In order to pay the state guaranteed indemnity license to the lost JSC “Trust commercial bank“Depositors need about 64 million euros, told reporters on Friday Financial and capital market commissions (FCMC) Chairman Pēters Putniņš.
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With the decision of the FCMC Council, temporary trustees have been appointed to the bank today, who will prepare the infrastructure to be able to pay out guaranteed deposits to customers.
Putniņš emphasized that the bank’s own money could be used for guaranteed deposits and no funds from the Deposit Guarantee Fund or money from the state budget would be required. The Deposit Guarantee Fund currently has more than € 100 million in savings. All bank assets, including the bank’s shareholders’ funds, will be used to repay deposits.
The total amount of deposits in the bank is 276 million euros. Of this amount, 25 million are residents ‘deposits, while non-residents’ deposits are about 250 million euros. Non-residents are mostly CIS citizens, as well as legal entities from different jurisdictions.
The FCMC Council today established that deposits in “Trasta komercbanka” were unavailable due to the revocation of the bank’s operating license.
The FCMC promises to look for an opportunity to start paying the guaranteed compensation as soon as possible. The Law on Deposit Guarantees stipulates that the payment of the guaranteed compensation must start within 20 working days from the day of unavailability of deposits. The FCMC Council will inform about the procedure, place and time of payment of the guaranteed compensation after the decision has been made.
The Deposit Guarantee Fund pays a guaranteed fee of up to EUR 100,000 to both individuals and legal entities for all types of deposits in any currency. The guaranteed remuneration applies to the bank’s customer deposits, to deposit interest accrued until the date of unavailability of deposits, to balances in current accounts or salary accounts and to funds in savings accounts. The guaranteed remuneration also applies to customer deposits in the Cyprus branch of Trasta komercbanka.
The guaranteed compensation to be paid to each client will be calculated by summing the deposits in all accounts, if these deposits are divided into several accounts, informs the FCMC.
FCMC Chairman Putniņš said in an interview with Latvijas Radio this morning that in total Trasta komercbanka has about 5,800 customers – about the same number of residents and non-residents.
Deposits in excess of the state-guaranteed 100,000 euros are available to 265 Trasta komercbanka customers. Of these, 59 are residents of Latvia, including 44 individuals and 15 legal entities. 206 are non-residents, including 52 individuals and 154 legal entities.
Putniņš expressed confidence that in the process of liquidation of the bank, most of the deposits exceeding the state guaranteed amount will be repaid.
For those whose deposit exceeds 100,000 euros, the amount of deposits is different – both several hundred thousand euros and millions, Putniņš informed.
As reported, the European Central Bank at the suggestion of the FCMC On March 3, the license of “Trasta komercbanka” was revoked. The Commission called for the license to be revoked because the bank had committed serious breaches in a number of important areas over a long period of time and concluded that it was not possible for the bank to be resolved or rescued in the public interest.
Putniņš does not think that what is happening with Trasta komercbanka could facilitate the outflow of deposits from other banks operating in the non-resident business. According to Putniņa, it is in the interests of each client that in the country where he deposits his money, banks are stable and work in accordance with the law. The closure of Trasta komercbanka is a signal that the institutions control the situation in the banking sector and prevent the existence of inappropriate market participants, Putniņš told reporters.
The Chairman of the FCMC expressed hope that next year the number of banks in Latvia will be the same as this year. “We hope that the banking industry will continue to be strong,” said the head of financial market supervision. At the same time, he admitted: if other banks have similar problems as in “Trasta komercbanka”, then the FCMC will act similarly.
“Trasta komercbanka” has been operating since 1989 and offered services to both local and foreign clients. Outside the Bank of Latvia, the consolidated group has representative offices in Russia, Ukraine, Kazakhstan, Tajikistan, Azerbaijan, as well as a branch in Cyprus.
The persons who have a significant shareholding in the bank are Igor Buimisters (from 33% to 50%) and Ivan Fursin (indirect shareholding from 20% to 33%).
At the end of the third quarter of last year, Trasta komercbanka was the 13th largest bank in Latvia in terms of assets.
Trasta komercbanka closed 2015 with a loss of 4.66 million euros, according to the bank’s unaudited financial statements. The group’s loss in 2015 was 6.21 million euros. The losses are smaller than in 2014, when “Trasta komercbanka” worked with a loss of 12.75 million euros, but the group’s loss was 14 million euros.
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