Summed up

  • 1999-01-28
LATVIAN BANKS LICK THEIR WOUNDS: Only 10 out of 27 Latvian commercial banks earned a profit in 1998, said Teodors Tverijons, Latvian Commercial Banks Association president, at a news conference Jan. 21. Tverijons said the other banks had incurred losses, most of which originated while forming reserves for Russian assets or writing off losses that were caused as a result of currency rate fluctuations. Large Latvian banks such as Rigas Komercbanka, Hansabank, Rietumu Banka and Latvijas Unibanka all finished 1998 worse off than when they started it.

LITHUANIA PUTS SQUEEZE ON FOREIGN VODKA: The Lithuanian government decided last week to toughen customs requirements in an effort to block cheap vodka and fuel coming from neighboring countries. The government will impose a temporary ban on vodka imports from Russia's Kaliningrad region and Belarus, according to Economics Minister Vincas Babilius. One car will be allowed only up to 30 liters of gasoline duty-free. The limit for one truck is 100 liters. The amount of vodka products is limited to half a liter per person (one liter via sea and air ports). Restrictions are also imposed on tobacco, coffee and some other goods. A person will only be allowed to bring in these goods after spending at least three days abroad.

LOG ON AT YOUR OWN RISK: The Estonian Insurance Companies Union will adopt a memorandum this week that recommends that members not compensate damages caused by the y2k computer problem scheduled to cause havoc come 2000. The recommendation will apply to policies yet to be signed. Katrin Hanko, the managing director of the union, said that most of the world's insurance specialists say problems connected with the year 2000 problem are not insurable risks: Everyone has been forewarned and can make adjustments.

THE RUSSIANS ARE COMING: Shortly after Latvia's national airline, airBaltic, launched direct flights to Moscow, Russia's Transaero Airlines grabbed a 0.35 percent stake in the company, according to airBaltic spokesman Ojars Sture. Transaero became a shareholder to help promote the development of airBaltic's Russian operation, Sture said. AirBaltic increased its statutory capital late last year by 2.4 million lats ($4.2 million) to 15.5 million lats. Transaero holds 54,000 lats worth of shares in airBaltic. The Russian investment comes shortly after airBaltic's shareholders opted to transform the company into a closed stock one, the first step toward making it a public stock. The company's main investors are the Latvian state (51 percent) and Scandinavian Airlines System (38 percent).

BUILDING COMPANY CONSIDERS EXPANSION: The Estonian-based Merko building company is planning to widen operations in the road building sphere and has explored the possibility of acquiring a stake in another road building company. Ulo Metsaots, Merko's financial director, told the Baltic News Service the plan is still under consideration. Acquisition of a stake in another company would immediately give Merko more background knowledge and experience, Metsaots said. In 1998, the Merko Ehitus building company had a turnover of 850 million kroons ($63.43 million) and 35 million kroons of profit.

DAIRY PRODUCTION CONTINUES TO SLOW: Lithuania's Kauno Pienas dairy has cut down production by nearly 20 percent due to the Russian crisis and overproduction on the domestic market. Perishable products comprise the bulk of the dairy's production. The director general was unwilling to comment on his company's 1998 results. "It will be good if we have at least a minimum profit or a zero profit-loss balance," he said. The company had 1.95 million litas ($487,500) in net profit in 1997.

UNIBANKA GETS INTO EURO GAME: Latvijas Unibanka granted its first credit in euros, the new common European currency unit, at the same interest rate as those for deutschmarks, said bank spokeswoman Liga Liepina. Unibanka was also preparing to accept deposits in euros earlier this week. Customers have already been given the option to open accounts in any currency of the 11 EU member states as well as in euros. "There are many advantages for customers holding a single account in euros," said Liepina, pointing to a new program for deposits in the EU currency that will also provide customers with more benefits than separate deposits in different European currencies. Experts predict the euro will become the second most used currency in the world after the U.S. dollar and will have a strong position in Europe. At the end of September, 1998, Latvijas Unibanka was the second largest commercial bank in Latvia in terms of assets. Its shares are quoted on the official list of the Riga Stock Exchange as well as on the London and Berlin stock exchanges.