Weekly financial market overview 12.10.-18.10.

  Konstantins Goluzins, CFA Head of Asset Management Phone.: (+371) 6700 0456 E-mail: LINKEDIN PROFILE   Main events of the previous week Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), has called for significant steps to address the increasingly unsustainable debt burdens of developing countries amid the coronavirus pandemic. “We are buying some time, but we have to face reality that there are much more decisive actions ahead of us,” said Kristalina Georgieva. According to her, it is necessary to immediately begin negotiations on restructuring the debts of countries in need. She warned that in 2021 the level of global debt will reach 100% of GDP and the negative impact of sovereign defaults could quickly spread. In April, the G20 granted the world's poorest countries the right to suspend payments on external sovereign debt, including servicing it, until the end of this year. The more than $20 billion thus freed should go to fight the coronavirus pandemic. On October 14, the G20 countries agreed to extend this moratorium for another six months. According to the latest forecast of the IMF, this year the world economy will record a significant decline of almost 4.4%, but it will recover and grow by 5.2% next year. Economic data USA. Consumer price index in September rose by 0.2% versus August, while the annual inflation was 1.4%. The growth of the core inflation rate excluding food and energy in September amounted to 1.7% y/y. The number of initial jobless claims for the week was registered in the amount of 898 thousand, which is 43 thousand more than the week before and 63 thousand more than predicted by analysts. Retail sales rose 1.9% in September versus August, while retail sales were expected to grow 0.7%. In turn, excluding data on gasoline and car sales from the indicator, retail sales in September grew by only 1.5% over the same period. Eurozone. The consumer price index in September rose by 0.1% versus August, while the annual inflation was negative and amounted to -0.3%. The growth of the core inflation rate, excluding food and energy in September amounted to 0.2% y/y. Industrial production in August increased by 0.7% versus July. In turn, the drop in industrial volumes in annual terms was 7.2%. China. The consumer price index in September rose by 0.2% versus August, while the annual inflation rate was 1.7%. The trade surplus in September was $37 billion. Export growth in September amounted to 9.9%, while imports in September increased by 13.2%. Key events this week On Monday, China will report a lot of economic data that will include third-quarter GDP growth, industrial production, retail trade and unemployment for September. On Wednesday, the US will report on changes in oil reserves for the week. On Thursday, the US will reveal the number of initial jobless claims for the week and we will be able to see the last official debate between Trump and Biden ahead of the November 3 elections. On Friday, the primary assessment of the state of the business sector in October will be published in the Eurozone and the United States. 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.

Information for clients

Dear customers! Due to the growing incidence of Covid-19, the Bank, taking care of your safety and the health of its employees, hereby informs that starting from Monday, October 12, customers will be served at the Bank's premises at Grēcinieku street 6 by prior appointment. Kindly asking please be understanding and please apply for a visit to the Bank in a timely manner! We also invite you to use the Bank's services remotely if possible! If you have any questions, please call +371 67000444 or contact your private banker!

Baltic International Bank joins the Latvian Startup Association Startin.LV

Having regard to the role of startups in the overall development of the national economy, the importance of providing support to this sector and the prospects offered by joint work in the development of the startup culture, Baltic International Bank has become a member of the Association. “As a partner and mentor, the Bank is interested in the development of startups, and this also fits within the priorities of the Bank’s strategy: to be a financial partner for small and medium-sized Latvian companies, to use and support innovative financial solutions and to promote capital market development,” says Dace Dūklava – Kokina, Head of Strategic and Business Development. Commenting on the accession of Baltic International Bank to the Association, Jānis Rozenblats, Chairman of the Board of the Association, points out: “The Latvian Startup Association represents over 70 startups, investors and other industry players. Our goal is to strengthen the local ecosystem, help existing companies and promote the formation of new startups in Latvia. We have already established successful cooperation with banks in Latvia and we are glad that Baltic International Bank has joined the list!” The Latvian Startup Association brings together startups and their associations based on common values, with the aim of representing joint interests, speaking with one voice and educating the public about startups in Latvia.

