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Court rules Trasta Komercbanka to be liquidated

Trasta Komerbanka, which lost its license earlier this month, will be liquidated under a ruling delivered on Monday by Riga City Vidzeme District Court, reported LETA.

The court also appointed sworn lawyer Ilmars Krums, recommended by the Financial and Capital Market Commission (FCMC), the bank's liquidator.

The court's ruling is final and cannot be appealed.

By launching the bank's liquidation before the bank's appeal against the withdrawal of its license is heard, the court has artificially prevented Trasta Komercbanka from exercising its rights, said the bank's lawyer Krista Kreicberga-Neija, indicating that the liquidation prevents many things envisaged in the EU's legislative acts.

FCMC Ieva Berroni argued that the bank's liquidation has to be started as soon as possible in order to recover as many of the bank's assets as possible. Berroni also said that Trasta Komercbanka's exit from the market will not leave a major negative impact on the stability of the Latvian financial sector.

Guntis Cerbulis, the head of the regulator's legal department, told journalists following the court hearing that the commission was satisfied with the ruling. "The liquidator will now take over the functions of the bank's management board and start the liquidation process," Cerbulis said.

In his words, the regulator has not set a deadline by which the liquidator has to complete the liquidation process but that in order to protect creditors' interests the process should be as quick as possible.

Trasta Komercbanka's representative did not give any comments to the press.

Trasta Komercbanka clients will start receiving their guaranteed deposits this Wednesday, March 16.

On March 4, the Financial and Capital Market Commission asked the court to launch the bank's liquidation.

As reported, the European Central Bank revoked Trasta Komercbanka's license based on a proposal submitted to the ECB by the Financial and Capital Market Commission, and the bank's operations were halted on March 4.

According to the Financial and Capital Market Commission, Trasta Komercbanka has been operating with losses for a long period and has no viable business model or development strategy adequate to the situation. In addition, serious and sustained breaches of the anti-money laundering and counter-terrorist financing regulations were identified in the bank's activities.

At the end of the third quarter last year, Trasta Komercbanka was the 12th largest bank in Latvia in terms of assets and the 13th largest in terms of deposits, according to the information from the Latvian Association of Commercial Banks.

Trasta Komercbanka closed last year with EUR 4.66 million in losses, which was 2.7 times less than the loss in 2014, according to the bank's unaudited financial report.

Latvia has in recent weeks stepped up efforts to show it is serious about addressing allegations of money laundering within the boutique banking sector to prove it is ready to join the Organization for Economic Cooperation and Development (OECD).

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