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Changes in the Bank’s working hours on Easter Holidays

Dear Clients! In connection with the Easter holiday, the Bank’s working hours have been changed: 09.04.2020. – Baltic International Bank will serve clients remotely until 4 p.m. 10.04.2020. and 13.04.2020. – Baltic International Bank will be closed. Please pay due attention to the above mentioned changes and plan your financial transactions in a timely manner. Happy Easter!

Changes in the currency exchange transactions

We would like to inform you that due to the state of emergency declared in Latvia Baltic International Bank have implemented changes in the currency exchange transactions to secure continuity of these transactions. As of March 27 we will accept all currency exchange transactions from clients only via Internet Banking of the Baltic International Bank, in the platform “@MAILUS.LV” or by contacting your private banker. We are truly delighted that you choose services and financial solutions offered by Baltic International Bank. We highly appreciate our cooperation and your loyalty towards our Bank! During these challenging times we invite you to have solidarity, maintain social distancing, be understanding and responsible to protect each other and society in general!

Starting from 17 March, Baltic International Bank will serve clients remotely

We, Baltic International Bank, take care of your health and of our employees.  We follow the measures announced by the government to contain the Coronavirus outbreak and health-related border management measures on the Latvian and the European level in the context of the COVID-19 emergency. From 17 March to 14 April, we therefore will communicate with and serve our clients remotely. We temporarily suspend a face-to-face service of clients and other visitors at Grēcinieku ielā 6 and Kalēju ielā 43 (except for special and pre-agreed cases). Teller (cash) operations normally carried out at Grēcinieku ielā 6 are temporarily suspended as well.     About the remote customer service We are injecting remote services into our business model, thus enabling you to manage your financial resources and conduct transactions anytime, day or night, and regardless of your location. To communicate remotely, you can use: the internet Banking facility used as a remote electronic delivery channel for banking services email correspondence with your private banker remote customer service: (+371) 6700 0444 instant messaging apps, such as WhatsApp, Viber, Facebook Messenger info email address: info@bib.eu Bank’s decision to serve the clients remotely is justified and reasonable. Bank continuously monitors the COVID-19 developments. Security and health of our employees, clients, and the Latvian community as a whole are our main priorities. About Bank’s safe deposit vault visitations To access your safe deposit locker at Bank’s vault, please get in touch with your private baker to pre-arrange your visit. To schedule the visit, please send a free-form confirmation stating that you have not travelled to coronavirus affected countries or areas within the last 14 (fourteen) days and have not contacted with the infected persons or with their close contacts. During this periods, please visit Bank’s vault only if you really need to access your safe deposit locker and the visit therefore cannot be rescheduled or postponed! The most current information and governmental decisions aimed at stopping transmission and prevent the spread of COVID-19 are available here: mk.gov.lv. About Bank’s work under the proclaimed part-time emergency rules Baltic International Bank is a locally owned bank that can boast of having long-standing and stable traditions in the Latvian financial system and economy. Bank has been providing financial services and multifaceted support to the local community for more than 26 years. Over that period, we have established personal links with enterprises and clients, and we take care about each of you more seriously than ever! Thank you that you have chosen to bank with us. We greatly value you support and appreciate your trust and loyalty to our business! Amidst evolving crucial events, Bank operates in a sound manner in accordance with its business continuity plan. All payments and transactions are executed as usual. Bank has embarked on a process to gradually switch over, if the need arises, to a comprehensive remote customer service at our Riga-based head office and at Bank’s representative office in Kyiv (Ukraine) while continuing to provide bespoke service to meet you individual needs and to offer top-quality financial products. We urge you to solidarize and demonstrate your understanding and responsibility, so that we confront the challenges together. Please take social distancing measures to reduce social interaction between people and hence protect each other and the community as a whole!

Baltic International Bank joins German-Baltic Chamber of Commerce

Baltic International Bank is pleased to join German-Baltic Chamber of Commerce (AHK) and become one of its nearly 500 members. The extensive experience of the Bank in providing customer-specific financial services and investment solutions based on the principles of the ESG will be particularly useful for members and partners. The activities of Baltic International Bank in AHK will help to strengthen local business development and promote sustainability issues identified in the Bank's goals. AHK has been the first contact point for more than twenty years for all involved in economic cooperation between Germany and the Baltic States. The fundamental knowledge resources of AHK on the German market are useful for any economic operator in the Baltic region who wants to start or expand its business in Germany. German businesses, who want to learn more about the market in Estonia, Latvia or Lithuania, with the help of the AHK, find the best place to realise their project in the Baltic States.

In 4Q 2019, Baltic International Bank continues to increase the number of local clients and boost the level of capital adequacy

