Efficiency 2015 Annual Report

ABLV Group News

In 2015, ABLV Bank was named one of the best Latvian export brands.

ABLV Bank as one of the best Latvian export brands

In 2015, ABLV Bank was named one of the best Latvian export brands. In order to identify the best exporters, an export advisory company Gateway Baltic in cooperation with a financial consultant BDO and a marketing agency DDB Latvia examined the performance indicators of 1,300 exporters whose annual export turnover exceeds EUR 1 million. Within the research, 100 best Latvian exporters were determined. Following the examination, the expert panel nominated 25 most prominent export brands, including ABLV Bank, for the title The Red Jackets.

Financial achievements

During 2015, a planned development of the bank and other companies of the ABLV Group continued because of consistent implementation of the group’s strategy, thus the aims set were achieved. The main focus was put on providing services to private and corporate clients. ABLV Bank is the largest bank in Latvia by the local capital and second largest by the assets.

The major audited financial indicators at the end of 2015 were as follows:

  • the bank’s profit — EUR 69.0 million,
  • the bank’s operating income — EUR 126.3 million,
  • the amount of the clients’ deposits — EUR 3.79 billion,
  • the amount of issued debt securities — EUR 558.4 million,
  • the amount of the bank’s assets — EUR 4.93 billion,
  • the bank’s loan portfolio — EUR 873.5 million,
  • the bank’s capital and reserves — EUR 281.5 million,
  • common equity Tier 1 capital adequacy ratio — 10.79%, the bank’s overall capital adequacy ratio — 17.27%, liquidity — 82.68%,
  • ROE reached 27.76%, ROA — 1.49%.

The major taxpayer

The analysis of data received in 2015 from the Lursoft database, the State Revenue Service, as well as the Financial and Capital Markets Commission showed that the five largest commercial banks of Latvia paid in 2014 over EUR 90 million in taxes. The leader with EUR 27 million paid in taxes was ABLV Bank.

Ambitious financing

In February 2015, an ambitious transaction in real estate financing for EUR 28 million was concluded, and, as a result, the main artery of the Old Town — Kaļķu Street — has turned into a family-friendly shopping street. The financial cooperation of ABLV Bank with AS Baltic RE Group has breathed a new life in a number of historic buildings, which in addition were reconstructed according to the wishes of new tenants — the representatives of well-known brands.

In March, in the historical building at 1 Vingrotāju Street two new clinics, Rigaer Turn-Verein and MAMA Rīga were open. Rigaer Turn-Verein takes care of patients’ physical, visual, and psychological wellbeing; and MAMA Rīga is the biggest reproductive health centre in the Baltics with a day hospital. The total amount of investments equalled to EUR 3.5 million, out of which 3 million were spent on restoration works, and 500,000 — on medical equipment.

In August, a four-star hotel Wellton Hotel Riga was opened in the very centre of Riga, at 49 Vaļņu Street. It is the seventh and the biggest hotel of Latvian Wellton Hotel Group chain. There are 174 spacious rooms, a French restaurant Allumette, and SPA. The interior is accented by the artist Juris Dimiters’ paintings. The investments in the hotel amounted to EUR 12 million, from which more than half was a loan granted by ABLV Bank. It is the fourth Wellton hotel in the Old Riga opened during the last ten years thanks to the financial partnership with ABLV Bank.

New financial services

In the second half of the year, we started offering a new financing service — transactional trade finance for commodities traded on stock exchange and over the counter. This service will be interesting for trading companies, which have successful experience in distributing highly liquid raw materials.

ABLV Bank offers transactional trade finance for such commodities as energy raw materials (crude oil, oil products, coal, gas), chemicals (methanol, benzene, mineral fertilizers, etc.), and different metals. These commodities should be moved from Baltic or CIS states to any place in the world. Within this service, the bank is ready to provide financing of the whole transaction cycle — from prepayment to the supplier to payment after delivery by the end buyer. The maximum loan amount can reach EUR 20 million.

