VILNIUS, March 19 (Xinhua) -- Lithuanian banks and branches of foreign banks in Lithuania earned almost 358 million euros (406 million U.S. dollars) in net profits in aggregate last year, the most since 2007, announced the country's central bank on Tuesday.
Net profits increased by almost 50 percent compared to 2017 and were the highest since 2007, shows aggregate data announced by the Bank of Lithuania.
"The banks cannot really complain about their results for the last year," Vitas Vasiliauskas, the Chairman of the Board of the Bank of Lithuania, told local press conference.
Profits in the Lithuanian banking system continued to be driven by improving economy and increasing lending volumes to households and businesses, supported by low interest rate environment, explains the Bank of Lithuania.
"The Lithuanian economy has been running above its long-term potential, it was helped by favorable interest rates which remained low," explained Vasiliauskas.
In 2018, the Lithuanian economic growth was 3.4 percent.
The banks' aggregate loan portfolio to households and businesses increased 6.7 percent to around 20 billion euros in 2018.
Profits of the banks in Lithuania, a small Baltic Country with a population of less than 3 million, were also supported by shrinking competition in an increasingly concentrated market, noted the Bank of Lithuania.
Last year, the banks in Lithuania had increased their margins for mortgages from 2.09 percent to 2.32 percent on average, says the Bank of Lithuania.
"We think the main factor for increased rates was concentration in the banking sector, the concentration has increased," noted Vasiliauskas.
At the end of 2018, 6 banks and 7 branches of foreign banks operated in the Lithuanian financial market, though three largest banks in Lithuania accounted to 83.9 percent of assets of Lithuanian banking system.
"The most active lenders are Swedbank and SEB," said Vasiliauskas.