Latvijas Krājbanka                                               18.07.2005



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(adjusted notice of 21 June by Latvijas Krājbanka)

The economy of Latvia has recently demonstrated trends of rapid growth that

 are reflected both in the most intensive speed of growth of the gross

 domestic product in the European Union, and in the increasing living 

standard. Latvijas Krājbanka considers that the internal market of Latvia is,

 therefore, very prospective and in the future the bank’s undivided attention 

will be concentrated on it, with the focus on servicing local companies and 

private individuals, and universal banking services.



The rapid development is further proved by the increased volume of credits 

and deposits with the bank. As at 1 June 133 million lats have been granted 

in loans, which is 9% more than at the beginning of the year, when the credit

 volume was 122 million lats.



The volume of deposits with Latvijas Krājbanka has jumped even more rapidly. 

Presently it consists of 185 million lats, which is a growth by 17% from 158 

million lats at the beginning of the year.



“These data prove that the inhabitants of Latvia are becoming more 

financially active, and that not only crediting, but also depositing volumes 

grow, which points to higher accruals and the rise in living standard. 

Presently the situation is especially favorable for concentrating on the part

 of the market which is presently not using services of any bank and are 

facing a choice right at the moment. Latvijas Krājbanka, as traditionally the

 closest bank to the inhabitants, will continue developing and offering 

competitive services necessary for the people of Latvia, focusing on 

consumption and mortgage crediting, card products, and remote banking products

 based on internet and mobile technologies.” says the President of Latvijas 

Krājbanka, Andris Nātriņš. 



The number of Latvijas Krājbanka’s customers has also grown. At the beginning

 of the year it was 271 thousand, growing to 275 thousand at the beginning of 

June. Moreover, the number of private individuals using Latvijas Krājbanka’s 

services has especially grown - from 263 thousand at the beginning of the year

 to 266 thousand as at 1 June.



“Our unfortunate experience is that the big banks are reluctant to service the

 small customers, just declaring in words that it is their priority. Therefore

 Krājbanka is the bank where the individuals can feel that they are expected at

 the bank even when they do not have extensive incomes.” says Andris Nātriņš.



From its very beginnings Latvijas Krājbanka has been the “citizens’ bank” for

 the inhabitants of Latvia, with both storing the deposits and providing payment

 facilities.  Also the extensive customer service center network makes the bank

 accessible and reachable for almost all inhabitants of Latvia. Therefore 

Latvijas Krājbanka has developed an action plan on how to increase the

 proportion of the number of its customers in the segment of private 

individuals’ market, and simultaneously with this it has taken a strategic 

decision on not making any investments or contributions in attracting residents

 of other countries, planning to decrease the proportion of non-resident 

operations with the bank. At the same time, Latvijas Krājbanka will comply with

 the decisions of 27 May of the Financial and Capital Market Commission Council

 on the lawful obligation of Latvijas Krājbanka not to open new accounts for 

residents of other countries that are not related to the already existing ones, 

verified in accordance with the best practice of “know your customer”. Such 

decision was taken in order to prevent the deficiencies and shortcomings 

detected, as provided for by the Law on Prevention of Laundering Proceeds from

 Crime, by the Financial and Capital Market Commission in the internal control

 system. An additional benefit gained from the decision is that in this way 

the bank will both align its activities with the latest amendments to the 

legislation, and will provide for optimum compliance with the directions, 

requirements and decisions of the Financial and Capital Market Commission. 

Presently the total proportion of non-resident customers exceeds the total 

number of Latvijas Krājbanka’s customers only by half of the percentage point.



By accentuating launch of the bank’s activities on the internal market, even 

more attention will be paid to the small and middle-sized businesses in Riga, 

and especially in the regions of Latvia. Latvijas Krājbanka is aware that it 

is exactly the small and middle-sized businesses that create the foundation for

 the development of economy in Latvia.



“Small and middle-sized companies do form the backbone of the national economy 

of Latvia, providing workplaces to the majority of inhabitants both in the 

cities and rural areas. The task for Latvian banks is to support activities of 

these businesses, as in this way wellbeing of the whole country and its people 

is facilitated. This is also essential if we view it from the point of 

development of private individuals’ market segment.” stresses Andris Nātriņš. 



Last year Latvijas Krājbanka’s audited profits were 1.302 million lats, which 

is 51% more than the year before. The bank ended the first quarter of this 

year with the profit of 625 thousand lats, which considerably exceeds the 

profit estimate for the first quarter of this year.



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