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Highlights

Baltic International Bank’s Opening Hours on 9 December 2019

Please note that the Bank’s working hours on 09 December 2019 (Monday) have been changed and will be as follows: the Bank will be open for customers till 16:00; Bank will process all payments and deals as usual. Please schedule your financial transactions and make all arrangements in a timely manner.

Baltic International Bank closed Q3 2019 with profit with an increase in deposits and assets

In Q3 2019, Baltic International Bank continued to show positive operating results closing this quarter with a profit of EUR 184 thousand. The work of the Bank’s Management Board and team helped achieve a 30% increase in assets and a 31.4% increase in net fee and commission income. Likewise, the Bank continued to work efficiently on optimising all of its business processes since in the first nine months of this year (compared to the same period last year) operating income increased by half a million euro, while expenses were reduced by 3.5 million. Ensuring compliance with the requirements of the Financial and Capital Market Commission, the Bank's capital adequacy ratio reached 13.35% and liquidity coverage ratio remained high at 166%. ‘In third quarter, Baltic International Bank was focused on promoting sustainable development and the local market by prioritising local customer service in line with its privately-owned bank strategy, with a particular focus on lending to small and medium-sized Latvian businesses, investment services and asset management services as well as the development of new services and products with high added value. Since the Bank operates in accordance with the ESG (Environmental. Social. Governance) approach, which focuses on sustainable development at all levels of the Bank's operations, a lot has been done in the field of sustainable development which any interested person can see for him/herself as the Bank also published its first Corporate Responsibility and Sustainability Report and set its Sustainable Development Goals under the United Nations (UN) Environment Programme Financial Initiative,’ says Viktors Bolbats, Chairman of the Board of Baltic International Bank. As a local capital bank, Baltic International Bank wants to contribute to the development of the local region, so it has launched a dialogue with governmental authorities and industry representatives to improve the current situation to further enhance the contribution of local capital banks to the Latvian economy. The importance of attracting foreign investment, which is one of the pillars of economic growth, must be borne in mind here making Baltic International Bank a responsible partner in serving not only domestic but also international clients.Viktors Bolbats   As of 30 September 2019, the Bank’s total customer assets amounted to EUR 498 million (data on the Group is given in brackets), assets under management reached EUR 101 million (EUR 101 million) which is 36% more than at the end of 2018. The value of financial instruments in brokerage service was EUR 149 million (EUR 149 million). In Q3 2019, net commission income increased by 31.4% (31.4%) year-on-year to EUR 6.46 million (EUR 6.46 million). The share of net commission income increased to 65.7% (64.6%). The share of net interest income was 15.6% (15.3%). Administrative expenses amounted to EUR 8.49 million (EUR 8.62 million) which is a decrease of 23.4% (22.4%) over the previous year. As of 30 September 2019, the Bank's own funds totalled EUR 24.04 million (EUR 24.11 million). The Bank’s Tier I capital ratio (CET1) was 9.62% (9.68%). The Total Capital Ratio reached 13.35% (13.43%). The Bank continues to work on new digital tools and channels – the open cooperation platform Open Banking which allows the Bank to fully comply with the requirements of the EU Payment Services Directive 2 (PSD2) is available from 14 September. The Bank is also working on a new Internet banking platform. Baltic International Bank has set its Sustainable Development Goals under the United Nations (UN) Environment Programme Financial Initiative; the Bank will focus its activities on seven of the 17 United Nations Sustainable Development Goals: ‘Good Health and Wellbeing’, ‘No Poverty’, ‘Affordable and Clean Energy’, ‘Decent Work and Economic Growth’, ‘Industry, innovation and Infrastructure’, ‘Responsible Consumption and Production’, and ‘Climate Action’. The Bank continues to engage in active dialogue with governmental authorities and other organisations on the place and role of private banks in the Latvian economy. Within this effort, at the media breakfast held in October, the local capital banks working group of the Finance Latvia Association (Association), represented by Viktors Bolbats, Co-Chairman of the Association's Strategic Development Committee, Chairman of the Board of Baltic International Bank, raised issues about the transformation of business models of the local capital banks as well as their place in the financial market and contribution to the Latvian economy. In the 3rd quarter of this year, the Bank rendered support to a number of publicly and socially significant projects demonstrating its care of different social groups. With the Bank’s support, the TERESA HOUSE day care centre was opened. Promoting the development of Latvian literature, a collection of memoirs ‘My 20th Century’ by Marina Kosteņecka was published. The author calls it the work of her whole life and, in the books, shares her life story, memories of crucial events in the recent history of Latvia and unique evidence of the era, i.e. letters received from readers and supporters during Atmoda. Also, in the 3rd quarter, within the framework of the reading and literature promotion project ‘Library’, residents of Latvia were given the opportunity to apply for participation in the creation of a unique exhibition of family and genealogy books. Key financial indicators:   The Q3 2019 financial report of Baltic International Bank is available here.

