Mike Collier in Riga -

They say that bad luck comes in threes, but depositors and regulators in Latvia will be hoping that isn't the case. Following the disastrous collapses of Parex Banka in 2008 and Latvijas Krajbanka in 2011 - both of which are still being fought over in court - Norvik Banka, the country's eighth-largest lender, is now the subject of reported comments from officials about impending collapse.

Whistleblowing website Pietiek.com on October 23 reported Janis Brazovskis, deputy chairman of the banking regulator, the Financial and Capital Market Commission (FKTK), as admitting that Norvik had problems with its funding and had effectively stopped lending since June. According to the report, Norvik has a month to raise €50m.

Norvik responded to the story by saying its paid capital had increased by €11.6m thanks to an injection from Hungarian tycoon Sandor Demjan, who took a 5% share of the bank. Demjan is no stranger to banking, being owner of Granit Bank, which operates in seven markets in Central and Eastern Europe, but has so far not ventured into the Baltic states. "Fixed capital invested funds will be used to strengthen the Bank's position in both the domestic and international market," a Norvik statement said, adding the bank was making "steady and convincing" progress and noting that pre-tax operating profits for the first nine months of the year were LVL8m (€11.5m).

However, an official statement by FKTK said Demjan had in fact only invested €5m, "with plans to increase [the amount] according to a schedule".

Norvik later told bne: "Norvik Bank is doing business as usual and meeting its liabilities to customers in full. We have not noticed any agitation among the customers or increase in withdrawals of money from the bank accounts... The level of Norvik Banka's capital exceeds the minimum capital adequacy requirements. And the Bank's liquidity ratio exceeds 51% - that is also 21% more than required."

Bad memories

FKTK chairman Kristaps Zakulis attempted to play down talk of a funding crisis, saying banks across the continent were working to strengthen their capital bases: "Steps taken so far to attract a strategic investor... will allow the bank to provide for sustainable business development," according to Zakulis.

The timing of the Norvik scare may be significant however, coming just before the Latvian parliament is due to vote on October 25 on the re-appointment of Brazovskis. Despite winning initial praise for his handling of the Krajbanka collapse when his then-boss Irena Krumane botched the whole thing, Brazovskis has faced stiff questioning from MPs (some of whom are disgruntled Krajbanka account holders) in recent days in his efforts to continue in the job.

It's not the first time Norvik has been hit by speculation and if the whispers are as false as FKTK says, it will join the likes of Swedbank in being affected by rumours which law enforcement agencies seem powerless to combat.

But the fact that FKTK and other officials came out with reassurances not dissimilar to Vaikulis' in the days and hours before Parex and Krajbanka went spectacularly bust means a certain degree of nervousness among Norvik account holders is hardly surprising.