Baltic International Bank continues to implement its business model geared towards wealth management and investments
In 1Q 2018, Baltic International Bank continued to implement its strategy adopted in autumn 2016 and aimed at socially responsible investing. Throughout the entire 2017 season, Bank carried out substantial de-risking measures. After having analysed the events that unfolded in Latvia’s banking sector during the first three months of 2018, we have put a greater emphasis on de-risking measures and diversification of customers.
Bank’s business model is geared towards wealth management and investment services. Bank’s objective is to increase its business volumes within the strategically chosen area while simultaneously continuing further de-risking in accordance with the legislative and regulatory requirements.
We are very pleased that our efforts in the priority areas of our business are gradually bearing fruit. In 1Q 2018, the total of customer funds reached EUR 432 million. By the end of 1Q 2018, the assets under management reached EUR 63.37 million. The volume of financial instruments in brokerage service has also showed a positive dynamics. By the end of 1Q 2018, the volume reached EUR 132.09 million, a 9.4-percent increase from the end of 2017.
By the end of 1Q 2018, the operating income totalled EUR 2.58 million. But because of the switch-over to the new business model and de-risking measures, Bank reported a EUR 696 thousand first-quarter loss. The structure of Bank’s operating income was heavily dominated by the net fee and commission income totalling 46.3 percent. In 1Q 2018, the percentage of the net fee and commission income increased by 16.6 percent compared to the same period last year. The net interest income totalled 26.5 percent. Administrative expenses reached EUR 3.53 million.
By the end of 1Q 2018, Bank’s assets reached EUR 279.91 million. Bank’s high-quality liquid assets (assets carrying investment-grade credit rating and balances due from the Bank of Latvia) totalled EUR 145.29 million or 51.9% of the total assets. Investments in government bonds totalled EUR 16.7 million or 5.97% of the total assets.
Bank maintains a well-diversified structure of liquid assets represented by bonds (16 percent), due from credit institutions (12 percent), due from the Bank of Latvia (71 percent) and cash (1 percent). The liquidity coverage ratio (LCR) totalled 245 percent. The liquidity ratio reached 80.86%. The net stable funding ratio (NSFR), characterizing the availability of a stable funding profile in relation to the composition of assets and off-balance sheet activities, reached 135.76 percent.
As of 31 March 2018, Bank’s own funds totalled EUR 25.73 million. Bank’s Tier I capital ratio (CETI) was 9.78 percent. The total SREP ratio (TSCR ratio) reached 13.06 percent.
While actively supporting the strategy implemented by Baltic International Bank, the switch-over to the new business model and diversification of target markets, in the beginning of 2018 Bank’s shareholders decided to increase Bank’s share capital by EUR 6 million.
In 1Q 2018, Baltic International Bank continued to support the projects of national significance specifically embracing Latvia’s literature, culture and arts. Bank sponsored the publication of the book „Kā gūt panākumus Latvijā” (How to Prosper in Latvia) whose authors are Kārlis Ozols and Laura Vanaga – Mickeviča. The book tells the readers about 14 outstanding Latvians who have accomplished great things in their life and their success stories.
Baltic International Bank also supported the presentation of the Annual Latvian Literary Award (LALIGABA) arranged to honour the most outstanding Latvian litterateurs.