ABLV: Audited profit of ABLV Bank, AS, in 2014 – EUR 58.7 million
On 4 November 2014, the single supervisory mechanism became effective, and the Eurozone largest banks came under direct supervision of the European Central Bank (ECB). Before ECB started performing supervisory functions, the banks underwent in-depth review of their balance sheets and stress testing – the comprehensive assessment. Our bank has successfully passed the comprehensive assessment. We are glad that ABLV Bank, AS, together with its subsidiary bank in Luxembourg, is the only private bank from the Baltics that has fallen under direct supervision of the ECB among the largest and famous European banks. This supervision ensures additional sense of safety for our customers and us, and it will also stimulate bank’s further development.
ABLV Bank, AS, and other ABLV Group companies are considered being significant employers and taxpayers. In 2014, there were 47 new jobs created in the bank only; and various tax payments made by the group to the state budget amounted to EUR 33.3 million, which is by 59.6% more than in 2013.
The bank’s major financial indicators of 2014 evidence stable growth. ABLV Bank, AS, is the largest bank in Latvia with local capital and is ranked second in terms of the amount of assets.
- The bank’s profit in 2014 amounted to EUR 58.7 million, and the group’s profit – to EUR 63.8 million. Whereas in 2013 the bank’s profit equalled EUR 43.7 million.
- The bank’s operating income before allowances for credit losses totalled EUR 122.4 million. Compared with 2013, operating income has increased by 11.1%.
- The amount of the customers’ deposits equalled EUR 3.41 billion as at the end of the reporting period.
- The amount of issued debt securities reached EUR 454.6 million.
- As at 31 December 2014, the amount of the bank’s assets was EUR 4.17 billion. Over the year, the amount of assets has grown by 25.8%, the total assets increasing by EUR 854.5 million.
- The bank’s loan portfolio equalled EUR 790.2 million, as at the end of December.
- The bank’s capital and reserves amounted to EUR 226.9 million.
- As at 31 December 2014, the bank’s capital adequacy ratio was 18.80%, whereas liquidity equalled 74.74%.
- ROE reached 28.82%, and ROA – 1.60%, as at 31 December 2014.
“Last year was full of different challenges, which had negative impact on regional economy. Nevertheless, our business model developed over several years proved to be efficient in such uncertainty conditions. The best evidence of our efficiency is the achieved ROE of 28.82%. Therefore, we start the year 2015 with excellent quality of assets, and we are full with confidence and optimism,” ABLV Bank Chief Executive Officer (CEO) Ernests Bernis said.
Continuing the bond issue programme, in 2014 we performed six new issues of coupon bonds. The total amount of all issues conducted in 2014 constituted USD 225 million and EUR 80 million. The bank initiated gradual replacement of long-term deposits with bonds at the end of 2011. Including new bonds and those already redeemed, we have performed 25 public bond issues until the end of 2014. As at the end of 2014, there were 19 bond issues included in the NASDAQ Riga list of debt securities.
The bank continued to invest available funds in securities. The total amount of the securities portfolio was equal to EUR 2.15 billion, as at 31 December 2014. The bank’s securities portfolio is mostly composed of fixed-income debt securities, and 72.8% of the portfolio is constituted by securities having credit rating AA- and higher. In the reporting period, average annual yield of the securities portfolio amounted to 1.4%.
In 2014, we paid considerable attention to development of corporate lending. At the end of August 2014, with the participation of ABLV Bank, AS, the deal of selling capital shares of Ventamonjaks terminal, working with transhipment of liquid ammonia at Ventspils Free Port, was successfully completed. This was one of the most significant deals in the transit and cargo transportation area recently – the deal amount equalled EUR 55 million, with the financing of ABLV Bank constituting EUR 33 million. Whereas in September, LNK Group used ABLV Bank, AS, financing of EUR 8.1 million to acquire modern office building in Riga, at 15 J.Dali?a Street, for more than EUR 10.5 million.
Performance of open-end mutual funds managed by ABLV Asset Management, IPAS, was influenced by complicated geopolitical and macroeconomic situation caused by strong price fluctuations in financial markets during the year. Nevertheless, the investors’ interest in our funds continued to grow, and as at the end of the reporting period more than 180 of our customers owned shares in our funds.
As at the end of the year 2014, the total value of assets of open-end mutual funds exceeded EUR 106.6 million. Since the beginning of the year, the total value of funds has increased by 21.2%, i.e., approximately by EUR 18.7 million. As at the end of 2014, there were 10 mutual funds available to our customers.
The year 2014 was also successful for ABLV Capital Markets, IBAS, which executes the customers’ instructions for purchasing and selling all types of financial instruments in the world’s major securities markets. In the past year, profit of ABLV Capital Markets, IBAS, amounted to EUR 2.9 million. As at 31 December 2014, the total assets of the company’s customers invested in financial instruments were equal to EUR 925.5 million.
In the reporting period, first increase of AmberStone Group, AS, share capital has been successfully completed, and thus the company’s capital has been increased by EUR 9.1 million, reaching EUR 14.0 million in total. ABLV Bank, AS, as well as several customers and shareholders of the bank participated in the share capital increase. ABLV Bank provided substantial support to arrangement of this share issue. The holding company AmberStone Group, AS, was established to separate the business not related to rendering financial and banking services from ABLV Group. The company will also take over the investments of limited partnership ABLV Private Equity Fund 2010, KS. It is planned that till the end of 2015 the share capital of AmberStone Group, AS, will be increased to EUR 35 million, also due to attracting new shareholders from ABLV Bank, AS, shareholders, customers, and partners.
The real estate development group Pillar managed to retain sales in 2014 at the level of 2013 and even slightly increase those. In 2014, Pillar concluded 626 sale transactions, the total amount of which reached EUR 33.5 million. Compared with 2013, the number of sales transactions has grown by 2%. The portfolio of uniform real estate has decreased from 836 to 583 properties over the year. The results of new projects sales were also good, since just about 8% of apartments in new projects developed by Pillar remained unsold as at the end of the year. There were 126 apartments in new and renovated projects sold, including 5 premium class apartments in Elizabetes Park House project. In addition, 48 transactions on sale of private houses and 11 transactions on sale of land plots were made in 2014.
ABLV Bank subsidiary bank in Luxembourg started offering services to customers in September 2013, and as at 31 December 2014 the bank’s assets and assets under management amounted to EUR 129.3 million. In 2014, ABLV Bank Luxembourg, S.A., started offering new fiduciary services to its customers: fiduciary deposits, which provide unique opportunities of placing term deposits with banks of the CIS and European states, and fiduciary loans, which allow lending to third parties.
At the end of December, the traditional Christmas charitable action arranged by ABLV Charitable Foundation and ABLV Bank, AS, was completed, and hundreds of the bank’s employees and customers took part in the action. The amount of donations under this fund drive was considerable – EUR 278 830. In addition to the donations of the Christmas charitable action, ABLV Bank, AS, donated EUR 1 044 267 to the programme “New Riga”. Substantial part of this donation will be allocated to construction of Latvian Contemporary Art Museum.