Baltic International Bank closes the first half of the year with a profit of 274 thousand euro

Baltic International Bank has closed the first half of this year with a profit of 274 thousand euro. In Q2 2020, the Bank continued to be active, strengthening its position as a local capital bank, improving its operational performance and resuming lending. Viktors Bolbats, Chairman of the Management Board of the Bank, points out: “I am pleased that, despite the time full of challenges in the global economy, Baltic International Bank has closed the first half of the year with a profit. It is important that in Q2 we achieved the goal set for the Bank at the beginning of the year, and that is to resume lending. In the first half of the year, we approved loans totalling 5 million euro, and we see that lending to small and medium-sized enterprises, which is in the focus of Baltic International Bank, is significant for stabilising the national economy as a whole. The capacity of local capital banks allows them to understand the needs of domestic entrepreneurs and respond quickly, providing the necessary business support mechanisms for domestic entrepreneurs.” In the reporting period, the Bank strengthened its capital adequacy ratio, which reached 17.37%, and also maintained a high liquidity coverage ratio at 145%. The Bank closed the first half of 2020 with the following financial results (data on the Group is given in brackets): Profit: EUR 274 thousand (EUR 217 thousand); Total capital ratio (TCR): 17.37% (17.09%); Liquidity coverage ratio (LCR): 145%; Assets: EUR 201.05 million (EUR 200.72 million). As of 30 June 2020, the total customer funds in the Bank amounted to EUR 367 million (Annex 1) and assets under management reached EUR 70 million (EUR 70 million). The value of financial instruments in brokerage service was EUR 132 million (EUR 132 million). In Q2 2020, the net fee and commission income grew by 0.6% (0.6%) on a year-on-year basis and totalled EUR 4.22 million (EUR 4.22 million). In percentage terms, the increase was up to 64.6% (64.7%). The Bank’s high-quality liquid assets (assets carrying investment-grade credit rating and claims on the Bank of Latvia) totalled EUR 108 million (EUR 108 million) or 54% (54%) of the total assets. Investments in government bonds amounted to EUR 15.26 million (EUR 15.26 million) or 8% (8%) of the total assets. The Bank maintains a well-diversified structure of liquid assets represented by bonds (14%), claims on credit institutions (6%), claims on the Bank of Latvia (77%) and cash (3%). The liquidity coverage ratio (LCR) was 145%. The net stable funding ratio (NSFR), characterising the availability of a stable funding profile in relation to the composition of assets and off-balance sheet activities, reached 160%. As the Bank continued to implement its asset quality improvement and capital strengthening programme, as of 30 June 2020, the Bank’s Tier 1 capital ratio reached 14.66% (14.33%), while the total capital ratio (TCR) was 17.37% (17.09%), which substantially exceeds the overall capital requirement ratio of 13.50%. As of 30 June 2020, the Bank’s own funds totalled EUR 21.33 million (EUR 20.68 million). In the reporting period, for the second consecutive year, the Bank was awarded the highest scoring category – Platinum Category – on the annual Sustainability Index, confirming the compliance of the company’s activities with the principles of sustainability. The Platinum Category is awarded to companies that have fully integrated corporate governance into their operations and in which responsible persons have been appointed at both the managerial and executive levels. “It is an honour to become a winner in the Platinum Category for the second time, and simultaneously it is a confirmation that the concept of sustainability in the Bank’s operations is not merely a short-term phenomenon, but also a carefully thought-out and implemented strategy in accordance with the principles of ESG. Environmental sustainability, good governance and social issues are the issues that we have worked on persistently for a long time, transforming Baltic International Bank into a modern investment bank and introducing ESG principles at all levels of activity,” says Viktors Bolbats, Chairman of the Management Board the Bank. This year again, the Bank traditionally supported the ceremony of presenting the Annual Latvian Literary Award (LALIGABA) in the first half of the year and also continued work within the project Bibliotēka (Library) aimed at promoting reading. In the first half of the year, the Bank also carried on with the reconstruction of the Kalēju Quarter, renovating the complex of buildings between Kalēju and Vecpilsētas Streets. The financial report of Baltic International Bank for the 1st half-year is available here.

