The Financial and Capital Markets Commission (FCMC) of Latvia allowed the reorganization of PrivatBank Latvia, as a result of which it lost its license as a credit institution and re-registered as a commercial society, NV writes.
According to the FCMC, in August PrivatBank transferred the accounts and obligations of clients to the Latvian Industra Bank.
“In accordance with the strategy adopted by shareholders in 2022, PrivatBank has significantly reduced its activity. According to the Law on Credit Institutions, a banking license can be surrendered provided that such an institution does not have a balance of deposits,” the FCMC reported.
Latvian PrivatBank was established in 1992 as Paritate Banka. In 2001, the Ukrainian PrivatBank became its main shareholder and the Latvian bank changed its name. Ukrainian PrivatBank was nationalized in 2016.
The largest shareholder of the Latvian PrivatBank is the state-owned PrivatBank with a 46.54% share. Bermuda-registered Concorde Limited owns 9.23%, Cypriot Wadless Holdings Limited and Unimain Holdings Limited own 9.14% and 5.29% respectively. that Privat is ready to sell its stake in the Latvian bank.
“In the Latvian bank, we have 46.54% of the shares, but de facto we are a minority shareholder. The other shareholders are a group of individuals, three Cypriot companies and a company from Belize, who generally act in a coordinated manner. In fact, we are blocked from management,” he said.
Krumhanzl said that PrivatBank is not investing in a Latvian daughter, but is looking for potential buyers.
As of March 2022, PrivatBank had the worst the capital adequacy ratio among all banks in the country, barely fitting into the regulations of the local central bank. In the first half of 2022, PrivatBank's losses amounted to €2 million, as of December 31, 2021 – €3.5 million.
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