Banks, Crisis, Financial Services, Latvia

"Guaranteed deposits of up to EUR 100,000 will be paid out starting from March 3 in a Latvian commercial bank selected by the FKTK," the financial watchdog’s representatives said.

The FKTK did not reveal yet which bank has been selected.

On Friday, March 2, the FKTK will hold a press conference on this matter.

The FKTK also said that funds of the Latvian Deposit Guarantee Fund will not be used in this case because ABLV Bank has sufficient funds to pay out the guaranteed deposits. It has been estimated that EUR 480 mln should be paid to ABLV Bank’s customers, and the bank has already transferred this amount to the FKTK’s account.

As reported, shareholders of ABLV Bank at an extraordinary meeting on Monday made a decision to start the liquidation process in order to protect interests of its clients and creditors. ABLV Bank believes that in this way it will be possible to ensure active protection of its customers, the bank said in a statement.

LETA also reported that the Latvian financial regulator, the Finance and Capital Market Commission, acting on the instructions from the European Central Bank (ECB), has ordered ABLV Bank to stop all payments as of February 19 following a report by the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury about ABLV Bank's involvement in international money laundering schemes and corruption. On February 24, the Finance and Capital Market Commission made a decision on occurrence of unavailability of deposits at ABLV Bank.

At the end of September 2017, ABLV Bank was the third largest bank in Latvia by assets. The bank's majority shareholders Olegs Fils, Ernests Bernis and Nika Berne own, directly and indirectly, 87.03% of the bank's share capital.