In 4Q 2019, JSC “Baltic International Bank” continued to implement its chosen business strategy to grow into a rock solid investment bank underpinned by stable financial performance. The Bank’s net fee and commission income surged by 2.1 percent (2.1 percent) on a YoY basis. The Bank also lowered its operating costs. The assets under management totalled EUR 81 million (EUR 81 million), the 8-percent increase from 2018-end. The Bank’s total capital ratio (TCR) stood at 15.11 percent (14.71 percent). In 2019, the Bank’s senior management and team tangibly improved, albeit with support of the Bank’s shareholders, the strength of the Bank’s balance sheet and reinforced the Bank’s capital base and financial condition. In doing so, the Bank achieved a rise in its capital ratios while maintaining the high liquidity coverage ratio (157%). As of 31 December 2019, the Bank’s own funds totalled EUR 19.43 million (EUR 18.86 million). The Bank’s Tier 1 capital ratio was 10.13 percent (9.71 percent). The Bank’s total capital ratio (TCR) attained the level of 15.11 percent (14.71 percent). The ratios enable the Bank to develop further its lending and financing activities and provide a sound basis for implementing the business model. Last year, the Bank revisited its client portfolio, trimmed down the overall portfolio-specific risk, and reduced its loan portfolio in an effort to improve the portfolio’s credit quality. The Bank therefore saw a decline in its assets. However, the level of the Bank’s capital adequacy soared, thus enabling the Bank to build up and expand its loan portfolio in 2020. In 2019, the banking sector continued to undergo significant structural changes. As a bank, we also participate in the process that poses ever-new challenges. Implementation of the changes and rearrangement of the system in an effort to put it on the right track cannot be done overnight. Reshaping of the business model, the quality of banks’ assets and capital adequacy are the key challenges facing a major part of European banks. Within that context, reshaping of the Bank’s income structure and improvement of the strength of the Bank’s balancer sheet are the biggest challenges. The Bank revisited its client portfolio, including changes related to our target markets. We continue to modify our product offerings and customer service model. We succeed in developing the chosen business models while remaining compliant with the financial-market requirements.   "The European Economic Area is the Bank’s main target market, albeit with a great emphasis on the Latvian market and the Baltic region. We are happy to see an increasingly growing interest from local Latvian businesses in the Bank’s services and an increasing number of local clients banking with us. Moreover, our services have earned the clients’ trust. Shortly after opening the account, the clients gradually intensify their activities and make up an ever-rising percentage of the Bank’s portfolio. With a support from our shareholders, we have made the Bank’s balance sheet stronger while concurrently achieving the high capital ratios. This is essential for our further development and lending activities”, the Chairperson of the Management Board of Baltic International Bank Viktor Bolbat emphasises. Bank invested vast sums of money in rearrangement of client structure, development of information technologies, infrastructure and internal control system, and enhancement of the professional competence of personnel. The implementation of the ambitious changes and loss allowances for risk assets set aside before switching over to the Bank’s new strategy exerted a short-term negative effect on the Bank’s financial results. The Bank posted a loss of EUR 2.77 million (EUR 3.05 million) in 2019. However, the Bank is operating ever more efficiently. Compared to 2018, the Bank succeeded in 2019 to trim substantially its operating expenses. In 4Q 2019, the operating income totalled EUR 14.13 million (EUR 14.14 million). While keeping up with the tech advancement, Bank has worked tirelessly to put its infrastructure in order and to develop data storage and management solutions. We have integrated automated customer service tools. We have also automated Bank’s AML/CFT/CPF practices.   "In 2019, we received the positive assessment by Sigma Ratings, a New York-based rating agency. The agency assigned BBB+ financial crime compliance (FCC) rating to Bank. In the first half of this year, the Bank will roll out the new Internet Banking version. The Bank’s sandbox solution for Open Banking is currently available to clients. Bank has opened the Investment Opportunity platform where its current and potential clients can use an interactive calculator to choose the most suitable investment portfolio“, Viktor Bolbat accentuates the Bank’s major tech milestones. As of 31 December 2019, the total customer funds reached EUR 404 million. The assets under management totalled EUR 81 million (EUR 81 million), the 8-percent increase from 2018-end. The volume of financial instruments in brokerage service are EUR 140 million (EUR 140 million) worth. In 4Q 2019, the net fee and commission income surged by 2.1 percent (2.1 percent) on a YoY basis and totalled EUR 8.64 million (EUR 8.64 million). In percentage terms, the increase is up to 61.2 percent (61.1percent). The net interest income totalled 15.5 percent (15.5 percent). Administrative expenses reached EUR 12.36 million (EUR 12.54 million), a 7.7-percent (6.9-percent) decrease on a YoY basis. The Bank’s high-quality liquid assets (assets carrying investment-grade credit rating and balances due from the Bank of Latvia) totalled EUR 133.79 million (EUR 133.79 million) or 59 percent (59 percent) of the total assets. Investments in government bonds totalled EUR 18.05 million (EUR 18.05 million) or 8 percent (8 percent) of the total assets. The Bank maintains a well-diversified structure of liquid assets represented by bonds (12 percent), due from credit institutions (7 percent), due from the Bank of Latvia (79 percent) and cash (2 percent). The liquidity coverage ratio (LCR) was157 percent. The net stable funding ratio (NSFR), characterizing the availability of a stable funding profile in relation to the composition of assets and off-balance sheet activities, reached 129 percent. Last year, the Bank completed the main structural works undertaken under a large-scale renovation and reconstruction project in Kalēju Kvartāls. Kalēju Kvartāls (Kaleju Quarter) is a quarter in the Old Riga situated between Kalēju Street and Vecpilsētas Square where refurbishment of the five-building complex is underway. The Bank’s new office premises will be located in the Quarter. The new office premises will be equipped in accordance with the principles of modern working environment. The solution resonates with the ESG concept that focuses on environmental protection, social responsibility and corporate governance and encompasses aspects such as environmental sustainability and corporate social responsibility. The Bank is committed to integrating ESG factors at the highest level. It is envisaged that the Bank’s employees will move to the new office spaces in 2020. The Bank is a steadfast supporter of culture and works of art, participates in the projects aimed at safeguarding cultural environment, supports events that focus on cultivating and instilling human values, and supports sustainable projects in Latvia and abroad. The Bank provided financial support for Day Childcare Centre St. Theresa’s Home and supported publication of the collection of memories “Mans XX gadsimts” (My Twentieth Century) by Marina Kosteņecka who is an outstanding publisher, writer and journalist. The Bank sponsored the exhibition titled “Ilmārs Blumbergs. Beigas Ir” dedicated to Ilmārs Blumbergs (1943-2016), a legendary Latvian artist and scenic designer Ilmārs Blumbergs (1943-2016). An urban site Latvijas dzimtu sols was opened in Riga’s oldest park Viesturdārzs. In Kyiv (Ukraine), Latvijas skvērs (Latvian square) was created. The Bank participated financially in all those projects. In 2019, the Bank started successful cooperation with Stockholm School of Economics in Riga (SSE Riga) by supporting SSE’s Scholarship Foundation. Last year, the Bank became the first locally owned bank honoured with the highest Platinum Award from the Sustainability Index. The award is a testimony of that the Bank has fully integrated social corporate responsibility and impact assessment standards into its strategies and practices. The Bank also issued its first-time non-financial report (ESG Report) prepared in accordance with NASDAQ’s ESG Reporting Guide (a support program for Nasdaq’s Nordic and Baltic markets). For the third consecutive year, the Bank has received the Family-Friendly Company Status. The Ministry of Welfare of the Republic of Latvia assigns the status to Latvian enterprises that adhere, in their daily activities, to the principles underpinning family-friendly enterprise.  The 4Q 2019 Financial Statements of Baltic International Bank are available for viewing here.

We define success stories ourselves

Oto Davidovs, head of Corporate Finance at Baltic International Bank, gives comments to the newspaper Dienas Bizness on the current issues in corporate financing, success stories and other future forecasts. The work on the National Development Plan for 2021-2027 (NDP2027) is underway. The Plan provides for an increase in bank loans to domestic non-financial companies (A-K sectors according to NACE classification) in proportion to the gross domestic product (GDP) value increasing this figure from 14% in 2018 to 23% in 2027. As Latvia's GDP continues to grow, the banks' domestic non-financial corporate loan portfolio is set to grow from 4 billion in 2018 to nearly 9 billion in 2027. The projected increase will force banks to significantly increase their balance sheets. The local capital banks are increasingly active in the small and medium-sized enterprise (SME) lending market showing readiness to issue new loans worth EUR 220 million to the national economy in 2020, but this is not enough to meet the goals set by the NDP2027. To achieve the planned lending growth, significant development of new sectors is needed. From the point of view of the banks, which are the most promising sectors with the greatest growth potential? The growing role of automation The types and volumes of SME lending should be considered in the context of our country's economic position in the European and global markets. At the European level, Latvia ranks among the last in terms of the well-being of its citizens. In pursuit of greater well-being, salaries will continue to grow and labour resources will become more expensive. In this situation, the lucky ones will be those optimising their production processes by investing in capital, new technologies thus achieving higher productivity and higher sales. Overall, the role of automation is growing which simplifies day-to-day work and allows doing more and better with the existing resources. In order to compete in the international markets, many of the sectors that drive growth in Latvia's economy will need to be automated. Businesses will benefit from that since new equipment will be more efficient and cost effective. Companies that will invest in equipment and technology in order to increase their productivity, for instance, manufacturing companies, are one of a group of companies where we see growth in demand for funding. Banks can support companies with financing for the purchase of new equipment across a wide range of industries.   Searching for a new Skype Long-term wise, the technology segment is one of the most promising sectors. Funds are invested in business accelerators, and opportunities to raise venture capital in several stages to directly finance technology companies are also increasing. Funds are invested, the environment and technology infrastructure are being developed, and the so-called hubs or places where several technology companies operate in one place are created, for instance, New Teika where the innovation movement Vefresh was launched. One of these companies is likely to be the Skype or Nokia of the future. One of the most valuable Latvian companies in 2019 is the technology company Mikrotīkls LLC which is engaged in the production of computer network equipment. Customers often turn to banks with the aim to get co-financing in technology company purchase transactions. Historically, banks have had to refuse this type of transaction due to insufficient collateral. Because of the Altum's guarantee product in corporate buy and sell transactions, banks can now look into financing such transactions.   Moreover, ICT or information and communication technology companies are highly profitable; in Latvia their average profitability is 4.5%, while in the industry – 10%. Services and solutions using artificial intelligence and cloud technology, data analysis and visualisation tools are increasingly evolving in the industry. Export volumes of ICT companies also continue to grow, so it is essential to keep this sector in the spotlight, and the customer activity is expected to continue to grow. Replacement of housing stock and office space Real property financing remains classically stable. Funding is sought by the real property developers looking to buy and develop properties, and refinance. Local capital banks can offer a more flexible approach and nuanced understanding of the local real property market. We see opportunities in the development of the housing stock of the economic segment. There are entrepreneurs who are developing and will continue to develop such structures, and the trend will only increase as the existing housing stock is ageing and its service life is coming to an end. The office segment for companies providing services is also developing. There is a marked migration from Class C office premises to Class B office premises, and from Class B office premises to Class A office premises. In addition, the ability to provide a more comfortable work environment in a modern office will definitely give the company the advantage of attracting qualified employees. Baltic International Bank is ready to support entrepreneurs by helping them choose the most appropriate financing as well as the conditions that will allow them to continue their successful business and ensure their development. However, enthusiasm, initiative and understanding of growth opportunities of the leader and team of a company are critically important too. This is followed by funding to support the company which can help the next Latvian "success story" develop faster and easier given that such a story has potential.

