The Management Reverta (until 10 May 2012 known as Parex banka) is pleased to report results for the first quarter of 2012. We continued to meet objectives and accomplish tasks set forth, at the same time implementing new business solutions in the area of loan restructuring.
Owing to the success in loan restructuring Reverta was able to repay LVL 8 million to the Ministry of Finance sooner than envisaged in the Restructuring plan.
All in all, economic activity of Reverta has been in compliance with the Restructuring plan and the reporting period was closed with LVL 7.6 million in losses as planned. Similarly as before, losses consist mainly of two items: provisions for unsecured loans and interest expenses exceeding interest income. In comparison with first quarter of 2011 when provisions were reduced by LVL 6 million, respective accounting period of 2012 presents additional provisions of LVL 700,000. Net interest expenses during the accounting period have reduced by LVL 1.2 million if compared with the respective period of 2011 which is due to the syndicated loan repayment (LVL 164 million) made last year.
Considering that loan portfolio of Reverta consists of distressed loans with permanent payment discipline problems, debt recovery is intensive. By the end of the accounting period experts of Reverta Litigations Division worked on more than 2500 loan cases in different stages.
In the current economic environment, and after several years of intensive recovery work, Management believes we are entering a very challenging phase in the corporate recoveries. We have employed a strategy designed to minimize dependence on the State, but now we are approaching the end of legal processes in a number of cases where the final recoveries will be crystallized. It is clear that substantial losses will need to be recognized.
Since distressed assets are gradually turned into recovered assets, mainly – real estates, more and more attention is paid to profitable disposal of them. Sale of real estates has been activated in various market segments – economic and premium class apartments, private house villages and development projects. During the accounting period a modern sales platform was launched on web site www.reverta.lv, as well as recruitment of a real estate sales team. Growth in sales proves that such decision was correct. During the reporting period we observed significant increase in the number of real estate transactions.
Several significant and awaited decisions were taken during the accounting period thus successfully closing the main stages for transforming Reverta into professional distressed loan management company:
- On March 15, 2012 the Financial and Capital Market Commission approved the request of Reverta, at that time – Parex banka, and annulled its banking licence;
- On April 27, 2012 Shareholders’ meeting of former Parex banka approved the new company name Reverta, by making respective amendments to the articles of association.
It has to be noted that change of status has not altered amount and structure of clients’ obligations – Reverta will continue to use every possible and legitimate tool to recover the state aid.
Main events after the end of the accounting period
May 10, 2012 was the first day for Reverta as a – the distressed asset management company with an asset portfolio worth almost a billion euro. The new brand and modern website not only mark changes in the visual identity of the company, but also portrays its status change.
On May 14, 2012 Reverta made the payment to the Ministry of Finance ahead of the planned schedule. The payment was transferred in two parts and amounted to EUR 25.2 million. Of that sum, EUR 8.4 million was paid in respect of interest for state obligations and EUR 16.8 million capital repayment. Consequently, during first 5 months of 2012. Reverta has repaid EUR 36.6 million in total to the Ministry of Finance. Since 1st August 2010 a total of EUR 47.4 million has been repaid to the State, in additional to the repayment of the syndicated loan of EUR 233.4 million.
For more information:
Marita Ozoliņa-Tumanovska, Manager of
Communications and Marketing Department
Tel. +371-6777-9142 or (mob.) 29287169
marita.ozolina@reverta.lv
