Regulator suspends operations of Latvia’s PNB Bank

Xinhua News Agency | Aug 16, 2019 at 1:58 AM

RIGA, Aug. 16 (Xinhua) -- The Latvian banking regulator has suspended the operations of PNB Bank (former Norvik Bank), the Financial and Capital Market Commission (FCMC) announced on Thursday.

In a statement on its website, the FCMC said that the provision of financial services by PNB Bank have been suspended and the regulator is deciding on the unavailability of deposits following decisions of the European Central Bank (ECB) and the Single Resolution Board (SRB).

The ECB, as a direct supervisor of PNB Bank, on Thursday decided to recognize the bank as failing or likely to fail financial institution. Meanwhile, the SRB has decided not to take actions to stabilize the bank's activities.

With a view to protecting the deposits of bank's customers, the Board of the FCMC at an extraordinary meeting decided to suspend the provision of financial services and decided on the unavailability of deposits at PNB Bank, the FCMC said.

In accordance with the regulator's decision, the bank must completely cease the provision of financial services, including the execution of customer payments as of Thursday. The decision has been taken to avoid the outflow of bank's funds.

Responding to the decisions of the ECB and SRB, the FCTC has decided on the unavailability of deposits to enable customers to receive guaranteed compensation as soon as possible.

In March, the ECB decided to take PNB Bank under its direct supervision at the Latvian banking regulator's request in the light of an ongoing legal dispute between Latvia and PNB Bank, which was heard at the International Centre for Settlement of Investment Disputes (ICSID).

In June, the bank's key shareholder Grigory Guselnikov, who owns the dual citizenship of Russia and Britain, sold his stake in the bank to "European Union & U.S. investors" without naming the buyers.

On July 30, Oliver Bramwell stood down as PNB Bank CEO.

At the end of 2018, PNB ranked Latvia's seventh largest bank by assets.