Profit of ABLV Bank, AS, in 2013 – EUR 43.7 million

Riga, Latvia, February 28, 2014, 16:27 / Banking

Although the year 2013 was controversial for the global economy, it was successful for ABLV Bank and the group. In September, the bank also celebrated its 20th anniversary. We started operations being one of the smallest banks, and due to steadily pursuing elaborated strategy our bank not only has successfully managed to overcome all crisis situations, meanwhile retaining its independence, but it also has become the largest private bank and one of the three biggest banks in Latvia in terms of the amount of assets.

The bank’s major financial indicators for 2013 reached their historic maximum, and those evidence stable growth.

  • The bank’s profit in 2013 amounted to EUR 43.7 million, and that of the group – to EUR 51.1 million. Whereas the bank’s profit for 2012 was equal to EUR 23.4 million.
  • The bank’s operating income before allowances for credit losses totalled EUR 110.2 million. Compared with 2012, operating income has increased by 27.3%.
  • The amount of the customers’ deposits equalled EUR 2.78 billion as at the end of the reporting period.
  • The amount of the issued debt securities reached EUR 308.4 million.
  • As at 31 December 2013, the amount of the bank’s assets equalled EUR 3.32 billion. Over the year, the amount of assets has grown by 8.9 %, the total assets increased by EUR 271.5 million.
  • The bank’s loan portfolio equalled EUR 761.3 million, as at the end of December.
  • The bank’s capital and reserves amounted to EUR 187.0 million.
  • Assets under management and customers` financial instruments amounted to EUR 926.7 million.
  • As at 31 December 2013, the bank’s capital adequacy ratio was 17.53%, whereas liquidity equalled 79.20%.
  • ROE reached 26.29%, and ROA – 1.36%, as at 31 December 2013.

In conditions of permanently growing impact of unfavorable factors and constantly increasing requirement of supervisory authorities, the most complicated – is to ensure the stable growth and development of the bank. Last year we managed to fulfill this task, while additionally we were improving the risk management and increasing the effectiveness of our procedures. One of the main achievements of the anniversary year was the beginning of customer services by our subsidiary bank in Luxembourg in September”, ABLV Bank Chief Executive Officer (CEO) Ernests Bernis described the year 2013.

Continuing gradual replacement of long-term deposits with bonds, there were several new bond issues performed during the reporting period. In total, there were four issues of subordinated 10-year bonds for the sake of raising the capital performed in 2013, their size being USD 55.0 million and EUR 20.0 million, as well as six issues of straight 2-year bonds, amounting to USD 175.0 million and EUR 40.0 million. These bonds have been also included in the NASDAQ OMX Riga stock exchange list of debt securities. As at the end of 2013, investors held ABLV Bank, AS, bonds worth EUR 308.4 million, and 15 bond issues were included in the NASDAQ OMX Riga list of debt securities.

Due to growing business volumes of ABLV Bank, AS, and other companies of ABLV Group, there were new jobs created within the group. In 2013, ABLV Group staff was increased by 90 officers, and 58 of those started their work at the bank’s structural units. As at 31 December 2013, there were 698 officers working in ABLV Group, and 571 of those – in the bank. Therefore, a decision on moving part of the bank’s structural units to new premises – business centre Jupiter Centre, at 7 Skanstes Street – was taken. Now the bank has two administrative buildings in Riga – at 23 Elizabetes Street and 7 Skanstes Street.

The bank continued investing in securities. The total amount of the securities portfolio was equal to EUR 1.40 billion, as at 31 December 2013. The bank’s securities portfolio is mostly composed of fixed-income debt securities, and 69.1% of the portfolio is constituted by securities having credit rating AA- and higher. In terms of the major countries, securities are allocated as follows: USA – 21.8%, Russia – 13.8%, Germany – 12.3%, Canada – 11.6%, Sweden – 8.8%, Latvia – 7.9%, Netherlands – 3.5%, Norway – 2.2%, Switzerland – 1.6%, and Great Britain – 1.4%. Whereas, 6.6% is constituted by securities issued by international institutions – the European Commission, EBRD, etc. In the reporting period, annual yield of the bank’s securities portfolio amounted to 1.8%.

