Baltic International Bank: Three-Quarter Performance Highlights

News - November 3, 2010

Baltic International Bank announces a successful completion of 3Q 2010. A broader product line and an enhanced business activity of the clients fostered increase in commission and fee income – up 26 percent over the same period in 2009. The bank’s interest income declined 7 percent mainly due to the fact that the averaged interbank interest rates in 2010 were lower than in the corresponding period a year ago.

However, consistent control strategies enabled the bank to keep its operating expenses in check and to end the third quarter with profit exceeding the last year’s figure more than twice. As compared to 30 September 2009, the bank’s loan portfolio grew 30 percent to achieve 49.6 million lats. The loan portfolio makes up 35 percent of the aggregate assets -- an indicative of the bank’s conservative asset allocation policy. The bank is focused on supporting projects initiated by long-term development-oriented enterprises and this activity results in higher lending volumes.  During the first three quarters of 2010, the bank’s securities portfolio has surged up to 19.9 million lats. In its investment strategy the bank remains prone to a moderate risk appetite, since the bank’s security portfolio comprises fixed-income financial instruments.

“As the economy is showing signs of stabilising in certain regions and developing countries are offering expanded opportunities, the new projects continue to attract increased investment interest”, says Ilona Gulchak, the Chairperson of the Board. “With rates at historical lows, deposit products are losing attractiveness for certain clients, while opening opportunities coming out of, for instance, the acquisition of unquoted companies are encouraging investments. Now, the bank is actively identifying the most suitable types of projects for its clients and provides the comprehensive transaction support”, emphasises the Chairperson of the Board.  The bank continues to maintain a high level of liquidity: the liquidity ratio stood at 80 percent as at 30 September 2010. “During the period being analysed, the bank’s capital adequacy ratio has improved from 11.2 percent (30 June 2010) to 12.2 percent (30 September 2010)”, says Ilona Gulchak.

This was largely due to the shareholders’ decision (made in August 2010) to increase the share capital by 5.25 million lats.  Our top priorities include broadening the array of banking products and services. Also, we are committed to keeping our clients informed on the latest legislative and industry updates. Following the changes to the Immigration Act to the Republic of Latvia, in 3Q 2010 the spectrum of banking products and services will be complemented by the comprehensive suit of support services (including all required information, advice and organisational arrangements) to help in obtaining valid residence permits by foreign nationals in Latvia. The capital increase will enable the bank to maintain healthy regulatory ratios and will open additional opportunities for asset diversification and safeguarding of customer funds.

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