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).

A collection of memoirs “My 20th Century” by Marina Kosteņecka has been published

This week, the Support Foundation of the National Library of Latvia (NLL) published a collection of memoirs of a columnist, writer and journalist Marina Kosteņecka which can be purchased in the Friends Room of the NLL. The books were published with the support of Baltic International Bank. Marina Kosteņecka tells about her collection of memoirs: "These books are a portrait of Latvia reflecting the bright soul of people and their ability to unite regardless of nationality. This is a confirmation of my love for Latvia and gratitude to people. I give back to my community..." Valeri Belokon, the main shareholder of Baltic International Bank, patron of Latvian literature: "These books are a fantastically valuable story about the latest history of Latvia based on personal experience, and their publication is an event in the Latvian book publishing industry. Four books in two languages will go to public libraries and be available to everyone." I am thankful to Marina Kosteņecka for her great contribution into the building and uniting of the Latvian society Valeri Belokon   In her speech at the event in honour of the publication of the books, the Head of Strategic Planning Department of Baltic International Bank Jekaterina Kuzņecova said: "Madam Kosteņecka, Latvia needs you. Your public standing, your ability to understand the mentality of people speaking different languages, diverse experience, your ability to speak the same language with both Latvians and Latvian Russians – all this is important for the unity of society, for creating common values, a sense of belonging to society. People want to see and hear you. You have things to tell them. They need you. Thank you so much and may you have the strength to keep going!" Jekaterina Kuzņecova, head of Strategic Planning Department, Baltic International Bank Minister of Culture of the Republic of Latvia Nauris Puntulis Having published the extensive collection of memoirs, the Director of the Support Foundation of the NLL Karina Petersone emphasises: "We are very glad to have been the publishers of Marina Kosteņecka's books in Latvian and Russian. In our opinion, something very valuable and beautiful has been created. These books not only play a role in Marina’s own work, they add colour and taste to an era that many generations call their own. We are pleased to see Marina return to the public space because her presence and opinion are very important for society." The collection consists of two books – "My 20th Century" and "Letters from the 20th Century" – in Latvian and Russian. The author calls it the work of her whole life, and in the books she shares her life story, memories of the most important events in the modern history of Latvia and unique evidence of the era – letters received from readers and supporters during the National Awakening (Atmoda). The co-author of the book "My 20th Century" is Georgs Stražnovs; the foreword to the book was written by Dainis Īvāns and Knuts Skujenieks.  Photo gallery of the event held in honour of the publication of the collection of memoirs "My 20th Century" by Marina Kosteņecka.

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.

Baltic International Bank sets the Sustainable Development Goals in line with the United Nations Environment Programme Finance Initiative

