Banks, EU – Baltic States, Financial Services, Latvia

Already last year Deutsche Bank narrowed its operations in Latvia and suspended cooperation with several Latvian banks who serve foreign customers. Now Deutsche Bank has decided to fully suspend cooperation with banks in Latvia.

Deutsche Bank declined to comment to LETA on its future plans in Latvia, while representatives of the Latvian Association of Commercial Banks said that the decision of the German bank will not affect operations of Latvian banks, and this decision might be related with changes in Deutsche Bank's own business strategy.

SEB Banka head Ieva Tetere said Deutsche Bank’s decision to stop cooperation with Latvian banks in a way is an assessment of the Latvian financial sector in general, its sustainability and compliance with the industry’s business standards. "The events of the recent years in Latvia have distorted the country’s reputation. At the same time, the bank’s decision to cut off access to dollar-clearing facilities for all Latvian banks, most likely, is related with Deutsche Bank’s own development plans," she said.

Tetere said that SEB Banka has been using services of several correspondent banks, therefore the German bank’s decision will not affect its operations.

Rietumu Banka’s spokeswoman Eleonora Gailisa explained that Deutsche Bank is currently changing its strategy and has suspended cooperation with many countries, including Latvia that so far has been a significant partner. She said that Rietumu Banka is constantly working on improvement of the quality of correspondent relations, therefore this decision will not affect its customers.

Rietumu Banka has informed its customers that starting from June of this year there will be changes in the list of corresponding banks used for payments in US dollars, euros and some other currencies.

Citadele bank’s spokeswoman Baiba Abelniece refused to comment on the bank’s relations with Deutsche Bank, just said that Citadele has correspondent relations with more than 20 banks outside Latvia. She also said that the share of US dollar transactions among the bank’s services was very small.

Deutsche Bank last year posted EUR 1.4 bln in loss, and this has been the second consecutive year the bank sustained loss. Recently also large fines had been slapped on the bank, for example, in January New York’s and British authorities imposed USD 630 mln (EUR 593 mln) fine on the bank for inability to prevent money laundering in Russia.

In the past years several international banks, such as JPMorgan and Commerzbank, former partners in US dollar transactions, have left the Latvian market.

Also, in the past year Latvia has taken considerable measures to prevent money laundering risks and ensure internal control systems in banks.