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Dec 28, 2010
Parex bank’s core capital increased

Total amount of the bank’s liabilities towards Latvia does not increase, no additional funding is required for carrying out the transaction.

Today, on 28 December, in accordance with the restructuring plan of joint stock company Parex banka and decision passed by the Cabinet of Ministers on 30 November 2010, the bank’s core capital was increased for the amount of 9.7 million. The purpose of this transaction is to ensure Parex banka’s performance of capital sufficiency indices.

Parex banka’s core capital was increased by 9’700’000 Lats by the means of closed share emission, thus emitting 9'700'000 registered shares with voting rights. Nominal value of each emitted share is one Lat. State joint stock company Privatization Agency purchased the emitted shares, thus increasing participation of the State in Parex banka’s core capital. After registering changes in Commercial Register of the Republic of Latvia, State joint stock company Privatization Agency will own 82% of Parex banka’s shares and the European Bank for Reconstruction and Development will own 15%.

Proportion of shares with voting rights after increase of core capital, on its part, is as follows: 79% of shares with voting rights are owned by State joint stock company Privatization Agency and accordingly 19% are owned by the European Bank for Reconstruction and Development.

Part of accrued interest for State term-deposits located in the bank has been used for increasing Parex banka's core capital, therefore additional funding was not necessary for carrying out this transaction. The total amount of Parex banka’s liabilities towards Latvia has not changed as a result of the transaction

About Parex banka

Parex banka is structured as a solution bank whose main task is to maximize recovery of the investments made by the State within the determined deadline. In order to achieve its goals, Parex banka focuses on recovery of assets, efficient restructuring of loans and management of real estate that has served as security for loans. Along with planning purposeful increasing of the value of assets, Parex banka also performs professional management of overtaken real estate and as soon as real estate market recovers, the bank will sell it at the best price possible in the interests of the State and tax payers.

Dec 1, 2010
Parex banka recovers LVL 20 million in first two months after the split

The first nine months of 2010 have been months of significant changes for joint stock company Parex banka – for the first time in Latvia’s history a large scale bank restructuring project was carried out, thus helping not only the biggest Latvian national bank – Parex banka – who was going through difficult times triggered off by processes of global financial crisis, but also, as financial experts say, for Latvian banks with national capital in general.

The European Commission approved the restructuring plan of Parex banka on 15 September. Obtaining the mentioned authorization is a significant success in carrying out the recovery plan of the bank; many European banks have to wait for the permission of the same type much longer.

Total financial results are still strongly affected by provisions made during accounting period of the bank and group companies in the amount of LVL 83.8 and LVL 75.2 million respectively. Therefore the first nine month of this year were concluded with total losses of LVL 120.0 and LVL 103.0 million, but losses before provisions and taxes made up LVL 43.2 and LVL 19.8 million respectively. Taking into account the fact that balance of Parex banka consists of problematic assets, the aim of provisions is recovery of decrease in value of assets.

“In general, the activities of the Bank have been undertaken in compliance with the prognosis of asset realisation and the restructuring plan approved by the Government and the European Commission which necessarily includes incurring some losses. However, due to the intense work in the two month since 1st August, Parex Banka has managed to recover more than LVL 20 million, that is, since the splitting of the Bank, which is down to the determined efforts of the excellent team that we have in the Bank,” underlines Chairman of the Executive Board Christopher Gwilliam.

As at 30 September 2010 the loan portfolio of Parex banka and its group was LVL 630.6 and LVL 638.0 million respectively, total assets – LVL 859.7 and LVL 866.4 million. Equity as at the end of September of 2010 equalled LVL 74.5 and LVL 78.4 million.

Considering the amount of assets managed by Parex banka which as at 30 September 2010 amounted to almost LVL 900 million a great deal of attention is paid to management thereof. For the given reason Parex banka pays special attention to recruitment of accordingly qualified experts and formation of professional team, as well as the company carefully and responsibly evaluates administrative resources and attracts effective outsourcing service providers.

By gradually recovering assets from the existing loan portfolio of Parex banka, it is planned that cash flow generated by the bank will be sufficient to make the next syndicated loan payment without state support. According to the agreement reached with providers of syndicated loan in March 2009, Parex banka has already repaid 70% of total loan amount. The remaining 30% or LVL 163 million is due in May 2011.

Even though activities undertaken with an aim to increase assets to be recovered will inevitably cause temporary losses even the most cautious forecasts say that with national economies recovering, value of loans and assets of Parex banka will increase in the future. The recovery term and total volume of assets to be recovered depends on both management efficiency of Parex banka, namely professional activities and knowledge of experts, and to a large extent also on global and local tendencies and speed of economic development, including impact of the said process on real estate markets.

About Parex banka

Parex banka is structured as a resolution bank whose main task is to maximize recovery of the investments made by the State in the time limit prescribed. In order to achieve its goals, activity of Parex banka is focused on recovery of assets, effective loan restructuring and management of real estates which once served as collaterals. While planning a targeted rising of value of the said assets Parex banka renders professional real estate management services so that when real estate markets recover real estates could be sold at a profit in the best interests of the state and tax payers.

Oct 18, 2010
Uldis Dzenītis, creator of the Constitution Protection Bureau of Latvia, will be in charge of security matters at Parex Bank

Today Uldis Dzenītis, a highly qualified expert in security matters, has joined the team of Parex banka. He is one of the creators of the Constitution Protection Bureau of Latvia (CPB), whose advice, given his unique expertise in the legal matters related to the national security, has been highly appreciated and demanded in other state security institutions as well.

U.Dzenītis has a wealth of experience as the deputy director and acting senior deputy director of the CPB (1995-2010). He has previously worked as a prosecutor in Riga and as deputy state secretary of the Latvian Ministry of Justice (1992-1994, 1994-1995). Prior to that, he was a prosecutor in Valka District and a prosecutorial investigator in Cēsis District.

U.Dzenītis will head the Security Sector of Parex Banka and he will be responsible for the internal security matters, as well as the protection of the bank’s economic interests.

“I am delighted that such a knowledgeable and experienced specialist is joining our team. Given the specifics of Parex Banka, which has to do with the recovery of substantial amounts of funds in a way that will unquestionably affect certain economic interests, we can expect that our efforts to recover the state investments will face serious opposition, that’s why economic security issues are of vital importance to us,” says Chris Gwilliam, Chairman of the Executive Board of Parex Banka.

“Employees are the foundation of any company’s success, and I dare to say that in the case of Parex Banka, this is a factor that is of particular importance, because recovering the state funds will largely depend on the professionalism and performance of Parex Banka’s employees. If we are to achieve the bank’s goals, we need only outstanding employees,” underlines C.Gwilliam.

U.Dzenītis’ professionalism is confirmed by the fact that he holds the Order of Viesturs, Second Class, the Gold Medal of Honour of the Latvian Security Police, a medal from the defence minister for facilitating Latvia’s membership in NATO, and a medal of honour for his investment in the development of the Military Counterespionage Service.

