Questions and Answers Regarding Unavailability of Deposits at ABLV Bank

Riga, Latvia, February 25, 2018, 11:35 / Banking

What should the depositors and clients having money in ABLV Bank do?

Currently, the clients temporarily have no access to their money neither in the branches of the bank nor through online banking; bank's card system is switched off as well, therefore the clients neither can make banking payment cards payments nor withdraw the money from ATMs. Transfer of the bank's client securities to other banks is not banned.

What amount will be disbursed to each bank's client?

Up to 100 000 euro are guaranteed to each eligible client per each Latvian bank, ensuring disbursement from the Deposit Guarantee Fund in case of unavailability of deposits.

ABLV Bank has enough liquid assets to ensure repayment of the amount to the DGF in full.

What types of client assets are covered by guaranteed compensation?

Compensations are paid for all types of deposits in all currencies in the amount not exceeding EUR 100 000 for all of accounts together, including accounts opened with branches of bank. The amount guaranteed by the state is applicable to deposits, current account balances, salary accounts, savings accounts, etc. The full amount is disbursed for the deposits that do not exceed EUR 100 000. Interest profit is part of the compensation amount, including the interest calculated until the date of occurrence of unavailability of deposits, provided that the total amount does not exceed 100 000 euro.

Who is eligible for guaranteed compensation up to EUR 100 000?

Guaranteed compensation up to EUR 100 000 applies to all clients of the bank, both natural and legal persons, either residents or non-residents. Guaranteed compensation applies also to the bank accounts of Latvian central and local governments (if the budget of relevant institutions does not exceed EUR 500 000).

When will disbursement of guaranteed compensation start?

Disbursement of guaranteed compensation shall start not later than within 8 working days of the date of occurrence of unavailability of deposits. (i.e. no later than on 7 March, 2018).

Depositors will have the right to receive guaranteed compensation for five years of the date of occurrence of unavailability of deposits.

What will be the currency of payable compensation?

According to law guaranteed compensation is payable in euros. In case deposits were in other currencies, they will be converted to euro. Laws and regulations do not provide for compensation for currency conversion losses.

What will be the pay-out procedure in case of a joint deposit of several clients that in total exceeds standard compensation?

If the bank has timely identified each of depositors, each depositor will be eligible to guaranteed compensation of EUR 100 000 in full.

Does guaranteed compensation apply to a subordinated debt to the bank?

No, subordinated debt is one of exemptions not qualifying for guaranteed compensation.

How will be determined the payable amount?

The Bank's accounting records maintain information about all the clients eligible for guaranteed compensation and the amount of their deposits. This information base has been monitored and verified also by the FCMC.

Is it possible to receive larger guaranteed compensation and who is eligible for this?

Yes, there are certain types of transactions where the natural persons involved are eligible to apply for additional compensation (up to EUR 200 000), i.e. together with standard compensation up to EUR 300 000. For example, in case the funds transferred in the account over last three months were derived from transactions with residential immovable property, state social security benefits, compensations for damages of a criminal nature or for wrongful conviction.

Will a client receive guaranteed compensation if the bank account is seized?

No, guaranteed compensation applies only to the amount that was available to the client (not seized) on the date of occurrence of unavailability of deposits. If a sworn bailiff or tax (duty) administration has started the enforcement procedure against the depositor on cash recovery, the recoverable amounts up to the guaranteed limit of EUR 100 000 will be disbursed to the sworn bailiff or the tax (duty) administration, respectively. If after settlement with bailiff or tax administration, part of the seized amount is waived, a client will be able to receive remaining guaranteed compensation later. In this case a five-year limitation period (during which guaranteed compensations may be received) starts from the day when guaranteed compensation or part of it has become freely available to the client.

What will happen with the funds transferred into the client account on the next day after the 23.02.2018 decision by FCMC on imposing restrictions on the activities of bank?

All the clients that meet the criteria for clients eligible for guaranteed compensation, regardless of when the funds were transferred into the account, are eligible for guaranteed compensation up to EUR 100 000.

What should other clients, whose deposits with the bank exceed EUR 100 000, do?

Please follow information on the further decisions by the ECB and FCMC.

What should ABLV Bank borrowers do?

These clients have to fulfil their obligations. While the conditions of the loan agreement are met, no one is entitled to implement changes in those conditions or make the borrower to repay the loan before the set term. The client should not worry as long as he is fulfilling his obligations according to the loan agreement.

Financial and Capital Market Commission