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Sunday 24.09.2017 | Name days: Agris, Agrita

FCMC puts rumours surrounding Norvik Banka’s problems to rest

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Norvik Banka is not insolvent, ensures its continuous operation and carries out obligations before its clients, the Finance and Capital Market Commission (FCMC) reports.

This was FCMC’s reaction to a publication on saying that the bank needs to increase its base capital in one month’s time by approximately 50 million LVL; otherwise a decision will need to be made to suspend its operations. The state guaranteed amount of funding for Norvik Banka is approximately 204 million LVL.

It is statement to the media the FCMC also confirms that it has been performing different measures along with the bank for several months. These measures are meant to secure the bank’s long-term business development. A well-known Hungarian investor – Sandor Demjan – has been attracted. He has already invested more than five million EUR and also plans to increase the invested amount in accordance with the approved schedule.

“Important steps have been made, attracting a strategic investor for Norvik Banka, which will allow a long-term development of the bank. Investor attraction process was carried out under close supervision of the FCMC,” – Chairman of the commission, Kristaps Zakulis, comments.

The invested money will be used to strengthen the bank’s capital and positions on the local and foreign markets.

The FCMC adds that Demjan is the Chairman of an internationally well-known development company TriGranit Development Cooperation and a shareholder of TriGranit Development Limited. Demjan is also the owner of Hungary’s Granit bank.

It is said in the commission’s statement that the entire world, including Latvia, have been working on the strengthening of the banks’ base capital since 2008.

Norvik Banka has already released a statement that says the bank has a paid base capital increase of more than 11.6 million LVL. The base capital was increased by attracting an important foreign investor from Hungary.

Before the increase, the bank’s capital was 57 390 281 LVL. After the registration of the increase at the Enterprise registry it will be 65 568 589 LVL.

The bank explains that the investor is a company owned by Demjan. His company has confirmed the interest to increase its participation in the bank’s capital after receiving an approval from the FCMC. This is why the company is conducting negotiations with the bank’s shareholders. The FCMC is informed about the deal, and the increase of the base capital is coordinated and accepted by the FCMC, Norvik Banka reports.

Deputy Chairman of FCMC, Janis Brazovskis, confirmed to that there problems with Norvik Banka exist. He did not deny that the bank has been under strict supervision of the FCMC for three months. He is certain that the bank will be able to complete the FCMC’s request to increase the bank’s base capital in full accordance with the schedule, set during negotiations with the bank’s owners.

The problems began after the bank’s largest owners – Icelandic Straumborg Group – ended up in financial difficulties. Active attempts are now being made to find an appropriate strategic investor; one that would solve the bank’s problems.

Norvik Banka’s base capital was 37.3 million LVL in the end of 2011. It was announced in March 2012 that the bank is planning to increase its capital by 15 million LVL. The FCMC requested this, so it was done.


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