ABLV Group closed Q3 2011 with LVL 20.7 million profit

November 28, 2011, 12:15 / Banking

As early as at the end of 2010, ABLV management announced its plans to work with profit in 2011, and those plans are being successfully implemented. Due to growing amount of deposits and commission income, as well as excellent investment activities, the Group’s profit amounted to LVL 20.7 million as at 30 September 2011, whereas the bank’s profit was equal to LVL 19.6 million.

At the beginning of the year, the bank’s overall profit in 2011 was planned to be LVL 17.8 million.

In Q3 2011, global economy was marked by several negative trends – growth of the world economy continued to decline and instability in global financial markets increased.

In the reporting period, a landmark decision was made by credit rating agency Standard & Poor’s – the US credit rating was decreased from maximum AAA to AA+. This decision lead to even larger fluctuations in financial markets, and consecutive drops in stock prices sometimes resembled the situation observed at the end of 2008. Moreover, in the last quarter, debt crisis in euro area continued to grow – it also affected Italy, and probability of default in Greece increased significantly. It should be noted that ABLV securities portfolio contains no securities of troubled euro-area countries.

Economic and financial situation in Latvia was stable. In Q2 2011, Latvian GDP increased by 5.6%. This economic growth is the largest one since the end of 2007. Economic development still is mainly based on the growth in export-related areas. Commercial banks sector also showed noticeable financial results – growing number of Latvian commercial banks reported profits. Unfortunately, situation with Snoras bank and Latvijas Krājbanka reflected badly on Latvian financial sector. Nevertheless, operations of ABLV Group have not been directly affected, since we had no deposits with Snoras and Latvijas Krājbanka.

Audited financial results as at 30 September 2011

  • Net profit of ABLV Group equalled LVL 20.7 million, including net profit of ABLV Bank – LVL 19.6 million. Part of the profit was gained as extraordinary income from successful investment activities.
  • Total amount of deposits with ABLV Bank reached LVL 1.464 billion. Since the beginning of the year, the amount of deposits has grown by LVL 216 million, i.e. 17.28%.
  • Net loan portfolio of ABLV Bank was equal to LVL 483 million.
  • Securities portfolio of ABLV Bank amounted to LVL 468 million. In the reporting period, annual yield of the securities portfolio amounted to 4.96%.
  • Gross amount of ABLV Bank assets totalled LVL 1.615 billion. Since the beginning of the year, the amount of assets has increased by 17.15%.
  • Capital and reserves of ABLV Bank amounted to LVL 89.519 million.
  • ABLV Bank capital adequacy ratio was equal to 13.76%, inasmuch as at the beginning of October, a permission to include audited profit for the first half of the year 2011 in the bank's equity was received from the FCMC.
  • ROE – 30.90%, ROA – 1.69%.
  • ABLV Bank liquidity ratio was equal to 70.75%.

In the reporting period, ABLV Bank, AS established ABLV Luxembourg, S.A., the aim of which is to explore financial market of Luxembourg and prepare everything necessary for obtaining banking license. ABLV Bank, AS, subsidiary bank in Luxembourg is supposed to start its operations in the middle of next year, and it will offer private banking and investment services to customers – investment management, brokerage services, and other banking services. Initial paid-in share capital of ABLV Luxembourg, S.A. equals EUR 2 000 000.

It should be noted that on the 16th of July this year, the bank launched new Internetbank version to improve customer service via Internet. The new Internetbank version was developed considering all customers’ needs and engaging both employees and a group of customers in testing.

ABLV Bank, AS is the largest independent private bank in Latvia. The bank’s majority shareholders – Oļegs Fiļs, Ernests Bernis and Nika Berne – hold 85.90% of the bank’s share capital. ABLV Group includes ABLV Bank, AS; ABLV Capital Markets, IBAS; ABLV Asset Management, IPAS; ABLV Transform Partnership, KS; ABLV Consulting Services, AS; ABLV Corporate Services, SIA; New Hanza City, SIA, and other companies. ABLV Group has representative offices in Moscow, St. Petersburg, Yekaterinburg, Kiev, Odessa, Minsk, Almaty, Dushanbe, Baku, and Tashkent.

Ilmars Jargans
Head of Public Relations Department
+ 371 6700 2296