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Highlights

Bank’s working hours on Latvian National holidays!

Dear Clients, We will work according to the following schedule during the Latvian National holidays! 17.11.2021: Baltic International Bank will serve clients until 4 pm 18.11.2021: Baltic International Bank will serve the clients remotely on a reduced schedule until 1:00 pm 19.11.2021: Baltic International Bank will operate as usual (from 9:30 am to 5:00 pm)   Please plan your financial transactions in a timely manner.   Festive holidays!

Baltic International Bank SE joins the instant payment service

Baltic International Bank SE has started its participation in the instant payment service of the Bank of Latvia, becoming the seventh bank in Latvia to join the pan-European instant payment settlement system or SEPA Instant Credit Transfer scheme. The Bank’s instant payment solution means that customers themselves do not need to choose the transfer type: the Internet Banking payment solutions will automatically redirect the customer’s payment to the fastest transfer type possible and select the instant payment option if the beneficiary’s bank involved in the transaction is also connected to the pan-European instant payment system.  Instant payments enable customers to make payments in seconds 24 hours a day, seven days a week, all year round, including weekends and public holidays. The service has been established by the Bank of Latvia, thus providing banks with the opportunity to transfer money from an account in one bank to an account in another bank in a very short time.     “We are making targeted efforts to provide our customers with high-quality services, so joining the instant payment service was a natural step in continuing the successful development,” Dace Dūklava-Kokina, Head of Strategic and Business Development at Baltic International Bank SE, points out. “They say that time flies on the wings of the wind, and making or receiving payments instantly is already a common practice. The Bank provides its customers with individual service and approach and this also means efficiency in the execution of orders upon their receipt.”

Baltic International Bank SE’s Rating Affirmed At ‘BBB+’ With Neutral Outlook

Baltic International Bank SE’s rating affirmed at ‘BBB+’ with neutral outlook for its financial crime compliance. NEW YORK, October 25, 2021 – Following a recent re-certification review of Baltic International Bank SE’s inherent risk environment and control effectiveness around internal compliance, governance and financial crime policies, Sigma has reaffirmed Baltic International Bank SE (BIB) “BBB+’’ rating, with the institution performing at a high-level when benchmarked against international best practices. The outlook for BIB is neutral, primarily due to its geographic exposure and increasing geopolitical tensions in the Baltic region.  The BIB rating reflects our view that, despite increasing geopolitical tensions and challenges of geography, the institution has improved its control framework since its last review in 2019. Specifically, a number of the areas identified by Sigma as part of the initial rating were addressed by BIB’s management and compliance team, including further de-risking of its customer base and an increased focus on financial crime compliance from an audit and risk assessment perspective. Against the backdrop of significant changes in Latvia, including more pronounced regulator action, as well as notable work by the nation to avoid graylisting by the Financial Action Task Force (FATF), BIB continues to navigate a challenging environment. The bank is equipped to pivot to lower risk markets and has in place a robust compliance team that can both maintain current business, as well as onboard new clients in Latvia and the broader EU as its strategy shifts to make it more dependent on client acquisition in lower risk markets as identified by Sigma’s proprietary country-risk model.. While BIB’s de-risking improves its residual risk score, pressure to onboard and grow the bank’s book will add pressure and the potential for new, previously unforeseen compliance gaps may emerge. This would likely be exacerbated if the institution were to move into new, materially different product offerings or other non- EU client opportunities. While we judge the risk of a more European-focus to be low overall, it is not without risk, particularly as these markets are historically less familiar from a growth perspective for the institution.     Publication: https://www.sigmaratings.com/knowledge-center/baltic-international-bank-ses-rating-affirmed-at-bbb-with-neutral-outlook?fbclid=IwAR293016DUIqNo4hNDEjXOZJD3UlxDigAIMCHWZgNaHZ1F3AKFAhDV-z3D0

Baltic International Bank encourages clients to use financial services remotely or by prior appointment!

In light of restrictions by Government of Latvia that are in effect from 11 October 2021, we encourage you to maximize the use of remote communication and remote service provision options for your financial transactions. In-person customer service will be provided by prior appointment.   Remote customer service We already provide most of our services remotely, allowing you to manage your finances and make transactions 24/7 from any location. For the remote communication use: Remote electronic service system - Internet Banking Email communication with your private banker Remote customer service: +371 6700 0444 Informative email: info@bib.eu   Information for vault attendants  You can access your safe deposit box by prior appointment, contacting your private banker. Within this period please visit Bank’s vault only in extra urgent cases!   Thank you for your understanding!  

