Liquidator of ‘ABLV Bank’: keeping money requires over 10 million a year

Likvidējamajai “ABLV Bank“Money storage expenses due to negative rates amount to more than 10 million euros per year, the bank’s liquidator Andris Kovaļčuks admitted in an interview with LETA.

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He noted that the bank’s maintenance costs have generally been reduced quite significantly, including a significant reduction in administrative expenses related to the bank’s operations.

“The reduction in staff alone shows that expenditure has more than halved. The other part is expenditure items specifically related to liquidation. One of them is money storage costs, which amount to more than 10 million euros a year for us. Some time ago I would not have believed that I would ever have such a problem, but in today’s conditions with negative interest rates it is, “Kovalchuk said, adding that this money is practically received Bank of Latvia.

Kovalchuk also noted that the bank tries to reduce this negative effect on expenses as much as possible by actively participating in government securities auctions and looking for where the maturities of securities coincide with the liquidation term structure. “Unfortunately, these are just securities with a maturity of up to 24 months, and there is also the problem of negative rates. Furthermore, the amounts available are not such that we can go in with big steps. So it is not that we have given in to this situation, but in general is a problem that even 10 years ago no one could even imagine, “said the bank ‘s liquidator.

He also noted that the second item of expenditure is the cost of inspections, which is not cheap.

“These two expense items are as valuable as all our other expense items combined,” the bank’s liquidator added.

According to Kovalchuk, ABLV Bank currently has about 240 employees, while in February 2018, when it was decided to start the bank’s self-liquidation, the bank had 670 employees. “There are now about 240 employees, and that number continues to decline. The liquidation of the bank are functions and projects that all have some sort of deadline. Gradually, as projects close, people are released,” he said.

Asked whether it was planned to move to any other premises, the liquidator of ABLV Bank pointed out that the bank rents premises in the building on Skanstes Street and, as the number of employees decreases, the bank is gradually giving up the number of floors used.

“Expenditure on premises is the position we work with all the time. At the same time, for an organization like us, moving is expensive enough, so in this case the benefit should be significant for us to change premises. But we watch the costs very hard and work with our premises for landlords, “said Kovalchuk.

Read the full interview:

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