PNB owners say bank has a future, should not be liquidated

Take note – story published 4 years and 9 months ago

In a further development of the situation at PNB bank, which has had its operations suspended by the European Central Bank, which deemed it likely to fail, the owners who only recently took over the bank released a statement August 18 saying they think it can be saved.

The new owners consist of a group of European and American investors who have never been individually named by the bank, but according to Reuters and other reputable sources they are known to include veteran businessman Roger Tamraz.

The Reuters report also raises questions about the exact state of ownership at the bank with former owner Grigory Guselnikov saying "he had found buyers for his stake in PNB Banka but the ECB had not given enough time to hand over ownership and inject capital."

The statement from the bank itself, which claimed to express the opinion of the new owners and the management board, said the new owners were ready to invest 146 million euros in PNB at the time of its suspension.

Perhaps more significantly it repeatedly calls into question the decision-making processes of both the ECB and the Latvian financial regulator, the Financial and Capital Markets Commission, suggesting the statement serves largely as a none-too-subtle hint that court action may follow in both the European Union and United States if shareholders do not feel their interests and investments have been properly served.  

However, with payments to depositors due to start August 22, it is unlikely in the extreme the ECB will reverse its decision to shut down the bank.  

The statement is reproduced in full below.

AS PNB Banka’s new shareholders and Management Board believe that the Bank is currently solvent and that the Bank’s liquidity is currently good. AS PNB Banka’s new shareholders had also submitted a plan to inject further capital of €146 million.

Within hours of the ECB's and the SRB's decisions on Thursday, the Bank reached out to the ECB and the SRB requesting the full text of their decisions so that their basis can be analyzed. There has been no substantive response by the ECB. The SRB merely stated that it needs to determine which parts of its decision can be disclosed to the bank.

The SRB was asked by the Bank to clarify on what basis it has stated on Thursday evening that the bank will be liquidated under national law. AS PNB Banka’s new shareholders and Management Board understand that the SRB has no decision-making power as regards a liquidation under national law.

AS PNB Banka’s new shareholders and Management Board also note the FCMC's statement on Thursday that its measures are "unexpected". The FCMC will have to explain the basis on which it made a determination of the unavailability of deposits.

AS PNB Banka’s new shareholders and Management Board will vigorously contest any petition for the opening of insolvency proceedings in front of the Latvian courts and in this context will demand that the Latvian courts obtain guidance from the European Court of Justice as to compliance with applicable European law.

AS PNB Banka’s new shareholders and Management Board reserve all rights and remedies on a national and European level as well as their rights pursuant to investment treaties. This includes the investment treaty between the United States of America and Latvia. AS PNB Banka’s new shareholders  have therefore written to the US Embassy in Riga. 

AS PNB Banka’s new shareholders and Management Board also recall the responsibility of Latvia and the European authorities as regards the credibility and reliability of banking regulation in Latvia. Outside observers (such as the US government) but also the competent Latvian authorities themselves have acknowledged the serious issues in this regard. The competent authorities and the courts should be allowed to discharge fully their responsibility in this regard so as to restore confidence in the system.

The ECB’s assessment of the Bank's financial position needs to be analyzed against the background of the auditor’s and the FCMC’s prior assessments. AS PNB Banka’s new shareholders and Management Board are concerned that the bank is treated differently than all other comparable banks in Latvia and elsewhere in Europe.

AS PNB Banka’s new shareholders and Management Board are convinced that the Bank's continued operations can be ensured and that this will be for the benefit of more than 100,000 Bank's depositors, 500 employees and their families as well as Latvia and its tax revenues.   


As previously reported by LSM, in March this year, regulatory oversight of PNB was given directly to the European Central Bank. PNB also happens to have a former NATO Secretary General on its council.  In July 2017 Norvik was fined more than a million euros by the financial regulator after being named by the Federal Bureau of Investigation as one of the Latvian banks used to channel funds to North Korea. It was formerly known as Norvik bank.

PNB depositors are advised to consult the webpage of the regulator for the latest developments and details of how to claim any monies owed.

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