Bank of Latvia grants EUR 97.5 million loan to ABLV Bank against pledge of securities

RIGA - The Bank of Latvia has granted a EUR 97.5 million loan to ABLV Bank against a pledge of securities, the Latvian central bank said.

"Based on the request from ABLV Bank and a supporting opinion from the Finance and Capital Market Commission, the Bank of Latvia has decided to grant a EUR 97.5 million loan to ABLV Bank against a reliable pledge of highly liquid securities," the Bank of Latvia said, stressing that the value of the pledge was much higher that the loan amount.

As reported, ABLV Bank has decided to pledge some securities, asking in return a loan of up to EUR 480 million from the Bank of Latvia, order to stabilize its situation.

The Latvian financial regulator, the Finance and Capital Market Commission, acting on the instructions from the European Central Bank (ECB), has ordered ABLV Bank to stop all payments as of February 19. The ECB said that the decision was necessary to give ABLV Bank time to take steps to towards stabilization of the situation.

Last week the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury proposed sanctions against ABLV Bank for its role in money laundering schemes that have been facilitating transactions for parties connected to North Korea's nuclear program and illegal activities in Azerbaijan, Russia and Ukraine. FinCEN also said in its report that the management of ABLV Bank used bribery to influence Latvian officials when challenging enforcement actions and perceived threats to their high-risk business.

ABLV Bank said it will make every effort to disprove the allegations.

At the end of September 2017, ABLV Bank was the third largest bank in Latvia by assets. The bank's majority shareholders Olegs Fils, Ernests Bernis and Nika Berne own, directly and indirectly, 87.03 percent of the bank's share capital.

ABLV Bank's bonds are quoted on the Nasdaq Riga Bond List. ABLV Bank is under direct supervision of the European Central Bank (ECB).