Aizkraukles banka summarized financial performance of the first three quarters 2008

October 17, 2008 / Banking
  • Aizkraukles banka operational financial indicators as of 30.09.2008.
* Assets1,135 billion
* Deposits873 million
* Loans684 million
* ROE 22,54 %
* ROA 1,83 %
* Operating income45 million
* Profit15 million

  • Since the beginning of 2008, the Aizkraukles banka assets has grown by 2.1%, the amount of attracted deposits — by 7%, whereas the amount of loans granted has decreased by 1.3%.
  • As of the end of the 3rd quarter of 2008, the Aizkraukles banka non-audited profit is LVL 15 million.
  • In future, the main focus will be on ensuring safe and sustainable work of the bank, further improvement of the level of services, and development of investment products..

“We consistently continue implementation of the new business strategy, under which key role is assigned to providing tailored services to companies and wealthy individuals. We refrain from concluding risky transactions, because we consider safety to be more important than profit in present circumstances,” said Aizkraukles banka co-owner and Chairman of the Board Ernests Bernis.

Financial performance

During the year 2008, the bank assets have grown by 2.1%, amounting to LVL 1.135 billion, as of the end of September. At the same time the bank loan portfolio as of the 30 September 2008 was equal to LVL 684 million, which is 1.3% less than at the beginning of the year.

As of the end of reporting period, the amount of deposits attracted by the bank was LVL 873 million. During the year 2008, the amount of deposits has grown by 7%, with considerable increase by LVL 77 million observed in the 3rd quarter of 2008.

The bank ROE index (ratio of the reporting period profit to the bank average equity) amounted to 22.54% as of the 30 September 2008, whereas ROA index (ratio of the reporting period profit to the average reported value of assets) was equal to 1.83%.

The AB.LV liquidity index is 54.83%, which is much higher than standard rate of 30%, set by the Financial and Capital Market Commission (FCMC).

Capital adequacy

As of the end of September 2008, the Aizkraukles banka index of capital adequacy amounted to 11.28%. According to preliminary calculations, after proceeds of issue of the bank subordinated bonds and audited profit of the first half of 2008 are added to the bank capital, the bank capital adequacy index will exceed 15%. The aim is to maintain capital adequacy above 14%, which is much higher than standard rate of 8%, set by FCMC.

Loans

During the 3rd quarter of 2008, there were no significant changes in the bank loan portfolio. The same is true for payment discipline. The loan portfolio amount has decreased by 1.3%, compared to the beginning of the year.

The bank long-term objective is to decrease gradually the amount of loan portfolio, paying most attention to its quality characterized by balanced risk-return ratio.

Issue of bonds

In the 3rd quarter of 2008, AB.LV initiated two issues of subordinated bonds — in US dollars and euros, with redemption date of the 1 October 2018. Initially, the volume of USD issue was USD 20 million and that of EUR issue amounted to EUR 10 million. In order to satisfy the demand for bonds in euro, the decision on increasing this issue up to EUR 12.5 million was made. Both individuals and corporate entities acquired the bonds.

The bonds issue was aimed at raising subordinated financial resources for the bank. They will be included in the bank’s capital to increase the bank’s equity accordingly, and to serve as grounds for the bank further growth.

About Aizkraukles Banka Group

AS Aizkraukles banka is 100% owned by Latvian shareholders. The bank’s majority shareholders are Olegs Fils — 47.04% shares, Ernests Bernis and Nika Berne — 47.04% shares. The Aizkraukles banka aim is to become the leading independent private bank in the Eastern Europe, providing corporate banking, private banking, asset management and advisory services to its customers. Aizkraukles Banka Group includes IPAS AB.LV Asset Management, IBAS AB.LV Capital Markets and other companies.

Ilmārs Jargans
AS "Aizkraukles banka"
Head of Public Relations Department
Tel.: +371 67 77 52 96