OREANDA-NEWS. November 18, 2008. The Latvian AS Parex Banka, which plans to extend syndicated loans granted by international financial institutions and seeks to do this at the best possible terms and conditions, sold 51 per cent of shares to the Latvian Government with the right of repurchase with the view of extending the above mentioned loans for the guarantees provided by the state of Latvia on the basis of the agreement with the Latvian Government, reported the press-centre of Parex Banka.

It should be noted that AS Parex Banka addressed the Latvian public authorities not because of some existing problems, but as a preventive measure to ensure extension of syndicated loans and further development of operation at the most favourable conditions possible, if the global crisis of the financial market persists.

With regard to the fact that the global crisis and stagnation in the international securities market may persist, the Latvian AS Parex Banka, being the largest bank of the local capital in the Baltic Sea Region, has reached the safest agreement with the state. Such a transfer of shares with the right of repurchase does not imply nationalisation of the bank; however, the state of Latvia has undoubtedly become the main shareholder of the bank. It also means assurance of the maximum state guarantees to the bank customers.

Granting the guarantees of the state of Latvia to AS Parex Banka for part of the shares of the bank is an important part of practice and complex of measures applied in EU Member States with a view to strengthening the financial sector in the event of a global crisis in the financial market. Respective state support measures to enterprises of the financial sector for the period of crisis have been developed and introduced not only in Latvia, but also in other countries, e.g. Sweden, Germany, the United Kingdom, Hungary, and others.

The Latvian AS Parex Banka complies with all mandatory bank requirements. Performance of the bank of 9 months is the profit of LVL 12.4 million (almost LTL 60 million). AS Parex Banka has been operating and will continue to operate as an independent bank, it will provide all banking services and perform all everyday customer service operations. According to the agreement signed with AS Parex Banka, the state of Latvia will take part in bank management and its managing bodies.

AB Parex Bankas in Lithuania is an independent legal entity acting in accordance with the Articles of Association and the law of the Republic of Lithuania. The bank complies with all mandatory requirements.

The change in the structure of shareholders of the parent bank has no impact either on daily business of AB Parex Bankas, or customer service, or transaction conditions. Deposits held in AB Parex Bankas by its customers, both natural and legal persons, have been covered with the amount of EUR 100,000 for each customer and are safe.