Efficiency 2015 Annual Report

ABLV Bank Luxembourg: a Safe Haven of Stability

As the performance of our subsidiary ABLV Bank Luxembourg, S. A. gathers pace, Benoît Wtterwulghe, ABLV Bank Luxembourg Chief Executive Officer, gives an insight into the bank’s activities, achievements and challenges. At this rate, the banking group is about to obtain a strong and steady member at the very heart of Europe.

At the end of 2015, our Luxembourg bank celebrated its second full year of activity. We believe that during this time, we have managed to establish a very strong foundation for its further development. Our bank started to offer its products and services to the clients of ABLV Bank, AS at the end of 2014 after obtaining its bank license in late 2013.p>

Running the Extra Mile

Our team is highly skilled and qualified in alignment with the elaborated strategy. The bank employs over 20 people dedicated to the service of our clients and specialising in CIS markets, private banking and wealth management. The majority of the employees were hired on the local market, but some came directly from Latvia and Switzerland. Indeed, several employees of our parent company, ABLV Bank in Latvia, decided to take the challenge to move to the international financial centre that is Luxembourg and brought with them the specific client centric approach and strong culture of ABLV group, which I was truly happy to learn and accept. Previously, I thought that the client centric approach was specific to private banking only, but finally discovered that it can be present in other domains of banking as well. All employees directly in contact with our clients speak perfect Russian and know their culture and mentality. Our team is dedicated to deliver a very high quality service in a transparent way. They all want to offer an individualized service to our clients and run the extra mile for them. Our team is the key element in achieving this goal. We want each client to feel unique.

Our team is the key element in achieving the goals we set ourselves.

Snapping at competitors’ heels

Our product range last year was almost as wide as that of our competitors in Luxembourg and other international financial centres like Geneva, Zurich or London. However, in our case, there is a major difference, namely, we tailor our products and services for clients from CIS markets and entrepreneurs from this region. Not only do we understand the culture and communicate with our clients in Russian, but our products are bespoke for those markets. It is a unique proposal in private banking and wealth management; no other bank has the same strategy, approach or offering. At the end of 2015, we started to propose Lombard loans granted against the pledge of financial instruments. Clients have the opportunity to use them in a very flexible way and for any purpose. They can do leverage and increase the size of their securities portfolio or transfer money out of the bank to finance some acquisitions or business activities.

Gaining recognition

Even though a significant part of our clients are introduced by private bankers and agents of our parent bank in Riga, more and more clients are coming to us courtesy of a reference from other clients or professionals specialized in CIS markets in Luxembourg. The bank has managed to achieve recognition and standing in the local market thanks to two years of hard work. In the Luxembourg market, over 20 local professionals (law firms, tax advisors, fiduciary companies, etc.) have advised their CIS clients to make contact with the bank. We aim to triple the number of such local professionals during the next few years.

The client base that we have built is a strong indicator that our approach meets the needs of individuals and legal entities based in the CIS. They enjoy personalized services in a stable and growing international financial centre.

The bank has managed to achieve recognition and standing in the local market thanks to two years of hard work.

Addressing Challenges

Luxembourg managed to emerge from the financial crisis of 2008 safe and sound, although tax transparency in Europe is now getting stronger. The country’s economic growth continues to be one of the strongest in Europe and all the rating agencies’ note for Luxembourg is continuously the best possible.

The bank ended 2015 with results far better than planned thanks to both revenues that were higher than planned and better management of costs. The offering of advisory services and even more discretionary asset management exceeded our expectations. The low volatility and high liquidity strategies that we offer have found favour with a high number of clients.

One of the major challenges for 2016 is the impact of the economic crisis affecting CIS markets. Some of our clients are suffering from the economic environment with declining turnover, pressure on margins and very tight or impossible access to credit. We need to offer them a safe haven of stability and flexibility during this tough period, which will hopefully end soon.

I am very impressed by the dynamism of the entrepreneurs in the CIS countries. They live in an environment that is far more risky, complex and volatile than in Europe, yet still have the courage to take risks and not give up even under the most challenging circumstances.

Reception at ABLV Bank Luxembourg

Table of Contents

Creative team: Arnis Artemovičs, Ernests Bernis, Jānis Bunte, Anna Celma, Ilmārs Jargans, Jekaterina Koļesina, Sergejs Mazurs, Samanta Priedīte, Jūlija Surikova, Romans Surnačovs
Project managers: Anna Celma, Jūlija Surikova
Interviews: Jānis Bunte, Ingrīda Drazdovska, Konstantīns Gaivoronskis, Katrina Gordejeva, Ilmārs Jargans, Jekaterina Koļesina, Sergejs Mazurs, Romāns Meļņiks, Sergejs Pavlovs, Romans Surnačovs, Jānis Šķupelis
Text authors: Leonīds Aļšanskis, Jānis Bunte, Anna Celma, Vladislavs Hveckovičs, Jānis Grīnbergs, Māris Kannenieks, Ļubova Kazačenoka, Jekaterina Koļesina, Zane Kurzemniece, Aleksandrs Pāže, Gints Pumpurs, Dmitrijs Semjonovs, Jūlija Surikova, Kaspars Vanags, Benoit Wtterwulghe
Photography: Arnis Artemovičs, Uldis Bertāns, Mārtiņš Cīrulis, Ieva Čīka, Krišjānis Eihmanis, Andrejs Hroneloks, Alise Jastremska, Valdis Kauliņš, Valts Kleins, Marks Litvjakovs, Sergejs Mazurs, Reinis Oliņš, Samanta Priedīte, Gatis Rozenfelds, Polina Viljun, LETA foto, Marka.photo, Studija F64
Proofreader: Jānis Frišvalds
Translators: Jekaterina Koļesina, Nataļja Malašonoka, Lidija Marsova, Jūlija Surikova
Design: Aivis Lizums, Valters Horsts

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Reproduction is prohibited without the consent of ABLV Bank, AS.