Possible delays in operations with the submitted transfers to the payment cards on 06-07 October 2021

Dear Client, Please be informed that due to technical reasons the operations with the submitted transfers to the payment cards can be temporarily hindered for up to 2 hours, from 9pm on Wednesday (06 October 2021) until 6am on Thursday (07 October 2021). The mentioned issue will not affect payments with payment cards. We appreciate your understanding and apologize for the inconveniences caused.   Best regards, Baltic International Bank SE

Weekly financial market overview 27.09.-03.10.

  Konstantins Goluzins, CFA Head of Asset Management Phone.: (+371) 6700 0456 E-mail: trust@bib.eu LINKEDIN PROFILE   Main events of the previous week US President Joe Biden signed a bill on temporary government funding until December 3, which delays the shutdown (suspension of the work of some government agencies), which was supposed to come into force at midnight on October 1. Among other things, the draft law, signed by the President, includes additional appropriations for disaster relief and those who have been evacuated from Afghanistan. Prior to this, the bill passed the approval of the Senate and House of Representatives of the US Congress. Congressmen and the head of state managed to approve temporary funding for the work of the government just a few hours before the deadline. The shutdown threat stemmed from a disagreement between Republican and Democratic congressmen over the US national debt. An interim version of the draft budget for the next fiscal year was discussed in the House of Representatives, but the Republicans blocked it in the Senate. They oppose the additional condition to increase the federal public debt, introduced into the draft budget by the Democrats. The United States approves budget allocations for 13 areas each fiscal year, including agriculture, justice, energy, and other industries. Bills for each direction must be signed by October 1. They account for less than 30% of budget expenditures, the rest goes to mandatory expenditures that are made in an automatic manner (for example, health insurance and pension programs). If Congress and the President do not agree on the allocated budget money, the government partially stops working, and employees are sent to idle time. The work is continued by structures and departments that perform vital functions. Economic data Eurozone. The consumer price index in September rose 0.5% versus August, while the annual inflation rate was 3.4%. The growth of the core inflation rate, excluding food and energy, in September amounted to 1.9% y/y. The unemployment rate in August fell by 0.1 percentage point and amounted to 7.5%. US. August data show that durable goods orders rose 1.8% from the previous month. The growth of the base indicator, which does not include civil aviation, amounted to 0.2% over the same period. The number of initial jobless claims for the week was registered in the amount of 362 thousand, which is 11 thousand more than the week before and 27 thousand more than predicted by analysts. In August, the level of personal income, as expected, increased by 0.2% mom, while in July incomes showed an increase of 1.1%. The level of personal spending in August increased by 0.8% in July. China. According to the assessment of the Caixin Bank, in September the PMI in the manufacturing sector rose by 0.8 percentage points and amounted to 50 points, in turn, according to the National Bureau of Statistics of China, the PMI Manufacturing in September was 49.6 points. Key events this week On Tuesday, the US is to publish data on the trade balance for August. On Wednesday, the Eurozone will report on retail trade for August and the data on changes in oil inventories for the week will be published in the US. On Thursday, the US will know the number of initial jobless claims for the week. On Friday, the US will publish data on the situation in the labor market in September.     The information provided herewith has an informative nature. This information cannot be regarded as an offer or recommendation for purchase, storage or sale of securities, or as an investment recommendation, an investment survey or a consultation on investments, or a recommendation to entrust management of your assets to the specific investment manager. The Client is fully aware and undertakes all risks involved in the investment. This information is prepared by AS Baltic International Bank.

Weekly financial market overview 20.09.-26.09.

