In order to ensure the stability of Latvia’s financial sector and to protect the interests of the bank’s clients, the Finance and Capital Market Commission (FKTK) decided at an extraordinary meeting on Monday, the 12th of December, to shut down operations of Baltic International Bank, according to information from FKTK website.
On top of that, a special police unit broke into the bank’s headquarters located on Grēcinieku Street in Old Riga. According to unofficial information, police are also performing searches in the homes of the bank’s officials.
Multiple police cars were seen parked near the bank’s entrance in the evening on the 12th of December. The entrance door was smashed in and light could be seen in the windows of top floors. State Police affirm they are currently performing an investigation in Riga. Authorities do not provide more detailed comments.
FKTK reports that the measures currently performed by the police are not related to the commission’s decision to shut down Baltic International Bank. The institution does not provide more detailed comments.
FKTK declared Baltic International Bank a financial institution that is either in or will soon end up in financial difficulties. The decision was made not to intervene or perform measures to stabilise the bank’s operations.
FKTK’s decision stated that the bank was to completely cease providing financial services at 18:00 p.m. on the 12th of December.
This means the bank’s payment cards, internet banking and payment processing are no longer active.
This decision was made to prevent money from leaving the bank, and to protect the interests of the bank’s clients and creditors. FKTK declared the Baltic International Bank a financial institution that has either ended up or will soon end up in financial difficulties. This decision, according to FKTK, is justified with the fact that the bank has not been able to ensure a sustainable strategy for a long time.
The bank’s existing strategy does not fit the bank’s capabilities and is not realistic. This is why the bank has not been able to adopt a profitable business model for some time. Additionally, the bank has serious internal management problems, including in the field of prevention of money laundering and terrorism and proliferation financing.
Despite FKTK’s efforts to implement improvements in these fields, the bank failed to ensure them and continued operating with losses. The bank also failed to restore profitability, improve its internal control system and ensure a stable outlook for the future.
According to available information, as of the 2nd of December Baltic International Bank had a total of 1 590 clients, and 280 of them had zero money on their respective account.
According to the law, the decision regarding unavailability of deposits is to be made within five days of FKTK uncovering a bank’s inability to pay out deposits. Payment of guaranteed compensation is to commence within seven days.
More information for the bank’s clients will soon become available on FKTK’s website.
In March 2022 Baltic International Bank announced that majority shareholders Valērijs Belokoņs and Vilorijs Belokoņs agreed to sell shares to Sheikh Hamad Bin Khalifa Bin Mohammed Al Nahyan of the United Arab Emirates, making him the bank’s sole shareholder.
It was planned to complete the deal once permission is received from the European Central Bank and FKTK.
As previously reported, in August 2022 FKTK fined the Baltic International Bank EUR 5 325 for failure to submit the financial account on time.
In nine months of 2022 Baltic International Bank operated with losses worth EUR 7.186 million, which is 3.6 times more when compared with the same period of 2021.