FCMC files an application for insolvency to the court against JSC "PNB Banka"

Following the European Central Bank (ECB) had assessed that JSC "PNB Banka" was failing or likely to fail and the decision by the European Single Resolution Board that resolution action was not necessary in the public interest, the Financial and Capital Market Commission (FCMC) has prepared an application to the court for the opening of JSC "PNB Banka's" insolvency proceedings.

The application has been submitted today, 22 August, to the City of Riga Vidzeme District, at the same time asking to appoint Vigo Krastiņš as insolvency administrator of the bank's insolvency proceedings.

The bank supervisors, the ECB and the FCMC, have repeatedly applied to JSC “PNB Banka” supervisory measures for the purpose that the bank would meet regulatory requirements, as well as granted the bank an opportunity to carry out capital strengthening measures within the specified deadlines, but the bank was unable to meet the set limits and deadlines. All the information submitted so far has been evaluated and has not provided assurance to the FCMC that the set supervisory measures would be complied. Consequently, the ECB as a direct supervisor of JSC "PNB Banka" decided to declare the bank as failing or likely to fail under the Regulation (EU) No 806/2014, and based on the findings that the bank's debt obligations exceeded its assets assets. In this situation, in accordance with Section 145 of the Credit Institution Law the FCMC may submit an insolvency petition to the court.

The nomination and appointment of an insolvency administrator are regulated by the FCMC regulations. The FCMC shall select the insolvency administrator from the list provided by the Insolvency Control Service. The FCMC shall assess the vision for managing the bank's insolvency proceedings proposed by applicants, existing experience and available resources, in addition assessing their understanding of the issues related to the prevention of money laundering and terrorism financing, as well as the information received from the law enforcement authorities.

Vigo Krastiņš will be appointed as insolvency administrator for JSC "PNB Banka" proceedings if his nomination is approved by the court.