Oct 1, 2010
Responsibility areas for Members of the Board have been defined

In accordance with Parex banka’s status and business strategy, its Board has carried out structural and organizational changes necessary for the bank. In order to ensure efficient activity and prevent duplication of the bank’s functions, responsibility areas of Members of the Board have been defined clearly:

  • Christopher Gwilliam, Parex banka’s Chairman of the Board, will be in charge for management of the Board, determining the bank’s strategic activity, administering restructuring issues and supervising the bank’s representative and branch offices in Latvia as well as abroad,
  • Finance, risk management and operational directorate will be under direct supervision of Solvita Deglava, Parex banka’s Board Member, and her spheres of competency will be settlement of financial issues, supervision of the bank’s IT matters, supervision of personnel-related issues, administration and control of loans as well as administrative matters,
  • Jurijs Adamovičs, Parex banka’s Board Member, will be responsible for the bank’s legal issues, restructuring of CIS loans, management of overtaken assets, corporate communications and matters related with minority shareholders.
Sep 29, 2010
Parex bank council chairman to urge irish businesses to enter Latvia

Parex Bank council chairman Michael Bourke will be one of the speakers at a seminar that is being organised on September 29 of this year by the Dublin Chamber of Commerce, “Latvia: The Road to Eastern Europe.” The seminar is meant for Irish businesspeople who wish to know more about business opportunities and the business environment in Latvia. The aim is to offer direct information to those Irish businesspeople who are interested in expanding their operations beyond their country’s borders by entering the Latvian market. That, of course, would mean new investments for Latvia.

The conference will be opened by the Latvian ambassador to Ireland, Pēteris Elferts, and appearing with Mr Bourke will be Kristīne Metuzāle from the London office of the Latvian Investment and Development Agency. She will speak about support which her agency can give to those who wish to launch business operations in Latvia. Mr Bourke, who is also a consultant to the Irish Central Bank, will speak about the financial services sector in Latvia, offering a look at his substantial experience in Latvia’s financial world.

“We are delighted that Mr Bourke agreed to take part in the Dublin Chamber of Commerce event. We hope and trust that this event will represent one more step in promoting further co-operation between Latvian and Irish businesses,” says Ms Metuzāle.

The event will allow Irish businesspeople to learn all about business opportunities in Latvia in such areas as information technologies and financial services. Participants will also learn about Latvia’s business environment and economy, and they will receive consultations on support that is available for businesspeople who wish to launch operations in Latvia.

Sep 17, 2010
Parex Banka’s Minority Shareholder Claim Does not Have a Legal Basis

Today, on 17 September, in accordance with anticipated agenda, a claim brought forward on 7 September 2010 by minority shareholders Firebird Republics SPV, Amber Trus and DCF Fund was reviewed in Parex banka’s Council Meeting. Minority shareholders turned to Parex banka’s Council with a request to file a claim against the bank’s former Board on selling Belorussian Parex leasing which took place at the beginning of last year.

After reviewing and prudently considering the request submitted by minority shareholders and the documents appended to it as well as other related significant documents, Parex banka’s Council concluded that there is no legal basis for filing a claim and that the requests of minority shareholders are based on incomplete information.

As it was mentioned already previously, selling of Parex leasing was recognized as a beneficial and well grounded solution according to the market situation and Parex banka’s restructuring plan. The transaction took place in May 2010, receiving an approval from Parex banka's Council, the European bank for Reconstruction and Development as well as Privatization Agency beforehand. Besides, the transaction was approved by Finance and Capital Market Committee and the European Commission was also informed about it. Selling of Parex leasing ensured maximum recovery of Parex banka’s asset worth, observing interests of all shareholders.

Decision on selling of Parex leasing was made after a detailed and thorough inspection of the transaction, simultaneously developing and assessing possible scenarios for developing the company’s business. Financial analysis of the sales transaction conducted preventively showed that Parex banka's benefits from the particular deal would be much bigger than the ones from continuing business activity within the framework of restrictions imposed on the bank.

Aug 30, 2010
SC Parex banka Reports First Half 2010 Financial Results

The first half of 2010 has presented new challenges for the Parex Bank. The restructuring process that was prepared by the international financial consultant Nomura International plc was launched and implemented in a purposeful way. The Parex Bank has demonstrated responsible and professionally balanced work during very complicated economic conditions, and these efforts have ensured that the bank can develop further in the interests of all of its shareholders.

In the middle of this reporting period, on March 23, the Cabinet of Ministers approved the restructuring plan for the Parex Bank, and on May 31, it was submitted to the European Commission for its approval. The plan spoke to the splitting off of certain Parex Bank assets to create a new bank with a stable financial foundation so that it might become more successful in attracting investors and repaying the state’s investment as quickly as possible. The remaining bank, the Parex Bank, will be able to sell its assets on the market in a longer period of time. Its job is to ensure maximum returns on the state’s investments.

During the first half of 2010, the Parex Bank received permission from the International Monetary Fund and the Finance and Capital Markets Commission (FCMC) to increase credit limits for the bank’s largest and most loyal corporate clients. It also concluded an agreement with the European Investment Bank on EUR 100 million in credit resources so that loans could be issued to small and medium enterprises. A trade financing agreement has been concluded, too, with the European Bank for Reconstruction and Development (EBRD).

On May 5, 2010, the Parex Bank concluded an agreement with the Bank of Latvia on the premature repayment of a loan of LVL 117.6 million. The decision was based on an increase in deposits at the Parex Bank, stability in the currency market for the lats, and the fact that the bank’s liquidity indicators substantially exceeded stated regulations.

The bank’s liquidity has improved during the reporting period, exceeding 60% as of June 30 of this year. Deposit volumes at the bank continued to increase during the half-year, and data show that total deposits at the end of June exceeded LVL 1 billion, not including deposits from the State Treasury. Since the beginning of the year, deposits at the Parex Bank and its group have increased by LVL 188.5 million and 211.5 million respectively. In terms of interest on term deposits, the Parex Bank has paid more than LVL 59 million to the State Treasury since December 2008, doing so in accordance with contractual obligations.

On February 12, 2010, Parex repaid EUR 310 million to providers of its syndicated loans. Because of the improved liquidity of the bank, it itself could cover most of that sum – EUR 165 million. The remaining EUR 145 million came from the State Treasury in the form of a term deposit.

The lending portfolio for the bank and the group on June 30, 2010, amounted to LVL 1.38 and 1.57 billion respectively, with assets of LVL 2.28 and 2.44 billion. Total equity at the end of the reporting period was LVL 124,5 and 100 million respectively. The most important shareholder, the Latvian government, provided aid to the Parex Bank and ensured additional necessary capital. On February 23, 2010, the Cabinet of Ministers approved an increase in the bank’s share capital of LVL 31.5 million. The increase occurred on February 26 via capitalisation of the relevant sum from the deposits that had been made by the State Treasury.

The bank and the group concluded the first half of this year with total net losses of LVL 61.7 and 73.0 million respectively, while losses before provisions, depreciation and taxes amounted to LVL 21.3 and 22.6 million. Financial results are still being influenced seriously by the provisions that the bank and group have had to make as a result of a drop in asset value of LVL 47.8 and 54.2 million respectively.

During the reporting period, in comparison to the same period in 2009, the Parex Bank cut administrative spending by 20% (LVL 5.6 million) - communications and IT costs by LVL 0.5 million, personnel costs by LVL 4.6 million, etc. Some costs were reduced by outsourcing services. Building management at the bank’s branches, for instance, now costs 80% less, while spending on office and housekeeping supplies has declined by 22%.

Financial results for the 1st half of 2010 (LVL)

About Parex banka

Parex banka is structured as a resolution bank whose main task is to maximize recovery of the investments made by the State. In order to achieve its goals, activity of Parex banka is focused on effective restructuring of loans and securing of overtaken loans the majority of which are real estate. Along with planning purposeful increasing of the value of assets, Parex banka also performs professional real estate management and as the situation becomes stable in real estate segments, it will sell them at the best price possible for the benefit of all shareholders.

