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International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 05:51

Latvia’s PrivatBank to close its Italian branch by year end

BC, Riga, 06.10.2016.Print version
The new board of Latvia’s PrivatBank has decided to close down its branch in Italy. Such a decision has been made after revising economic operations of the bank’s branches, the bank reported.

In August the Italian branch of PrivatBank received a notification from Bank of Italy on commencement of administrative proceedings against the Italian branch due to alleged violations of customer identification rules and banking regulations. PrivatBank has not been allowed to carry out any further operations in the country beyond letting clients withdraw savings or transfer them to other banks.


PrivatBank said in a statement to the press that the decision on closing down the branch has been made on September 19 and the Bank of Italy has been informed on it.


The board of PrivatBank was replaced early this year and the new board started revising operations of the bank’s structural units and branches. PrivatBank’s board member Robert Christian Schoepf explained that the number of customers and turnover at the bank’s Italian branch had been comparatively small. "Opening of the branch in Italy, in fact, can be considered as an experiment of the previous management, which has not paid back in the situation of growing competition, differences in regulations, and consequences of the financial crisis," said Schoepf.


As reported, the Latvian Finance and Capital Market Commission in December 2015 decided to impose a more than EUR 2 million fine on the bank and ordered it to replace its board because the board members had for a long time permitted numerous large transactions in violation of several regulations. As a result, the bank was involved in the transactions that have created for it increased risks of the loss of reputation, money laundering and terrorism financing.


PrivatBank closed the first half of this year with a profit of EUR 4.76 mln, which is by 10.8% less than in the same period last year, according to the financial report published by the bank. The bank's assets at the end of June 2016 stood at EUR 512.73 mln. At the end of June, Privatbank was Latvia’s 11th largest bank by assets.


PrivatBank, 46% owned by Ukraine's PrivatBank, was set up in Latvia in 1992 with 13 branches in Latvia and one in Italy.






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