bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 25.06.2017 | Name days: Maiga, Milija
LatviaLatvia

European Central Bank revokes the licence of Trasta komercbanka

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUFollowing a request of the Financial and Capital Market Commission, the European Central Bank has revoked the licence of Trasta komercbanka, according to the announcement of FCMC.

FCMC decided to launch the revoking of the licence because the bank has been making serious breaches in many of its business areas for a long time. Because of that, it has been decided that it is not possible to apply specific regulations to the bank and save it in the interest of the public.

Gundars Grieze, Chairman of Trasta komercbanka, says the bank’s legal team is currently considering the option of challenging ECB’s decision in court.

FCMC has concluded that Trasta komercbanka has no critically important functions, it is not an important bank and its exclusion from the market will not impact the stability of Latvia’s financial sector all that much. In the event of the bank’s liquidation, all of its clients will be paid the state guaranteed compensation of EUR 100,000. This will ensure protection of interests of 93% of the bank’s clients, notes FCMC. It has also been decided that saving the bank is not in public interest.

At the end of January, FCMC prohibited Trasta komercbanka to carry out debit transactions with amounts exceeding EUR 100,000 per client. This is because the bank failed to attain progress in sorting out multiple important banking areas – capital increase, bank business development strategy and improvement of its internal control system. It is also worth taking into account that FCMC had previously warned two of the bank’s largest shareholders – Igor Buimisters and Ivan Fursin – about their inability to properly comply with requirements stated in the Law on Credit Institutions.

FCMC has concluded that the bank has been working with losses for a long time and that the bank’s current business model is not sustainable. On top of that, FCMC believes the bank has failed to develop a business strategy that would comply with the actual situation on the market.

Considering all the breaches committed by the bank up to this point, the European Central Bank has decided to revoke Trasta komercbanka’s licence following a request from FCMC. The decision of ECB came into force on 3 March at 00:00 local time.

The goal of the single relief mechanism of the Union of European Banks is to save banks that end up in difficulties with minimal expenses and reduce the possible impact to national economy to a minimum. However, assistance can only be provided in instances when a specific bank’s rescue is required in the interest of the public (if the bank carries out important financial functions and plays a major role in economy). In all other cases, the bank can be liquidated as part of an insolvency process, explains FCMC.

Following FCMC’s January decision, Trasta komercbanka had announced its intentions to present a new investor. The bank had also pointed to the fact that 15 March would mark the conclusion of the 15th release of bonds, which would bring the bank EUR 15 million in capital increase. According to the bank’s latest annual account, its base capital was EUR 20,642,000 on 30 September 2015. The release of bonds in March would increase the bank’s base capital to EUR 35,640,000.

Trasta komercbanka was founded in 1989. It offers services to local and foreign clients. Outside of Latvia, the bank’s group has representatives in Russia, Ukraine, Kazakhstan, Tajikistan, Azerbaijan and Cyprus.

In Q3 2015, Trasta komercbanka was the 13th largest bank in Latvia based on assets.

The bank concluded 2015 with losses worth EUR 4.66 million. The group’s total losses for 2015 were EUR 6.21 million.

On 17 December 2015, officers of State Police Economic Crimes Prevention Office carried out a search in the bank’s office building in Riga, Palasta Street 1. Two of the bank’s employees were detained.

The bank’s public relations specialist Elina Bikulca had reported that time that the two employees were suspected of being involved in the laundering of EUR 13,000.

ENAP reported, without mentioning the name of the bank, that two employees of a Latvian commercial bank were detained based on suspicion of money laundering. A criminal process has been launched against the two bank employees shortly after.

De Facto programme of LTV reported that it is possible that it was Trasta komercbanka’s board member Viktors Ziemelis who was the one who organized the money laundering scheme in the bank. He has since been dismissed from his post.

The programme reported that the search in Trasta komercbanka was related to another money laundering scheme that was uncovered in Russia. Roubles were used to procure securities and sell them through European banks. This method made sure the clients’ money ended up on offshore accounts. The same scheme is currently investigated by American authorities against Deutsche Bank, which ended up in an international scandal last October.

Ref: 102.109.109.7885


Leave a reply

Real estate purchase «pain threshold» in Latvia – EUR 100,000

In relation to the possibility of purchasing a new home, Latvian residents view EUR 100,000 as the «pain threshold». The critical border for new project apartments is 1,300 EUR/m2. For standard apartments it is 1,000 EUR/m2. For private homes it is 1,600 EUR/m2, according to results of a study by PrivatBank.

Lembergs & Co. gathered to discuss «problems» of the high and mighty

Political businessman Ainars Slesers held a friendly discussion with his associates – Aivars Lembergs, Andris Ameriks, Janis Urbanovics, Janis Duklavs and Valerijs Kargins – at Ridzene Hotel. The group discussed toppling Valdis Dombrovskis’ government, replacement of multiple high-ranking officials and the possible sale of pieces of land within Riga Freeport’s territory, according to transcripts from the conversation published by Ir magazine and provided by anonymous sources.

Lithuania set to limit cash payments to 3,000 euros

The Farmers and Peasants-led Lithuanian Cabinet has approved a draft bill envisioning restrictions on use of cash, limiting the kind of settlements up to 3,000 euro.

Saeima establishes indexation increase for pensioners with high seniority

On Thursday, 22 June, Latvia’s Saeima approved Social and Employment Matters Committee’s prepared amendments to the Pension Law in two readings, ensuring greater pension indexation for multiple pensioner groups next year.

Romanian Parliament ousts Grindeanu government

The Romanian government of Prime Minister Sorin Grindeanu has not survived a no-confidence vote and has fallen after less than six months in power.