Local capital banks are ready to invest EUR 220 million in the Latvian economy

Changes in the Latvian banking industry, the increased attention to it from international organisations, and the challenges of the time required Latvian banks to seriously restructure development models and search for the new ones. In a short time, these tasks were successfully completed by the small mobile banks with local capital that managed to find their niche in the financial market and prove to be necessary for the Latvian economy. Individual approach As a co-chair of the Strategic Development Committee of the Finance Latvia Association, I would like to emphasise that lending and investing in Latvian business is becoming a priority for local capital banks. Knowing and understanding the local business environment allows them to be closely connected with national economies. Such banks are predictable, the names of their shareholders are known to the public, they are actively involved in the public life of Latvia and are interested in maintaining its stability in the long term. In 2020, three local capital banks – Baltic International Bank, BlueOrange Bank and Signet Bank – are ready to provide EUR 220 million in the form of loan funds for the development of the Latvian economy. This figure grows with every passing year. In 2018, said banks issued loans to local companies in the amount of EUR 61 million, while for 2019, the amount expected according to forecasts is EUR 170 million. If the cooperation of our three banks turns out to be successful, we will form a single platform for lending to local businesses. Apart from that, financing can be attracted through other investors or other forms, for instance, the issue of securities. Unlike major banks which have large flows of customers and do not always manage to serve all of them in more depth, we have the opportunity to work with each entrepreneur individually and delve into their problems. These are ambitious people, the engine of our economy, they need to be supported. Who will do that but us?   About new priorities Since 2016, Baltic International Bank has been making comprehensive and profound changes in the management structure, customer service and internal control system. And now we work keeping the new priorities in mind. Let me quote some figures. As of October 2019, the assets of Baltic International Bank amounted to EUR 300 million, while the total amount of customer funds managed by the Bank on the balance sheet or in the form of securities and assets under management was almost half a billion euro. The number of local customers grows every month. Now they make up 38%. 37% are citizens of the EU and the European Economic Area, and 25% are citizens of other countries. The demand of local customers for account maintenance and loans is also growing. I think this growth will continue next year.We plan to strengthen all the teams responsible for providing financial services to Latvian customers and those of the euro area market. Being in a single European banking union, we use the experience gained in servicing international customers in order to work with the euro area residents. Baltic International Bank has extensive experience in international business. Today, in many Latvian companies there is an international owner, an international tenant of a building, an international client. And here our competence can help to figure out which financing instrument to use, what kind of consultation is needed. We will help the customer save both time and money. We also help in financing projects of Latvian businessmen abroad where special competency is needed; we will give a tip as to how to get a guarantee, how to protect your investment in a particular country. Now, we are developing cooperation with the development finance institution Altum. They give to Latvian entrepreneurs guarantees which reduce banking risks. Environmentally friendly projects The volume of lending always depends on three things – the availability of actual capital, the amount of the capital requested by the regulator, and the strategic decision of the bank itself. Every bank decides what kind of company it is ready to support: whether it will finance a company operating in a neighbouring country or will develop a Latvian company with foreign capital; whether it considers our real property market stable and so on. Every bank has its own priority scale. The goal of Baltic International Bank is to be a bank that, together with customers, invests in environmentally friendly and long-term projects aimed at a sustainable future. The Bank’s development strategy has been developed until 2030 and provides for a whole range of measures necessary to meet this goal. In 2017, we began to implement the globally recognised ESG approach. It was chosen as a model that meets our beliefs and “packs” the Bank’s development strategy into an understandable and logical structure. The essence of the ESG approach The term ESG means Environmental, Social, Governance (environment, social responsibility, and corporate governance). This is the approach that defines the appropriate model of social behaviour. It stands on three pillars.   1. Environmental impact. This means taking care of reducing greenhouse gas emissions, saving natural resources, reducing carbon dioxide emissions, and using renewable energy. In this area, our Bank, together with customers, implements investment projects associated with improving energy efficiency, production and use of renewable energy. Through the Bank, customers have the opportunity to receive income from capital gains and, simultaneously, to improve the environment. 2. Social responsibility provides for the care of employment, human rights, health and personal safety, and the protection of various social groups. Baltic International Bank actively participates in the country’s public life, contributes to the creation of new jobs both by providing financing to companies and through its own development. Throughout its history, the Bank has supported the preservation and transfer of artistic and cultural values ​​to future generations. Significant projects include publishing books, participating in the Annual Latvian Literature Award (LALIGABA), creating a mobile application for the National Museum of Art, and many others. 3. Reliable corporate governance includes taking care of the effectiveness of this management, of an impeccable reputation, and prevention of the corruption risk. Baltic International Bank pays particular attention to open communication with customers, partners, employees, compliance with international and Latvian laws, as well as ethical standards. All three things – ecology, social responsibility and corporate governance – are closely related. A well-designed control system can ensure that many conditions are met. As a business organisation, we have assets worth EUR 300 million, provide 219 jobs in different buildings that use electricity, heat, consume water, paper, produce garbage, etc. A socially responsible employer should think about all that, as well as about the projects that he or she supports. The Bank has many faces If, in former times, profitability was the only thing in the mind of a business, and, for instance, energy saving remained for many companies in the good to have category, the role of business has now expanded much. Think, for instance, of the green bonds of Latvenergo, or an ESG strategy for banks. It got to the point that the European Banking Authority (EBA) supervising European banks said that a long-term, responsible approach would be introduced into the regulations. So, our choice is a farsighted decision. The banking industry will be the one where such an approach is a must have. Our customers are citizens of the world, whether they are residents of Latvia or other countries. Responsibility for resources is equally important to all of them. I believe the principles of ESG are close and understandable to everyone. To not be ashamed tomorrow Implementation of the ESG approach in the daily work of the Bank is a very ambitious goal and requires a lot of effort from us. This implies a change in thinking, habits of all employees of the Bank – from the chairman of the Management Board to the cleaner. I understand that I have a great responsibility because the whole team looks at me. Therefore, I learn daily myself and am ready to help others. I formulated a new approach for myself as follows: so that tomorrow there would be no shame for the decisions that are made today. If more and more business organisations adhered to this principle, then one could count on qualitative changes in society. The answer to the question “what needs to be done to change” is one – to learn, make mistakes, correct mistakes and learn again. You cannot become specialists in a new approach in a month or even a year, but you can constantly go forward. Our team is not afraid to experiment; we look at the reaction of people which allows us to adjust our actions and specify goals. And there are three things to consider. Firstly, you must understand that the decisions you make today should work for the future. Secondly, you need to clearly understand what it means exactly in your work, for your customers, for your employees. This question is far from being obvious; it takes time to understand how you will implement the decision you made in real life. And, finally, it is necessary to start delivering on promises. I want to emphasise that we are not doing this for self-promotion; this is our position. The Bank is a public organisation, and it is important for us that society knows our point of view. Being proactive Our "child" – the ESG model – has been maturing for three years. We made the decision just in time. Now, evaluating global trends, we see how our chosen strategy fits into them. Responsibility and transparency are, in fact, the main requirements of international organisations for the banking industry. We started thinking about these things a few years ago and were proactive. It was clear that banks can only develop along the path of responsible business. Banking business is one of the oldest types of entrepreneurship; people started lending and borrowing money a very long time ago. And this business has always been based on trust. Not only do we want openness and transparency from customers and partners, but customers and partners expect the same from the Bank. It is always a two-way road. This is the approach provided by ESG. Not a single bank exists on its own; all the banks in the world are parts of an ecosystem. Yes, each financier, investor, customer may have his or her own position, own capabilities, vision of the business, but each should have his or her own long-term approach. Most of our partners have it, especially those from large countries. The ESG strategy is one of the most popular strategies in the USA and Europe. Platinum as a symbol of endurance ESG touches on all aspects of the Bank’s activities: those that seem obvious – management, lending, investments, services, and those more subtle ones – human resources, IT, and participation in public life.   Baltic International Bank supports many public projects. I will give an example of the "Library" project which popularises the books of Latvian writers through social networks. I was very pleased it was supported by other banks without even being aware that it was our project. And the way it developed proves the importance of our initiative. We also support the publication of books by local authors. The project that we started in 2018 and which we plan to complete in 2020 is the publication of the unique book “Family Coats of Arms in Contemporary Latvia”. Alongside, we work on the organisation of the exhibition together with the Ministry of Culture. Baltic International Bank is located in Old Riga; here, we own several buildings of cultural and historical significance. Reconstruction is currently underway in the quarter between Kalēju and Vecpilsētas streets. In old houses, we strive to preserve the spirit and style of former times. At the same time, modern workplaces, environmentally friendly conditions will appear here as the latest technologies are used in the reconstruction. Keeping the unique look of Old Riga, we create a modern and comfortable environment in it. This year we were the first of the Latvian banks to receive the highest platinum category of the Sustainability Index. It is assigned by the Institute of Corporate Responsibility and Sustainability which, according to the world-recognised methodology, helps Latvian companies assess their level of responsibility. Baltic International Bank has been undergoing such an audit since 2014 and this year it received the highest rating. Given that platinum is very resistant to external influence, we regard this as a good symbol of resistance to difficulties. Contribution to the future Banking is a very sensitive area. Now, it is of utmost importance for all of us to show that we comply with modern conditions and the requirements of the time. And, of course, the reputation of the industry is very important. For me, ESG is our contribution to tomorrow, something to be proud of in the near future. We adopted ESG principles not as a project that can be started and completed, but as a constant forward movement that has become an integral part of our business. Of course, each bank has its own history and its own choice. But in general, I think that ESG will become an “explosive topic” for Latvian banks, and sooner or later all financial and credit institutions will begin to move in this direction. By our decision we moved with the times and requirements thereof. I am convinced that our path will become a model for others. We specified the year 2030 as the time when we will have achieved the goal. By this time, we should become a bank that takes full advantage of the possibilities of responsible investment for customers and participates in them. We will not only offer customers environmentally-friendly and investment-friendly facilities, but we will also invest in long-term projects that help Latvia and the Latvian economy to grow and develop. Article in “Free City” with Viktors Bolbats. (RU)

