Latvijas Banka supplements Deposit Guarantee Fund with EUR 6 million in 2025 through active asset management
In 2025, Latvijas Banka generated EUR 6 million in income by actively investing the Deposit Guarantee Fund's (DGF) assets, which was reinvested into the fund. Since 2023, total earnings from asset management have reached EUR 19.7 million.
According to the DGF report published by Latvijas Banka, the central bank actively invested the fund's assets in liquid short-term securities in 2025, yielding EUR 6 million in income. This amount was channeled back into the DGF, increasing its value. Since 2023, Latvijas Banka has earned a total of EUR 19.7 million from active management of DGF assets.
At the end of 2025, the DGF's value stood at EUR 302 million, rising to nearly EUR 315 million by June 2026. During the reporting year, member institutions contributed EUR 22.9 million to the fund.
Last week, the Saeima supported a proposal to amend the Deposit Guarantee Law, drafted by Latvijas Banka and submitted by the Ministry of Finance, to set a new target for the DGF at 3% of total deposits in Latvian credit institutions and credit unions. Currently, the DGF's pay-in level is 2.4% of all covered deposits of its members. According to preliminary calculations by Latvijas Banka, the 3% target will be achieved in 2027, as the Latvian banking sector undergoes structural changes.
Under the Deposit Guarantee Law, any customer of banks or credit unions in Latvia – whether a natural or legal person – is guaranteed compensation of up to EUR 100,000 per bank or credit union for all types of deposits in all currencies. This state-guaranteed amount covers deposits, current account balances, wage accounts, savings accounts, etc.
The DGF was established on 1 October 1998 to ensure the disbursement of compensation to depositors when a deposit guarantee scheme participant becomes unable to pay out deposits, loses its license, is declared insolvent, or in other cases where Latvijas Banka determines deposit unavailability. The fund is managed by Latvijas Banka, which also handles compensation payments. If the DGF lacks sufficient funds, Latvijas Banka may borrow from a deposit taker or another member state's guarantee fund; as a last resort, the Ministry of Finance allocates funds from the state budget.
DGF assets accumulate from quarterly payments by deposit takers (banks and credit unions), calculated as a percentage of covered deposits adjusted by a risk factor, plus income from asset management. Currently, 10 credit institutions and 20 cooperative credit unions registered in Latvia are members of the DGF.
