The court on Friday rejected the request from the financial regulator CSSF to liquidate ABLV Bank Luxembourg. This means that the bank’s payments will be suspended for six months in a so-called “protective” way. The CSSF was initially made a temporary administrator of ABLV Bank Luxembourg since the collapse of its parent company. Two new directors were sworn in before a judge in the commercial court on Friday.  

Attorney Alain Rukavina, of the Rukavina Etude, and Deloitte partner Éric Collard have been appointed “judicial administrators with the suspension of payment.”

If the positive figures provided by ABLV Bank Luxembourg are correct, the search for a buyer should not be too complicated.

“We are also pleased that the Luxembourg courts have taken an independent decision and have not followed the instructions at European level”, ABLV Bank Luxembourg lawyer Anne Morocutti said on Friday.

In a press release issued in the wake of the decision, the bank welcomed the announcement, indicating that it hoped to find a favorable outcome for the entity that remains:

“We believe that this is the best possible outcome for ABLV Bank Luxembourg, S.A. clients and staff providing the time needed to explore the optimal solutions.

The decisions of the European Central Bank (ECB) seem to have been taken for all entities of the ABLV group regardless of their specific situation and quality. ABLV Bank Luxembourg, S.A. has an extremely strong excess capital (the capital adequacy ratio of more than 29% versus the legal requirement of 10.5%), a very high liquidity (the LCR of 383% versus the legal minimum requirement of 100%), no bad loans, and a very limited reliance on the group. The Luxembourg court considered the specific situation of the Luxembourg entity and overruled the decisions of the ECB based, amongst other, on the very strong financial standing of ABLV Bank Luxembourg, S.A., a result of its sound management.
ABLV Bank, AS is very satisfied that the soundness of the Luxembourg entity has been recognised. Luxembourg subsidiary. ABLV Bank Luxembourg, S.A., has shown that it has been able to mobilize sufficient amounts of cash to meet all requests for external transfers.

As it was previously announced, the request for an introduction to the CSSF to Luxembourg is an automatic consequence of the instructions of the ECB not to lift the restrictions imposed on ABLV Bank, AS, which leads to the liquidation of all banking entities of the ABLV group. ABLV Bank, AS emphasises that ABLV Bank Luxembourg, S.A. is able to meet all of its obligations towards customers and creditors.”