Bernis told a news conference that the decision was the hardest in his life, noting that 25 years of work had been canceled in a week and a half. “The decision has been made,” Bernis said. “I’ve been thinking a lot about it for the last few days and I haven’t understood how a bank that has received all these accusations could have grown into one of the leaders in the country in 25 years,” he said.
The bank had raised enough liquid funds to continue working, but the decision on the unavailability of deposits actually meant liquidation, the bank’s representatives explained.
Phil also pointed out emotionally that it is really hard to believe what has happened.
The disbursement of the guaranteed deposits will start on Friday, Reinfelds said, saying that the authorized bank will be announced in the near future. He reaffirmed that this money will be paid from bank funds.
Reinfelds informed that Elvijs Vēbers, a sworn attorney, is being appointed as the liquidator, and Andris Kovaļčuks, Chairman of the Board of New Hanza Capital and Arvīds Kostomārovs, an expert in corporate finance, could also work in the group.
The liquidators will start their work when the Financial and Capital Market Commission (FCMC) approves the submitted liquidation plan, which is currently being developed.
In order to maximally protect the interests of customers and creditors and taking into account the decision of the European Central Bank (ECB) to initiate liquidation proceedings, the Extraordinary General Meeting of Shareholders of AS “ABLV Bank” has decided on self-liquidation on Monday.
ABLV Bank believes that in this way it will be best able to ensure the protection of its assets in order to settle with all customers, the bank said in a statement.
Bright scenes: from the heyday of “Aizkraukles banka” to the decline of “ABLV”
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“Given the insolvency and liquidation proceedings that have taken place in Latvia so far, we believe that this is the most appropriate decision that could have been made after the ECB’s announcement of the liquidation proceedings. The bank is in excellent financial condition, so we must protect every client and his rights.” emphasized Ernests Bernis, Chairman of the Board of ABLV Bank.
“The decision is very difficult, but in these circumstances the most appropriate,” admitted Bernis.
The Law on Credit Institutions stipulates that the self-liquidation of a credit institution shall be performed by a liquidator elected by the shareholders’ meeting.
The representative of the Financial and Capital Market Commission (FCMC) Ieva Upleja told LETA that the commission has not yet officially received information about the decision of ABLV Bank shareholders, therefore it is not possible to confirm the information about the bank’s liquidation process, therefore it cannot be commented.
As reported, on February 23, the ECB decided not to rescue the bank and to initiate liquidation proceedings, which must be implemented in accordance with Latvian legislation.
The FCMC, following the ECB’s instruction, has temporarily imposed payment restrictions on ABLV Bank since 19 February, prohibiting debit operations on customer accounts in any currency. On the night of Saturday, February 24, the FCMC, taking into account that the ECB had not given an instruction to lift the set payment restrictions, decided that ABLV Bank had unavailable deposits.
ABLV Bank acknowledged that the FCMC’s decision essentially means that the bank’s liquidation process may be initiated in the near future. The FCMC related the decision to ABLV Bank for political reasons.
ABLV Bank’s problems came after the US Department of the Treasury’s Financial Crimes Enforcement Agency (FinCEN) announced in mid-February that it planned to impose sanctions on ABLV Bank for money laundering schemes that aided North Korea’s nuclear weapons program and illegal activities in Azerbaijan, Russia. and Ukraine. The report published by FinCEN also states that until 2017, the management of ABLV Bank used bribery to influence officials in Latvia, trying to prevent legal actions against it and reduce the threat to their high-risk activities.
The Bank has previously emphasized that its assets are sufficient to meet the requirements of all customers and creditors. All deposits guaranteed by the Deposit Guarantee Law will be disbursed with ABLV Bank funds.
ABLV Bank’s account with the Bank of Latvia on Friday, February 23, was 693.988 million euros, which is 78.4% more than at the end of last year, according to the information published by the bank. On 23 February, ABLV Bank had invested EUR 939.104 million in securities, which is 47.5% less than at the end of last year, when the bank had invested EUR 1.788 billion in securities, but unfinished transactions in securities amounted to EUR 409.082 million.
At the same time, the published financial results also reveal that ABLV Bank’s assets on February 23 amounted to EUR 3.311 billion, which is 10.2% or EUR 374.512 million less than at the end of last year, when the bank’s assets amounted to EUR 3.685 billion.
On 23 February, cash at ABLV Bank’s cash desk amounted to EUR 12.002 million, while ABLV Bank’s claims on banks amounted to EUR 80.145 million. On February 23, ABLV Bank had issued 963.8 million euros in loans. The bank had attracted 2.107 billion euros in deposits, which is 21.1% less than at the end of last year, when ABLV Bank had attracted 2.672 billion euros in deposits.
At the end of September 2017, ABLV Bank was the third largest bank in Latvia in terms of assets. The Bank’s largest shareholders – Oleg Fil, Ernest Bern and Nika Bern – own 87.03% of the bank’s shares on the basis of direct and indirect participation.
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