The Court Recognises the Soundness of ABLV Bank Luxembourg, S.A. Which Can Now Be Sold to New Investors

Riga, Latvia, March 9, 2018, 14:26 / Banking

The Luxembourg Commercial Court (Tribunal de Commerce de Luxembourg) has decided today to refuse the request to place ABLV Bank Luxembourg, S.A. in liquidation.

The Commission de Surveillance du Secteur Financier (CSSF) will terminate its activity as the temporary administrator of ABLV Bank Luxembourg, S.A. The court has appointed two external administrators which will work at the bank during the following six months until the bank finds new investors.

With the decision of the Luxembourg court, the bank stays under the protection of the suspension-of-payments status.

We believe that this new ruling is the best possible outcome and good news for ABLV Bank Luxembourg, S.A. clients and staff providing the time necessary to explore the optimal solutions.

The decisions of the European Central Bank (ECB) seem to have been taken for all entities of the ABLV group regardless of their specific situation and quality. ABLV Bank Luxembourg, S.A. has an extremely strong excess capital (the capital adequacy ratio of more than 29% versus the legal requirement of 10.5%), a very high liquidity (the LCR of 383% versus the legal minimum requirement of 100%), no bad loans, and a very limited reliance on the group. The Luxembourg court considered the specific situation of the Luxembourg entity and overruled the decisions of the ECB based, amongst other, on the very strong financial standing of ABLV Bank Luxembourg, S.A., a result of its sound management.

ABLV Bank, AS is very satisfied that the soundness of the Luxembourg entity has been recognised. Potential investors have already expressed interest in our Luxembourg subsidiary. On top of this, last week, ABLV Bank Luxembourg, S.A. showed that it was able to quickly mobilize sufficient amount of cash to meet all request for external transfers.

As it was previously announced, the request introduced by the CSSF to the Luxembourg court was an automatic consequence of the instructions of the ECB not to lift the restrictions imposed on ABLV Bank, AS, which consequently leads to the liquidation of all banking entities of the ABLV group. ABLV Bank, AS emphasises that ABLV Bank Luxembourg, S.A. is able to meet all of its obligations towards clients and creditors.