The European Central Bank moved to liquidate ABLV Bank following US accusations that it laundered money. The ECB which had already placed a freeze on payments by the lender, said in Frankfurt that ABLV was failing or likely to fail. Kai Pfaffenbach / Reuters
The European Central Bank moved to liquidate ABLV Bank following US accusations that it laundered money. The ECB which had already placed a freeze on payments by the lender, said in Frankfurt that ABLShow more

European authorities move to liquidate Latvian lender after US accusations



European authorities moved to liquidate Latvia’s ABLV Bank after clients pulled assets from the lender following U.S. accusations that it laundered money.

The European Central Bank, which had already placed a freeze on payments by the lender, said that ABLV was failing or likely to fail, handing it over to Europe’s Single Resolution Board. That authority said a resolution of the bank, which generally means a sale or restructuring, isn’t in the public interest because neither ABLV nor its Luxembourg-based subsidiary provide "critical functions" and their failure won’t have a "significant adverse impact" on financial stability.

ABLV was plunged into crisis after the U.S. Treasury Department this month proposed to ban it from the American financial system, saying it helped process illicit transactions, including for entities with alleged ties to North Korea’s ballistic missile program. The bank responded by saying the allegations are wrong and misleading and that it was working to provide information to the Treasury that would help to overturn the proposal.

“The bank is likely unable to pay its debts or other liabilities as they fall due,” the ECB said in a statement on Saturday in Frankfurt. “The bank did not have sufficient funds which are immediately available to withstand stressed outflows of deposits before the payout procedure of the Latvian deposit-guarantee fund starts.”

ABLV took a different view, saying it accumulated more than 1.36 billion euros ($1.67bn) over four business days to strengthen its liquidity and ensure 86 percent of its demand deposits.

“The bank considers that it has fulfilled all requirements of the regulator in order to resume operation,” ABLV said in a statement. “It was absolutely sufficient for the bank to resume executing payments and meet all obligations toward its clients, yet due to political considerations the bank was not given a chance to do it.”

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Latvian bank freeze over alleged North Korea links

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Latvia’s central bank late Friday said it tripled emergency liquidity assistance to ABLV after input from the ECB and local regulators. The ECB previously asked Latvia’s Financial and Capital Markets Commission to impose a moratorium on ABLV, which meant the bank was barred from making payments on financial liabilities including deposits until further notice. The measure, a first for the ECB, was necessary to stabilize outflows after a “significant deterioration of bank’s financial position.”

ABLV saw 600 million euros of deposits and securities, equivalent to 18 per cent of its liabilities at the end of September, withdrawn after the U.S. Treasury announcement, Peters Putnins, the chairman of the Latvian Financial and Capital Market Commission, has said. The bank meets liquidity and capital adequacy ratios set by the Latvian regulator, Ernests Bernis, the bank’s chief executive officer, has previously told reporters.

“The bank failed to duly implement the tasks imposed on it by the European Central Bank to stabilize the activities of the bank,” Mr Putnins, who’s also a member of the ECB’s supervisory board, said in a statement.

ABLV and a subsidiary will be wound down under Latvian and Luxembourg law, meaning eligible deposits are protected up to 100,000 euros, the SRB said in a statement early Saturday from Brussels.

At a news conference, Mr Putnins said officials wouldn’t need to tap the nation’s deposit insurance fund. The question of covering deposits of more than 100,000 euros cannot be addressed as long as the bank still has a license, which is decided by the ECB, he said.

"Taxpayers don’t have to worry: the bank itself will make these payments with its own resources," Mr Putnins said. He added that a bond repaid by ABLV this week didn’t violate the ECB’s moratorium on payments because the funds stayed in client accounts at the bank.

The Latvian regulator said payouts on deposit insurance, which cover accounts with up to 100,000 euros, must be started no later than March 7. About 470m euros would be needed, according to preliminary estimates.

