Non-resident bank insists it has a future

Take note – story published 6 years and 1 month ago

Little-known Latvian bank LPB (formerly Latvijas Pasta Banka/Latvian Postal Bank) said March 29 it had drawn up a new business model to keep it a viable concern as regulatory heat is turned up in the non-resident banking sector.

"On March 23rd 2018, the Bank has submitted to the Financial and Capital Market Commission (FKTK) a revised Bank's operational strategy, which provides further strengthening of the Bank's focus on activities in relation to provision of FinTech services in the field of e-commerce," the bank said in a news release accompanying its unaudited financial figures for 2017.

"Despite the recent developments and changes in the financial sector of the Republic of Latvia, management of JSC LPB Bank has no doubts about maintaining the operations in Latvia, looks positively at future business development and is optimistic about achieving new goals," the bank said.

However, no specific details of what this strategy might be was included in the release other than a vague statement that the "Bank’s strategy is based on an idea of development the bank specializing in one direction, working with certain range of clients and developing relevant and interesting products and related services’ technologies for these clients."

The full financial report can be read HERE, though the first page is superfluous waffle, even pausing to ponder the Greek derivation of the word "energy". This is followed by a dozen pages on risk management.

The "priority regions" for the bank are identified as "Latvia, Russia, other CIS countries, EEA countries."

As at 31 December 2017, the Bank’s capital adequacy ratio was 19.09% - down from 25.73% a year earlier.

Its assets at the end of 2017 were 234 million euros (up from 204 million at the end of 2016) and its liabilities were 206 million euros (up from 174 million at the end of 2016). Profits before tax were 7.5 million euros in 2017 (12.6 million euros in 2016). 

It remains 100% owned by Latvian-registered company Mono.

You  can read LSM's overview of the remaining players in the non-resident banking sector HERE.

As previously reported by LSM, LPB is one of the lower-profile non-resident banks in Latvia, but achieved unwanted prominence in 2016 when it was fined €305,000 for failing to stop massive payments through its accounts in connection with a billion-euro 2012-2013 Moldovan fraud according to a report by independent financial investigators Kroll, carried out for the National Bank of Moldova.

LPB's release came on the same day the Ministry of Finance said it had drafted amendments to the Law on the Prevention of Money Laundering and Terrorist Financing to restrict high-risk client financial operations in the Latvian financial sector.

This, and the recent collapse of high-flying non-resident bank ABLV, has prompted speculation about how many of the remaining 10 non-resident banks can continue to operate in future.



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