ABLV Bank made a decision about its voluntary liquidation

ABLV Bank made a decision about its voluntary liquidation

 

On 26th February 2018 at the extraordinary general meeting of shareholders, ABLV Bank has made a decision about its voluntary liquidation so to ensure the best protection of its assets for settlement with all clients.

As per Ernest Bernis, Chairman of the Board of ABLV Bank, «… Taking into account the insolvency and liquidation procedures that had taken place in Latvia before, we believe that this is the best option we could have made after the statement of the European Central Bank regarding commencement of winding up procedures. The financial standing of the bank is excellent, therefore we should take good care about every client and protect their rights…… This has been a hard decision, but it is the most suitable one in the given circumstances”.

It should be reminded that two weeks earlier, the allegations presented in the Proposal made by the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury have caused  a considerable deposit outflow and further ECB decision on freezing of all the debit transactions by the Bank. 

According to the official notification of the Bank published at its website, “ABLV Bank has received a decision of the Council of the Financial and Capital Market Commission (FCMC) “On Occurrence of Unavailability of Deposits”. This decision is related to the payment restriction imposed by the regulators on 19 February, which in FCMC’s opinion is not subject to reviewing. The decision on the merits means that in the nearest future the process of liquidation of the bank may be started.

The bank considers that it has fulfilled all requirements of the regulator in order to resume operation. In four business days, the bank accumulated more than EUR 1.36 billion to strengthen liquidity thus ensuring 86% of all demand deposits. It was absolutely sufficient for the bank to resume executing payments and meet all obligations towards its clients, yet due to political considerations the bank was not given a chance to do it.

The bank emphasizes: the amount of its assets is sufficient to satisfy demands of all clients and creditors. All deposits, including the ones guaranteed by the Deposit Guarantee Law, shall be disbursed with the funds of ABLV Bank.”

More information about the procedure of disbursement of the guaranteed compensations to the eligible clients of ABLV Bank in accordance with Deposit Guarantee Law is available on our website.

Upon Announcement on Voluntary Liquidation, the Bank published the announcement about the procedure of disbursement of the guaranteed compensations to the eligible clients of ABLV Bank in accordance with Deposit Guarantee Law:

«… Given that the funds are unavailable to the clients of the Bank already since 19 February 2018, it was decided to commence disbursement of compensations sooner than the law provides – starting from 3 March 2018, it will be done by Citadele banka, AS.

According the Deposit Guarantee Law, there are up to EUR 100 000 guaranteed to each eligible client from Deposit Guarantee Fund. ABLV Bank has sufficient amounts of liquid assets to ensure repayment of all sums; therefore, the Bank has already transferred more than EUR 480 million to the Fund for disbursement guaranteed compensations.

On 28 February 2018, we carried out calculation of the sums of guaranteed compensations to be disbursed for all clients and placed those funds on separate accounts. You can see the sum in Internetbank, in the “Guaranteed disbursement account”. The disbursement of compensation shall be ensured for all types of deposits in all currencies in the amount not exceeding EUR 100 000 in all accounts in total unless these funds are not for covering client’s liabilities. It implies deposits, balance on current accounts, card accounts, cash accounts for brokerage services, savings accounts etc.

Clients of the Bank eligible for guaranteed compensation are individuals, legal entities, residents and non-residents. Certain exceptions regarding deposits for which the guaranteed compensation is not being paid are provided in Section 23 of Deposit Guarantee Law.

Starting from 3 March 2018, the disbursements shall be done in accordance with the following procedure:

  • An application for disbursement of guaranteed compensation you can submit in Citadele banka, AS and its branches..
  • guaranteed compensation shall be disbursed in one payment to each client in euros;
  • if guaranteed compensation amount does not exceed EUR 1000, upon depositor’s choice it can be disbursed in cash to the depositor applying charges to disbursement of cash in accordance with Citadele banka, AS pricelist;
  • if guaranteed compensation amount exceeds EUR 1000, it can be transferred only to the depositor’s account in any credit institution in accordance with Citadele banka, AS pricelist.

More information about the procedure of disbursement of the guaranteed compensations to the eligible clients of ABLV Bank in accordance with Deposit Guarantee Law can be found on relevant page of the bank’s website.

We strongly recommend all the clients who had accounts with ABLV Bank to contact our Consultants in order to discuss the issue of opening alternative accounts at other Banks.

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