Developing the Bank's strategy and moving towards the overall goal of becoming a strong and sustainable investment Bank based on the internationally acclaimed ESG (Environmental. Social. Governance) approach, Baltic International Bank has set the Sustainable Development Goals under the United Nations Environment Programme Finance Initiative (UNEP FI) and is committed to achieving these goals in the Bank's operations and processes. By 2030, the United Nations (UN) has approved a total of 17 Sustainable Development Goals. In its activity, the Bank will focus on seven of them. Responsible banking principles of the UNEP Financial Initiative The UNEP FI sets out six principles for responsible banking. The first is alignment which requires the Bank to align its business strategy to be consistent with and contribute to individuals’ needs and society’s goals in accordance with the Sustainable Development Goals (SDGs), the Paris Climate Agreement, and relevant national and regional frameworks. The second principle of responsible banking is about impact constantly increasing the positive impact and reducing the negative impact on society and the environment. The third principle of responsible banking is our customers as the Bank commits itself to working responsibly with its customers and counterparties to encourage them to adopt sustainable practices and enable economic activities that create shared prosperity for current and future generations. The other three goals are related to stakeholders and define responsible cooperation with stakeholders and their involvement in the achievement of society’s goals; governance and goal setting through a responsible culture and efficient management of the Bank; and finally, the sixth goal is about transparency and accountability with the Bank committing itself to being transparent about and accountable for its influence and contribution to all processes and achievement of society’s goals. “The banking sector has an important role to play in promoting sustainable development. It can set an example for others directing society towards a sustainable economy, for instance, by encouraging investment in environmentally friendly and sustainable projects. Baltic International Bank bases its day-to-day processes and activities on the ESG (Environmental. Social. Governance) approach which encompasses all areas of the Bank's activity allowing it to succeed in a sustainable and socially responsible manner; so, our desire to set and implement the Sustainable Development Goals under the UNEP FI which is a comprehensive initiative that operates at both micro and macro level, covering a wide range of areas from employee concerns to responsible consumption, climate protection, poverty and inequality at all levels, is only natural”, emphasized Viktors Bolbats, chairperson of the Management Board of Baltic International Bank. The UN Sustainable Development Goals, which Baltic International Bank will implement in its activity, are organically embedded in sustainability activities excellently complementing and enriching them as we are proud to be the first local equity bank in Latvia to receive the highest Platinum Award of the Sustainability Index in our country this year.Viktors Bolbats    “Each of the Sustainable Development Goals is also relevant for Latvia, and our country is committed to promoting them through prosperity, inclusive society and sustainability. It is clear that this can only be done jointly, and business involvement plays a crucial role. Baltic International Bank is one of the first domestic companies to choose, from a wide range of Sustainable Development Goals, the goals that are most relevant to it and commit itself to meeting them by tailoring them to its own interests, needs and possibilities. We expect the interest of local businesses to grow significantly in the near future, and, as new companies become aware of their wider economic, social and environmental impact, they will align their sustainability plans with global goals,” said Dace Helmane, director of the Institute for Corporate Sustainability and Responsibility.   Bank's 7 Sustainable Development Goals Since its foundation, it has been important for the Bank to maintain a healthy lifestyle and promote well-being at all ages which is why “Good Health and Well-Being” is the first Sustainable Development Goal that the Bank focuses on in its activity. The Bank cares for its employees by creating a supportive culture for children and families in the work environment, and, as a responsible employer, ensures motivating working conditions, balancing work and leisure time, and organising special events for the families and children of its employees. Caring for society, the Bank organises the Blood Donor Day and provides diverse support to cultural and literary projects, for instance, by sponsoring the publication of the unique book "Family Coats of Arms in Contemporary Latvia”. In line with the Sustainable Development Goal providing for "Poverty Eradication" in all its forms and at all levels, the Bank engages in a variety of community activities – renders annual support to the boarding schools where, within the framework of charities, the Bank’s employees jointly provide footwear, clothing, games and sports equipment and other things useful for children, donate computer equipment to Latvian schools, participate in various donation collection initiatives to support children and families in need. Baltic International Bank renders socially significant support to the Holy Family House, a multifunctional family support centre that enables families with children, adults, seniors, and people with disabilities to receive spiritual, social, psychological and educational support, and integrates Christian values into society, as well as to the day childcare centre “Teresa's Home” which provides social services for disabled children living in Riga. The Bank is committed to providing affordable, reliable, sustainable and modern energy to all in line with the Sustainable Development Goal "Affordable and Clean Energy" whereby the Bank offers and supports alternative investment ESG projects, such as the current wind energy investment project. In line with the Sustainable Development Goal "Decent Work and Economic Growth", the Bank promotes stable and sustainable economic growth, full employment and good work for all by caring for its employees and paying its taxes and salaries responsibly. This is also evidenced by the "Family Friendly" award given to the Bank for the third year in a row by the Ministry of Welfare of the Republic of Latvia, one of the criteria of which is taking care of the needs and comfort of the employees. Innovations, which also lie at the heart of the Sustainable Development Objective "Industry, Innovation and Infrastructure", run throughout all of the Baltic International Bank’s operational processes. In addition to supporting start-ups, especially in financial technology, and implementing innovative solutions such as Open Banking or open banking platform for cooperation Sandbox, the Bank is also working on improving its infrastructure through an ambitious, large-scale project in the Kalēju Quarter where the Bank performs renovation of the oldest building in Riga with a total investment of approximately EUR 12 million. In line with the Sustainable Development Goal "Responsible Consumption and Production", the Bank promotes sustainable consumption and resource use. For instance, in 2018 the Bank reduced its water consumption by 9.9% compared to 2017; the Bank also sorts waste of which almost half (42%) is recycled. Since 2016, the Bank has started monitoring electricity consumption, and set itself the target of reducing it by 5% in 2017. Lighting has been optimised, and some of the bulbs were replaced by LED bulbs. The Bank also purchases electricity from renewable sources. Heat consumption is also reduced because of the careful adjustment of the equipment to the needs of the employees, as well as eliminating unnecessary consumption. There is also regular environmental education for employees. Energy consumption has a major impact on CO2 emissions and their impact on the climate. The Bank reduced its CO2 emissions by 5% (in 2018 compared to 2017) in line with the UN Sustainable Development Goal "Caring for the Climate" under which the Bank also supports sustainable projects with a lasting public contribution.   About the United Nations Environmental Programme Financial Initiative (UNEP FI) The United Nations Environment Program is a leading international environmental body that sets the agenda for environmental issues worldwide, promotes the implementation of coherent environmental and sustainability processes within the United Nations system, and acts as an authoritative advocate for environmental issues at the international level. The UNEP FI is an international partnership between the UNEP and the financial sector. More than 200 institutions, including banks, insurers and investors, are working with UNEP FI to bring about systemic financial change in support of a sustainable world. UNEP FI brings together leading international banks, regional leaders, development banks and specialised environmental banks. 

