"It is good that (banks) maintained profits, but their return on equity is at a rather low level compared with Scandinavian banks. Thus, banks are not interested in investing more in Lithuania, because they can make higher profits in Scandinavia," Stasys Kropas told reporters on March 8th.
"Such a large cut in administrative expenses means that the quality of professionals and the number of professionals working with business customers is on the decline," he added.
According to Kropas, given rising wages and growing demand for skilled professionals, banks have no more room to reduce their administrative costs.
"I see no more room for reduction. Therefore, it is important that our revenue structure should be similar to the European Union. AS you can see, commission income accounts for only one-third, and interest income, for two-thirds. Loans have started growing, but they will not grow enough to offset banks' losses from negative interest rates," he said.
Figures released by the central Bank of Lithuania on Tuesday show that the Lithuanian banking sector's administrative costs fell by 12.2 percent in 2015 compared with 2014.
Banks' key revenue sources continued to shrink: net interest income declined by 2.6 percent, and net services and commission income was down by 10.2 percent.
Lithuania's five major banks – SEB, Swedbank, DNB, Nordea and Danske Bank – are owned by Scandinavian banking groups.