Baltic International Bank celebrates Phase 1 Rafter Festival for the major renovation project – Kalēju Quarter

On Friday, 8 November, Baltic International Bank celebrated Phase 1 Rafter Festival for its major renovation and reconstruction project – Kalēju Quarter – marking the completion of an important phase of the construction works, i.e. reinforcement of the load bearing structures, and roofing. Kalēju Quarter is the Old Riga quarter between Kalēju Street and Vecpilsētas Square where a five-building complex is being renovated. The first phase of the project – renovation of two historic buildings (the new premises of Baltic International Bank) – has been completed. We highly appreciate and thank the builders for their work and are confident that as a result of the reconstruction of this major quarter Riga will obtain another significant sightseeing and recreation place, local business people – business premises in Old Riga, and the Bank – office space. Viktors Bolbats   "I would like to emphasise that the project is implemented in the highest quality in close cooperation with the supervisory authorities; since succession is one of the core values of Baltic International Bank, in the project implementation we paid the utmost attention to the preservation of the cultural and historical heritage which was also confirmed by the external experts who gave positive opinions. We want to be competitive in the labour market, so today we think of how to attract top professionals to the Bank. We see that for the new generation the working environment and conditions are one of the factors according to which they choose their employer, so the Kalēju Quarter will be a working environment tailored to the modern employee," says Viktors Bolbats. The guests of the event had the opportunity to take a guided tour of the Kalēju Quarter renovated buildings under the guidance of the architects Ivars Šļivka and Juris Šūpols. Presenting to the guests the work done in the field of construction and technical works, as well as in the preservation of the historical evidence of the building, the architect Ivars Šļivka emphasised that the renovation of the Kalēju Quarter is characterised by sustainable solutions implemented within the framework of the principles of restoration of cultural and historical buildings and in compliance with all legal enactments and regulations governing the execution of construction works in the historical centre of Riga. “The Rafter Festival is an important milestone showing that the works are done as planned; it is the time when we can appreciate what we have accomplished. At present, two historic buildings are being restored in the Kalēju Quarter after the putting into operation of which works on the other three building will be continued. In these two buildings, we have carried out large-scale technical and construction works as well as cultural and historical restoration. In order to preserve the historical evidence of the buildings, two culturally valuable and ornate objects have also been restored. The state art monument of 1593 – Epitaph – was renovated and is planned to be included among Riga's most famous sights. A beautiful, historic furnace has also regained its appearance,” says Irīna Armanova, Project Manager for Real Estate Development, noting that the entire building complex is being designed with special energy efficient solutions (which is a big challenge in Old Riga) as well as new engineering networks. After the reconstruction, the total floor space will increase as the existing floors have been re-planned and two new floors – the sixth and the seventh – have been added. In March 2020, 90 of the 220 employees of Baltic International Bank will be able to move to the new premises in the Kalēju Quarter renovated buildings which are equipped in line with modern work environment principles and align with the Bank's ESG (Environmental. Social. Governance) approach which, in addition to preserving the environment and good governance, also implies the implementation of the principles of corporate social responsibility at the highest level and concern for the employees enabling them to work in a progressive future office. About the Kalēju Quarter Construction began in 2018, and throughout the ambitious project archaeologists were working together with the builders. The total investment will be around EUR 12 million. The project is expected to be completed by 2022. The aim of the project is to create a publicly accessible Old Riga quarter where everyone will be able to see and touch the historical evidence of the city's formation for nine centuries. The cultural and historical heritage will be combined with an attractive working environment for the employees of Baltic International Bank. The quarter is located in the territory of the urban monument of national importance “Historic Centre of the City of Riga”, a UNESCO World Heritage Site “Historic Centre of Riga” and an archaeological monument of national importance “Archaeological Complex of the Old Riga”. The remains of the Riga city wall (approx. the year 1200) have been preserved along the quarter nearby Kalēju Street. After the reconstruction, the revitalised quarter will consist of two main functional zones. Commercial galleries or passageways will occupy the lower three floors of the buildings, the Money Museum will be on the first floor, and Baltic International Bank's office space will be on the upper floors. The quarter will house a high-end restaurant, while the courtyard-built atrium will accommodate small exhibitions and concerts. The works are performed by the architectural firm Ivara Šļivkas birojs LLC and the contractor Ramej Construction LLC. Actual construction is carried out under the project developed by Architects SIA “Ivara Šļivkas birojs”. SIA “Ramej Construction” is the contractor and the executor of the works.  An international company SIA “TUV NORD Baltik”, which operates independently from the executor and from the project developer, supervises the construction.

