Citadele Bank has repaid the whole sum of €203.7m of the Latvian State term deposit to the Ministry of Finance. These funds were repaid in instalments over one-and-a-half years, and the total sum was repaid earlier than planned. Citadele paid €14.7m in interest to the State for utilising the deposit between August 2010 and February 2012.
The last instalment, €46.94m, was transferred to the State Treasury on February 14th, of €340,000 interest. “The bank has acquired certain trust in people’s eyes in order to attract the necessary funds for repaying State deposit and ensuring liquidity. Now Citadele will have to prove that it can increase its value regardless of the volatility that exists in European financial markets so that it can be handed over to private shareholders, recovering the funds invested in its share capital, within a reasonable period,” claims economy minister Daniels Pavļuts.
“Having repaid the State term deposit, our team will now continue developing Citadele in a well-considered manner focused on long-term cooperation with our clients.We will continue increasing the bank’s liquidity and we will concentrate on a solid and profitable asset structure,” says Juris Jākobsons, chairman of the Board of directors of Citadele Bank.
Up to now, “Citadele has especially promoted deposit products ... [which] are the main source of funding for the bank,” explains Jākobsons, which has enabled the bank to “issue new loans worth LVL 151m in 2011 in Latvia. This is 10% of the total amount of newly issued loans in the local banking sector. In 2012 we will continue funding the Latvian economy paying special attention to small and medium enterprises, and facilitating utilisation of resources available from the EU structural funds.We will also continue working on introducing new products and services tailored to the needs of clients.Every Lat deposited with Citadele is invested in the Latvian economy, and it continues working for the benefit of the national economy.”
Apart from the term deposit Citadele Bank also has a subordinated loan worth €64.3m granted by SJSC “Privatization Agency”. Citadele has paid €11.4m in interest for this loan between September 2010 and February 2012 to the Latvian State.The state’s share in the bank’s capital is worth some LVL77.2m (around € 109.8m), which eventually will be sold off to recover its funds.
The bank, which was founded at the end of July 2010 is majority owned by the country's SJSC Privatisation Agency; while 25% plus one share is held by the EBRD. The bank claims to be trading profitably.