Shareholders of Aizkraukles bank want to double bank’s authorized share capital.

March 25, 2002 / Banking

At the General meeting of the S/C "Aizkraukles bank" (AB), held last Friday, a decision to double it’s authorized share capital, increasing it up to 10 millions LVL this year, has been made. «It will secure higher stability of the Bank and deposits’ safety» considers one of it’s main shareholders, AB Council Chairman Ernest Bernis.

It is planned, that shareholders’ equity during the Year 2002 will increase by more than 2 millions LVL (up to 15,7 millions LVL). Such an increase will enable the Bank to boost its loan activities on local market. At present the authorized share capital of AB is 5 millions LVL, but shareholders’ equity at the end of the last year amounted 13,6 millions LVL.

The General meeting of AB approved Annual Report of the Year 2001 and took a decision about last year’s profit division. 2,9 millions LVL of previous years retained earnings and 2,1 millions LVL of this year’ s profit will be diverted to the increase of authorized capital. It has been decided to pay to the shareholders 500 thousands LVL (five LVL for one share) in dividends, the rest of the Year 2001. profit, 1,6 millions LVL to be kept within the Bank as retained earnings.

An annual budget and Activities’ Plan was approved at the General Meeting. According to the approved Bank’ s strategy, shareholders foresee the possibility to increase it’s market share, purchasing another Bank within Latvia.

Will work intensively to introduce the new brand, "AB.LV".

AB has foreseen large activities to strengthen the brand "AB.LV" on local, as well as on international market. Thus the Bank will try to increase it’s competitiveness and recognition of its brand name, aiming to highlight it’s advantages and values — application of modern technologies and an individual approach in clients’ service. Becoming more open and more understandable to public, AB will go onwards with introducing it’s new corporative style in all it’s fields of activities.

Is planning to invest in technologies’ development.

During this year the Bank is planning to invest one million LVL in information technologies’ and new products’ development. At services’ work out an emphasis will be made on modern technologies’ introduction in accounts’ settlement. The Bank is planning the increase of electronic transfers within total amount of it’s clients’ transfers. In spring an introduction of new AB Internet Bank, meeting all the requirements of modern users, is foreseen. Besides AB is going to introduce a new, updated version for the account settlement system "Bank-Client", but in the second half of the year a work on introduction of telephone-bank will be started.

During this year AB will start to offer intermediary services in deals with stocks and securities and will activate the sale of payment cards, issued by bank.

Development of Clients’ services network in the Year 2002.

During the Year 2002. AB is going to extend Clients’ services in Riga, creating new Clients’ Service centers in Purvciems and Teika/Jugla districts. The Bank will continue transformation of the existing clearing centers into Clients’ Service Centers by expanding both premises and number of services rendered.

950 thousands LVL are going to be invested into reconstruction of AB central office in Riga, Elizabetes Street 23, which is planned to be opened at Bank’ s ten years’ Anniversary at the end of the next year.

An expansion in Latvian and International Market is planned.

AB shareholders are of opinion, that the rates of growth in Bank’s financial indicators this year will be determined by planned expansion both on Latvian and the International Marketplace. Acting as Latvian Bank with private capital already for many years, AB has capitalized on the opportunities to work successfully not only in our country, but also in other markets, thus securing attraction of significant financial resources and promoting development of national economy.

During one year’ s time the shareholders of AB are planning to increase the Bank’ s loan portfolio up to 41,3 millions or at 37%. It is foreseen, that the total sum of assets at the end of the year will be 175,5 millions LVL, increasing at 41% in comparison with the end of the last year. According to the budget plan, approved by shareholders of AB, this year the bank’ s deposits should increase at 46%, reaching the amount of 155 millions LVL.

Less of profit this year, aiming better future

The shareholders of the Bank approved profit forecast of 2,6 millions LVL in the budget, having foreseen decrease of it’ s amount this year, as last year’s audited profit of AB was 4,2 millions LVL.

"Planning an active expansion of AB in Latvian, as well as in the International market, in the Year 2002. we should encounter an increase of expenses, which will decrease the possibilities of profit this year ," the strategy of the Bank is explained by Council Chairman E. Bernis, and he emphasizes, that " it has been decided to reject short term gains in order to reach prompt development in future".

E. Bernis argues, "this strategy will pay off in the Year 2003, when AB is planning a remarkably higher profit. Our long term strategy is to increase local market share, which, after the involvement of new clients and significant increase of sales this year will bear fruit during next years."

Ernests Bernis,
AB Council Chairman