Baltic International Bank becomes a partner in a real estate development project in Old Riga

Baltic International Bank has become a partner and investor in an ambitious real estate project at 16 Smilšu Street, Old Riga. The project will be implemented in cooperation with partners, the brand A&B Apartment Inn Balticum of the company A Consulting SIA. Both small and larger apartments will be available for rent and purchase, depending on the interests and needs of the clients, after the renovation in the complex of three buildings, located on one of the main streets of the Old Town. In the words of Viktors Bolbats, Chairman of the Management Board of Baltic International Bank: “The real estate segment, especially the development of Old Riga, is a close concern of the Bank, since our office buildings are located here, and we are also working on the reconstruction of Kalēju Quarter. At the same time, the project at 16 Smilšu Street will become another step in the Bank’s operations aimed at developing this part of the Old Town and real estate together with partners, while providing construction specialists with new jobs, as well as expanding and supplementing the real estate market with a quality offer. This is a very beautiful complex of buildings, and after the completion of construction work, we will be able to offer a renovated, tasteful residence near a park, with all necessary urban infrastructure to anyone interested”. During the implementation of the project, Baltic International Bank will work in partnership with the entrepreneur Aleksandrs Zindmans, owner of the A&B Apartment Inn Balticum brand: “Riga and Old Riga play a special role in my life, and I am glad that Baltic International Bank has become a partner with which we will be able to carry out work on the renovation and reconstruction of this property. We estimate that after the completion of the work, the market will be supplemented with apartments ranging from ​​27 square metres, which are more suitable for young and ambitious people, for whom this is likely to be their first home, to spacious apartments of up to 100 square metres.” After reconstruction, the building will be available to those interested at the end of 2021. Baltic International Bank is currently actively implementing renovation works in Old Riga between Kalēju Street and Vecpilsētas Square – in Kalēju Quarter, where it is planned to invest EUR 12 million over five years. [gallery columns="8" link="file" size="large" ids="36871,36880,36868,36874,36865,36862"]

Global Finance names Baltic International Bank as the Best Digital Bank in Latvia

Baltic International Bank has been announced a winner of World’s Best Digital Bank Awards 2020 by Global Finance and recognised as the Best Digital Bank in Latvia. “We are pleased and honoured that our work has been appreciated at the international level! This victory is yet another indication that the development strategy chosen by the Bank was correct and that we have created the product our clients need. The title of the Best Digital Bank in Latvia is additional encouragement to continue along the path of active work on improving digital services, thinking about the interests and needs of our customers,” says Jānis Osis, Head of Digital Channel Development of Baltic International Bank. Winning Round One of World’s Best Digital Bank Awards 2020 and receiving recognition as the Best Digital Bank in the country makes it possible to continue participating in Round Two of the competition in which Baltic International Bank aims for the title of the Best Digital Bank in Central and Eastern Europe. In April this year, Baltic International Bank introduced the new Internet Banking, offering improved functionality, increased user friendliness as well as updated security solutions. The Internet Banking of Baltic International Bank provides for multilevel signing of payments and multilevel approval of applications as well as for using the function of instant payments, which can be selected from the list of beneficiaries. A smart payment form that adapts itself depending on the information entered by the customer has also been introduced. To process several payments in a quick and easy manner, the Bank has implemented payment import and payment summaries export, a search function and simultaneous approval of several payments.  Over the twenty-one years of its existence, World’s Best Digital Bank Awards has become one of the most prestigious competitions, and receiving an award in any segment of the competition is considered one of the highest recognitions in the industry, demonstrating excellence in digital financial services.

