European Central Bank takes over direct supervision of Citadele banka

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The European Central Bank on January 11 said it was taking over supervision of Latvia's Citadele banka as part of its remit to regulate banks deemed to be of systemic importance.

An announcement from the domestic regulator, the Financial and Capital Market Commission (FKTK) said:

"The European Central Bank (ECB) has decided to classify Citadele banka as a significant credit institution, commencing its direct supervision on 1 January 2021. In future, the ECB will exercise direct supervision over three of Latvia's largest banks within the Single Supervisory Mechanism (SSM) of the European Union (EU) banking union."

The other two banks are the Baltic operations of Sweden's Swedbank and SEB banks. The liquidated bank ABLV was previously uder ECB supervision, too. Following the collapse of ABLV in the wake of U.S. money-laundering concerns, Citadele became Latvia's third-largest bank. According to its third-quarter 2020 financial statements it has 332,000 active clients, 4.4 billion euros in assets and 1,241 employees.

75% of Citadele shares belong to a consortium of investors led by Ripplewood Advisors LLC and 25% belongs to the European Bank for Reconstruction and Development (EBRD).

Since 2014 Latvia has been part of the SSM of the European banking union, and three most significant banks in Latvia have been supervised within the single mechanism for the Eurozone countries.

"In the day-to-day supervision of these three largest banks, the ECB and the FKTK are constantly cooperating within joint supervisory teams," FKTK said.



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