Financing Sustainable Businesses – a Local Step with a Global Impact – Viktors Bolbats

Viktors Bolbats, Chairman of the Board of Baltic International Bank, Co-chairman of the Strategic Development Committee of the Financial Industry Association gives an expert opinion to the Forbes Latvia magazine. The word ‘sustainable’ is used very often now. So, what is actually meant by sustainable? Sustainable means to be supportive, to promote and increase; one that does not harm the environment or deplete natural resources, while promoting the ecological balance in the long run. This concept has much in common with the operating principles of our Bank – Baltic International Bank, which is in line with the ESG (Environmental. Social. Governance) approach, which provides for responsible actions in the areas of both environmental conservation and social responsibility and governance. Already now the Bank is supporting several sustainable projects, including in the advanced field of wind energy. Moreover, green funding is no longer marketing but a manifestation of the awareness of citizens; today it is also a practical consideration in terms of the possibilities and costs of raising funds. It is also expected that with time these principles will be set on a regulatory level. Thus, for example, banks that will have already introduced sustainable and green project financing will be acting proactively and will be one step ahead of the others. One of the green financing manifestations is green bonds originating in Scandinavia. What does the green bond mean? It is the same form of securities that investors buy, but already initially tied to certain indicators of rating agencies that reflect the presence of the green factor. A company issuing the green bond is already immediately informing the market that the borrowed funds will be used for projects that are environmentally and socially friendly. In Latvia, examples of such companies are green bond issues by Latvenergo and Altum.   Scandinavian experience shows that green financing can also be beneficial. If two different bonds are simply put on the table – one green and one regular, then we conclude that a green bond can usually be released at a lower price, so funding is potentially cheaper. This is another sign that green funding is no longer simply a subsidised initiative, but a valuable and profitable project. Also in Latvia, the issuance of bonds – as an additional opportunity to raise funds for business growth – is becoming more popular. In line with the strategic move toward a powerful investment bank, Baltic International Bank has obtained a licence to organise a bond issue that allows one to ensure capital raising for companies in the form of bonds. We are already offering our customers companies that are developing in environmentally friendly ways. The currently very topical term, not much discussed in Latvia and directly linked to sustainable business financing, is ‘taxonomy’. In the European Union, (ES) taxonomy is a classification tool to help investors and businesses identify environmentally friendly economic activities. Why is taxonomy so important? As Europe needs to raise private capital for sustainable activities, EUR 175 to 290 billion of private investment needs to be attracted additionally to meet the climate targets. Taxonomy is applied to financial market participants with regards to financial products or corporate bonds traded as sustainable financial products. As I mentioned at the beginning of the article, the exact definition of terms is of great importance, so taxonomy aims to standardise the concept of environmentally sustainable investment across the EU, thereby making it easier to invest in environmentally sustainable economic activities. The establishment of a European framework and uniform standards can have a positive impact on the provision of services of “green financial instruments” (e.g. green bonds, mortgage loans for energy-efficient housing) and on strengthening the confidence of market participants in these instruments. In order to include an economic activity in the EU taxonomy, it must meet at least one environmental objective without causing significant damage to the remaining five. Six taxonomy environmental objectives are climate change mitigation; adaptability to climate change; sustainable use and protection of water and marine resources; transition to a circular economy; waste reduction and recycling; pollution mitigation and control; and protection of healthy ecosystems. Taxonomy sends a serious signal to corporations and other private companies, investors, banks and public authorities about future economic trends, investment opportunities and risks. The EU taxonomy provides more clarity to investors, issuers, policy makers and regulators. This combines international environmental objectives with investment practices and sends a clear signal on activities that are in line with environmental objectives.   Taxonomy will also affect lending policies of banks, and here is a home task for banks, educating clients about the availability of funding at local capital banks, both in the form of credit and bond issuance. The latest data from the Financial Industry Association regarding the lending index in the business segment shows that this year the ability and willingness of entrepreneurs to borrow has reached a record high level in Latvia, with the lending index rising to 114 points compared to 110 points a year earlier. Certainly, each bank has a different strategy, business models and opportunities, but at the moment local capital banks are entering the segment of lending to local companies increasingly more rapidly. It is also one of the most important opportunities for a new business model of Baltic International Bank, since lending to small and medium-sized enterprises is a way of generating profit that allows local businesses to be supported in a sustainable way. We are prepared to support the local economy in even larger volumes, so discussions of banks with the regulator are ongoing regarding options to review the capital adequacy ratios. Forecasts show that local capital banks can inject a total of around EUR 220 million into the national economy. Taxonomy is currently in the form of guidelines, but in time these guidelines will form a framework for the EU legislation and regulatory rules, requiring additional standard criteria for corporate lending and financing to also assess the sustainability of businesses. In this case, Baltic International Bank has acted urgently, since the ESG evaluation criteria have already been met in terms of both investment and lending, so it will be easier for us to work with customers at a time when the principles of taxonomy are no longer encouraging, but mandatory, and we will not need to implement any reforms or rearrangements in a hurry, but we will simply be able to continue that which has been started. Companies will also have to report on their environmental impacts. To promote good practices, Baltic International Bank has already issued its first nonfinancial report this year to share its environmental, corporate and management practices. This includes factors and measurements according to NASDAQESG Reporting guide for Nordic and Baltic countries. It should be understood that the financial sector – private capital – plays an important role in the rest of the climate-neutral economy. Taxonomy aims to provide practical guidelines for policy makers, representatives of different sectors and investors on how best to support and invest in economic activities that contribute to achieving a climate-neutral economy. A wide variety of sectors are covered, including energy, transport, agriculture, production, information and telecommunications technologies, real estate. Read Viktors Bolbats expertise in the November issue of Forbes Latvia (LV).

Baltic International Bank presents an ESG Report at the Non-financial Reporting Seminar organised by the Institute for Corporate Sustainability and Responsibility