Doctor of Economics Edgars Voļskis takes office on the Management Board of Baltic International Bank

Doctor of Economics Edgars Voļskis took office on the Management Board of Baltic International Bank as of 1 August this year. As a Member of the Management Board, Dr. E. Voļskis will be in charge of the Bank’s financial activities and related matters as well as the development of business and information technologies. Commenting on the confirmation of Edgars Voļskis in office, Viktors Bolbats, Chairman of the Management Board of Baltic International Bank, points out: “I am pleased that Mr. Voļskis has joined the Bank’s management team!" The professional experience and knowledge of E. Voļskis will make a significant contribution to the further strategic development of the Bank, and I am convinced that his expert point of view will allow the Bank to more decisively and more effectively implement the strategy for the development of its activities, which we have already begun to introduce. The year 2020 is significant for the Bank – we have successfully resumed lending, closing the first half of this year with a profit. Strengthening of the management team and welcoming of new strong professionals is a logical step towards further success!Viktors Bolbats   Edgars Voļskis holds a PhD in Economics from the University of Latvia and is one of the most recognised experts in the field of the pension system in the country. He is the author of the book Guidelines of the Pension System, a board member of the Latvian Association of Economists and the author of a number of scientific publications. Edgars Voļskis worked for the auditing company KPMG for 13 years, of which the last two years he was involved in the establishment and management of the KPMG office in Minsk (Belarus), where he also worked before joining the management team of Baltic International Bank. In the period from 2009 to 2011, he was an advisor to the Minister of Welfare, while being employed in audit companies. His 14 years of professional experience is also associated with work in Croatia, Slovenia, Belarus, and Bosnia and Herzegovina as an expert on project assignments for the World Bank, UN, EBRD and other international organisations. He supplemented his education by studying at Harvard University (USA) and also completed the combined online program of Oxford and Princeton Universities. In addition to his professional knowledge and extensive work experience, Edgars Voļskis has a command of eight languages, including not only Latvian, Russian, English and German, but also Spanish, Slovenian, Bosnian and Serbo-Croatian.

Baltic International Bank issued a loan of EUR 1.2 million for a real estate renovation project

Continuing the development of the lending segment, Baltic International Bank issued a loan in the amount of EUR 1.2 million for a real estate development project at 63 Dzirnavu Street, Riga. The project provides for the renovation of residential buildings and further income-generating activities through the sales and rental of modern apartments. The Bank’s funding will be used to renovate the building’s façade and interior decoration, resulting in the development of 59 apartments. This project involves the shaping of apartments for which the developer and the Bank see potential in terms of sales or rental under the current real estate market conditions. “The financing provided will not only enable the creation of jobs for the employees involved in the development of the project and the reconstruction of the building, but also contribute to the improvement of the urban environment as well as increase the supply of the rental market in the capital. Crediting support for the segment of small and medium-sized enterprises is one of the priorities of Baltic International Bank’s operating strategy, and 5 million euro was approved for the issuing of loans in the first half of the year,” Viktors Bolbats, Chairman of the Management Board of Baltic International Bank, points out. Commenting on the transaction, Mārcis Dobrājs, real estate developer and representative of D63 SIA, emphasises: “It is gratifying that even under the current market conditions there are banks that see the opportunity of implementing promising projects and are ready for strategic cooperation with entrepreneurs”. As previously reported, Baltic International Bank closed the first half of this year with a profit of 273 thousand euro.

