OREANDA-NEWS. July 24, 2012. The Citadele Bank transferred LVL 3.5 million to the State Treasury, as additional compensation for aid that was received from the state in the past, reported the press-centre of Citadele Bank.

“The fact that the bank received state aid means that we face a series of moral and legal obligations toward the state, the national budget, and all taxpayers in the country,” says the bank’s board chairman, Guntis Belavskis. “Citadele concluded 2011 with a profit of LVL 3.5 million, and I can say now that we have transferred a similar amount to the State Treasury as compensation for that aid.”

“It is thanks to the successful development of Citadele and to the fact that the bank operates at a profit that the state has been able to receive additional budget revenues in the form of compensation,” adds Minister of Finance Andris Vilks.

According to the Commitments to the European Commission the bank shall remunerate Latvia for the asset relief every year in which Citadele banka's capital adequacy ratio on solo basis is not lower than 12% and capital adequacy ratio at group level is not lower than 8%. The capital adequacy ratios of the Bank and Group as at 31/12/2011 were 13.3% and 11% respectively, which are above the set ratios of the Commitments of 12% and 8%.

As has been reported in the past, Citadele completed 2011 with a profit of LVL 3.5 million. Prior to February of this year, Citadele had repaid all of the state’s term deposits ahead of schedule and at a total sum of EUR 203.7 million (LVL 141.5 million). The bank also paid EUR 14.7 million (LVL 10.2 million) in interest on the deposits. The bank is continuing to pay interest on a subordinate loan from its shareholder, the Latvian Privatisation Agency and European Bank of Reconstruction and Development. Between September 2010 and July 2012, the bank has paid interest to Latvian Privatisation Agency in amount of EUR 12.4 million (LVL 8.7million).

Of all of the aid that the Citadele Bank has received from the state (excluding aid given to the Reverta company), EUR 64.3 million (LVL 44.7 million) came from the Privatisation Agency in the form of a subordinated loan, and the state’s capital share at Citadele amounts to LVL 77.2 million (EUR 109.8 million). The state can recover these investments by selling shares in Citadele.

During the first quarter of this year, Citadele posted considerably better financial indicators than during the same quarter last year – a profit of LVL 1.02 million for the bank, and a profit of LVL 2.28 million for the group. The bank’s deposit portfolio increased by 3% (LVL 31.4 million) during Q1.

Early in 2012, Citadele discharged emitted securities at a face value of LVL 20.6 million. Since the discharge of the securities and the repayment of the state’s deposits, Citadele has become a classic, deposit-financed bank which is much less dependent on state aid and international finance markets.