Aug 27, 2010
Parex banka brings an interlocutory application to supreme court

Joint Stock Company Parex banka has brought an interlocutory application to Supreme court of the Republic of Latvia regarding the ruling passed by Riga District Court on deposit of seven million Lats for securing possible losses of defendants Valērijs Kargins and Viktors Krasovickis.

In accordance with the ruling passed by Riga District Court, Parex banka had to deposit seven million Lats to bailiff; however the sum is not proportional to the possible losses caused to defendants. Such a ruling was the initiative of the Court, still the substantiation for it is not clear and such a necessity does not arise from the essence of the claim brought forward. Parex banka initiated the action on compensation of losses occurred to it and the mentioned deposit for securing possible losses of defendants only creates additional losses to the bank. Actually, the plaintiff, wishing to protect its violated legitimate interests in a fair court, is put in a significantly disadvantaged situation than defendants.

Besides, the deposit sum considerably exceeds not only the possible losses from securing of claim caused by defendants, it also exceeds the practically possible enforcement amount of secured claim. Considering the present situation and the fact that V.Kargins and V.Krasovickis formally do not possess any notable property in Latvia, it is anticipated that the actually mortgaged amount of defendants' property will be much smaller than the total amount of secured claim determined by the Court. For this reason Parex banka litigates the Court’s ruling on the deposit to be made and the bank considers the ruling should be cancelled.

It has already been announced that on 30 July 2010 Parex banka filed a claim against its former Members of the Board – Valērijs Kargins and Viktors Krasovickis – requesting them to compensate losses caused to the bank. The total sum of claim amounts to 62 million Lats.

On 16 August 2010, Riga District Court resolved to secure the claim brought forward by joint stock company Parex banka against its former owners and Members of the Board – V.Kargins and V.Krasovickis – for compensation of losses by mortgaging real estate, movable property and cash funds possessed by V.Kargins and V.Krasovickis as well as payments due to them by third parties. This also refers to monetary funds possessed by them in credit institutions and other finance authorities, including Parex banka.

Simultaneously the Court has resolved to secure Parex banka with compensation of losses which might arise from execution of this decision by depositing seven million Lats in bailiff’s deposit account. Parex banka court ruling was executed on 19 August 2010.

About Parex banka

Parex banka is structured as a solution bank whose main task is to maximize recovery of the investments made by the State. In order to achieve its goals, activity of Parex banka is focused on effective restructuring of loans and securing of overtaken loans the majority of which are real estate. Along with planning purposeful increasing of the value of assets, Parex banka also performs professional real estate management and as the situation becomes stable in real estate segments, it will sell them at the best price possible for the benefit of all shareholders.

Aug 10, 2010
Parex Banka Plans to Give Up Moody's Services

Considering the specific nature of Parex banka’s future activities as resolution bank, and that the Bank does not plan to attract new depositors or grant new loans, Parex banka no longer has any need to be rated. Accordingly, the current agreement with Moody’s International Rating Agency has been reviewed on the formalities required to terminate the agreement. This is consistent with the Bank’s determination to restrict minimum and to meet the Bank’s operational needs, thus decreasing the Bank’s administrative costs.

As the restructuring process of Parex banka completed on 1 August, it launched its activity in accordance with its new goals and functions as a resolution bank, setting maximum recovery of the State’s investments as its top priority.

Chris Gwilliam, Chairman of the Board of Parex banka, emphasizes: “Services provided by Moody’s International Rating Agency are vital when a company is interested in attracting additional funds or, for example, potential investors. However we do not plan to carry out such activities because they are not related with the goals and tasks that Parex banka has set.”

In accordance with Parex banka’s strategy, its future activity will be focused on loan restructuring and securing overtaken loans which mostly will take the form of effective management of real estate. As the situation improves on the Real Estate market, Parex banka plans to realise assets for the best price possible based on a property conducted transparent process in the interest of all stakeholders.

We would like to remind that two enterprises were established as a result of Parex banka’s restructuring – most of the previous Parex banka’s assets were transferred to Citadele banka and the non-performing assets were left in Parex banka – the resolution bank.

Aug 2, 2010
Parex banka’s Board Elected

In accordance with the decision passed by Members of Parex banka's Council on July 31, 2010, Christopher John Gwilliam, Solvita Deglava and Jurijs Adamovičs * - three highly qualified professionals with notable experience in the financial sector - were elected in the bank's Board. The new Members of the Board will assume their posts on August 1.

Mr. C. J. Gwilliam began his career with Midland bank in 1972. Mr. Gwilliam's field of expertise is an extensive one – loan issues as well as consultations especially on bank privatization and corporate markets. Christopher John Gwilliam has significant experience in banking spheres related with rehabilitation, recapitalization as well as other change management processes in banks.

Solvita Deglava started working for Parex banka in 2008, assuming the post of Acting Chairman of Audit Committee. Since March 2010, Ms. Deglava is Head of Financial and Administration Department and she is also in the post of Deputy Head of Loan Restructuring Directorate. Prior to joining Parex banka, she has acquired extensive experience in auditing and financial management, working in such companies as PricewaterhouseCoopers and Latvijas Kuģniecība. Professional activity of Ms. Deglava is related with provision of consultations in financial and tax issues, financial risk management, attraction and control of loans, financial assessment of financial investment projects as well as other matters. She is a member of Association of Certified Chartered Accountants, the UK since 2001.

Jurijs Adamovičs, on his part, has been an advisor to Board of Directors of EBRD (European Bank for Reconstruction and Development) in London where he consulted Finnish, Norwegian and Latvian government representatives on issues related with strategic and operational management of banks; he has worked in audit, budget, financial activity and policy committees. Mr. Adamovičs has run a group of advisers for assessing internationally significant restructuring project solutions. Prior to that, Mr. Adamovičs worked for the Ministry of Finance of the Republic of Latvia in the post of International Finance Department Director.

About Parex banka

Joint Stock Company Parex banka was founded in 1992 and it has operated successfully via its representative offices, branches and subsidiaries in 13 countries. In late 2008, due to changes in global finance markets, the State took over shares of Parex banka in order to ensure stability of the bank's liquidity and carry out the bank's restructuring. As a result of this process, on August 1, 2010 the company's activity was transferred from Parex banka to AS "Citadele banka". A part of Parex banka's previous assets and liabilities have been retained in the so called "solution bank" or Parex banka. The main task of Parex banka is maximum recovery of the investments granted by the State.

Additional information:
Marita Ozoliņa-Tumanovska
Head of Communications and Marketing
Tel. 67778384 or 29287169
e-mail: Marita.Ozolina-Tumanovska@parex.lv




* J. Adamovičs will start working in the Board of Parex banka on August 16, 2010.
Jul 30, 2010
Parex banka Starts Proceedings Against Former Board Members

On 30 July 2010 Parex banka filed a suit in court against its former board members, Valērijs Kargins and Viktors Krasovickis, seeking to collect compensation for losses caused to the bank when they were in office.

The bank has analysed loan and deposit agreements that were concluded between January 1, 1995, and December 5, 2008, between the bank and its two former board members, who were also the bank’s majority shareholders, as well as with other persons related them. The bank has identified a series of transactions which were concluded in violation of the bank’s interests. Terms applied to the bank were particularly disadvantageous and much different than those which would usually apply to agreements concluded by unrelated parties. Analysis of these transactions shows that during the stated period, the two former board members enriched themselves at the bank’s expense.

