Financial performance of Aizkraukles Banka Group in Q2 2009

August 31, 2009 / Banking

Audit of Aizkraukles Banka Group financial report for the first half-year 2009 has been completed. The audit was performed by international audit company Ernst&Young Baltic.

Aizkraukles Banka management is satisfied with performance in H1 2009. The strategy chosen by the bank, which is based on more than 15-years long experience, proved to be successful and ensured stability of the bank operations and income level, despite difficult situation in the world and Latvian financial sector. The Aizkraukles Banka operating revenues, amount of attracted deposits, and sales exceeded those planned initially.

The most important event in H1 2009 was repayment of two syndicated loans. Following the agreements provisions, in February and in June, Aizkraukles Banka repaid syndicated loans of EUR 70 million and EUR 85 million, which were received in 2008. There are no other syndicated loans received by Aizkraukles Banka.

Financial performance

As of 30 June 2009, value of the bank assets amounted to LVL 960 million (gross value of assets equals LVL 1.004 billion). The bank revenues maintained to be high, and in H1 2009 the bank financial operations profit, before expenses on making provisions, totalled LVL 20.2 million. Since the beginning of the year, share of net revenues from commission fees and other non-interest income in the total revenue structure, before expenses on making provisions, has grown from 40% to 44%. In accordance with the strategy, the bank consistently continues developing the services which do not require raising additional capital and ensure sustainable cash flow from operating activities.

During the first six months of 2009, the amount of attracted deposits has grown significantly. Since 31 December 2008, the amount of deposits with the bank has increased by LVL 85 million, i.e. 11.94%. This result is considerably above the planned one, since composing a cautious financial plan for 2009 the bank foresaw an increase in deposits by 5% during the whole calendar year.

Following the set strategic objectives, the bank loan portfolio was decreased by LVL 50 million, and as of 30 June 2009 it totalled LVL 577 million.

Aizkraukles Banka has been making and continues to make provisions for potential loan impairment. Evaluating quality of the loan portfolio, Aizkraukles Banka employs great caution to minimize possible effects of economic recession. As of 30 June, the total amount of provisions for loan impairment was equal to LVL 39 million, which is 6.36% of the total gross value of the loan portfolio. Because of making considerable provisions, the bank losses in the first half-year amounted to LVL 8.14 million. It is important that the bank capital remained unchanged — mainly due to steady income and increasing value of securities constituting the securities portfolio.

Growing amount of deposits attracted and dedicated decrease of the loan portfolio allowed the bank liquidity to reach 41.58%, as of 30 June 2009, exceeding the initially planned level (the minimum liquidity required by FCMC is equal to 30%).

As of the end of June 2009, the bank capital adequacy amounted to 15.17%, which is almost twice as much as minimum ratio of 8% required by FCMC.


The first half of the year 2009 was also successful for the Group members — the brokerage joint stock company “AB.LV Capital Markets”, SIA “AB.LV Transform Investments”, and SIA “New Hanza City”. In the reporting period, the total profit of these subsidiaries was equal to LVL 88 thousand.

About Aizkraukles Banka Group

JSC “Aizkraukles banka” is 100% owned by Latvian shareholders. The bank’s majority shareholders are Oleg Fil — 47.04% shares, Ernest Bernis and Nika Berne — 47.04% shares. The Aizkraukles Banka aim is to become the leading independent private bank in the Eastern Europe, combining all banking services, including asset management and advisory services, in a single customer-tailored offer. Aizkraukles Banka Group includes IPAS AB.LV Asset Management, IBAS AB.LV Capital Markets and other companies.

Additional information:
Ilmars Jargans
Aizkraukles Banka
+ 371 6777 5296