State looks at resuscitating Krajbanka

RIGA - More than 300 million lats (428.5 million euros) could be necessary to renew Latvijas Krajbanka operations, Financial and Capital Market Commission deputy chairman Janis Brazovskis said in an interview with the daily Diena, reports Nozare. lv. Brazovskis says that, at the moment, the bank’s capital insufficiency amounts to 167 million lats, and an additional 100-150 million lats could be required to ensure its liquidity.

However, the bank’s recovery is not the goal in and of itself. It is of the utmost importance to recover the funds of its depositors and creditors, emphasizes Brazovskis. “Whenever a company is declared insolvent, it is right to consider its potential recovery. Krajbanka’s recovery is possible, but the question is, whether it is possible to find sufficiently stable investors who would be ready to carry it out,” says Brazovskis. Krajbanka’s recovery was discussed with Russian banker Alexander Antonov, father of the former Latvijas Krajbanka owner Vladimir Antonov and who is suspected of fraud and embezzlement in the case of both Krajbanka’s and Lithuanian bank Snoras’ collapse.

The elder Antonov said that his “cooperation partners” could be ready to review this issue of reviving the bank. “My answer was ‘yes,’ if they are stable investors with transparent quality capital, why not? It is always better to restore something than completely destroy it,” said Brazovskis. On Dec. 13, the Riga Regional Court decided to launch insolvency proceedings against Latvijas Krajbanka following a petition from the Financial and Capital Market Commission.

The regional court turned down the Financial and Capital Market Commission’s suggestion, however, to appoint Ints Goldmanis as the bank’s administrator, and told the Commission to nominate another candidate for the bank’s administrator, said the court’s press secretary Aigars Berzins. The court also ruled that the bank’s property would be arrested. From Nov. 29 to Dec. 16, 70,235 clients of Krajbanka withdrew a total of 259.3 million lats from the Deposit Guarantee Fund. Estimates say that Krajbanka clients have withdrawn approximately 74.1 percent of the previously allotted 350 million lats for the state-guaranteed compensation payments. As of last week, compensation has been paid out to 29.5 percent of 238,000 eligible bank customers.