These conclusions are based on a legal and financial audit and a detailed and competent analysis of the circumstances which have prevailed. The audit and analysis was done at the bank’s request by financial and legal consultants from Latvia and abroad – the legal firm Herbert Smith LLP (London), the auditing company KPMG LLP (London), and the legal firm of Eversheds Bitāns (Latvia).

It is of key importance that according to the information that is at the bank’s disposal, the stated agreements were concluded in a way which represented a conflict of interest for Kargins and Krasovickis while also violating a number of legal norms. Accordingly, the activities of the two former board members can be said to have involved serious violations of the duties of board members, as specified by law, thus leading to serious losses for the bank. The Commercial Law states that board members must be honest and careful in their management of the relevant enterprise. Board members are liable for losses caused to the company by their action or inaction. That is why the bank has the right to file suit against the former board members, demanding compensation from them for the losses that were caused.

As part of the lawsuit, the bank is also seeking compensation from Kargins and Krasovickis for losses related to violations of the Investment agreement that was concluded in November 2008.

The government took over the capital shares of Kargins and Krasovickis on December 5, 2008. At this time, 76.6% of shares in the Parex banka belong to the Latvian Privatisation Agency, while 19.7% belong to the European Bank for Reconstruction and Development.

About Parex banka

Joint stock company Parex banka was founded in 1992 and it has operated successfully via its representative offices, branches and subsidiaries in 13 countries. In late 2008, due to changes in global finance markets, the State took over shares of Parex banka in order to ensure stability of the bank’s liquidity and carry out the bank’s restructuring which was completed on august 1, 2010. After the split-up, a part of assets have been retained in the so called “solution bank” which continues to work under the name of Parex banka.

Jul 30, 2010
Extraordinary Shareholder Meeting of Parex Banka Elects New Supervisory Council
Today, on July 30, 2010, extraordinary shareholder meeting of Parex banka elected a new Supervisory Council consisting of four people – Michael J. Bourke, present Deputy Chairman of Parex banka’s Supervisory Council, as well as Sarmīte Jumīte, Vladimirs Loginovs and Mary Ellen Collins. All of the elected Members of Supervisory Council have notable knowledge and extensive international experience in financial sector. The new Council will assume their posts on 1 August 2010, up to the point the current Supervisory Council will be in duty.

M. J. Bourke has almost 40 years of professional experience in banking sector – he started his career in the Irish Central Bank in 1971. Later on, he worked for the International Monetary Fund (IMF) and his job tasks were related with granted foreign loans; he has worked for NCB Group, an Irish bank, in the post of financial director. He has also continued working for the IMF and cooperated with central banks in Central and Eastern Europe. From 1992 – 1997 M. J. Bourke was also an advisor of the Bank of Latvia, helping to develop a modern bank supervision system in the State. From 1997 – 2006 M. J. Bourke worked in the post of the President and Chairman of the Board of Rietumu banka and in 2009 he was elected in Supervisory Council of Parex banka. The Irish government has appointed M. J. Bourke as the Honorary Consul in Latvia; Mr. Bourke is also a member of Association of Chartered Certified Accountants (FCCA).

Vladimirs Loginovs, on his part, has more than ten years of experience in investment banking and corporate finance, including organization of M&A deals for such enterprises as Baltcom GSM, Mobil Plus and Kolorits, organizing privatization deals for such companies as Ventspils Nafta and Latvijas Unibanka as well as for many other companies in the Baltic States. Presently, V. Loginovs is a consultant to Privatization Agency, however previously he used to be Head of Investment Services Department at Parex banka. He acquired his degree in CFA (Chartered Financial Analyst) in the USA.

Sarmīte Jumīte has worked in several leading positions at the Ministry of Finance of the Republic of Latvia, such as Head of External Debt Administration Department; presently she is Director of Legal Department of the State Treasury. S. Jumīte has taken part in negotiations with the World Bank, European Investment Bank as well as other banks in Latvia on granting State loans and State guarantees.

Mary Ellen Collins has more than 30 years of experience in banking sector. For the time being, she is an independent financial consultant and she specializes in attracting investors to developing markets in Central and Eastern Europe as well as Russia and Central Asia. Before that, she worked for the European Bank for Reconstruction and Development for eight years where her main job tasks were restructuring companies and rehabilitating them after crises.

About Parex banka

Joint stock company Parex banka was founded in 1992 and it has operated successfully via its representative offices, branches and subsidiaries in 13 countries. In late 2008, due to changes in global finance markets, the State took over shares of Parex banka in order to ensure stability of the bank’s liquidity and carry out the bank’s restructuring which was completed on august 1, 2010. After the split-up, a part of assets have been retained in the so called “solution bank” which continues to work under the name of Parex banka.
Jul 30, 2010
An Extraordinary meeting of Shareholders to be held at Parex banka

An extraordinary meeting of shareholders of SC „Parex banka” to be held on 30 July 2010. The main issues on the meeting’s agenda include election of Supervisory Council and Audit Committee, as well as issues related to transfer of part of the assets to the bank Citadele.

Current Council of Parex banka was elected in an extraordinary shareholders’ meeting on 6 April 2010 , being chaired by Juris Jākobsons, further members of the Council are Michael J. Bourke, Laurence Phillip Adam, Klāvs Vasks and Juris Vaskāns. This shareholder meeting also discussed issues related to Audit Committee.

76,6% of the Bank’s shares are held by Latvian Privatisation Agency, the EBRD is the owner of 19,7% of Parex banka’s shares, while the rest is in the ownership of minority shareholders.

About Parex banka

Founded in 1992, Parex banka currently employs around 1 700 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.

Jul 1, 2010
An Extraordinary meeting of Shareholders to be held at Parex banka
An extraordinary meeting of shareholders of SC „Parex banka” to be held on 30 July 2010. The main issues on the meeting’s agenda include election of Supervisory Council and Audit Committee, as well as issues related to transfer of part of the assets to the bank Citadele.

Current Council of Parex banka was elected in an extraordinary shareholders’ meeting on 6 April 2010 , being chaired by Juris Jākobsons, further members of the Council are Michael J. Bourke, Laurence Phillip Adam, Klāvs Vasks and Juris Vaskāns. This shareholder meeting also discussed issues related to Audit Committee.

76,6% of the Bank’s shares are held by Latvian Privatisation Agency, the EBRD is the owner of 19,7% of Parex banka’s shares, while the rest is in the ownership of minority shareholders.

About Parex banka

Founded in 1992, Parex banka currently employs around 1 700 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.
Jun 4, 2010
Extraordinary meeting of Parex banka’s shareholders to be held on 6 April 2010

Initiated by the Privatisation Agency, Parex banka’s shareholders will assemble for an extraordinary meeting to elect the Council and an Audit Committee for the bank on 6 April 2010.

The current membership of the Council was approved on 29 January 2010 with Andžs Ūbelis as the chairman and following members: Kaspars Āboliņš, Juris Vaskāns, Michael J. Bourke and Laurence Philip Adams.

Mr Ūbelis is also the deputy state secretary of the Latvian Finance Ministry, and he has chaired the bank’s Council since 23 December 2008. Over the course of 10 years in the system of national governance, he has held a series of positions related to management of EU financing, as well as European integration.