  Konstantins Goluzins, CFA Head of Asset Management Phone.: (+371) 6700 0456 E-mail: trust@bib.eu LINKEDIN PROFILE   Main events of the previous week Last week, the Organization for Economic Co-operation and Development (OECD) lowered its forecast for global economic growth for 2021 to 5.7% from the previously expected 5.8%. The forecast for global GDP growth for 2022 has been improved to 4.5% from 4.4%. The OECD report says that the global economy is growing much faster than could be expected a year ago, but its recovery remains uneven, which puts a number of risks in developed and developing countries alike. The OECD also notes that massive incentives from governments and central banks helped to avoid the worst when the pandemic began. World GDP has so far exceeded pre-pandemic levels, but in many countries, especially in developing countries where vaccination rates are low, the lag behind pre-crisis indicators in both GDP and employment remains. The OECD believes that the economic impact of the new COVID-19 delta strain is still rather weak for countries with a high proportion of vaccinated populations, but this factor has slowed the momentum for economic growth and increased pressure on supply chains as well as prices. A sharp increase in inflation rates is apparent in the USA, Canada, Great Britain and some developing countries, but in many other developed countries, especially in Europe and Asia, inflation remains quite low. The US Federal Reserve kept its base interest rate at 0-0.25%. The Open Market Committee believes it would be prudent to maintain this range until labor market conditions reach levels in line with estimates of maximum employment and inflation rises to the 2% target. The Fed will also continue to buy at least $80 billion in Treasury bonds monthly and mortgage-backed securities (MBS) for at least $40 billion monthly. However, according to the committee, a slowdown in the pace of asset purchases may soon be required if the development of the economy as a whole meets its expectations. The Fed also lowered its forecast for the country's GDP growth in 2021 to 5.9% from 7%. At the same time, the forecast for the growth of the American economy for 2022 and 2023 was improved to 3.8% from 3.3% and to 2.5% from 2.4%, respectively. In 2024, US GDP is projected at 2%. The Fed also raised its forecast for inflation in 2021 to 4.2% from 3.4%, in 2022 - to 2.2% from 2.1%. In 2023 and 2024, inflation is expected at 2.2% and 2.1%, respectively. The forecast for US unemployment in 2022 was downgraded to 4.8% from 4.5%. In 2022 and 2023, this indicator is projected at the level of 3.8% and 3.5%, in 2024 - at the level of 3.5%. Among other things, all 18 committee members kept the forecast for the base interest rate in 2021 at the level of 0-0.25%. As for the following years, nine members of the committee in 2022 are in favor of keeping the rate at the same level, six for an increase from 0.25-0.5%, three for an increase to 0.5-0.75%. At the same time, in 2023, most committee members expect the rate to rise to 1-1.25%. In 2024, the largest number predicts an increase to 2-2.25%. The Bank of Japan left its monetary policy unchanged following its meeting on September 22, but worsened its assessment of exports and industrial production. The Japanese central bank kept the short-term interest rate at minus 0.1%, and the benchmark for the yield of 10-year government bonds - at about 0%. With this, the regulator has strengthened expectations that large-scale incentives will not go anywhere in the foreseeable future, although many large economies have already begun to think about curtailing emergency measures to support the economy. The regulator retained the overall assessment of the Japanese economy, noting that it is in a growing trend, but remains in dire straits due to the effects of the pandemic. The Bank of England at the meeting ended September 22, kept the base interest rate at 0.1% per annum. The committee also advocated maintaining the volume of asset purchases financed by the Central Bank issue at £20 billion and continuing the UK government bond purchase program in the amount of £875 billion. This brings the overall target for asset purchases to £895bn. The regulator added that at its previous meeting, the committee indicated the possible need for some tightening of monetary policy if the economy develops in accordance with baseline forecasts. However, despite the supporting factors, significant doubts remain. Economic data Eurozone. According to the preliminary assessment of the PMI business activity index in September, the indicator decreased by 2.9 points compared to the previous month and amounted to 56.1 points. Of the indicators that make up the index, business activity in the service sector was 2.7 points lower, and the state of the manufacturing sector also fell 2.7 points. US. According to the preliminary assessment of the PMI business activity index in September, the indicator decreased by 0.9 points compared to the previous month and amounted to 54.5 points. Of the indicators that make up the index, business activity in the service sector was 0.7 points lower, and the state of the manufacturing sector also decreased by 0.6 points. The number of initial jobless claims for the week was registered in the amount of 351 thousand, which is 16 thousand more than the previous week and 31 thousand more than predicted by analysts. Key events this week On Monday, data on sales of durable goods in the US for August will become available. On Thursday, China will know the level of business activity in the industrial sector in September, and the US will publish the number of initial claims for the week, and will also publish the latest estimate of GDP growth for the second quarter. On Friday, the Eurozone will report on the rise in prices for September, and the US will publish data on personal income and personal spending of Americans.     The information provided herewith has an informative nature. This information cannot be regarded as an offer or recommendation for purchase, storage or sale of securities, or as an investment recommendation, an investment survey or a consultation on investments, or a recommendation to entrust management of your assets to the specific investment manager. The Client is fully aware and undertakes all risks involved in the investment. This information is prepared by AS Baltic International Bank.

