ABLV bank vows to restore stability, compliance officer quits

Two days after ABLV bank presented a plan outlining its future to the European Central Bank in Frankfurt, chairman and chief executive Ernests Bernis told reporters February 22 the bank's chief compliance officer had resigned as part of an attempt to restore its fortunes.

Cutting a much more fatigued and reserved-looking figure than usual, Bernis said: "This was on his own initiative, from the best corporate and moral principles, and we want to thank Aleksandrs Pāže for his work at the bank."

A re-jigged board for the bank would help to restore its reputation in the wake of recent scandalous headlines, he said.

"The main thing is that the new head restores normal functioning of the bank... and most important of all: compliance with all the rules," Bernis said.

He also strenuously denied the bank had ever offered or given bribes to any official or other individual.

"I say again: we have never given bribes," he said, adding that on February 21 ABLV had asked the police, regulator and KNAB anti-corruption force to check the bank's own records in a bid to clear its name.   

Bernis also praised the messages and offers of support the bank had received from its "wonderful" clients.

Bank officials also attempted to underline that despite requests for cash from the Latvian central bank to bridge a liquidity gap, ABLV remained well capitalized overall.

Past lapses in compliance checks had met with action, said Vadims Reinfelds, deputy chairman, who told reporters: "I can assure you that there were both disciplinary actions and firings within the bank in connection with compliance issues."

Separately, the bank said it will perform a planned redemption of straight coupon bonds issued in 2016. The bonds will be redeemed at 100% of the face value, and at the same time last coupon payments under these bonds will be made. Their respective amount was EUR 20 million and USD 75 million at face value of the bonds. The term of the bond issues was 2 years, and they were included in the Nasdaq Riga list of debt securities.

Thursday afternoon the Finance Ministry issued a statement about the situation in which ABLV finds itself saying:

"Recent developments as regards the situation with ABLV Bank differ considerably, as compared to 2008, given the stability of the financial sector and high financial performance indicators. The Ministry of Finance (MoF), the regulator of the financial sector - the Financial and Capital Market Commission (FCMC) and the European Central Bank (ECB), in collaboration with the Bank of Latvia, are professionally working in the 24/7 mode to control the situation, fully respecting the interests of the population and entrepreneurs.

The MoF can confirm that the State budget funds will not be invested into ABLV Bank.

The statement was issued while Finance Minister Dana Reizniece-Ozola said during an interview with journalist Janis Domburs on the Delfi news portal that ABLV is not a systemically important bank in Latvia. Domburs immediately pointed out that according to the definition used by the market regulator, it is indeed a systemically important bank.

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