ABLV Bank Profit in 9 Months of 2017 – EUR 40.8 million

Riga, Latvia, November 30, 2017, 10:12 / Banking / Inside information

The ABLV Bank results in nine months of 2017 allow expecting achievement of the objectives set for this year. All major performance indicators of the bank remain high, including capital adequacy and liquidity ratios. In the reporting period, we continued improvement of the internal control system of the bank including work in the field of ML/TF and sanctions risk management, and systematic decrease of ML/TF and reputation risks related to clients’ transactions.

ABLV Bank, AS has continued bond issues. Under the Seventh Bond Offer Programme that took place from July to October there were four new coupon bond issues held with a total size of USD 150 million and EUR 40 million at face value, as well as one subordinated bond issue of EUR 25 million. Including the redeemed bonds, we have performed 46 public bond issues so far amounting to EUR 1.45 billion.

In the reporting period, ABLV Asset Management, IPAS has engaged in managing funds of the second pension pillar in Latvia. As from 2 October 2017, a new pension plan — ABLV Active Investment Plan — is available to all Latvian residents participating in the second pension pillar. Its manager is the Deputy Chairman of the Board of ABLV Asset Management, IPAS Jevgenijs Gžibovskis, who has more than 15-year experience in managing various investment portfolios and funds, including ABLV Emerging Markets USD Bond Fund and ABLV Emerging Markets EUR Bond Fund management during last 10 years. An active strategy has been chosen for ABLV Asset Management, IPAS second pension pillar investment plan, which enables to achieve the return exceeding the inflation level.

Financial indicators

The key financial indicators of ABLV Bank demonstrate stable operation in accordance with the previously approved plan. ABLV Bank, AS is the largest bank in Latvia with local capital. In the first nine months of 2017, the ABLV Bank, AS profit amounted to EUR 40.8 million.

  • In the first nine months of 2017, the bank’s operating income totalled EUR 84.5 million;
  • As at 30 September 2017, the amount of deposits in the bank equalled EUR 2.67 billion, while the amount of the bank’s assets totalled EUR 3.63 billion;
  • The bank’s loan portfolio equalled EUR 1.01 billion, whereas the amount of commercial loans grew up to EUR 638.4 million as at 30 September 2017;
  • The bank’s capital and reserves amounted to EUR 341.2 billion;
  • As at 30 September 2017, the bank’s total capital ratio was 22.94%, whereas liquidity ratio equalled 75.87%;
  • ROE reached 16.68%, and ROA — 1.44%.

As at 30 September 2017, the total amount of the bank’s securities portfolio was equal to EUR 1.66 billion. The bank’s securities portfolio is mostly composed of fixed-income debt securities, and 66.2% of the portfolio is constituted by securities having credit rating AA- and higher. In terms of major countries, the securities are allocated as follows: USA — 32.6%, Germany — 14.3%, Latvia — 13.3%, Russia — 10.9%, Sweden — 6.2%, Canada — 4.6%, Finland — 3.6%, Austria — 2.2%, China — 1.7%, Norway — 1.2%, Poland — 1.1%. Whereas 1.8% is constituted by securities issued by international institutions. In the reporting period, annual yield of the securities portfolio amounted to 2.46%.

Whereas, as at the end of September 2017, the total assets under ABLV Asset Management, IPAS management amounted to EUR 115.9 million, which are invested in mutual funds managed by the company.

Within nine months of 2017, good performance was demonstrated by our subsidiary for investments in commercial properties — New Hanza Capital that was working at a profit of EUR 173.4 thousand. The income of the group within nine months of 2017 equalled EUR 893.6 thousand.

In September, in cooperation with one of Germany’s leading alternative investment fund management service providers IntReal, New Hanza Capital Fund 2017, an alternative real estate investment fund, was established in Germany. During the reporting period, New Hanza Capital has also performed its first bond issue in order to attract additional funds for its operative needs. The total size of the bond issue is EUR 10 million. In the New Hanza Capital bond issue, ABLV Bank has been the arranger of the issue ensuring the necessary documents for it, as well as performing the initial placement of the bonds.

Meanwhile Pillar Group companies continued development of the large-scale project New Hanza. This September the construction of infrastructure stage 1 of New Hanza was completed. The first construction works were started here in July 2016, and their total costs have reached EUR 8.4 million. Pillar has started the construction of ABLV Bank headquarters. The first construction works comprise the so-called zero earthworks, which include installation of piles, excavation and placement of concrete for the underground parking. The general contractor of this massive project is Pillar Contractor, SIA. It is planned that the earthworks will take up to 18 months and the costs of this construction may amount to EUR 17.8 million.

In September, development of the technical project of reconstruction of Riga Cargo Railway Station located at New Hanza was completed; a construction permit was obtained and the reconstruction works were started. The former station warehouse will become a multi-functional venue for concerts, exhibitions, conferences and private events “Hanzas perons”, able to host up to 1000 people. This is going to be a significant object in the upcoming New Hanza district and a new landmark on Riga’s culture map. It is planned to complete the reconstruction works by December 2018.

We express our gratitude to our clients for their loyalty and to the employees for their contribution to the bank’s and the concern’s growth!

The bank's public quarterly report as at 30 September 2017 and reports of the Council and the Board are available at the bank’s website www.ablv.com.

This announcement contains inside information.

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 87.03% 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; Pillar Development, SIA, and other companies. ABLV Consulting Services has representative offices in Moscow, St. Petersburg, Vladivostok, Kiev, Odessa, Minsk, Almaty, Baku, Tashkent, Hong Kong, and Limassol.