The name of this 85-year old financial institution in Latvian “Latvijas Krajbanka” translates in English as “savings bank of Latvia”. Its name is synonymous with impressive competence and local expertise during different political systems, economic upturns and downturns. All of which have led to its solid reputable image at the local market.
Reflecting through the times
There are only a few people who have a chance to glimpse into the archive boxes of Latvian Savings bank, also known as JSC. If you happened to be one of the lucky few, you would marvel as you went through piles of photos reflecting on different times and crucial periods of history of 20th century. From the photo of the board meeting of the founding members staged between the two world wars, which sits by the large art deco table, to the picture on the interior wall of the branch, which carries a picture of Stalin on its wall. Both are poignant reminders of history which have shaped the development of the bank.
This was not the only colourful part of the bank’s history. Latvijas Krajbanka was also the first major sponsor of local band “Prata Vetra” now called “Brainstorm” who, like the bank, have spread their recognition far beyond the borders of Latvia. Indeed Latvijas Krajbanka has been more than a bank – once state-founded, later state-run, even later partly state-owned, privatised and finally a privately owned public stock company with a history comparable only to that of the Central Bank.
JSC Latvijas Krajbanka was founded in 1924. It then became The Post Office Savings Bank of Latvia. This became the norm in many other countries at the same time. Local authorities used the Post Office and its cash flow in order to establish a new and promising banking enterprise. That was just the case in Latvia, where The Postal Savings Bank was intended as a bank for a working classes. The main business in those days was savings deposits and payment transactions.
The Post Office Savings Bank of Latvia is not unlike its counterparts that spread throughout the Western Hemisphere of the second half of 19th and first half of 20th century.
A public institution
Originally located in the building that held the headquarters of the Post Office, the Post Office Savings Bank soon grew strong in its outreach to the population in different localities around the country. This made it indispensable for the financial system of Soviet rule. Interestingly the core business didn’t change much – the focus of the business was services to individuals and a savings deposit in what was then to become the Savings bank of the Soviet Republic of Latvia. Savings were a must, especially when it came to putting aside money for children or saving up for a larger purchase like a car or an apartment.
At the roots of banking tradition
After independence was regained, the name of the bank was changed to reflect the new reality – The State Savings Bank of Latvia. But it was much more than a name, since once again in its history the bank had a crucial role to play in the newly re-established Latvia and its freshly constructed financial system. Latvijas Krajbanka was the first to issue and accept credit cards and even participated in the development of the local card-payment system Globuss card, which was, however, too sophisticated and technologically advanced for the early half of the 1990s.
The privatisation process in Latvia is nearly over, but to this very day Latvijas Krajbanka holds most of the accounts of privatisation certificates (vouchers denoting the share of privatisation held by a particular individual according to his or her age and some other factors) that are to be used for privatising either living space or some of the state or local government-owned objects whose privatisation had been agreed upon earlier. Comparatively, a much smaller fraction of vouchers is held by the state-owned Mortgage Bank of Latvia.
Always in proximity to customers
The main focus of the business has remained the same throughout the country’s history. The bank’s focus on stability have helped its core customers: individuals, small and middle-sized businesses and local authorities. It doesn’t mean you are not likely to find major corporations in the client portfolio of the bank, but it means that the Latvijas Krajbanka’s business is where its loyal customers have resided.
Although on the surface, the clientele of the Latvijas Krajbanka can be easily misjudged in terms of profitability gains for the bank, the savings deposits are a long proven tradition. Rather than the question being able or unable to afford a savings deposit, a substantial share of population have chosen to save to protect themselves from potential crises. This is why Latvijas Krajbanka is a popular choice for many.
Another focus is on the importance of proximity to clients. Latvijas Krajbanka’s extensive branch network provides clients and their businesses the largest physical network, currently operating 123 banking outlets and well as being a leader in internet banking.
Latvijas Krajbanka, J.Dalina str.15, Riga, LV-1013, Latvia.
Tel: +371 67092020; email: firstname.lastname@example.org;