Mr Āboliņš is governor of the State Treasury, while Mr Vaskāns was formerly on the board of the Privatisation Agency. Mr Bourke has served a long term as the president of the Rietumu Banka. He also has a wealth of experience with international financial institutions, including the Irish Central Bank, the IMF, and the NCB Group. Mr Adams represents the European Bank for Reconstruction and Development. He has a 25-year history in the financial sector and has worked for foreign financial institutions such as ABN AMRO Bank and Citibank.

The previous extraordinary meeting of shareholders was held on 29 January to decide on the issue of bank’s debt securities.

Currently, the Latvian Privatisation Agency is the majority shareholder of Parex banka, holding 76.6% of the Bank’s shares, but 19.7% are owned by the European Bank for Reconstruction and Development. Minority shareholders hold the remaining shares.

About Parex banka

Founded in 1992, Parex banka currently employs some 1 900 people at branches all over Latvia and 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. Parex banka has signed up to the European Code of Conduct on housing loans.

Jun 1, 2010
Parex Banka receives award for good services

Parex banka has received an award from the Praise Good Services! campaign as one of the most highly praised companies in the financial sector. In Rīga, the greatest amount of praise was received by the Laimdota and Citadele branches, while elsewhere, the same was true for client service centres in Daugavpils, Gulbene, Rēzekne, Saldus and Jēkabpils. Clients particularly praised the individualised and polite attitude shown by client service specialists.

Parex banka board chairman Nils Melngailis: “Parex banka very much appreciates the trust which its clients invest in it, and the praise that has been given offers additional stimuli for our employees. High-quality services are one of the bank’s standards, and since the state took over the bank, we’ve tried not only to preserve, but also to improve that level of quality. Client service standards will remain important after the bank is restructured into two parts.”

The “Praise Good Services!” campaign presented the Parex banka with a diploma and a set of stickers reading “Our Clients Praise Us in 2010.” These will remind employees and their clients that relations with clients are the greatest priority for the bank. Other companies in the financial sector to be rewarded included Swedbank and the Balta AAS insurance company. The “Praise Good Services!” campaign took place in March, with the people of Latvia being asked to devote more attention to the culture of client services in the country so that the best services could be praised.

67 companies and institutions which cover nearly 1,000 client service institutions in Latvia took part in the campaign. The full list can be found at www.labsserviss.lv. The campaign attracted a great deal of public attention, and the large amount of praise that was given to the various participants led organisers to conclude that public opinion is changing in a positive direction.

Parex banka is also proud of the fact that it has received the title of best bank in Latvia in eight categories in the Euromoney survey which focused on private banking services. Parex bank was the only bank with domestic capital to be nominated for these titles in the Nordic and Baltic region.

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.

May 31, 2010
Priority of 1Q 2010 – restructuring of Parex banka

Parex banka has announced the financial results for first quarter of 2010, stating that the main focus of Parex banka‘s management was on the restructuring of the Bank, with the principal restructuring goals of the Bank to stabilize the enterprise’s operational activities, create a stable bank with long-term potential, and increase the interest of private investors in the Bank.

Parex banka’s restructuring plan was developed by international financial consulting firm Nomura International plc. On 23 March, the Latvian Cabinet of Ministers (Government) approved this restructuring plan and it was submitted to the European Commision for approval on 31 March 2010. According to the plan a part of Parex banka’s assets will be used for the creation of a new bank with a stable financial base, which will make it easier to attract investors and repay the resources invested into the Bank by Latvian state institutions at the earliest possible convenience, while the Resolution bank will be able to sell its assets in the market over the long term, with the goal of ensuring a maximum return on the investment made by Latvian state structures.

During the 1st quarter of 2010, Parex banka received the authorization of the International Monetary Fund and the Latvian Financial and Capital Market Commission (FCMC) to increase the credit limits of the Bank’s largest, loyal corporate clients. The Bank also signed an agreement with the European Investment Bank on the granting of EUR 100 million in credit resources for loans to small and medium enterprises, and signed a trade finance agreement with the European Bank for Reconstruction and Development (EBRD); thus, enabling its corporate clients to lower the cross-border deal risks.

Parex banka’s liquidity indicators are improving and currently its liquidity ratio already exceeds 60%. During the first three months of this year, the volume of deposits in the Bank continued to increase and compiled data indicate that the total volume of deposits at the end of March exceeded LVL 1 billion, not including the deposits placed into the Bank by the Latvian State Treasury; thus, enabling the Bank to anticipatory repay LVL 117.6-million loan to the Bank of Latvia prior the final maturity. Since the beginning of this year, the total volume of client deposits in the Bank and in the Group has grown by LVL 131.2 million and LVL 149.8 million, respectively. Although an increase in deposits can be observed in all of the Bank’s business segments, the largest increase of LVL 59.5 million has been in the corporate client segment.

On 31 March 2010, the Parex banka’s loan portfolio was LVL 1.42 billion, while that of the Group was LVL 1.62 billion. Total assets amounted to LVL 2.44 billion for the Bank and LVL 2.59 billion for the Group. The volume of capital and reserves was LVL 160.3 million for the Bank and 142.2 million for the Group at the end of the 1st quarter of 2010. During the first three months of 2010, the Bank continued to fulfil the Latvian regulations governing capital requirements. The Bank and the Group ended the 1st quarter of this year with total net losses of LVL 26.7 million and LVL 30.8 million, respectively. However, the losses before provisions, depreciation and taxes were LVL 9.9 million for the Bank and LVL 10.5 million for the Group. The financial results continued to be significantly affected by the supplemental accumulation of asset impairment provisions of LVL 19.0 million by the Bank and LVL 20.8 million by the Group.

1Q 2010 financial report

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.

May 27, 2010
Equity Capital of Parex līzings un faktorings Increased

Parex banka has increased the equity capital of its subsidiary, Parex līzings un faktorings (Parex leasing and factoring), by 9.2 million Lats, thus confirming that provision of leasing and factoring services will be an important part of bank's future strategy. Increase of the enterprise's equity capital was registered in the Commercial Register on May 25.

The equity capital of Parex līzings un faktorings is now 9.4 million Lats. This enables the enterprise to operate in accordance with its establishment purpose – provision of leasing and factoring services which creates an opportunity for it to implement business ideas and contribute to the recovery of Latvian economy. This also enables private individuals to purchase motor vehicles corresponding to their income level.

Parex līzings un faktorings is a subsidiary of Parex banka. Since March 1, 2006, the enterprise offers a full spectrum of leasing services in the Latvian market. Starting from September 15, 2009 onwards, Valdis Strupčenko has acquired the position of the Chairman of the Board of the bank's subsidiary.

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.
May 6, 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.

Apr 28, 2010
Parex banka’s pricelist changed since May 11, 2010

In order to update bank’s pricelist according to situation in Latvian financial services market, starting with May 11, 2010 SC „Parex banka” will apply new tariffs for the following services:

  • cash currency exchange operations;
  • money transfers;
  • payment card services;
  • lending services, including state guaranteed study/student loans, Parex banka’s study/student loans and consumer credits;
  • financial instrument and currency dealing services;
  • current account tarrifs for non-residents;
  • additional services, including sending information by fax following a request from the client, issue of documents from archive and preparation of standard statements.
  • The new tariffs for bank’s services are available in bank’s homepage www.parexgroup.com/en/fees, in bank’s client service centres and branches as well as in our Client’s call center (tel. 6 701 0000).

