Questions and answers about the suspension of JSC "PNB Banka's" activities

Why the activities of JSC “PNB Banka” have been suspended?

The decision is taken because the bank’s liabilities (debts) exceed its assets; its capital adequacy ratio is below the required minimum. The European Central Bank (ECB) in cooperation with the Financial and Capital Market Commission (FCMC) must react in such a situation as the statutory requirements are not met. The decision to suspend the bank’s activities has been taken since the bank had failed to comply with the supervisory measures.

How does this decision affect the bank clients?

All services provided by the bank are currently suspended. The clients will not temporary access their funds in the bank until the disbursement of the guaranteed compensation of up to EUR 100 000 per person is commenced. The FCMC makes every effort to start guaranteed compensation payments as soon as possible – no later than 27th August 2019.

What should depositors – clients both natural and legal persons do?

In coming days the Board of the FCMC will decide on the procedure for guaranteed compensation payment. Please follow also information published on the FCMC’s website at: www.fktk.lv.

What should those recipients of pensions and benefits do, who receive the benefits and allowances in JSC “PNB Banka” and who have no other account?

The clients of the State Social Insurance Agency (SSIA) have to open an account with another bank and contact the SSIA. Negotiations are ongoing with the SSIA to offer clients the possibility of receiving pensions and benefits in the guaranteed compensation payment account. The FCMC and SSIA will inform about the process in the near future.

What should recipients of pensions and benefits do, who receive these benefits and allowances in JSC “PNB Banka” and who have an account in another bank?

The clients should notify the SSIA of the account in another bank to which the pension or benefit should be transferred.

What should JSC “PNB Banka” borrowers do?

The suspension of the bank does not affect the clients’ obligation to fulfil their obligations. While the conditions of the loan agreement are met, no one is entitled to make any changes in those conditions or recover the credit from the client before the set term. The clients should not worry as long as they are fulfilling his obligations in a timely manner.

How will the clients be able to access their funds in future?

The full amount of deposit is disbursed for the clients whose deposits do not exceed EUR 100 000. The disbursement will be carried out by another bank from the funds of the Deposit Guarantee Fund. The FCMC will provide more details on the procedure, venue and time-frame for the pay-out of guaranteed compensation in the near future.

What about the clients whose deposits in the bank exceed EUR 100 000?

These clients will receive the guaranteed amount, EUR 100 000. The clients whose deposits exceed the ceiling of the State guaranteed compensation, EUR 100 000, will be able to file claims in capacity of creditors within the procedure of bank liquidation or insolvency proceedings.

When will the disbursement of guaranteed compensation be started?

The FCMC will publish information on the procedure, venue and time-frame for the pay-out of guaranteed compensation in the newspaper “Latvijas Vēstnesis”, on its website www.fktk.lv and other mass media. In accordance with law the disbursement of guaranteed payments shall start no later than within 8 working days from the moment of inaccessibility of deposit.

Will the JSC “PNB Banka” payment cards no longer be valid after the suspension of the bank’s activities?

After suspension of the activities the payment cards issued by “PNB Banka” will no longer work.

What should those clients abroad do, who have debit cards as the only way to pay, for example, for hotel services?

Unfortunately, the only way to get the money abroad after the suspension of the bank is to seek assistance from the family, friends or relatives and use money transfer services.

Will clients be able to use JSC “PNB Banka” online bank?

No, after the suspension of JSC “PNB Banka”, online bank will be suspended as well.

What will happen to the client pension plan funds?

The funds of pension plans are managed by the bank’s subsidiary, the investment management company “PNB Asset Management”, which is a separate legal entity and the custodian bank for pension plans is not JSC “PNB Banka”, but JSC “Swedbank”, in which these funds are kept separately from other funds. The suspension of JSC “PNB Banka” in no way will affect the management and holding of the funds of pension plans. JSC “Swedbank” continues the custodian bank functions and the fund manager continues the fund management. If, for any reasons, the manager will no longer be able to perform management functions, the management shall be transferred to another fund manager or temporarily taken over by a custodian bank (in this case, JSC “Swedbank”).

What will happen to the securities held in the bank (for example stocks, bonds)?

JSC “PNB Banka” ensures that the customer-owned securities are held in custody accounts separately from the bank’s own proprietary portfolio. Consequently, the customers will be able to transfer securities without limitation to their financial instruments account with another institution as soon as technically possibe. Timing of such transfer may depends on action of bank’s sounterpatry.

What will happen with open positions in derivatives?

In view that the provision of financial services by JSC “PNB Banka” has been suspended, and to avoid any change in the customer’s balance within the bank due to market risk, the customers’ open positions in derivatives will be terminated by closing deal at the time of suspending the bank activities.

May the clients switch to another bank?

Yes, it is possible by opening an account with another bank.

Where can customers address their questions?

Additional information to the customers and media, as well as current phone numbers are available on the FCMC website: www.fktk.lv/en . FCMC’s e-mail for JSC “PNB Banka” clients: pnbbanka@fktk.lv