OREANDA-NEWS. In the audited financial report of AS "TRASTA KOMERCBANKA" has been made some changes in the design of the document. These changes do not affect the important financial information about the Bank.

In 2014, Latvia’s GDP grew by 2.4%, and this growth was mainly secured by such sectors as construction, public administration, transport and trade. Notwithstanding that this indicator is down almost twice compared to three previous years, it is still two times higher than the average figure in the European Union and 2.5 times higher than in the euro zone, the member of which Latvia has been since January 1, 2014. The unemployment rate in Latvia in 2014 dropped from 9.5% to 8.5%, and the inflation in the country was very low - 0.6%.

Latvia’s budget deficit in 2014 was at about 2% of GDP (the tax revenue plan in 2014 was underperformed by 0.7%). The current account deficit reached 3% of GDP, however, in line with the initial estimates, the national debt last year fell in percentage terms to 37% of GDP. In 2014, Latvia managed to successfully attract 2 billion euros from global financial markets, thanks to the issue of 7-year government euro bonds in January and 10-year government euro bonds in April, which made it possible in March to reduce the debt to the European Commission by 1 billion euro, and in January 2015 by another 1.2 billion euro. Thus, the government finances at this point can be regarded as well balanced. In view of the above mentioned, the international rating agencies Moody's Investors Service, Standard & Poor's and Fitch Ratings continued to positively evaluate the potential of Latvia, and by March 2015 the country's credit ratings were upgraded to A level.

On the other hand, in 2015, none of Latvia’s external trading partners are expecting a significant economic growth; consequently, the future GDP growth of Latvia is also difficult to predict. In 2015, it is projected to increase by 0.5-1%.

Despite this situation, in 2014 the Bank continued to develop its activities not only in Latvia, but also abroad, as evidenced by the fact that the Baltic-Hong Kong Trade Association awarded TKB a certificate attesting to a special membership status of the Bank in the organization. As acknowledged by the Association management, this status is granted to companies for special merits in the development of the Association. TKB is still the only bank in the Baltic States, which has its representative office in Hong Kong.

Thinking about further possibilities that can be offered to Bank's customers in the acquisition of new export markets, in 2014, the Bank continued its activities in the Latvian Chamber of Commerce and Industry (LCCI). This membership provided an opportunity to hear opinions of business people, problems and needs of export undertakings, as well as to share Bank's experience in the execution of safe and effective trade financing operations, which the Bank has been providing to its customers for a decade as the sole representative of the international factoring organization Factors Chain International (FCI) in Latvia.

In 2014, the Bank began to work on increasing the range of services offered to existing and new customers. The Bank conducted a survey among its customers to find out their wants and wishes. The proposals made by customers served as impetus for the development of such new services as customer packages. In 2014, the Bank continued to work on the development of new products, especially in the Life Style segment. A special loyalty programme was created offering Bank's cardholders the opportunity to use great offers in the best places of recreation in Latvia and aboard.

In 2014, the Bank continued to develop technologies which secure access of Bank's customers to their accounts from anywhere in the world with the highest degree of safety. It also started the process for changing the image of the Bank to update the company logo and corporate style. The Bank's new slogan "Open Private Banking" means that we are open for cooperation with a wide range of customers, and TKB is planning to further improve the quality of customer service.?

Last year, the Bank continuously maintained high standards of customer service and quality of payments. The excellent quality of Bank's international payments was once again recognized by its business partners. The largest German banks Deutsche Bank and Commerzbank for the ninth consecutive year awarded their annual prizes STP Award 2013 and STP Excellence Award 2013 to the Bank. Thus, the Bank once again received the acknowledgment of the professional work of its team and excellent customer service rendered in the previous period of work.

According to the US Foreign Account Tax Compliance Act (FATCA), the Bank successfully registered with the US Internal Revenue Service Register as a member of FATCA and received special registration numbers. Bank's participation in the FATCA programme allows for making dollar payments in standard mode.

In 2014, the Bank celebrated its 25th anniversary, which is testimony to the Bank's experience, solidity and successful operation in the Latvian and foreign financial markets. The Bank will continue to develop its services, focusing on service extension, upgrading of service quality and deeper understanding of customer needs.

The Bank’s assets as at 31 December amounted to EUR 581.11 million, which is by EUR 166.0 million more than the final figure of 2013. During the reporting period the amount of attracted deposits reached EUR 500.22 million, which is an increase of 164.74 million compared to the final figure of 2013. In 2014, the Bank actively worked to recover its non-performing loans and to improve the quality of its loan portfolio, as a result of it the Bank’s loan portfolio in the reporting year shrank by EUR 14.61 million, reaching EUR 98.82 million at the end of 2014.

Taking into account that Ukraine is one of Bank’s counterparty countries; its crisis has also affected the Bank's financial position in 2014. The Bank ended the year with a loss of EUR 12.75 million as a result of provisions made for a range of loans mostly related to the Ukrainian market, as well as for real estate loans in Bulgaria. The Bank's operating profit was EUR 5.4 million. Accordingly, the Bank's capital and reserves decreased by EUR 12.63 million, and as at 31 December 2014 amounted to EUR 41.92 million. Thanks to the prudent dividend payment policy in the pre-crisis years, at the beginning of 2014, the Bank had at its disposal the retained earnings reserve in the amount of EUR 28.31 million. Thus, the current-year losses will be covered by the prior years’ undistributed profit, leaving at the Bank’s disposal the remainder of EUR 15.56 million.

The amount of Group’s assets as at the end of the reporting period was EUR 574.13 million, which is by EUR 157.44 million more than the final figure of 2013. The Group ended the reporting year with a loss of EUR 14.01 million. The Bank's consolidation group consists of the subsidiary companies: “TKB Nekustamie ?pa?umi”, “TKB L?zings” and its subsidiary “TKB Leasing Tajikistan”, “TKB LU” and “Project 1”; and also “Heckbert C7 Holdings” and its subsidiary „Ferrous Kereskedelmi KFT”.

As one of the priorities of the Bank's activities in 2014 was the capital strengthening through the issue of subordinated bonds in the amount of EUR 10 million. The issue was successfully completed and the subordinated bonds were purchased by 47 investors, including 38 individuals and 9 legal entities. Based on "NASDAQ OMX Riga" Board decision, on 16 December 2014, the bonds of AS „TRASTA KOMERCBANKA” were included in the Baltic list of debt securities. Issue of bonds is an attractive alternative for raising of capital, and from investors’ perspective, such fixed-income assets as corporate bonds are the financial instruments that are suitable for diversification of investment portfolio by both private and institutional investors. In 2015, the Bank intends to continue the strengthening of its capital.

In 2015, the Bank is planning to pay special attention to upgrading of information systems and technologies having an enhanced focus on the development of its online banking and website, which will be not only up-to-date and comfortable but also easily adaptable to mobile devices. In parallel, internal changes have been planned in order to reduce business risks and improve staff qualifications.