ABLV Bank, AS, audited profit in H1 2014 – EUR 32.9 million

Riga, Latvia, August 21, 2014, 09:36 / Banking

During the first half of 2014, the bank and other companies of ABLV Group continued to grow, due to consistent implementation of the group’s development strategy. Although the situation in several our target markets was complex and strained, we managed to achieve planned results due to our thoroughly chosen business model, risk management, and cautious policy.

“In the first half of the year, we had to work in our major target markets in the situation of completely unpredictable developments. Notwithstanding the difficulties, we are satisfied with the achieved results, and our previous decisions on asset allocation strategy once again proved to be correct. Eventually, we managed to achieve the best performance results in the bank’s and group’s history,” ABLV Bank Chief Executive Officer (CEO) Ernests Bernis told about the reporting period.

The most significant events in the reporting period were the change of the currency in which ABLV Bank, AS, share capital is denominated from lats to euro, following Latvia’s joining to eurozone, and also issue of shares, under which voting shares and employee shares were issued. After changing the currency and completing the issue, the bank’s share capital is EUR 32 400 770 and consists of 29 385 000 registered shares providing voting rights and 3 015 770 employee shares. The total paid amount of applications for voting shares substantially exceeded the offer, and therefore some of the applications were satisfied partly. The sale price of one newly issued share was EUR 12.05, and 66 current shareholders of the bank participated in acquisition of the shares. The results of the issue once again show that we have many loyal shareholders. The funds obtained from the share issue will be invested in the bank’s further development.

Continuing the bond issue programme, this year we have performed four new issues of coupon bonds: two of them under the Third Bond Offer Programme, and two other – under the Fourth Bond Offer Programme. The total size of the bond issues amounted to USD 150 000 000 and EUR 40 000 000 at face value respectively. Following these bond issues, there are 18 bond issues included in the NASDAQ OMX Riga list of debt securities. The bank initiated gradual replacement of long-term deposits with bonds at the end of 2011. Including new bonds and those already redeemed, we have performed 22 public bond issues so far.

On 25 April 2014, ABLV Bank, AS, entered into primary dealer agreement with the Treasury, thus joining Latvian Primary dealers group. Primary dealers are cooperation partners of the Treasury entitled to take part in the domestic bond issues and auctions arranged by the Treasury. During this period we have also acquired substantial amount of Latvian government securities, and currently we have Latvian government securities worth EUR 182.9 million in our portfolio.

The bank’s major financial indicators in the first half of 2014 indicate stable growth of the bank. ABLV Bank, AS, is the largest bank in Latvia with local capital and is ranked third in terms of the amount of assets.

  • The bank’s profit in H1 2014 amounted to EUR 32.9 million, and profit of the group – to EUR 33.1 million. Whereas in H1 2013 the bank’s profit was EUR 21.6 million.
  • The bank’s operating income before allowances for credit losses totalled EUR 59.6 million. Compared with H1 2013, operating income has increased by 13.6%.
  • The amount of the customers’ deposits was EUR 2.98 billion at the end of the reporting period.
  • The amount of issued debt securities reached EUR 352.0 million.
  • As at 30 June 2014, the amount of the bank’s assets totalled EUR 3.58 billion. Since the beginning of the year, the amount of assets has grown by 7.9%, the total assets increasing by EUR 263.0 million.
  • The bank’s loan portfolio was EUR 743.8 million at the end of June.
  • The bank’s capital and reserves amounted to EUR 204.4 million.
  • As at 30 June 2014, the bank’s capital adequacy ratio was 16.82%, whereas liquidity equalled 81.01%.
  • ROE reached 35.41%, and ROA – 1.87%, as at 30 June 2014.

The bank continued investing in securities. The total amount of the securities portfolio was equal to EUR 1.74 billion, as at 30 June 2014. The bank’s securities portfolio is mostly composed of fixed-income debt securities, and 68.7% 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 – 25.0%, Latvia – 11.9%, Germany – 11.7%, Canada – 11.6%, Russia – 11.1%, Sweden – 9.4%, Netherlands – 2.2%, and Norway – 2.2%. Whereas 3.4% is constituted by securities issued by international institutions – the European Commission, EBRD, etc. In the reporting period, annual yield of the securities portfolio amounted to 1.9%.

In the reporting period we have implemented several new products and services for the convenience of our customers. Those include Internetbank for iPad tablet computers, improved main Internetbank, and Internetbank for iPhone smart phones.

In February 2014, the bank’s Mortgage Loans Division moved back to the premises at 21a Elizabetes Street in Riga, after reconstruction and repair works had been completed there. Concentrating all customer service in one place, at 21a Elizabetes Street, we ensure new service level for mortgage borrowers.

As at the end of June 2014, total assets under ABLV Asset Management, IPAS, management amounted to EUR 101.1 million, of which EUR 95.7 million were customers’ investments in our open-end mutual funds, and EUR 5.4 million were customers’ funds invested in individual investment programmes.

The first half of 2014 was also successful for ABLV Capital Markets, IBAS, which executes customers’ instructions for purchasing and selling all types of financial instruments in the world’s major securities markets. In the first half of the year, profit of ABLV Capital Markets, IBAS amounted to EUR 1.0 million. As at 30 June 2014, total assets that company’s customers invested in financial instruments were EUR 874.3 million.

Another affiliate company of the bank, real estate development and trading group Pillar, in the first half of 2014 achieved the highest amount of trades in its history. During the first six months of the year, Pillar group concluded transactions on sale of 350 properties, which is 48% more than during the respective period last year. The total amount of transactions reached EUR 18.3 million.

The complete audited report for H1 2014, as well as quarter reports, reports of the Council and the Board, and opinion of audit company Ernst & Young Baltic, SIA, are available at the bank’s home page www.ablv.com.

ABLV Bank, AS, is the largest independent private bank in Latvia. The bank’s major shareholders — Oļegs Fiļs, Ernests Bernis and Nika Berne – directly and indirectly hold 86.23% of the bank's voting 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