Treasury’s loan for covering guaranteed compensations to the depositors of „Latvijas Krājbanka” paid off completely

14.01.2014
  • Section:

Press Release
10.01.2014

Treasury’s loan in the amount of 264 million euros for covering guaranteed compensations to the depositors of „Latvijas Krājbanka” paid off completely

On 10 January 2014 the Financial and Capital Market Commission (FCMC) that ensures management of the Deposit Guarantee Fund (DGF) transferred to the national budget the last portion in the amount of 14.98 million euros  of the loan granted to ensure covering the guaranteed compensations to the depositors of „Latvijas Krājbanka”. Therefore, the principal amount of the DGF debt totalling 264.057 million euros has been fully repaid, and liabilities to the Latvian State are met.

„This is good news for tax-payers in Latvia, because today, in about two years instead of the planned three years, the State funds borrowed for ensuring guaranteed compensations to the customers of „Latvijas Krājbanka” have been returned in full,” the Chairman of the Financial and Capital Market Commission Kristaps Zakulis emphasized.

As the customers of each bank have the right to the State-guaranteed compensation of up to 100 000 euros irrespectively of whether sufficient funds are available to the DGF at the moment or not, in case of the lack of the funds they have been provided from the State budget via the State Treasury, afterwards gradually repaying the debt from the recovered funds and regular quarterly contributions to the DGF by the deposit takers. 

After suspension of the activities of „Latvijas Krājbanka” in late 2011, the guaranteed compensations of ~ 477 million euros were due to the customers, however only ~212 million euros were set aside in the DGF at that time. Consequently, the Latvian State via the State Treasury lent ~264 million euros. This borrowing was gradually repaid from the funds recovered by the DGF in the course of bank’s insolvency proceedings, as the DGF was the first in the line of creditors, as well as from regular quarterly payments to the DGF by all deposit-takers (banks and credit unions). In about two years the principal amount of the loan was completely covered thus paying off the State debt. 

As reported earlier, on January 9, KPMG, the administrator of „Latvijas Krājbanka”, transferred 15 million euros to the DGF continuing to settle liabilities to the creditors.

Depositor protection and DGF
In accordance with the Deposit Guarantee Law compensation of up to EUR 100 000 is guaranteed to all the customers of Latvian banks (both natural and legal persons) per depositor per each bank and deposits in every currency (all accounts added together, if several accounts at one bank in one name). The government guaranteed compensation covers deposits, current account balance, salary accounts, savings accounts etc.

Further information:
http://www.fktk.lv/en/customer_protection/operation_of_guarantee_funds/deposit_guarantee_fund/

Laima Auza
Head of Communications Department
Financial and Capital Market Commission
Phone: +371 67774860, +371 26148001
laima.auza@fktk.lv

Contacts


Address:
Kungu iela 1, Riga, LV-1050
Phone:
6 7774800
E-mail:
To report on unauthorised firms
Data protection

Follow the news