We also offer our corporate clients loans secured by value of a company. This is an alternative solution in lending — unlike general practice, under which loans are mostly secured by real estate, this type of loan involves assessment of the business’ ability to generate income. Such loans can be obtained by legal entities having more than five year experience of operating in the Baltic States. The maximum loan amount can be up to EUR 15 million, and shares of the company’s capital are used as main pledge under the loan.

State support in providing mortgages to families with children

In 2015, ABLV Bank and the Latvian Development Finance Institution (ALTUM) concluded an agreement on participation in the state support programme under which ALTUM provides guarantees for home purchase or housing construction for families with children.

The size of a state guarantee depends on the number of children. Families with one child under 18 can receive a state guarantee of 10% of the mortgage sum (up to EUR 10,000). Families with two children under 18 can receive a state guarantee of 15% of the mortgage up to EUR 15,000 and a state guarantee of 20%, but not more than EUR 20,000 is available for families with three or more children.

Better insurance conditions

The list of risks insured under travel insurance was expanded for holders of Gold and Gold Business payment cards, as well as Platinum and Infinite payment cards. For example, insurance of Gold and Gold Business level includes the risk of travel cancellation or delay of transit flight. The limit of insurance compensation for holders of Classic and Business cards is now equal to that under Gold and Gold Business level. Also, the maximum limit of compensation for holders of Infinite cards has been set equal to EUR 200,000. A significant innovation is the possibility to include unlimited number of children under 17 years of age in the insurance policy, subject to additional fee.

Whereas under insurance of residential property, we have developed two unique insurance policies, in cooperation with the Latvian branches of Seesam Insurance AS and Compensa TU S.A. Vienna Insurance Group:

  • ABLV Apartment Insurance, and
  • ABLV House Insurance.

These policies include not only real estate insurance, but also insurance of movable property (furniture, kitchen and household appliances, computer equipment, electrical appliances, etc.), landscape elements (for private houses: fences, gates, lighting fixtures, benches, elements of plant arrangement, etc.), and civil liability.

Higher security of the Internetbank

To ensure more secure Internetbank, we have introduced significant changes in the process of clients’ identification. Now two-factor authentication (recognition) is applied to the clients having one representative, one Internetbank user, and one authorization tool — when logging in to the Internetbank, these clients need to provide not just user ID and password but also the code card or Digipass value. Additionally, we should note that until 2017 the usual code cards with printed values will be gradually replaced to a safer electronic Digipass GO 100, which generate unique codes. The new card is as thin as a code card, so it is still convenient to carry in a wallet or purse. And in use it is even easier, because when you click on the button only one correct code is being displayed.

Well-known multifunctional devices Digipass 270 and large Digipass 300 Comfort are also available upon the client’s request.

Moreover, last year we offered our clients a new Internetbank application for iPads. It includes both functional and visual innovations aimed at making the application even more convenient to use. The most significant changes:

  • new section ‘Locations and Contacts’ at the application start page, providing information on the bank’s headquarters, contact information of all representative offices of ABLV group, as well as their location on map, alongside the possibility to plan the route,
  • possibility to send details via SMS or e-mail,
  • displaying the payment cards linked to the card account in the account list.

To ensure more reliable and secure Internetbank, we have launched safer code cards Digipass GO 100 that generate unique authorization codes for each transaction.

Digipass GO 100

ABLV Bank increases share capital

To improve the capital adequacy and ensure funds required for development, another issue of ABLV Bank shares was performed at the beginning of 2015 in order to increase share capital. Under the issue, there were 2,385,000 registered shares issued, and 82 shareholders of the bank applied for acquisition of those. The sale price of one share was EUR 13.85. Whereas at the end of the year, 265,000 personnel shares were issued. Following the increase, the share capital of ABLV Bank amounted to EUR 35.3 million, and the same was comprised of 31,770,000 ordinary shares and 3,530,000 personnel shares.

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

All rights protected by the Copyright Law of the Republic of Latvia.
Reproduction is prohibited without the consent of ABLV Bank, AS.