At the end of September, the Institute for Corporate Sustainability and Responsibility (InCSR) hosted an experience exchange seminar and a discussion on non-financial reporting for Latvia’s largest and most responsible companies during which Baltic International Bank presented its ESG (Environmental. Social. Governance) Report. Viktors Bolbats, chairman of the Bank’s Management Board, shared his experience in implementing the sustainability strategy and presented the Bank's future goals. Good practice examples were also shared by the Institute for Corporate Sustainability and Responsibility, JSC Latvenergo, Coca-Cola HBC Latvia LLC, as well as the representative of Sustinere, a non-financial reporting expert from Estonia – Marko Siller. At the time of presenting the Bank's first non-financial or the ESG Report, Viktors Bolbats, chairman of the Management Board of Baltic International Bank, emphasized the importance of sustainability: “Nowadays, sustainability is no longer an option but a necessity. In my opinion, ESG (or sustainability) means doing things today that we can be proud of tomorrow and further on. The ESG approach is appropriate for us since it covers all three areas that the Bank already perceives as the pillars of its development. ESG has both environmental and social considerations as the Bank is not only a financial institution, a credit institution, but also a consumer of energy and other resources, a taxpayer, an employer. The ESG (Environmental. Social. Governance) approach pervades all of the Bank's core business areas; our ESG goals are not declarative, but implemented in all day-to-day processes.” We have to understand that in this age, not only we expect openness and transparency from our customers and partners – they also expect it from the Bank. The Bank is part of an ecosystem that must work responsibly with this system. Banks carry a heavy burden of social responsibility. They also have the opportunity to support and engage in responsible investment transactions that benefit the national economy as a whole. With this in mind, we have set the Bank's strategic goal for the year 2030 to specialize in profitable, environmentally friendly and sustainable investments,   adds Bolbats noting that the ESG approach is also a change in habits and mindset where leadership support, clear objectives are essential and indicators, employee engagement and effective internal communication are measurable. “More and more companies, both in the world and in Latvia, are not only accountable for their financial performance, but also for their impact on the employees, environment and society. This is, of course, influenced by global developments, international regulation and the demand from civil society for greater openness and mitigation of the negative impact of business. In addition, entrepreneurs are beginning to realise that non-financial reporting helps improve risk management and long-term environmental and management performance thus contributing to competitiveness,” explains Dace Helmane, CEO of InCSR. After the attendees were interviewed on key criteria for a meaningful non-financial report, it was concluded that a meaningful non-financial report should be based on a completely fair approach (nearly one-third or 27.3% of the participants stressed it) while data was ranked second (19.5%). Among the topics covered in non-financial reporting, readers are most interested in corporate governance and business ethics (28.4%) followed by data privacy and protection issues (17.3%), and customer and consumer satisfaction aspects (14.8%). Marko Siller, a non-financial reporting expert from Estonia, said: “All major companies need to look for the most effective ways to showcase their progress and influence. If a company does not do so, it no longer speaks the same language with the rest of the business community – customers, suppliers, investors. Today, beautiful, self-praising words must be proven with data, measurable goals, and real results.” Guntars Mikhailovs, international relations specialist at JSC Latvenergo, explained to the audience the involvement of stakeholders and their great role in meaningful reporting: “Stakeholder engagement is an essential part of good governance and sustainability for any organisation. It provides insight into issues of mutual interest, improves employee motivation, increases stakeholder confidence and, as a result, contributes to the organisation's value. The Latvenergo Group regularly reviews the views of stakeholders on past cooperation and aspects that are important to the Group's sustainability as well as discusses proposals to improve the Group's performance. The design of the sustainability report and the format in which stakeholders receive relevant information about the company are also important.” Dace Dricka, public relations manager at Coca-Cola HBC Latvia LLC, said she was very proud of Coca-Cola HBC Latvia's achievements in the field of sustainability, and also wanted to remind the attendees that sustainable performance never stops, so businesses must focus both on achieving their long-term sustainability goals and communicating properly to the public and stakeholders since only such an approach will be viable in today's corporate socially responsible environment. The event was attended by more than 30 different companies and organisations from different sectors – finance, mobile, energy, logistics, manufacturing, etc. Institute for Corporate Sustainability and Responsibility The Institute for Corporate Sustainability and Responsibility (InCSR) was established in early 2011 with the aim of strengthening the sustainable development of the state and local community by educating the public and raising awareness of responsible and forward-looking behaviour and promoting the development of civil society. InCSR provides reliable measurements, supports and promotes civil society activities, organises and participates in various projects, seminars and campaigns on proactive and safe behaviour, and provides a platform for the exchange of experience and opinions.

World experience in combating money laundering – Joseph Сofer Black

In an interview with the newspaper Latvijas Avīze, Member of the Supervisory Board of Baltic International Joseph Cofer Black talks about world experience in combating money laundering and upcoming challenges on the Supervisory Board of Baltic International Bank.     What is the global situation with the dirty money in the world – is it improving or getting worse? Honestly, this question is almost like a question about religion – is its impact increasing or decreasing? Speaking on the macro level, I can surely say that during the recent period the flow of “dirty money” has always existed in the world. By the recent period, do you mean beginning from the September 11, 2001? Or is it when everyone started to pay attention to that? I would say earlier. At least looking from the US perspective, the story about the “dirty money” starts with the war against drugs. Disregarding the huge resources devoted to combat this phenomenon, very rarely were these activities able to significantly impact or change the “street price” of drugs. And if the price does not change – then there isn’t real consistent success in the fight against drugs. Yes, they shot Pablo Escobar and caught El Chapo, took down some of the drug cartels but others formed all too quickly to take their place. What to do next? In these circumstances, the law enforcement authorities came up with the strategy of “follow the money”. Logistics and putting the generated profit back into the financial system are the weak links of the drug distribution system. If we can’t win in the logistics area, then finances remain. I remember that during those times, in 1980s and 1990s when I was going to South America and visiting a port or beach, motor boats with powerful engines worth more than a million USD stood side by side just like cigarette packages on the shelf– dozens. They either belonged to the drug dealers or were taken from the drug dealers – and their task was to transport drugs. If your business can write off losing vehicles worth more than million USD as the cost of doing business – then your business is inherently highly profitable. These were the circumstances when the strategy changed – instead of trying solely find and disrupt the logistical side, try to follow the money and compromise the heads of the drug cartels. As you mentioned the September 11 attacks, they occurred when I was the Director of the Counterterrorism Center in CIA. In the beginning, we were not that successful with the concept of “following the money”, concerned that it might take away already limited resources in other areas. The second limitation was related to the fact that unlike the drugs target, terrorism does not require a lot of money. It was not expensive to organise the September 11 terror act, maybe a few hundred thousand USD. It is pocket money compared to the amount of funds involved in drug trafficking. It is difficult to trace a small amount of money. Still, gradually the intelligence organisations started to do just that in cooperation with international partners. I have to say that results were better than expected; still it is very difficult to disrupt financing of terrorist units. Best results are obtained when we monitor the financial system and search for anomalies therein but, of course, we also have to deal with political limitations. Speaking about limitation of “dirty money” and policy...I would dare to say that there is a feeling in the Latvian financial circles that the report of the US Financial Crimes Enforcement Network (FINCEN) about the ABLV Bank and the following actions were too harsh, unjustifiably emphasizing Latvia. Meaning that money-laundering problems exist also in other countries and Latvia already since 2016 started reinforcement and control of the anti-money laundering requirements. I have been to few countries where Americans are not considered part of their issues. And my Latvian friends think just like you. But what would you have us to do?  There are so many crucial questions/problems and we have to deal with them and the tyranny of time no matter how noble the intentions. But dissatisfaction by one partner with the other in a relationship may well be expressed in a clear and obvious manner. Let’s be honest – this is my 14th time in Latvia already, I really like Latvia and its citizens.  But before I made a decision whether to come and work here, I did a little research. Reputation of Latvia on the internet was not especially good and happily, incompatible with reality. However, during the last decade we have witnessed multiple violations of the anti-money laundering regulations. It is not fair to blame Americans that they are protecting their interests and deciding to send a clear message, in the situation when other methods have already been tried before. Only those who do not know the background of the relationship can do that. I have heard all the following - “this bank was made a victim”, “it is not true”, “this is false news” and even - “Russian special services stand behind that”. Nonsense! “Money laundering on the “systemic” level, as was reported in the FINCEN report – is a checkmate game. A charge not made lightly. Systemic is a serious term. Systemic – it means that an integrated system has been created at an organisational level, performing money-laundering activities regularly and repeatedly. And as a cherry on top - “money laundering on behalf of North Korea” cannot be ignored. Find me another country on the world map with whom US has relations that are more difficult and where money-laundering activities on its behalf could infuriate Americans more. What do you expect the US would do in this situation? And how long can Latvian banks participate in the money laundering activities for the financial system state reputation not to suffer?  In this case, you can call US action tough love; it is based on good intentions and genuine desire to help the system that is struggling on its own. As the Head of the FCMC Pēters Putniņš have stated publicly – in the case of North Korea, money laundering the means were coming from some European banks, passed through Latvia and returned to other European banks. Why the role of Latvia was emphasized? Why there isn’t similar FINCEN reports about other European banks? I am not in the situation to comment on statements by Mr. P. Putniņš. And there were reports about other banks as well that might not have attracted so much attention. Still, I stand by my words. The US administration has neither time, nor energy to deal with made-up things. Reading the FINCEN report in its entirety, it is clear that the US was highly motivated to send a clear message. And believe me – these reports were not compiled by a random official pointing his finger at a map and haphazardly choosing a country to target. Compilation of these reports includes combined work by many institutions and the results reflect a coordinated view. Majority of the money flowing through the Latvian banking system come from the CIS countries, first, from Russia. In considering the difficult relations between the Western world and Russia, why would we worry that money is flowing out of the Russian economy, taking away resources for investments, and being spent in Western countries, buying mansions on the Mediterranean coast, insanely expensive yachts and English soccer clubs? Here I agree with you – maybe we should not worry. Although the relations with Russia have become more complicated, still the majority of Americans like Russians – the way they perceive themselves has many similarities with the way we Americans perceive ourselves. We could ask why Russia had to adopt such quarrelsome and aggressive attitude regarding international issues and why Vladimir Putin has to publicly demonstrate short films about aiming of nuclear weapons on the targets in US. When Russians are buying mansions in Italy, I am more amused than worried. You want yachts – be my guest. Real estate in New York – wonderful. What concerns me is that the source of this money may originate from the diversion of state funds and fraudulent privatization. If you look what people are included in the US sanction lists – then the depressing majority are people who became rich using methods considered illegal in US. Some say that US is hindering the development of Russia.  Russia these days can be its own worst enemy. But democratic and stable Russia full of satisfied and content people is in the interests of US. And it would be much better to invest the money spent on mansions and yachts in Russian infrastructure, social services and education. Do you have many colleagues who with the previous work experience in intelligence services, combatting the financing of terrorism and money laundering, and diplomatic services start working in the banking system of the Baltic’s? It is a good question as work in the financial system has many similarities to intelligence and diplomatic services. Many principles are the same – know what you are dealing with, protect your own people and our friends, invest in the future, effectively use the limited resources to reach your goal. In fact combatting of money laundering is my main task as the Member of the Supervisory Board here in Baltic International Bank. One of the main directions of this work remains unchanged - establish and improve mechanism, system identifying risky clients, and determine potential risks in this area. Nevertheless, answering to your question – no, I don’t see the inflow of American specialists. I see more representatives of some other European countries.   Olafs Zvejnieks, Newspaper Latvijas Avīze, 14.05.2019   Interview Latvijas Avīze with Joseph Cofer Black (LV) 