Weekly financial market overview 13.09.-19.09.

  Konstantins Goluzins, CFA Head of Asset Management Phone.: (+371) 6700 0456 E-mail: trust@bib.eu LINKEDIN PROFILE   Main events of the previous week Rating agencies Fitch, as well as S&P have increased investor fears that the default of one of the largest Chinese developers in China - Evergrande, carries huge risks to both the financial stability of China and the global economy. Against the backdrop of a wave of defaults by Chinese companies on debt obligations that swept the market in the first half of 2021, the current state of Evergrande, whose liabilities are approximately equal to 2% of Chinese GDP, are already being compared with the bankruptcy of the American investment bank Lehman Brothers. It was this that became the starting point of the "Great Recession" of 2008. In August, news emerged of a possible default by the second largest development group in China, the Evergrande Group. The company itself denied them, but after a few days it published a rather poor report on financial condition, which in particular highlighted the problem with liquidity. Market concerns were also confirmed by Fitch, which warned of the "systemic risk" of the company's default. Fitch also emphasizes that the Chinese government will not allow a situation of a sharp increase in prices for housing, credit and mortgage products, but the threshold at which it fully intervenes in the situation is very high. A scenario in which a developer's default will affect the entire real estate market in China and will have wider macroeconomic consequences, Fitch called it unlikely. But it is worth noting that if this "unlikely" scenario were to happen, more than 250 banks and non-bank companies, to which Evergreen owes more than $300 billion (even the Chinese government cannot provide an accurate estimate of the debt), as well as more than 200 thousand full-time employees and almost 4 million people that Evergrande employs for project work will suffer. Moreover, the subsidiaries of Evergrande Group have already defaulted in amount of $145 million. Much more pessimistic estimates are given by the international agency S&P, which downgraded the rating of the developer and its subsidiaries from CCC to CC, calling it a default “inevitable”. S&P said in a press release that S&P downgraded Evergrande because the company's liquidity appears to be depleted, the risk of non-payment is extremely high and could eventually lead to debt restructuring, which means that a default scenario is almost inevitable. Recall that in the first half of 2021, the volume of defaults by Chinese companies on debt obligations amounted to almost $10 billion - the largest figure in history. Perhaps this is why the likely default of Evergrande has been compared to Lehman Brothers. After all, the global financial crisis began with the US mortgage crisis in 2007, after which the fall of one of the country's largest banks started the Great Recession. Economic data Eurozone. The consumer price index in August rose by 0.4% versus July, while the annual inflation rate was 3%. The growth of the core inflation rate excluding food and energy in August amounted to 1.6% yoy. Industrial production in July increased by 7.7% compared to July 2020, which exceeded expectations by 1.5%. US. Retail sales rose 0.7% in August, while retail sales were expected to decline 0.8%. In turn, excluding data on gasoline and car sales from the indicator, retail sales in August rose by 1.8%. The consumer price index in August rose by 0.3% against July, while the annual inflation rate was 5.3%. The growth of the core inflation rate, excluding food and energy resources, in August amounted to 4% yoy. The number of initial jobless claims for the week was registered in the amount of 332 thousand, which is 20 thousand more than the week before and 2 thousand more than predicted by analysts. China. Industrial production in August increased by 5.3% compared to August 2020, which was a slowdown in industrial growth, as an increase of 5.8% was expected. Retail sales rose 2% in August, while retail sales were expected to grow by 7%. The unemployment rate in August remained at the July level and amounted to 5.1%. Key events this week On Wednesday, the US will publish data on home sales in the secondary market for August, as well as changes in oil reserves for the week, in turn, the Fed will publish its decision on the interest rate and will give its assessment of the US economy. On Thursday, the level of business activity in September will become known in the Eurozone and the US, as well as the number of initial jobless claims for the week that will be published in the US. On Friday, the US will publish data on new home sales for August.     The information provided herewith has an informative nature. This information cannot be regarded as an offer or recommendation for purchase, storage or sale of securities, or as an investment recommendation, an investment survey or a consultation on investments, or a recommendation to entrust management of your assets to the specific investment manager. The Client is fully aware and undertakes all risks involved in the investment. This information is prepared by AS Baltic International Bank.

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