The bank said its liquidation may be started “in the nearest future” and that “the amount of its assets is sufficient to satisfy demands of all clients and creditors.”

Chairman Olegs Fils, Bernis and his wife Nika Berne directly and indirectly held about 87 per cent of ABLV voting shares as of Nov. 1. The heads of the bank’s divisions, employees, customers and business partners also own shares, according to its website.

With a 3.63bn-euro balance sheet at the end of September, ABLV is comparatively small by international standards. It has been directly supervised by the ECB since late 2014 because it is one of Latvia’s three biggest banks by assets.

ABLV’s Latvian competitors said they don’t expect the ECB’s decision to have a “material impact” on the country’s banks.

The ABLV case could negatively affect “some” other Latvian banks that focus on servicing nonresident clients, S&P said on Thursday, adding total exposure of the deposit guarantee fund to the non-resident focused banks, including ABLV, is close to 2.2bn euros or equivalent to 7.5 per cent of the country’s gross domestic product.

Still, even under a scenario of substantial spillover effects from ABLV to other nonresident-focused banks, the Latvian government’s exposure “is not material or potentially capable of undermining the country’s strong fiscal position,” it said.

The Association of Latvian Commercial Banks “fully supports decisive and forceful action against money laundering for the benefit of the local economy and a resilient financial sector,” according to a statement. “We will continue to actively pursue significant further reduction of higher risk clients and will ensure total quality control.”

Score

Third Test, Day 2

New Zealand 274
Pakistan 139-3 (61 ov)

Pakistan trail by 135 runs with 7 wickets remaining in the innings

Company%20Profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3ENamara%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3EJune%202022%0D%3Cbr%3E%3Cstrong%3EFounder%3A%20%3C%2Fstrong%3EMohammed%20Alnamara%0D%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%20%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EMicrofinance%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%20%3C%2Fstrong%3E16%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3ESeries%20A%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFamily%20offices%0D%3Cbr%3E%3C%2Fp%3E%0A
if you go

The flights

Emirates have direct flights from Dubai to Glasgow from Dh3,115. Alternatively, if you want to see a bit of Edinburgh first, then you can fly there direct with Etihad from Abu Dhabi.

The hotel

Located in the heart of Mackintosh's Glasgow, the Dakota Deluxe is perhaps the most refined hotel anywhere in the city. Doubles from Dh850

 Events and tours

There are various Mackintosh specific events throughout 2018 – for more details and to see a map of his surviving designs see glasgowmackintosh.com

For walking tours focussing on the Glasgow Style, see the website of the Glasgow School of Art. 

More information

For ideas on planning a trip to Scotland, visit www.visitscotland.com

A cheaper choice

Vanuatu: $130,000

Why on earth pick Vanuatu? Easy. The South Pacific country has no income tax, wealth tax, capital gains or inheritance tax. And in 2015, when it was hit by Cyclone Pam, it signed an agreement with the EU that gave it some serious passport power.

Cost: A minimum investment of $130,000 for a family of up to four, plus $25,000 in fees.

Criteria: Applicants must have a minimum net worth of $250,000. The process take six to eight weeks, after which the investor must travel to Vanuatu or Hong Kong to take the oath of allegiance. Citizenship and passport are normally provided on the same day.

Benefits:  No tax, no restrictions on dual citizenship, no requirement to visit or reside to retain a passport. Visa-free access to 129 countries.

COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Revibe%20%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202022%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Hamza%20Iraqui%20and%20Abdessamad%20Ben%20Zakour%20%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Refurbished%20electronics%20%0D%3Cbr%3E%3Cstrong%3EFunds%20raised%20so%20far%3A%3C%2Fstrong%3E%20%2410m%20%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFlat6Labs%2C%20Resonance%20and%20various%20others%0D%3C%2Fp%3E%0A
COMPANY PROFILE
Name: Airev
Started: September 2023
Founder: Muhammad Khalid
Based: Abu Dhabi
Sector: Generative AI
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
 
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