Baltic International Bank closed the first half of 2019 with profit, successfully completing the transition to the new business model
In the first half-year of 2019, Baltic International Bank significantly improved its performance results in comparison with the first half-year of 2018. The Bank closed the first half-year of this year with a positive result – a profit of EUR 295 thousand. Continuing to implement the new model, the Bank increased operating income and reduced operating expenses in comparison with the first half-year of 2018. Due to support of the Bank's shareholders and work of the Bank's Management Board and team, the Bank's capital adequacy ratio was significantly improved to 14.16% (12.9% as of 31.12.2018), meeting the requirements of the Financial and Capital Market Commission and maintaining a high liquidity ratio of 212%. Assets under management, including securities, portfolios, co-financing are at historically highest levels showing growth of 33%.
“Financial results of the first half-year (receiving profit) are an important milestone for the Bank, demonstrating that its business strategy is beginning to prove its viability. Following the trend of previous months, we are confident that we will strengthen and improve this result further in the next quarters. To continue the successful transition to the new business model, the Bank continues development of a privately-owned bank strategy focusing on providing investment services and asset management services to customers, developing new services and products with high added value, implementing changes in the Bank's positioning and customer demand. The Bank transforms its income structure and strengthens internal control systems by giving priority to servicing customers from Latvia, Baltic States and European Economic Area (EEA),” says Viktor Bolbat, Chairman of the Management Board of Baltic International Bank.
As of 30 June 2019, the total customer assets reached to EUR 527 million (Annex 1), assets under management totalled EUR 96.84 million (EUR 96.84 million), demonstrating growth by 30% year-on-year. The value of financial instruments in brokerage service was EUR 168 million (EUR 168 million).
Operating income for the first half of 2019 increased by 24% (26%) compared to the same period of the last year and amounted to EUR 6.92 million (EUR 7.08 million). Net commission income increased to 60.6% (59.2%). The specific weight of net interest income was 20.8% (20.3%). Administrative expenses amounted to EUR 5.62 million (EUR 5.68 million) and were reduced for 27.9% (27.1%) in comparison with the previous year.
As of 30 June 2019, the Bank's own funds totalled EUR 24.27 million (EUR 24.34 million). The Bank’s Tier I capital ratio (CETI) was 10.03% (10.11%). The Total Capital Ratio reached 14.16% (14.26%).
In the first half-year, the Bank continued to work on new digital tools and channels – development of an improved version of the Internet Banking, started offering the Open Banking API Sandbox solution to launch the Open Banking solution in September, and launched an Investment Opportunities platform, on which existing and potential customers can choose their investment portfolio using an interactive calculator.
On its way to becoming a strong investment bank, Baltic International Bank organized a high-level Investment Forum for its customers, business partners and key stakeholders in the first half of the year. The Investment Forum was one of the important events in the region for investment banks. The purpose of the forum is to provide a platform for discussing and sharing world-class experience and the latest investment management strategies and creating future business prospects for the Bank's customers, as well as fostering international investor interest in the Baltic market.
In March 2019, Sigma Ratings, a New York-based rating agency, assigned BBB+ financial crime compliance (FCC) rating to Baltic International Bank placing it among industry leaders. Viktor Bolbat, Chairman of the Management Board of Baltic International Bank, explains: "This is a high appreciation of the Bank's work, as Sigma's report covers both the financial crime prevention processes already implemented by the Bank, also in the field of prevention of money laundering and terrorism financing, and gives a positive assessment of the Bank's future development.”
Owing to the business model of Baltic International Bank and its high corporate governance and sustainable business principles as well as its social initiatives, in 2019, Baltic International Bank has significantly improved its performance in the Sustainability Index to the highest Platinum category, and the Bank was awarded Family Friendly Company Status by the Ministry of Welfare for the third year in a row.
In the first half of this year, supporting Latvian literature the Bank continued implementation of the reading promotion project ‘Library’. The project aims to educate the public regarding the importance of literature in people’s lives and to tell people about private libraries and collections held in private libraries. The project will introduce Latvian dynasties and treasures of their libraries as well as something special – their coats of arms.
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The financial report of Baltic International Bank for the 1st half-year is available here.