Baltic International Bank respects the decision of the FCMC

News - March 9, 2016

Baltic International Bank respects the decision of the Financial and Capital Market Commission (FCMC) of the Republic of Latvia to impose fines on Bank and the Chairperson of Bank’s Board.

Insufficiently evaluated and documented customers’ past transactions constituted the rationale behind the FCMC’s decision. But today, the FCMC views the past transactions as transactions in respect of which insufficient customer due diligence (CDD) measures were applied. The FCMC made its decision based on the results of the inspection carried out last year.

The inspection did not detect any unlawful transactions. Bank has already eliminated all identified shortcomings.

In its decision, the FCMC admits that currently Bank is fully compliant with all of the regulatory requirements and continues to develop its internal control system.

The decision made by the Board of the FCMC does not exert any impact on Bank’s customers and daily activities. Stable financial performance indicators (FPIs) and profit from previous years enable Bank to pay the fine.

Bank intends to continue constructive cooperation with the FCMC to enhance international competitiveness of Latvia’s banking sector.

Before the last inspection, Bank made investments (both on its own initiative and in an effort to follow the FCMC’s recommendations) in human resources and technologies specifically aimed at AML/CFT. Currently, Bank’s AML/CFT staff complement comprises 22 employees (2012: 8 employees). Furthermore, 51 employees take on additional AML/CFT responsibilities. The employees have obtained 6 foreign and 9 domestic (issued in Latvia) AML certificates. Moreover, Bank uses technological solutions for transaction monitoring and event analysis, including the screening of customers against various sanctions lists (AML Suite). Bank continuously improves banking processes and ensures that its AML/CFT-specific documents are at all times kept complete and up-to-date and conform to the FCMC’s recommendations and industry-wide best practices.

Baltic International Bank was established in 1993. Bank complies with all regulatory requirements posed by the FCMC and even maintains its ratios well in excess of regulatory thresholds. As at 31 December 2015, Bank’s common equity tier 1 (CET1) ratio was 12.7 percent and total capital ratio was 17.6 percent. The liquidity ratio of 91.87 percent significantly exceeded the minimum internal equirement of 60 percent. In 2015, Bank’s assets grew by 3.7% to reach EUR 550.39 million. The total volume of customers’ funds (including assets under anagement, brokerage portfolio, debt securities issued, deposits, and subordinated deposits) increased by 7.6 percent to reach EUR 728.19 million.

In 2015, Bank recorded EUR 716 000 in profit.

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