Rail Baltica agreement will allow trains to travel at 240 km/h

Saeima of the Republic of Latvia will soon ratify Rail Baltica agreement, which is expected to allow passenger trains to travel at a speed of 240 km/h instead of 120 km/h. Higher travel speed will also ensure cargoes from Tallinn reach Poland within two days.

Mamikins: Latvia is becoming a landfill for rich European countries

A very large fire took place at an illegal landfill in Jurmala this week. According to information from the State Environmental Protection service, the fire had engulfed 23 tonnes of waste, mainly plastic waste, says Latvian MEP Andrejs Mamikins.

Latvian businessmen use e-commerce opportunities for business development

With e-commerce volumes growing around the world, Latvian businessmen use it more and more often for business development, including exports of goods and services. As noted by DPD, the number of packages sent to foreign countries grew 22% last year.

Latvia wishes to change its state president’s election process

Reviewing proposals to change the state president’s election process, Saeima’s Legal Affairs Committee decided to submit proposals developed by the work group to different Saeima factions for review, as BNN was informed by Saeima’s press-service.

Coalition parties close to making final decision with tax reform; no more obstacles

Coalition parties no longer have any more differences of opinions in regards to tax reform principles. Parties are close to making the final decision, said Economy Minister Arvils Aseradens after the meeting with Finance Minister Dana Reizniece-Ozola.

Saeima plans to introduce personalized voter cards

For next year’s Saeima elections, voters who only have an ID card and no valid passport are planned to be provided with personalized voter cards.

Producer price level in industry up 0.4% in Latvia

Compared to April, the level of producer prices in Latvian industry grew by 0.4 % in May 2017. The prices of products sold on the domestic market increased by 0.3 %, whereas the prices of exported products grew by 0.5 %. The prices of products exported to euro area countries grew by 0.8 % and of products exported to non-euro area countries – by 0.4 %.

Opinion: local media in Daugavpils are corrupt

«Now that we constantly face new and more elaborate security risks, concerns tend to increase about the fight for people’s minds in the information space. This is why the bar for professional journalists should be held high. Baltic Centre for Media Excellence plays an important role in all this,» said chairman of Saeima’s Foreign Affairs Committee Ojars Eriks Kalnins after the meeting.

Life in Riga remains more expensive than life in Vilnius and Tallinn

Riga is recognized as 126th most expensive city in the world. Life in the Latvian capital is considerably more expensive than it is in Vilnius or Tallinn, according to a study published by *Mercer Human Resource Consulting.

Most universities in Estonia to cut number of new students this year

Three of the four universities working in Estonia have expressed plans to bring down the number of admissions in the coming academic year.

Foreign investors do not support amendments proposed for Financial Instruments Market

The Foreign Investors Council in Latvia does not support proposals for protection of rights of minority shareholders, which are include and proposed in amendments to the Law on the Financial Instruments Market.

Ligo celebration causes condom sales to go up in Latvia

Nearly 39% Latvian residents plan to spend around 21 to 40 euros on Ligo, according to results of a survey performed by Maxima. 22% of respondents plan to spend around 20 euros on the celebration. 22% of residents plan to spend 41 to 60 euros, and 17% - more than 61 euros.

Latvian government asked to compensate profits lost from rejecting Nord Stream 2

Considering the stance of the Latvian Republic in relation to Nord Stream 2 project, in which the Cabinet of Ministers decided not to permit the participation of Ventspils Freeport, Noord Natie Ventspils Terminal and Baltic Express have decided to ask the government to compensate lost profits. An official request has been submitted to the prime ministers.

Hospital: countryside residents with no easy access to a urologist are at risk

For the third consecutive year urologists from Riga Eastern Clinical University Hospital’s travel to Latvia’s far-away regions to provide men there with free health check-ups and consultations. This year urologists decided to visit Dobele, Cesis, Rezekne and Jekabpils.

Stoltenberg visits Iron Wolf exercises in Lithuania

NATO Secretary General Jens Stoltenberg has visited Lithuania on Tuesday, June 20, to see international military drill Iron Wolf 2017 and has noted that the involved countries are protecting each other.

German Chancellor could support introducing eurozone budget for sensible purposes

Angela Merkel, the Chancellor of Germany, has stated that she could support the introduction of a separate eurozone budget and a position of an eurozone finance minister, in case of right circumstances and sensible aims.

Prosecutor decides to end criminal case against former KNAB officer Juris Jurass

In spite of the decision by Security Police to present charges, the prosecutor responsible for the case has decided to end the criminal process commenced against the now former official of Corruption Prevention and Combating Bureau Juris Jurass for intentional disclosure of official secrets.

Latvia wants to introduce electronic working time tracking in construction

Saeima’s Budget and Finance Commission has expressed unanimous conceptual support for amendments to the Law on Taxes and Duties. These amendments provide for the introduction of electronic working time tracking system in construction, as BNN was informed by Saeima’s press-service.

Alleged bomber shot in Brussels central station

In the central station of Brussels, Belgium, soldiers have shot a man suspected he was to detonate explosives, local authorities have stated. The man was shot and later died after reportedly setting off a small explosion on Tuesday, June 20, and no-one else is believed to have been injured.

Expert: pension capital grows, but the Latvia still has a ways to go

«Latvia’s pension system has been named one of the best in the world multiple times. Pension capital in it has grown rapidly over the years. The volume of savings gathered on the 2nd level pension system by the end of Q1 2017 came close to EUR 3 billion. The volume saved on the 3rd level pension system was close to EUR 4 billion,» explains Nordea Pensions Latvia board member Ilja Arefjevs.

Newest comments