Baltic International Bank insures employees against contracting Covid-19

Baltic International Bank has taken out insurance for all employees of the Bank, insuring them against the need for inpatient treatment of Covid-19 as a result of contracting Covid-19. This is financial insurance, which provides for financial support in this situation. Inga Auziņa, Head of Human Resources Management at Baltic International Bank, points out: “Undoubtedly, one of the biggest recent challenges and, at the same time, priorities for us, as well as for many other enterprises in Latvia, has been taking care of our employees during the COVID-19 outbreak. Along with the distancing standards, disinfection, remote work, technological capabilities and other factors that we provided to Baltic International Bank employees, we have learnt a way of coexisting with this “unknown” factor. Covid-19 insurance is nothing short of an essential opportunity to take care of employees and provide the necessary support if necessary, and as an employer we consider this opportunity to be highly important. This insurance is an additional guarantee in the new circumstances in which we will have to live for some time more and which we need to adapt to.” Covid-19 insurance is an accident insurance service of IJSC BALTA. “In a short time, the Covid-19 viral infection has completely changed our lives, creating a number of challenges for everyone, while making safety and stability the main public priority. Businesses also face serious challenges, both economic and human. As the state-level restrictions are gradually lifted, more responsibility for the epidemiological and social safety of the work environment will be put on the shoulders of employers. Employee support has never been more important than today, and we are pleased that companies are aware of this and are actively using the opportunity to support their employees, taking care and providing additional protection in these difficult times for everyone,” says Ludmila Ščegoļeva, Personal Insurance Product Manager and Risk Underwriter at BALTA. Baltic International Bank employs 215 people.

Bank resumes in person service to clients

Dear Clients! Please be informed that as of May 13, 2020 Baltic International Bank resumes in person service to clients. From May 13 to May 15 we will provide in person service to clients from 11.00 am to 3.00 pm, but starting from May 18 – according to the usual working hours of the Bank. To provide as safe services to our clients as possible and not put the health of Bank’s clients and employees at risk, please take into consideration that you can visit the Bank only by prior appointment. To book your appointment please contact the Bank by phone: (+371) 6700 0444 or via email: You can also book your appointment by contacting your private banker. We will be happy to see you in person! However please thoroughly evaluate the necessity of your visit and if possible use Bank’s services remotely!

Small and medium-sized enterprises can receive support to access capital markets

Baltic International Bank invites small and medium-sized enterprises (SMEs) to apply for the attraction of financing via stock exchange as part of the European Union funds support program “Support for attraction of financing for small and medium-sized enterprises (SMEs) in capital markets”. Aim of the program is to help SMEs in Latvia to attract financing for their development via capital markets, allowing the enterprises to boost their international competitiveness and promote capital markets development of Latvia. This is the first program of this type in Baltic region. Bank offers to provide emission organizer services – develop debt securities provisions, prepare emission prospectus – documents required for the registry of emission in the authorised institutions, organize cooperation of the issuer with the stock exchange, as well as secure technical base for the performance of debt securities transactions. We are offering analytical and informative materials for the attraction of financing as well as maintaining of relations with investors both during the emission preparation period and also after the issuance of bonds in the secondary market. Baltic International Bank, Head of Corporate Finance Oto Davidovs explains: “Capital market development and bond issue of the enterprise is one of the sources of receiving external financing and for many years already it is used all around the world as an efficient and beneficial alternative to attract financing. It is very good solution for the companies with the growth ambitions exceeding the financing attraction possibilities banks can offer.” In comparison to Western Europe capital market of the Baltic countries is in its early development stage, although I have to emphasize that lately market can be characterized with rapid growth and bond issue as a tool for the receiving of the development financing for the company is growing in popularity.Oto Davidovs   In the frame of the European Union funds development period support program will be implemented as the pilot project and the total initially available financing is planned in the amount of EUR 1’ 000’ 000, meaning, EUR 800’ 000 EUR for the support of issuing of shares and EUR 200’ 000 EUR for the support of debt securities (bond issue). It is planned that open tender for the attraction of financing will be organized quarterly. Administrator of the program is Central Finance and Contracting Agency (CFLA). Support will be provided for the covering of the following preparation costs: Service costs of the organizer of emission (investment bank); Costs of preparing the emission prospectus or the securities registration documents; Costs of Due Diligence; Consulting costs of legal, financial, taxes, auditors, certified consultants. Support of SMEs is issued as a form of grants covering 50% from the eligible costs but not more than EUR 100’ 000 EUR for one applicant in the event of issuing of shares and not more than EUR 20’ 000 in the event of issuing the debt securities (bonds).

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.

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 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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