Baltic International Bank Supports the Opening of Day Childcare Centre St. Theresa’s Home

On 23 August 2019, a service of consecration was held to sanctify St. Theresa’s Home, the day childcare centre in Riga. A charitable foundation Caritas Latvija implemented the project by channelling ESF money into the project and with support from Baltic International Bank. During sanctification of the centre, His Excellency Metropolitan Archbishop of the Roman Catholic Archdiocese of Riga Zbignev Stankevich (Zbigņevs Stankevičs) said the following heartfelt words: "The creation of the daycentre for children having specific needs is important not only for the Church but also for the entire community. To propagate works of mercy is the Church’s second most important mission. The Church’s foremost mission is to glorify God by proclaiming the gospel. The centre will foster social rehabilitation and integration of children with special needs and will provide support to their parents. It is of paramount importance that every single child visiting the centre experiences joy and happiness." “We feel overwhelmingly pleased that our long-standing partnership with the Roman Catholic Archdiocese of Riga and, from now, also with Caritas Latvija proves to be beneficial to the community. Through our joint efforts, we make people, and children in particular, feel happier", the main shareholder of Baltic International Bank and patron Valeri Belokon emphasises. “The very substantial amount of work has been done and so much love has been contributed to create the centre. Now, St. Theresa’s Home is ready to give joy and a warm welcome to everyone who needs it”, the Head of Bank’s Strategic Planning Department Jekaterina Kuzņecova said. “For the childcare centre, Bank provided financial assistance and helped make the territory more attractive by planting thuja trees. Stemming from the classical Latin word “thya”, thuja means arborvitae or tree of life. As Bank is committed to sustainable thinking about future generations and to sustainable living, it is of the utmost importance to practice the ESG principle in everyday life. We were just happy to make the landscape more vibrant and welcoming“, J.Kuzņecova added. We are a bank that is truly attentive to the needs of our fellow citizens and that takes a lead on strengthening family values. The support therefore appears quite logical. As succession is one of its core values, Bank consistently promotes intergenerational bonds, principles of family unity and family well-being. Valeri Belokon   The director and  psychologist of the centre Ilze Reinfelde was very satisfied that the project team comprised knowledgeable and seasoned professionals, such as social workers, a speech-language therapist, music therapists, art therapists, an ergotherapist (occupational therapist), physiotherapist, social teacher, carers and pastoral counsellor (pastoral care consultant). St. Theresa’s Home provides social services for children with disabilities who live in Riga. Overall, the project aims to provide services to 50 children and the members of their families. Predominantly pupils of special needs schools are eligible for the benefits delivered by the project. The children can also access different specialists. However, the parents say that the benefits are still insufficient. That is why they eagerly seize the opportunity offered to their children to attend additional activities arranged and scheduled by the available specialists.    

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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