The Council of Latvijas Banka has approved the Annual Report of Latvijas Banka for 2025. In addition to the financial statements for 2025 and the unqualified independent auditors' report, it provides an overview of the economic environment and economic development in Latvia and the euro area, as well as information on the operation of the national central bank and its accomplishments in the areas within its mandate.
Pursuant to the Law on Latvijas Banka, the financial statements were audited by independent external auditors recommended by the Governing Council of the European Central Bank (ECB) and approved by the Council of the European Union. Latvijas Banka has received a positive auditors' opinion on its financial statements for 2025 from the auditing company SIA KPMG Baltics.
Latvijas Banka concluded 2025 with positive financial results, despite the negative results of monetary policy operations stemming from the interest rate hikes implemented by the Governing Council of the ECB in previous years to curb inflation in the euro area. Total recognised gains of Latvijas Banka amounted to 332 million euro (214 million euro in 2024), leading to an increase in Latvijas Banka's capital and reserves by 35% (to 1.275 billion euro). In 2025, 58 million euro were allocated to provisions for financial risks, resulting in gains worth 28 million euro being recognised in the profit and loss statement.
Latvijas Banka's payments into the state budget for 2025 amounted to 56 million euro: 19 million euro as dividends from 2025 profits, 21 million euro as interest on deposits of the Latvian government, and 16 million euro as taxes.
Latvijas Banka managed to close 2025 with gains, although most national central banks of the Eurosystem and the ECB closed the year with negative financial results before the use of provisions for financial risks. This pertains to the central bank's primary task – formulating and implementing monetary policy – during a period when a significant rise in interest rates was essential to curb rising prices. As interest rates decline and stabilise, central banks resume recognising profits in their profit and loss statements.
Since the restoration of its operation in 1992, Latvijas Banka overall has earned 717 million euro of which 465 million euro were appropriated to the state budget. At the same time, it should be taken into account that the key task of central banks is to implement monetary policy rather than to generate profit.
In the Foreword to the Annual Report, Mārtiņš Kazāks, the Governor of Latvijas Banka, emphasises that in 2025 the priorities of Latvijas Banka were a secure and crisis-resilient financial sector, modern and accessible financial sector services, as well as an innovative and efficient central bank.
In the area of critical financial services, Latvijas Banka developed a solution for offline card payments. This will enable the use of payment cards in large grocery stores, fuel stations and pharmacies even during communication disruptions. Continuity solutions for critical financial services, including the network of critical ATMs and the ability of large companies to make payments in crisis situations, were improved. At the beginning of the year, minimum cash availability requirements took force, and efforts to strengthen the digital resilience of the financial sector and mitigate cyber risks continued. At the end of the year, Verification of Payees (VoP) was introduced, reducing the risk of errors and fraud.
In the area of accessibility of financial services, a significant leap in lending was achieved. This was especially notable (more than 16%) in the corporate segment. Household lending was reinforced by lower interest rates and a simplified framework for mortgage refinancing. More than 11 500 mortgage borrowers used the possibility of refinancing, and their total savings during the term of the loan agreements amounted to approximately 50 million euro.
In 2025, Latvijas Banka continued efforts to improve the functioning of the 2nd pension pillar. A proposal to allow residents to choose the most appropriate time to withdraw funds when the value of securities decreases in financial markets was prepared and submitted to the Ministry of Welfare. In addition, investment limits were reviewed, the management of the 2nd and 3rd pension pillars was simplified, and the upgrade of the manapensija.lv website was launched with its gradual transfer from the securities depositary Nasdaq CSD SE. Decisions made in 2025, for example, on lower ongoing commission caps for the 2nd pillar managers, resulted in 2.8 million euro in savings for residents.
Other important measures include the opening of Latvijas Banka's payment system to direct participation by payment institutions and electronic money institutions, the development of sectoral fintech and capital market strategies, the drafting of legal acts allowing credit unions to start lending to legal entities, as well as the introduction of a new type of financial institutions – specialised credit institutions with a lower initial capital.
In 2025, preparations took place, and as of 1 January 2026 new requirements came into force on in-person provision of commercial bank services. This will significantly improve access to commercial bank services for residents and companies residing or operating in regions.
As underlined by the Governor of Latvijas Banka, the public appreciates the contribution of the central bank. According to data from a population survey conducted by the market and social research agency Latvijas Fakti at the end of 2025, more than a half of the Latvian population trust Latvijas Banka, and more than two thirds believe that the central bank conducts its operations professionally.
In 2026, Latvijas Banka will continue to strengthen the financial sector, with the accessibility of financial services and meeting customer needs among its key priorities.