By pay-out of guaranteed compensations, deposits will be completely refunded to 88% of the clients of ABLV Bank

RIGA - The Financial and Capital Market Commission (hereinafter – FCMC) has taken a decision to commence pay-out of guaranteed compensations to the clients of ABLV Bank AS starting from 3 March this year, by entrusting the pay-out of the guaranteed compensations to JSC “Citadele banka”. Thus the pay-outs of guaranteed compensations to the clients of ABLV Bank will be ensured within five working days since setting in of non-availability of deposits, which was established by the FCMC on 23 February 2018. In accordance with the Deposit Guarantee Law, the guaranteed compensation shall be available for depositors or bank clients starting from the eighth working day after the day when non-availability of deposits was established.

ABLV Bank has 22 830 clients who have the right to receive a guaranteed compensation up to the amount of EUR 100 000 – 14 362 foreign clients and 8 468 domestic clients. By disbursing guaranteed compensations, it will be ensured that in total deposits will be completely refunded to 88% of ABLV Bank AS clients, in turn domestic deposits will be completely covered to 97.8 of ABLV Banks AS clients.

In this case of the pay-out of guaranteed compensations the funds of the Investment Guarantee Fund (IGF) will not be used for the pay-out of compensations because ABLV Bank AS has sufficient funds. 480 million EUR are necessary for the pay-out of compensations to the clients of ABLV Bank AS which ABLV Bank AS has already transmitted to the account of the FCMC where the funds of the IGF are kept. All funds are refunded up to EUR 100 000 to every client whose deposits in the bank do not exceed this amount.

Jelena Lebedeva, the Head of the Resolution and Guarantee Fund Division: “This is the case when the risk of operation of one bank has caused the situation in which the deposit guarantee system established in the country should be involved by ensuring protection of clients. Operation of any bank has certain risks, that is why such mechanism is established. By quick start of the pay-out of guaranteed compensation we create feeling of safety for all clients of the bank because the confidence that the guarantee system is working and the clients of Latvian banks are under the state protection is strengthened for both the domestic clients and foreign clients in Latvia irrespective of their country of origin.”

The FCMC has selected to entrust the pay-out of guaranteed compensations to JSC “Citadele banka” (hereinafter - “Citadele”), by assessing the most appropriate solution for the interests of clients of the bank and by taking into account its technical equipment for commencement of the pay-out of guaranteed compensations as soon as possible, and also by complying with the previous experience in co-operation with this commercial bank of Latvia. The FCMC and “Citadele” have co-operated also in provision of guaranteed compensations to the clients of JSC “Latvijas Krājbanka” in 2011. The joint stock company “Citadele banka” has confirmed its readiness to carry out the pay-out of guaranteed compensations, by entering into agreement with the FCMC On Ensuring the Readiness for Performance of the Pay-out of Guaranteed Compensations on 23 November 2011.

The clients of ABLV Bank will be able to apply for the pay-out of guaranteed compensation in four branches of “Citadele” in Riga and in one branch in Jūrmala, in turn foreign clients are called to apply to the headquarters of “Citadele” in Riga, Republikas laukums 2A during working hours indicated by the bank.

In order for the pay-out process to be smooth, bank invites the clients, especially foreign ones, to ascertain that valid personal identification documents of a client are at the disposal of ABLV Bank AS or the identification information of the client is up to date.

The Deposit Guarantee System of Latvia provides for a guaranteed compensation up to EUR 100 000 to each client of ABLV Bank AS. The guaranteed compensation in the amount up to EUR 100 00 is paid out to both the natural persons and legal persons for the all types of deposits in any currency. The guaranteed compensations shall apply to deposits of bank clients, to interest of deposits, which are accrued until the day of setting in of non-availability of deposits, to balances in current accounts or salary accounts and to funds in saving accounts. The guaranteed compensation shall apply also to deposits of clients in subsidiary banks of the bank. The guaranteed compensation to clients of ABLV Bank Luxembourg, the subsidiary bank of ABLV Bank AS, will be paid out by the Luxembourg Deposit Guarantee Fund (Fonds de garantie des dépôts Luxembourg).