Plenty of Challenges for Europe -Dr. Hans-Friedrich von Ploetz

In an interview with the newspaper “Dienas Bizness””, Member of the Supervisory Board of Baltic International Bank - Dr. Hans-Friedrich von Ploetz emphasizes that, given the rapid development of renewable energy resources, our only chance is to become “greener”. Would he currently invest into oil, gas or coal? He would most likely say - no. He would rather invest in new sustainable technologies. Although significant progress have been achieved in adjusting of the financial sector, industry still has to deal with many problems and risks. Dr. Hans-Friedrich von Ploetz, Baltic International Bank Member of the Supervisory Board, former State Secretary of the Federal Foreign Office and German Ambassador to NATO, the UK and to Russia in an interview with business paper Dienas Bizness. He tells that attempts to adjust this industry on the European level are highly supported, emphasizing that various future challenges and risks await the industry players also further. How do you evaluate ongoing processes in Latvian financial sector – does society need to worry about stability of this sector? Banking industry is operating under stressful conditions all around the world. I can’t name a single country where people would not follow updates in banking sector due to various risks, for example, money laundering and terrorism financing. These risks are very challenging. I think that progress have been achieved in European Union (EU) countries, including Latvia, as to this matter, still it is not yet the time to relax and let our guard down. In recent years banks working with non-residents have encountered more problems. What is your opinion regarding this issue – have these banks really committed violations? Everyone can follow latest updates from Russia, Estonia, Finland and other countries. Of course, we can’t deny that violations did happen in separate cases but I don’t want to highlight any country in particular. It is clear that this issue still requires further efforts and task is not easy. Efforts of Latvia have been evaluated positively; at the same time we have to understand that improved international cooperation matters a lot. One cannot overlook that in this area sometimes good regulatory framework can be an obstacle to such cooperation. I think that banks are doing what it takes to eliminate risks related to non-residents. If I am accurately informed, during recent years dramatic decline of non-resident clients have been observed in Latvian banks. Regarding non-resident banks the loudest scandal in Latvia, of course, was ABLV Bank. How do you evaluate this situation? It is very sad that a bank of this size can file for bankruptcy within few days. It has a negative impact not only on clients concerned but also reputation of state and its banking sector. What should be done to improve Latvian banking system? In my opinion, the Latvian government, its regulators and the banking sector is trying to improve the Latvian banking system not only on the national but also Eurogroup level. I am afraid these efforts have to continue in all spheres, with special attention to improving the qualification of personal and technical resources. Sadly, those forces who try to break the rules do not give up their efforts to succeed one way or the other with their illegal activities. Both regarding employee qualification and technical equipment, and information exchange between banks, banking sector in every country still encounters very many challenges and risks. Power industry has become one of European priorities during recent years. What are global trends as to this area – are we becoming greener? Politically – definitely. Our publics are much better informed and ask for action. Therefore I think that we have no choice but to “greener”. Very ambitious goals were set in Paris Climate Conference related to global warming and climate change. Both EU countries and the EU in general are on the right track. For example, Germany reacting to the nuclear accident in Fukushima decided to completely waive use of nuclear power in the next few years. The risks involved in nuclear power plants is considered to be too high and dangerous for both environment and climate. In addition, Germany also wants to stop the use of brown coal – lignite in power plants in the near future and of other coal in the medium term. At the same time it is clear that demand for electrical energy will grow considerably in Europe as we use evermore electrical appliances on daily basis. How we are going to satisfy this dramatically growing demand? Renewable energies are one option and they are rapidly developing. Germany was a front runner and subsidised solar and wind energy at great cost, in particular to its consumers. The effect is impressive: renewable energies compete today successfully with fossil energy. Whether I would continue to invest into oil, gas or coal, I would most likely say - no. I would rather invest in new sustainable technologies. There are many negotiations related to high RES scenario and energy efficiency but frequently entrepreneurs emphasize high expenses in implementing of these solutions. Can we expect for green technologies to become cheaper in future? Of course, these technologies are expensive but we have to keep in mind that they were even pricier in recent past. Technological development is enormous, with emerging markets like China in the vanguard. At present, developed countries consume about 40% of energy and the high growth, economies of Asia 20%.  Experts predict that it will be the other way round in 20 or 30 years, but the global volume of energy consumption will be much higher than today!  So we have to act fast: The global train is gaining speed, and European economies occupy no longer the first carriages. Already today China has more electric cars than Europe. Several European countries have already expressed commitment to completely stop using fossil fuels. In your opinion, is this necessary and actually doable? When I arrived in London in 1999 as the German Ambassador to the UK, one of the first people I met was the CEO of British Petroleum (BP). We spoke for more than an hour but he hardly mentioned BP’s core business, petrol. He spoke about green energy and green technologies. He said it is our future, emphasizing that he as a CEO is responsible for this company to continue operating profitably. He was right, wasn’t he? So, you think that we can really stop using fossil fuels in future? There are more than meets the eye as to this. We need fossil fuels but it is stupid to burn oil for electricity or mobility. Remember that you can get to a goal in many different ways. Clearly our lifestyle will change in the future and I don’t think it is a bad thing. At the same time, I think that in future fossil fuels will be used more efficiently in many other areas. I hope that inefficient and environmentally harmful use of fossil fuels will be reduced but still these resources will find their place on the market. You mentioned that currently you would decline from investing in the fossil fuels industry. On what resources would you put your money on? Let me give you one example: There is an innovative company in Latvia specialising in the construction of large concrete floors, for example for large stores, warehouses and industrial buildings. Its new technology allows them to reduce the consumption of cement by 40%. Thus, they not only reduce the use of energy to produce cement, the entire construction process takes up less time. Thanks to a special new mix of raw materials, their floors are almost immune to cracks – which used to be a big problem of the industry. Three advantages in one technology - excellent! Would I invest in this company? My answer is definite - yes! I could give you hundreds of similar examples. You are the former German Ambassador to the UK. Currently many Europeans are concerned about this country and its further decisions. What should be considered after Brexit? I have noticed two opposing parties as to this matter. There are people considering Brexit as a relief because it has always been difficult to cooperate with the United Kingdom, the British were not even sure if they wanted to be part of Europe in the first place. The other group, to which I belong, thinks the UK leaving the EU will be a great loss. The future will be very different from the past.  Europe is no longer in the lead. The United Kingdom was large and powerful power in the 19th century. In the 21st century which European country is powerful enough to successfully stand on its own? Not the UK, not Germany, not France! In contrast, the EU is a very powerful organisation – a serious global player – but only in such fields as trade where its members have pooled their sovereignty in the hands of the EU-Commission. If and when Brexit happens, we will have to learn to live with the new situation, yet another challenge, but unfortunately “home-made”!   Armanda Vilcāne, Newspaper Dienas Bizness, 02.04.2019   Expert opinion. Interview Dienas Bizness with Dr. Hans-Friedrich von Ploetz