In 2013, ABLV Bank, AS, affiliate companies ABLV Capital Markets, IBAS, and ABLV Asset Management, IPAS, worked hardly on launching new products and improving existing ones. During 2013, the range of our open-end mutual funds was expanded by four new funds: two corporate bond funds, ABLV European Corporate EUR Bond Fund and ABLV Global Corporate USD Bond Fund, and two new stock funds, ABLV European Industry EUR Equity Fund and ABLV US Industry USD Equity Fund. Just like existing mutual funds, the new funds are also managed by ABLV Asset Management, IPAS.

As at the end of 2013, total assets under ABLV Asset Management, IPAS, management amounted to EUR 93.2 million, of which EUR 87.9 million were customers’ investments in open-end mutual funds managed by the company, and EUR 5.3 million were customers’ funds invested in individual investment programmes.

ABLV Capital Markets, IBAS, which executes customers’ instructions for purchasing and selling all types of financial instruments in the world’s major stock markets, gained profit of EUR 3.3 million in 2013. As at 31 December 2013, the total assets of the company’s customers invested in financial instruments were equal to EUR 780.4 million.

Other companies of ABLV Group also continued to grow. The year 2013 was successful for the whole Latvian real estate sector, but real estate development and trading group Pillar outperformed the market in 2013, achieving great results. Its sales increased 2.5 times, i.e., by 141.0%. According to different estimates, the overall market growth is estimated 30.0%. In 2013, the company made the total of 613 property sale transactions, amounting to EUR 38.6 million. Whereas, during 2012 Pillar sold 254 properties for EUR 15.7 million.

We always try to stay close to our customers, and therefore in 2013 we continued expanding the network of our representative offices abroad. The representative office of ABLV Consulting Services, AS, opened in Vladivostok (Russia), as well as territorial structural unit in Limassol (Cyprus) started its operations. Having opened new representative offices, now ABLV Group has 12 representative offices in 8 countries – Russia, Ukraine, Belarus, Kazakhstan, Tajikistan, Azerbaijan, Uzbekistan, and Cyprus.

In September 2013, ABLV Bank subsidiary bank in Luxembourg, ABLV Bank Luxembourg, S.A., started rendering services to customers. Alongside traditional banking products, customers are also offered services developed especially for customers of the Luxembourg bank: fiduciary deposits, overnight deposits, advisory investment management, etc. ABLV Bank Luxembourg, S.A., combines the high level of ABLV customer service and traditions of the largest European investment centre.

"In 2014, we plan to increase the bank’s operating income at least by 15.0%. Due to business expansion, there will be at least 140 new jobs created in ABLV Group this year. We will pay more attention to development of lending projects in Latvia, and we also plan to considerably increase investments in Latvian securities," Ernests Bernis outlined the plans and major tasks for 2014.

The complete audited report for the year 2013, quarterly reports, as well as reports of the council and the board, and report of audit company Ernst & Young Baltic, SIA, are available at the bank’s home page

ABLV Bank, AS, is the largest independent private bank in Latvia. The bank’s majority shareholders — Oļegs Fiļs, Ernests Bernis and Nika Berne – directly and indirectly hold 86% of the bank's share capital. ABLV Group includes ABLV Bank, AS; ABLV Bank Luxembourg, S.A.; ABLV Capital Markets, IBAS; ABLV Asset Management, IPAS; Pillar Holding Company, 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, Vladivostok, Kiev, Odessa, Minsk, Almaty, Dushanbe, Baku, Tashkent, and Limassol.

Ilmārs Jargans
Head of Public Relations Department
+371 6777 5296