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ECB considers putting Latvia' s Rietumu Banka under direct supervision

Xinhua, May 11, 2016 Adjust font size:

Latvia's third largest commercial bank, Rietumu Banka, is facing close scrutiny by the European Central Bank (ECB), which has included the Latvian bank in its list of four lenders that may put under direct supervision, the ECB said Tuesday.

The results of the upcoming in-depth analysis are expected in November 2016.

The formal reason for the ECB to consider direct oversight is the fact that Rietumu Banka, which used to be the fourth largest bank in Latvia by assets, has risen to third position after its assets grew 22.7 percent in the first quarter of 2016 to impressive 3.8 billion euros (4.3 billion U.S. dollars).

The 129 credit institutions already under the ECB's direct supervision include Latvia's ABLV Bank and SEB Banka, as well as Swedbank Latvia.

Latvian public television LTV reported last month that French law enforcement authorities brought charges against Rietumu Banka and its president, Aleksandrs Pankovs, for their role in a major tax-avoidance scheme.

The main suspect in the case is Nadan Bensoussan, the former chairman of the France Offshore company, who had been using Rietumu Banka's services, according to the LTV report.

Rietumu Banka is also known as a credit institution servicing clients from Russia and Ukraine, and its large share of non-resident deposits is seen as risk factor by organizations like the International Monetary Fund and Moody's Investors Service. Enditem