Aizkraukles Banka issues new shares to increase equity capital to LVL 6.5 million

July 5, 2010, 12:40 / Banking

Issue of Aizkraukles Banka new shares has been completed. 10 000 shares have been issued additionally to 100 000 that constituted the bank share capital before. After issue, the new shares equal 9.09% of the bank share capital. The shares’ selling price was LVL 650 each.

Two thirds of the new shares have been bought by the bank current shareholders, top managers and employees, as well as Latvian Private Banking customers. Whereas one third has been purchased by the bank foreign customers, mainly individuals. Upon completion of the issue, the bank major shareholders — Ernest Bernis and Oleg Fil — hold about 86% of the bank capital.

Though the issue was in the form of non-public offering to a limited group of persons, the overall paid amount of applications exceeded LVL 9 million, which is 40% above the offer amount; therefore, some of the applications have been fulfilled partly.

Aizkraukles Banka Chairman of the Board and Chief Executive Officer Ernest Bernis explained the purpose of the issue of shares:

“During the last half of the year, there was a significant increase in all segments of business — servicing individuals and corporate entities, lending, securities transactions, asset management. Compared to the previous year, business volume has increased by at least 30% this year, also in terms of assets, revenues, and number of transactions. This increase in business requires additional capital to be raised. At the end of 2007, we clearly stated our further focus — servicing individual and corporate customers and rendering related services to Latvian and foreign customers. Moreover, we see our bank as an independent private bank. The whole development strategy that we design and implement serves this purpose. Actually, since the bank began its operations in 90s, we relied on ourselves only. The crisis of 2008 required considerable mobilization of our efforts and resources. Now we may say the most difficult time is over, stabilization in Latvian economy has been observed since the middle of the last year, and slow growth started this year. We also see that the business model chosen by the bank has grounds for success in future, since this model managed to sustain a crisis unprecedented in terms of its scale. That is why we questioned ourselves what we are going to do when pace of business exceeds that we accounted for. To answer the question whether we will be able to sustain increase in lending, the issue of new shares has been performed. Many of those who bought shares have been our customers for more than ten years. After the issue, about 30 new shareholders joined the bank. We don’t see a need for raising capital once again in the following year.”

Aizkraukles Banka is the largest independent private bank in Latvia with controlling interest owned by Latvian shareholders, combining all banking services, including asset management and advisory services, in a single customer-tailored offer. Aizkraukles Banka Group includes brokerage joint stock company “AB.LV Capital Markets”, investment management joint stock company “AB.LV Asset Management”, “AB.LV Transform Partnership” LP, “AB.LV Transform 1” Ltd, JSC “AB Konsultācijas”, “AB.LV Corporate Services” Ltd, “New Hanza City” Ltd, “Elizabetes 21a” Ltd, and other companies.

Additional information:

Ilmars Jargans
Head of Public Relations Department
+ 371 6700 2296