6 May 2010
Parex banka repays 117,6 million lats to Bank of Latvia
prior to final maturity
Parex banka has concluded an agreement with the Bank of Latvia on repayment of
loans amounting to 117,6 million lats prior to final maturity. This decision has
been made taking into account the constantly growing deposit base of Parex
banka, stability in Lat money market, as well as the Bank's liquidity ratio,
which is currently well above the regulatory level. These loans were issued in
the last months of 2008, and they have been repaid on Wednesday, 5 May 2010.
Nils Melngailis, Chairman of Parex banka's Management Board, stated: „The Bank
has achieved better results as expected in attracting deposits in the first
quarter 2010. We have received large-scale term deposits both from residents and
non-residents, thus the total deposit portfolio has increased in all business
segments. Likewise, we have witnessed a certain increase in the customer
activity, including, more client transactions, active usage of payment cards and
increase of other business activity. This enables the bank to fully cover one of
the largest liabilities towards one of the largest lenders - Bank of Latvia.”
The repayment of the loan will enable Parex banka to decrease the monthly
interest payments, as well as ensure more effective management of the Bank's
securities. Moreover, the Bank's deposit base has increased by more than 100
million lats in the first quarter 2010, excluding the deposits made by the State
Treasury. The steepest increase was observable in the corporate sector, where
the deposit amount has hiked by 58%.
Meanwhile the Bank has paid more than 51 million in interest on the deposits to
the State Treasury since December 2008. Expecting a further improvement of the
Bank's liquidity ratio, Parex banka is looking forward to consider the
opportunity of repaying State Treasury deposits in nearest future.
In February 2010, Parex banka has made the second payment to its syndicated
lenders, transferring the sum of EUR 310 million in accordance with its
contractual obligations. As the situation at the bank has become more stable and
liquidity has improved, the bank was able to cover most of the sum - EUR 165
million. In accordance with the agreement on changes in the repayment terms
reached with the providers of the syndicated loan in March 2009, currently the
Bank has repaid 70% of the total loan, while the remaining 30% will have to be
paid in May 2011.
About Parex banka:
Founded in 1992, Parex banka currently employs around 1 800 people in Latvia.
The Bank offers universal banking services throughout the Baltic Region, the CIS
and other European nations such as Germany, Switzerland and Sweden. Parex Group
companies operate across the banking, finance, leasing, asset management and
life insurance sectors. Currently, 76,6% of the Bank's shares are held by
Latvian Privatisation Agency, while the EBRD is the owner of 19,7% of Parex
banka's shares. Parex banka has signed up to the European Code of Conduct on
housing loans. In March 2010 the Bank participated in Evaluate good service!
campaign and received the most client appraisals in financial sector.
Additional information:
Inga Saleniece
Corporate Communication Manager
Parex banka
Ph. +371 67778870 or +37126564629
E-mail: pr@parex.lv