Billionaire Dermot Desmond owns 33 percent of Latvia’s Rietumu Bank, which said it had set aside a total of 30 million euros to cover fines and fees levied after the protracted case in France.
It plans to significantly reduce its exposure to loans in Russia and Belarus by refinancing them or selling them to other providers. Its net exposure to Russia was EUR 129 million, Belarus EUR 18 million and Ukraine EUR 3 million.
Rietumu was allegedly used by clients involved in tax evasion and money laundering. Although the 80 million euro fine against the bank was reduced to 20 million euros in 2021, Rietumu said in its newly released annual report that it still has to pay 10 million euros in compensation to the French state after losing an appeal earlier this year gold.
In 2017, the Paris Criminal Court found Rietumu guilty of aggravated money laundering, acting as a bank and assisting in laying out, concealing or converting the proceeds of crime.
It was ordered to pay a fine of 80 million euros and jointly and separately with the other defendants 10 million euros in damages to the French state, as well as 100,000 euros in court costs. Rietumu was also banned from operating in France for five years.
In 2021, the appeals court reduced the €80 million fine to €20 million. Ritumu then appealed against the French government’s 10 million euro compensation. However, in January this year, it lost that appeal.
“Considering that the bank has previously accumulated sufficient deposits to cover possible fines, the outcome of the aforementioned criminal case will not affect the bank’s future operations and stability,” Rietumu said in its latest annual report.
The bank made a profit of 19 million euros last year, down from 22 million euros in 2021.
Rietumu Banka chairman Jelena Buraja said that while the global economy was affected by Russia’s invasion of Ukraine, the bank “overcame these complex challenges”.
“Not only have we managed to maintain a high level of stability and reliability, but we have also continued to support our customers in developing and implementing their new projects,” she said.
When the war started, Ritum immediately stopped new loan activities in Russia and Belarus. By the end of 2022, the bank’s loan portfolio will total 584 million euros.
“The bank plans to moderately increase its lending portfolio in Latvia, other Baltic states and the EU in 2023,” it noted.