Apr 6, 2010
New Council of Parex banka elected at a extraordinary shareholders’ meeting
New Council of Parex banka was elected during extraordinary meeting of shareholders on Tuesday 6 April 2010. Following Council members were elected – Juris Jākobsons, Michael J. Bourke, Laurence Phillip Adams, Juris Vaskāns and Klāvs Vasks.

Two new representatives were elected to the Council – Juris Jākobsons, Project Manager of Parex banka restructuring issues at Latvian Privatisation Agency, and Klāvs Vasks, Member of the Board at Latvian Guarantee Agency. Both appointed Council Members have more than 15 years of extensive experience in banking sector.

Since January 2010 Juris Jākobsons is Project Manager of Parex banka restructuring issues at Latvian Privatisation Agency. Previously he held position of Chairman of the Board and President at Vereinsbank Riga (later renamed HVB Bank Latvia, currently UniCredit Bank), prior being also Member of the Board and Vice-president at SEB Bank Latvija. Mr Jākobsons has an Executive MBA from Helsinki School of Economics and Business Administration.

While Klāvs Vasks holds the position of Member of the Board at Latvian Guarantee Agency since July 2009, having previously attained extensive banking experience at SEB Bank Latvija, where he was Vice-president, Head of Restructuring and workout and Head of Large Corporate Banking. Mr. Vasks has attained a MBA at Riga Business School.

As previously announced representatives of Ministry of Finance Andžs Ūbelis and Kaspars Āboliņš have resigned from Parex banka’s Council effective 31 March 2010. A.Ūbelis was the Chairman of the Council since 28 December 2008. Both former Members of Parex banka’s Council did not receive any financial awards for efforts in the Bank’s Council and will not receive any compensations for the resignation.

Ministry of Finance has stated that the post-crisis stabilisation stage has come to its conclusion and the restructuring phase has begun; thus, the importance of Ministry’s representative presence at the management of the Bank has decreased. Further indicator of the stabilisation of the Latvian economy is decision of international rating agency Moody’s Investors Service to increase Latvia’s future development evaluation from negative to stable.

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.
Apr 6, 2010
Parex banka deposits exceed LVL 1 billion

During the first three months of 2010, the Parex banka continued to receive higher volumes of deposits. Data now show that on March 8, total deposits exceeded the sum of LVL 1 billion – LVL 1.019 billion, to be exact. Last time such a volume of deposits was recorded by the bank in April 2009.

Since the beginning of the year, total deposits made by the bank’s clients have increased by LVL 117 million. Growth has been seen in all of the bank’s business segments, particularly in the segment of corporate clients, where the volume of deposits increased by 59 million lats. Rapid growth of deposit volumes has been seen since the repayment of the second tranche of the bank’s syndicated loans in February, when the Parex banka provided most of the total sum of EUR 165 million.

In 2009 bank’s business was arranged in three main directions – service of private persons, service of corporate clients and private capital management, setting different priorities for each sector.

The bank would like to remind that according to the decision of government of Latvia on bank’s restructuring model, all bank’s depositors will be automatically transferred to the new bank and restructuring will not affect the cooperation between the bank and its clients, and clients will not be required to re-sign any agreements. Restructuring plan has been submitted to the European Commission for its approval.

In 2009 Parex banka has attracted 16 080 new clients and currently bank’s client base consists of 379 971 clients.

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. Parex banka has signed up to the European Code of Conduct on housing loans.

Mar 31, 2010
Parex banka re-structuring plan submitted to the EC

The JSC “Pare banka” re-structuring plan has been completely prepared and on March 31 submitted to the European Commission (EC) to agree on the state aid for the finance institution.

On the basis of the decision made by the Cabinet of Ministers on March 23 on the JSC “Parex banka” re-structuring model, “Parex banka” has prepared a re-structuring plan in compliance with the EC guidelines. According to the EU state aid control requirements the Ministry of Finance shall submit the “Pare banka” re-structuring plan to the EC for approval; the same has already been done with international lenders within the set term – on March 31, 2010. It is planned that the EC opinion will be submitted till June 30, 2010.

On March 23, the Cabinet of Ministers took a decision on the JSC “Parex banka” re-structuring model separating part of assets into a new company (new bank). This model in compliance with the EC guidelines was recommended to the government by the financial consultant “Nomura International plc” because it has several notable advantages in respect of recovery of public investments and interests of the bank’s clients.

Information prepared by:
Baiba Melnace
Head of Communication Division
Phone 6 708 3850; 2 926 5135
baiba.melnace@fm.gov.lv

Mar 31, 2010
Annual meeting of Parex banka’s shareholders to be held on 30 April 2010
The annual meeting of Parex banka’s shareholders will be held on 30 April 2010. The agenda of the meeting contains the approval of bank’s 2009 annual report.

As reported previously, on 6 April 2010, Parex banka’s shareholders will assemble for an extraordinary meeting to elect the Council and an Audit Committee for the bank. This meeting has been initiated by the Privatisation Agency. The previous extraordinary meeting of shareholders was held on 29 January to decide on the issue of bank’s debt securities.

Currently, the Latvian Privatisation Agency is the majority shareholder of Parex banka, holding 76.6% of the Bank’s shares, but 19.7% are owned by the European Bank for Reconstruction and Development. Minority shareholders hold the remaining shares.

About Parex banka

Founded in 1992, Parex banka currently employs some 1 900 people at branches all over Latvia and 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. Parex banka has signed up to the European Code of Conduct on housing loans.
Mar 30, 2010
Asset Management Company "Parex Asset Management" notifies of the recent changes in the composition of the Company Council

The new Council has been approved by March 29, 2010 by decision of the sole shareholder of the Company, and these changes were registered in the Commercial Register of the Republic of Latvia on March 29, 2010. As a result of such changes the Company Council shall continue its work composed of the following members: Chairman of the Council Nils Melngailis and the Council members Solvita Deglava, Anatoly Friedman and Russel James Breiding.

Solvita Deglava currently is a Head of Credit restructuring financial and administrative departments of AS Parex Banka and deputy Head of Credit restructuring department of AS Parex Banka. From December 2008 to March 2010 she was the Chairman of Audit Department of AS Parex Banka. Before AS Parex Banka, since year 2005 to 2008 Solvita Deglava has been a Member of the Management Board, a Member of a Council and Senior vice president of finances in a company AS "Latvijas kuģniecība" (Latvian Shipping Company).

Mar 27, 2010
Parex banka’s eurobond price on the secondary market at pre-crisis levels

On 26 March 2010, indicative prices in the Bloomberg system show that the price of Parex banka’s eurobods on the secondary market reached a level of 92.72% of their face value. The Bloomberg data indicates that since 15 January, 2009, when the secondary market price of the bonds was at its lowest point of 34.95% of the face value, the price of the Bank’s Eurobonds has returned to pre-crisis levels.

Kaspars Jansons, Vice President, Head of Treasury at Parex banka commented: “The market welcomes the changes in the stability of Parex banka and the recovery of the Latvian economy, being reflected in the price of the Bank’s bonds on the secondary markets reaching the pre-crises levels. Moreover, the current price level indicates that there are no visible risks as to the splitting up of Parex banka and the decision made by the Latvian Cabinet of Minsters has not negatively impacted the price of the Bank’s bonds.”

