, based in the Latvian capital Riga, was founded in 2001 and for the last 19 years has established a reputation as a reliable partner and financially stable organisation. At the end of 2017, the bank changed its name to BlueOrange and is now Latvia’s ninth largest bank. Today, BlueOrange represents the latest technology, innovation and worldwide availability of its services to meet the diverse needs and expectations of its clients.

According to the 2018 annual report, BlueOrange has a liquidity ratio of 101.1% and closed the year with a profit of 7.4 million euros. In addition to the deposit business, this also includes lending to private individuals and business customers as well as all other common banking products.

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Overview of the Latvian Economy

Latvia is an independent parliamentary democracy and has been a member of the European Union (EU) since 2004. In 2014, Latvia joined the euro zone in compliance with the Maastricht criteria (also: EU convergence criteria) and successfully introduced the euro as its national currency. Latvia’s economy has been on a clear growth trajectory for years and has remained extremely stable, it was even elevated to sixth place in the EU. Economists suspect that strong private consumption and high gross fixed capital formation will push the country even further ahead this year than its neighbours Estonia and Lithuania. At 40.2% of gross domestic product (GDP), national debt is the seventh smallest in Europe (2018).

Latvia ranks 78th among the world’s exporting countries. In 2018, wood and wood products accounted for the largest share of export goods. This is hardly surprising, as half of the country’s surface area is covered by forests. Another important economic sector is agriculture. In 2018, it contributed around 3.3% to the gross domestic product.

The chemical industry and logistics are also critical sectors in the Baltic country, which currently has around 2 million inhabitants. Latvia’s geographical location connects Europe with the East. Thanks to the good infrastructure, goods can be shipped to 25 million people in the Baltic Sea region within 48 hours. The railway line between Riga and China delivers goods one month faster than the fastest sea route.

Government actively combats money laundering

The Latvian government is regulating the banking sector with new law, thereby actively combating money laundering. Since the beginning of 2018, banks in Latvia have no longer been allowed to hold accounts for foreign mailbox companies without proven business activities and representative offices. In addition, the Association of Commercial Banks of Latvia (LKA) strives to limit offshore business to 5% of total banking business.

Around 40% of deposits with Latvian banks come from abroad. The savings deposits of bank customers are guaranteed by the Latvian Deposit Protection Fund up to the equivalent of 100,000 euros per customer.