Teksts
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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 īpašumi”, “TKB
Līzings” 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.
The management of the Bank is grateful to all customers,
shareholders and employees of the Bank for their loyalty, support
and successful performance.
This report is available on the Bank's Internet homepage at
www.tkb.eu. The Bank management has prepared The Corporate
Governance Report for 2014, which is freely available on the
internetpage of the Bank at www.tkb.eu.
AS “TRASTA KOMERCBANKA” is one of the oldest commercial banks
in Latvia which has been working in the financial market since
1989. The bank offers a wide range of financial services for local
and international clients. The consolidated group has also
representative offices in Russia, Ukraine, Belarus, Kazakhstan,
Tajikistan, Azerbaijan, Hong Kong and a branch in Cyprus.
Elīna Bikuļča
Public Relations Specialist
Phone: +371 67027785
fax: 67027700
elina.bikulca@tkb.lv
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