On 15 February 2010, Parex banka completed the first tranche of notes issue of EUR 17,680,000, and concluded relevant two-year deposit agreements worth EUR 130 million. This kind of deposit agreements with customers will improve the liquidity of the bank. The second tranche of bonds is to be organized in two months, upon the formation of the secondary bond market. To facilitate the trade of securities in the secondary market the Bank has signed a contract with investment bank Morgan Stanley about the distribution of the securities in the international market. Morgan Stanley will not be paid for this service.

About Parex banka

Founded in 1992, Parex banka currently employs around 1 900 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. Parex banka has signed up to the European Code of Conduct on housing loans.

Mar 26, 2010
Restructured parts of Parex banka will be able to fulfil all liabilities

Parex banka and financial experts from the international consulting firm Nomura International have prepared detailed business plans for both parts of the restructured bank, which indicate that both parts of the bank will be sustainable and able to fulfil all of their liabilities. Financial projections attest that the new bank will return to profitability already next year, while the existing bank will continue to operate, focusing on the maximum recovery of resources in favour of its shareholders.

In line with the business plan, the new bank will derive a profit in 2011, gradually increasing its deposit portfolio and launching a lending programme. The existing bank, for its part, will cover its liabilities towards borrowers, gradually recovering resources for the bank’s current lending portfolio. Forecast indicators show that both parts of the bank will be attractive to investors. The business plans will be a key part of the restructuring plan that is to be submitted to the European Commission on March 31, as well as to the Financial and Capital Markets Commission in order to license the new bank.

The main objective of the restructuring is to improve the bank’s basic operations in the Baltic States, as well as to return the bank to the private sector so that its operations have a positive effect on the economic recovery process in Latvia. Management of the problematic part of the bank’s lending portfolio will be split off to maximise the recovery of those resources. The decision on Parex banka’s restructuring model was taken on 23 March, based on the European Commission guidelines on state aid to financial institutions.

About Parex banka

Founded in 1992, Parex banka currently employs around 1 900 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. Parex banka has signed up to the European Code of Conduct on housing loans.

Mar 25, 2010
All Parex banka’s depositors to be transferred automatically to the New Bank

The new Parex banka’s restructuring model foresees that all of the bank’s depositors will automatically be transferred to the new bank. This will in no way affect the bank’s cooperation with customers, and all the existing customer agreements with the bank will remain effective.

The new bank will operate successfully and persistently, without requiring additional state support or the restrictions that are currently burdening Parex banka’s work. Consequently, the bank will be able to develop services far more dynamically, offering its customers a wide range of products, including lending services.

Parex banka has received an approval from the International Monetary Fund and the Financial and Capital Markets Commission (FCMC) to increase credit limits to its most loyal corporate customers. Moreover, the bank has reached an agreement with the European Investment Bank on the provision of EUR 100 million for loans to small and medium enterprises, as well as concluded a trade finance agreement with the European Bank for Reconstruction and Development (EBRD). These agreements will allow the new bank to launch operations actively, thus, facilitating the economic development in Latvia.

The business model of the restructuring plan provides for the development of the two parts of the bank, each with different strategies, and both fully committed to fulfil all binding liabilities towards customers. The restructuring plan is subject to European Commission approval.

About Parex banka

Founded in 1992, Parex banka currently employs around 1 900 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. Parex banka has signed up to the European Code of Conduct on housing loans.

Mar 24, 2010
SC Parex Banka (“Parex banka”) announcement to Holders of its €200,000,000 5.625% Notes due 5 May 2011 (ISIN: XS0253533318) (the “Notes”)

Parex banka announces that it has today published preliminary proposals for a possible restructuring of the Bank.

Such restructuring may include the spin-out of certain assets and liabilities from Parex banka into a new bank (“New Bank”) to be capitalised by the Latvian Government and the European Bank for Reconstruction and Development.

The purpose of the restructuring is to provide a platform for the sustained growth of the New Bank and to preserve the financial situation of Parex banka, whilst complying with the European Union State Aid principles. Subject to the fulfilment of a number of conditions, including the approval of the European Commission, it is intended that the proposed restructuring will be implemented by July 2010. A press release in relation to the proposed restructuring is available at www.parexgroup.com.

Parex banka expects to make proposals to holders of the Notes shortly. The aim of those proposals will be to ensure the continued performance of coupon and repayment obligations on the Notes by Parex banka or New Bank after the restructuring.

Mar 23, 2010
Parex banka signs agreement with European Investment Bank

Parex banka is glad to announce that the bank has signed an agreement with the European Investment Bank on 23 March 2010. The signed agreement provides funding in amount of EUR 100 million for co-financing small and medium sized enterprises in Latvia. Lending of these funds will start after receiving approval from the European Commission for the bank’s restructuring plan and receiving respective guarantees from the Latvian government.

Nils Melngailis, Chairman of Parex banka’s Management Board states: “Loans to corporate clients are a very important instrument, allowing the bank to grant necessary financing to Latvian enterprises; thus, providing support in reviving the Latvian economy. The reached consent with the European Investment Bank verifies the trust of international financial institutions in Parex banka and stabilisation of its operations."

Parex banka will use the financial resources provided by the European Investment Bank to issue loans to those enterprises, which plan to expand competitive and environmentally friendly development projects. The conditions of the agreement provide that the European Investment Bank will disburse the funding in several instalments. Parex banka has started to prepare the necessary procedures in order to receive an approval from the Financial and Capital Market Commission as well as other preparatory tasks in order to be ready to commence lending immediately after receiving the approval of bank’s restructuring plan from the European Commission. The Financial and Capital Market Commission has removed the prohibition for Parex banka to issue new loans utilising funding received from the European Investment bank.

About Parex banka

Founded in 1992, Parex banka currently employs around 1 900 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. Parex banka has signed up to the European Code of Conduct on housing loans.

Mar 22, 2010
Parex banka allowed to extend credit limits to loyal corporate customers by LVL 10 million

Parex banka has received an approval from the International Monetary Fund and the Financial and Capital Markets Commission to increase credit limits to its most loyal corporate customers, thus facilitating their development potential in the economically challenging environment. The provision is effective as of 22 March 2010, and the bank will divert up to LVL 10 million for this purpose.

The increased credit limit will be available to those corporations, which have been Parex banka’s customers for at least five years. The increase will be equal to up to 20% of the customer’s existing liabilities, provided that the customer’s funding requirements are reasoned, with sufficient cash flow and collateral.

Head of Corporate Services Sector Agnese Paegle: “This decision will allow us to strengthen relations with the strategically most important customers of bank’s corporate sector by issuing loans which the enterprises need to pursue further development. As we all know, the current lack of lending resources is one of the most fundamental obstacles hindering the economic recovery of Latvia. This will also substantially facilitate Parex banka’s competitiveness in the corporate services segment.”

Prior to increasing the credit limit, the bank will appraise the collaboration history with each particular customer, including the assessment of average monthly account balance, absence of delayed payments or breach of loan agreements, gross income of the bank from the customer or group of customers, as well as the duration of cooperation.

About Parex banka

Founded in 1992, Parex banka currently employs some 1 900 people at branches all over Latvia and 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. Parex banka has signed up to the European Code of Conduct on housing loans.

Mar 20, 2010
Parex and EBRD agree on guarantee issuance for bank’s clients

Parex banka has signed a trade facilitation agreement with the European Bank for Reconstruction and Development (EBRD), aimed to assist Parex banka’s clients to reduce the risks of their international transactions.

