ABLV: ABLV Bank performance in Q3 2015
The bank’s major financial indicators in Q3 2015 demonstrate stable and consistent growth of the bank. 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 Q3 2015 amounted to EUR 60.4 million, showing an increase by 20.6% in comparison to the same period in 2014.
- The bank’s operating income for 9 months of 2015 before allowances amounted to EUR 102.6 million.
- During 9 months of 2015, the amount of deposits with the bank has grown by 7.0%, reaching EUR 3.64 billion.
- As of 30 September 2015, the amount of the bank’s assets totalled EUR 4.65 billion.
- The bank’s loan portfolio amounts to EUR 871.1 million, and the amount of commercial loans has increased and reached EUR 524.0 million.
- The bank’s capital and reserves amounted to EUR 268.6 million.
- As of 30 September 2015, the bank’s capital adequacy ratio was 16.95%, whereas liquidity equalled 76.22%.
- ROE reached 33.66%, and ROA – 1.76%.
ABLV Bank continued issuing bonds in the reporting period. Under the Fifth Bond Offer Programme, from July to October four new coupon bond issues were performed, their total amount being USD 150 million and EUR 40 million at face value. In addition, one subordinated bond issue in the amount of EUR 20 million was performed. Including the redeemed bonds, we have performed 32 public bond issues so far. Currently, there are 21 bond issues included in the Nasdaq Riga Baltic list of debt securities.
The total amount of the bank’s securities portfolio was equal to EUR 2.59 billion, as of 30 September 2015. The securities portfolio is mostly composed of fixed-income debt securities. Securities with credit rating AA- and higher constitute 73.2% of the total securities portfolio. In terms of the countries, investments are allocated as follows: USA – 30.7%, Germany – 15.4%, Latvia – 10.2%, Canada – 8.5%, Russia – 8.4%, Sweden – 7.4%, Netherlands – 2.7%, and Norway – 1.9%. Whereas 3.6% is constituted by securities issued by international institutions – the European Commission, EBRD, etc. In the reporting period, annual yield of the securities portfolio amounted to 2.3%.
In Q3 2015, we started offering a new financing service to our customers – transactional trade finance for commodities traded on stock exchange and over the counter. This service is interesting for trading companies, which have successful experience of trading in highly liquid raw materials. We offer transactional trade finance for such commodities as energy raw materials (crude oil, oil products, coal, gas), chemicals (methanol, benzene, mineral fertilizers, etc.), and different metals. These commodities should be moved from Baltic or CIS states to any place in the world. Within this service, we are ready to provide financing of the whole transaction cycle – from prepayment to the supplier to payment after delivery by the end buyer. The maximum loan amount can be up to EUR 20 million. Corporate lending is developed as well. In August this year, four-star hotel Wellton Hotel Riga was opened in Riga. The investments in the hotel amounted to EUR 12 million, and more than half of this amount was constituted by loan granted by ABLV Bank.
Open-end mutual funds managed by ABLV Asset Management, IPAS demonstrated good results. Continuing the tradition of launching new ABLV mutual fund each year, from 17 September we offer a new fund to our customers – ABLV Emerging Markets Corporate USD Bond Fund. The base currency of the new mutual fund is USD, and its assets will be invested in debt securities issued or guaranteed by companies and credit institutions registered in emerging countries. Together with the new fund, 12 mutual funds are currently available to our customers, and those funds cover a wide range of investments – from government bond to total return funds. At the same time, we introduced single principle of charging the fees for issue of investment certificates. From 17 September, for all bond funds this fee will be equal to 1.00%, and for stock and total return funds – to 1.50%
Given that positive trends resumed in real estate market, the companies of Pillar group demonstrate even better performance – during nine months Pillar has entered into agreements on the sale of real estate in the amount of 12.5 million euros. There were 272 transactions made over nine months. The total portfolio of properties managed by Pillar has been decreased considerably. Whereas Pillar portfolio of premium-class apartments was expanded in September, following the commissioning of Miera Park House apartment block in Riga, at 57a Miera Street. Pillar purchased this new building from an affiliate company of SEB bank for EUR 2.4 million at the beginning of 2013. The amount of investments in reconstruction and finishing works reached EUR 5.8 million.
To enter the market of insurance services, in cooperation with Latvian branches of Seesam Insurance AS and Compensa TU S.A. Vienna Insurance Group as an insurance companies and we as an insurance agent have developed two unique residential property insurance programmes for customers: ABLV Apartment Insurance and ABLV House Insurance. Besides real estate insurance, these insurance policies include insurance of movable property, landscape elements, and civil liability.
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