Baltic International Bank receives BBB+ financial crime compliance rating, with a positive outlook

Sigma Ratings, a New York-based rating agency, assigned BBB+ financial crime compliance (FCC) rating to Baltic International Bank placing it among industry leaders. Sigma’s report also noted that the bank’s outlook is positive. Sigma Ratings reviewed Baltic International Bank’s inherent risk environment and control effectiveness around FCC. The review included FCC factors specific to AML, CFT, sanctions, and aspects of other non-credit risk issues such as geo-political risk and national-level regulatory proficiency. Chairperson of the Management Board, Baltic International Bank, Viktors Bolbats told: “We are truly delighted by the positive assessment of the renowned rating agency Sigma Ratings as it demonstrates that our hard work and increased investment in the area of fighting against financial crimes have paid off.  Baltic International Bank firmly believes that privately owned banks need to shape a sustainable business model with the underlying corporate governance principles and transparency in all actions, including the fight against criminal crimes.”   Some of Baltic International Bank’s key strengths, according to the Sigma Rating report, include its increased investment in compliance, both in headcount and technology, as well as sophisticated transaction monitoring system (TMS) with a comprehensive list of detection scenario rules. Baltic International Bank has advanced controls in place in order to mitigate against financial crime.   Baltic International Bank deserves credit for embracing transparency and investing in its financial crime control environment.  The rating speaks to a relatively strong control environment and an engaged management team that recognize the importance of proactive risk management across all three lines of defenseStuart Jones, Jr., Chief Executive Officer of Sigma Ratings     In light of the overall situation faced by the sector, in 2018 Baltic International Bank invested money towards enhancing professional qualification of its employees and their expertise in the fight against financial crimes in accordance with international standards. For instance, all of the employees involved in implementing the Know Your Customer (KYC) and Know Your Customer’s Partner (KYCP) principles have undergone an in-depth AML/CFT training. The Bank has revised AML/CFT policy and related procedures and implemented new amendments requested by regulator. The Ministry of Finance (MF) and the State Revenue Service (SRS) have admitted Baltic International Bank to Gold Level of the In-depth Cooperation Programme or so-called SRS White List, thereby acknowledging the transparency of operations as well as tax compliance discipline.   Baltic International Bank Financial Crime Compliance (FCC) Rating Report   About Sigma Ratings Sigma Ratings, Inc. (“Sigma”) is a New York-based firm pioneering a technology-driven approach to assess governance and financial crime risk at the entity level. Sigma evaluates entities on non-credit risks, including financial crime compliance, governance, sanctions, corruption and reputation. Sigma’s methodologies are based on industry best practice that have been developed in consultation with the public and private sector. Sigma’s ratings are also reviewed by an independent Rating Committee before issuance. Sigma regularly presents to U.S. regulators and regulators around the world for further feedback and ideas. Sigma’s leadership team includes professionals with more than 100 years of combined experience, including deep domain expertise on counter illicit finance-related matters as senior U.S. Government, legal and development finance experts. Company clients include financial institutions and investment firms, multinational companies, insurance firms and governments in the Americas, Europe, the Middle East and Southeast Asia.

Valeri Belokon: The existence of our nation in 200 years depends on literature

Valeri Belokon, the main shareholder of Baltic International Bank and the long-standing patron of Latvian literature, who also supports the current project ‘Library’ aimed at promoting reading, believes that the existence of the literary industry is of great importance for our entire nation. Preserving literature, we preserve the Latvian culture and language. What do we leave behind, apart from language? We leave the thoughts of our people. If we lose the word, we lose the thought. Books should be published to enable us to keep a big, complete, philosophical thought.Valeri Belokon   In the seventh interview in a series of video stories within the framework of the ‘Library’ project, Valeri Belokon gives a peek into his private library and tells about his personal motivation prompting him to provide support. The books have everything that we need for our life and for the life of our soul,’ he says. ‘Support to literature is my vocation and the voice of my heart. A person can support literature only if he or she understands it and needs it. It is not that literature goes with hat in hand.Valeri Belokon   The patron also expresses his views on the role of literature in the preservation of the Latvian language. ‘We are in a situation where we need to maintain our language and culture. I believe that this is what we are doing at the moment and what definitely have to keep doing.’ In an interview with Baltic International Bank, the main shareholder points out, through laughter and, at the same time, very seriously, that all the answers to questions can be found in books. ‘Nowadays, people think that Google has all the answers, but I have to disappoint them by saying that this is actually not true. Books provide all the answers,’ he says. Watch full interview The full interview with Valeri Belokon is available on the home page of the ‘Library’ project at www.manabiblioteka.lv. There you can also find six other interviews published before: with writers Nora Ikstena and Māris Bērziņš, Zbigņevs Stankēvičs, metropolitan archbishop of the Roman Catholic Church, Andris Vilks, director of the National Library of Latvia (NLL), Kārina Pētersone, director of the Latvian National Library Support Society, and Vaira Vike-Freiberga, former president of Latvia. In the coming months, it is also planned to publish an interview with Uldis Bērziņš, poet and translator, Imants Lancmanis, Latvian art historian and heraldry specialist, and Sanita Stinkule, head of the Department of Ethnography of the National History Museum of Latvia. The project ‘Library’ has been created by Baltic International Bank, a long-standing patron of Latvian literature. The ‘Library’ initiative proposes to tell stories about the importance of literature in people’s lives, stories about personal libraries, their content, emotional and professional value. The development of Latvian literature is one of the long-term public support endeavours of Baltic International Bank. Believing that knowledge of culture and history of one's country is the basis of the national identity of each nation, Baltic International Bank financially supports the publishing of books of national importance and implementation of literary projects.

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