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Citadele Starts Working with Profit; Results are Better than Anticipated in Restructuring Plan

05.08.2011.

Citadele Bank has finished the first half of 2011 with profit and achieved better results during its first activity than anticipated in the Bank’s restructuring plan, informs Juris Jākobsons, Chairman of Citadele Bank’s Board of Directors.

“We are very grateful to the State of Latvia, residents and our clients for their loyalty and the opportunity that they have given us. During the first year of activity, our main task was to start working solidly and with profit. We have achieved a positive result in the first half year already which is better than the restructuring plan had anticipated. What is more, the profit of LVL 0.2 million must be seen in context. Citadele launched operations with huge obligations, and the economy in the Baltic States has grown slower than previously planned,” says J. Jākobsons

13’963 new clients chose Citadele Bank since August 2010: Citadele has acquired more than 11’000 new clients in retail customer and small and medium enterprises segment and more than 180 new clients in corporate services sector in Latvia, over 700 new clients in Estonia and in private capital management sector – over 1,600 new clients.

"The fact that Citadele earned a profit during the first half of this year sends a very powerful signal to shareholders and potential investors. Successful operations by the bank allow us to expect serious investor interest, which means that the government of Latvia, as the shareholder, will be able to demand better terms for the transaction,” comments Vladimirs Loginovs, Head of Business Service Department at Privatization Agency.

“I am proud and grateful for the immense contribution and loyalty of our employees which was of special significance in achieving better six-month results than anticipated,” comments J. Jākobsons.

According to the final data for the first half of 2011, Citadele’s total assets amount to 1.25 billion Lats. The Bank’s loan portfolio is 641 million Lats and the amount of capital and reserves is 84 million Lats. The total amount of deposits with Citadele Bank at the end of the first half year of 2011 reached 1.01 billion Lats. The bank’s capital asset ratio is reported as 13% and its liquidity ratio is a healthy 62%.

According to data of 30.06.11, Citadele is the third largest bank in Latvia in terms of attracted deposits (9.7% market share), the sixth largest bank according to the amount of assets (6.5% market share) and the fifth largest by the total amount of loans issued (5.2% market share).

Information about Citadele’s first year of activity

Practicing long-term cooperation with American Express and paying special attention to regular customers of these credit cards enables Citadele to acquire the leading position in Latvia’s credit card market. Citadele Bank has maintained exclusive rights to issue American Express® credit cards and to attract trade companies to American Express network in Latvia.

During its first year of activity, Citadele has started offering such new and unique products for the Baltics as New Mortgage Loan and Citadele Payment Card.

In order to facilitate business development, Citadele has practiced active lending and worked on development of new loan offers during 2011. Citadele Bank has started issuing funding of European Investment Bank to small and medium enterprises the total amount of which is 100 million Euros.

According to the data of Association of Commercial Banks of Latvia for 2011: even though the total amount of loans issued since the beginning of 2011 has decreased by 5.4%, Citadele Bank has acquired a 7.2% share of issued loans thus making its way to the 4th place among most active banks in Latvia in terms of lending. Citadele is ranks 3rd among most active lenders and it has a 9.1% share of the market. 

“Citadele Bank will continue developing products relevant to Latvia’s and Baltic States’ markets and it will carry on investing in development of Latvian economy by supporting entrepreneurship and offering new opportunities to every resident,” explains J. Jākobsons. Our goal is to become the most valuable financial group in the Baltic States and we are purposefully approaching it.”

Awareness of Citadele in the society – 92%

According to data of market and public opinion research centre SKDS, during its first year, Citadele succeeded at increasing the share of Latvia’s residents who see the Bank being stable, safe, convenient and advantageous. After foundation, the general awareness of Citadele Bank is significantly higher than the one of other banks which are active in Latvia’s market for a longer period.

A study conducted by Data Serviss Finance Track research agency also serves as proof of this tendency – Citadele’s results are the 4th best on the market in all awareness indices – the total awareness of the Bank is 92%. The study shows that clients became more ready to suggest Citadele’s services to others after the Bank changed its brand. The indicator of positive feedback continues growing.

As announced previously, during its first year of activity, Citadele Bank reimbursed a total of 44.9 million Lats or 63.9 million Euros invested by the State already twice before deadline. During its first year, the Bank has paid the State a total of 12.8 million Lats in interest payments for the received support.

During the first year of activity, Citadele completely retired Eurobonds for the amount of 200 million Euros thus successfully settling long-term liabilities.

Presently 75% minus one Citadele Bank’s shares are possessed by the Privatization agency on behalf of the Latvian State and the owner of 25% plus one share is the European Bank for Reconstruction and Development (EBRD).

The Bank has 44 branch offices in Latvia and 7 other countries – Estonia, Germany and Sweden. It has 19 subsidiaries which work in various sectors of the financial market. The Bank is represented in the Baltic States, Sweden and Ukraine; representative offices in Azerbaijan, Kazakhstan, Ukraine, Russia, Belarus and a subsidiary in Switzerland.

Citadele Bank's group provides an extensive range of financial services the main types of which are bank accounts, payment cards, deposits for retail customers and enterprises, consumer loans and mortgage loans, corporate lending, guarantees and letters of credit, leasing and factoring, distribution of American Express credit cards in Latvia and Lithuania, private capital management services and Concierge Service, life insurance, asset management incl. management of 2nd and 3rd level pension funds as well as closed 3rd level pension funds for enterprises.

Citadele Bank was founded on 30 July 2010 and launched its activity on 1 August 2010.