Banks, Financial Services, Legislation

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Financial watchdog fines BlueOrange Bank with EUR 1.2 mln

BC, Riga, 21.12.2018.Print version
The Latvian Financial and Capital Market Commission (FKTK) has imposed a EUR 1.2 mln fine on BlueOrange Bank for failing to meet requirements of the Law on the Prevention of Money Laundering and Terrorism Financing (AML law), FKTK reported.

FKTK and BlueOrange Bank have entered into an administrative agreement on setting legal obligations under the scope of the Law on the Prevention of Money Laundering and Terrorism Financing in order to improve the functioning of the Bank's internal control system. The agreement provides that the fine has been reduced from EUR 3.69 mln to 1,246,798 euro.

The violations have been discovered in 2016 and 2017. FKTK finds the violations significant, and the bank has been find also earlier for violations of regulations on prevention of money laundering and terrorism financing.

The maximum fine for the breach is 10% of the bank's annual turnover which would be a fine of EUR 3,694,216. FKTK took into consideration that the bank at its own initiative developed a plan on dealing with the discovered violations and submitted detail information on the conducted and planned investments in the IT systems and technologies and improvement of employees' qualifications.

The bank's management reported that in a year the bank has introduced significant changes, improved the internal processes and introduced a new approach to identifying customer risks, and has invested more than EUR 600,000 in IT systems.

The bank in early 2017 has changed its business model, strategy, expanding its share in the Latvian market, choosing service of Latvian companies and individuals as the priority direction.

The bank has issued more than EUR 100 mln in loans to resident customers.

Latvia’s BlueOrange Bank closed the first nine months of 2018 with EUR 9.603 mln in profit, up 74.7% against the same period last year. The banking group’s profit expanded 82.2 % y-o-y to EUR 9.009 mln.

At the end of June 2018, BlueOrange Bank was the eighth largest bank in Latvia by assets. The bank’s key owner is Latvia’s BBG.

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