The EBRD support will be available to Parex banka’s customers operating in the Baltics, which import and export goods and services and need bank guarantees and letters of credit.

Agnese Paegle, head of the Corporate Services Directorate: “This is a key step we’re taking with the help of our second largest shareholder. We’ll help our corporate clients to pursue their business plans and to enhance their business volumes. The EBRD is well known and prestigious throughout the world, and its guarantees will allow businesspeople to open up new roads toward their business goals, as well as to find new and valuable partners abroad.”

One of the Parex banka’s strategic aims for this year is to introduce and to develop new corporate client services standards both in Riga and in the most active regional centres - in Ventspils, Liepāja, Tukums, Ogre, Jelgava, Valmiera, Rezekne, Daugavpils and Jekabpils.

About Parex banka

Founded in 1992, Parex banka currently employs some 1 900 people at branches all over Latvia and 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. Parex banka has signed up to the European Code of Conduct on housing loans.

Mar 16, 2010
Ministry of Finance: Government informed about models for bank’s restructuring

According to the Latvian Ministry of Finance, the Cabinet of Ministers reviewed various models for the restructuring of the Parex banka on Tuesday, March 16. The government received a report from the Latvian Privatisation Agency (PA) on work that is being done to ensure a split of assets and the creation of a new enterprise (new bank) in a way that will be in line with the bank’s future business profile. This model is recommended by government’s international financial consultant, Nomura International plc, in correspondence to European Commission guidelines. The PA added that the restructuring model is being studied in depth, emphasising the fact that the splitting up of the bank will in no way affect the bank’s clients and their relationship with the bank.

The decision on a restructuring model is of key importance so that the restructuring of the Parex banka can be completed. After the agreement of the relevant institutions in Latvia, the Ministry of Finance will submit the plan to the European Commission for its approval. This is required because of EU procedures related to the provision of government aid to financial institutions.

The splitting off of assets and obligations will begin after the European Commission approves the restructuring model. Assets unrelated to the bank’s basic operations will be split off. They will be managed and sold in accordance with a pre-approved strategy. After the restructuring, the bank will be able to relaunch its lending operations. The Parex banka has already reached agreement on financing that will allow it to issue loans to small and medium companies in the Baltic States, thus playing an important role in the region’s strategy for economic recovery.

On January 25, the PA renewed its contract with the international investment bank Nomura International plc, which is serving as a consultant on the sale of the Parex banka. Nomura International plc is drafting the restructuring plan and will be responsible for its implementation, as well as for the sale of assets that are available for sale as a result of the restructuring. Nomura International plc analysis suggests that the existing Parex banka lending portfolio can be managed most effectively by splitting off assets that are unrelated to the new bank’s future strategic development. The establishment of a new bank will allow it to strengthen its positions in the Baltic market. The restrictions on bank operations that are in place now will be lifted, and it will be possible to diversify the new bank’s asset refinancing sources, thus ensuring the full repayment of the state’s subsidies to the greatest possible extent.

Baiba Melnace
Head of Communication Division
Ministry of Finance
Telephone: +371 67083850; +371 29265135
baiba.melnace@fm.gov.lv

Mar 4, 2010
Extraordinary meeting of Parex banka’s shareholders to be held on 6 April 2010
Initiated by the Privatisation Agency, Parex banka’s shareholders will assemble for an extraordinary meeting to elect the Council and an Audit Committee for the bank on 6 April 2010.

The current membership of the Council was approved on 29 January 2010 with Andžs Ūbelis as the chairman and following members: Kaspars Āboliņš, Juris Vaskāns, Michael J. Bourke and Laurence Philip Adams.

Mr Ūbelis is also the deputy state secretary of the Latvian Finance Ministry, and he has chaired the bank’s Council since 23 December 2008. Over the course of 10 years in the system of national governance, he has held a series of positions related to management of EU financing, as well as European integration.

Mr Āboliņš is governor of the State Treasury, while Mr Vaskāns was formerly on the board of the Privatisation Agency. Mr Bourke has served a long term as the president of the Rietumu Banka. He also has a wealth of experience with international financial institutions, including the Irish Central Bank, the IMF, and the NCB Group. Mr Adams represents the European Bank for Reconstruction and Development. He has a 25-year history in the financial sector and has worked for foreign financial institutions such as ABN AMRO Bank and Citibank.

The previous extraordinary meeting of shareholders was held on 29 January to decide on the issue of bank’s debt securities.

Currently, the Latvian Privatisation Agency is the majority shareholder of Parex banka, holding 76.6% of the Bank’s shares, but 19.7% are owned by the European Bank for Reconstruction and Development. Minority shareholders hold the remaining shares.

About Parex banka

Founded in 1992, Parex banka currently employs some 1 900 people at branches all over Latvia and 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. Parex banka has signed up to the European Code of Conduct on housing loans.
Mar 2, 2010
The transactions with Mortgage bank’s payment cards in Parex banka’s ATM network increase by 84%

In the first month of unified ATM network of Parex banka and Mortgage bank, the transactions with Mortgage bank’s payment cards in Parex banka’s ATMs increased by 84%. In total transaction amount, carried out with the Mortgage Bank’s payment cards has increased by 95% in comparison to last year’s results. At the same the number of transactions with Parex banka’s payment cards in Mortgage bank’s ATM network has increased by 51%. The total number of transaction has increased by 47%.

The results confirm that the unification of Parex banka and Mortgage Bank ATM network was rational step to increase the customer service quality, and the new service has gained customer recognition. The ATMs of Parex banka are mainly located in Riga, largest shopping malls and major cities of Latvia, while Mortgage bank’s ATMs are mostly located in the regions, district centres and rural municipalities, for example, in Aizkraukle, Dobele, Kuldīga, Madona, Preiļi, Valka and etc. The common network comprises already 205 ATMs.

Parex banka is a member of common ATM service network with GE Money Bank and Latvian Savings Bank. Under this alliance the customers of respective banks using Parex banka’s ATMs for money withdrawals are not charged additional commission. The same conditions apply to the customers of Mortgage Bank withdrawing money at the ATMs of Latvian Savings Bank, Rietumu Bank and SEB, and to the customers of latter banks withdrawing money at Mortgage Bank’s ATMs.

All cash withdrawal machines of Parex banka and Mortgage Bank are a subject of the agreement signed by both banks. However, cash deposits into customer’s account will be allowed only at the cash machines of the account bank. Currently, Parex banka has 10 cash deposit machines operating in the largest shopping malls, Latvijas Pasts branch Sakta and the Bank’s customer service centres.

About Parex banka

Being founded in 1992, Parex banka offers universal banking services throughout the Baltic region, the CIS and other European countries such as Germany, Switzerland and Sweden. Parex Group companies operate across the banking, finance, leasing, asset management and life insurance sectors. Parex banka is the only partner of American Express in Latvia and Lithuania, allowed to issue American Express credit cards. Since 05 December 2008 the State owned Mortgage and Land Bank of Latvia is the majority shareholder of Parex banka.

Feb 26, 2010
Parex banka registers the increase in equity capital

On 26 February, Parex banka registered an increase in its equity capital by LVL 31.5 million. The bank’s capital was increased in accordance with a decision taken by the Latvian Cabinet of Ministers on 23 February 2010.

The capital increase has been effectuated by capitalizing the relevant portion of an existing State Treasury deposit in the bank; thus, no additional funding was required for this purpose. Furthermore, the transaction does not affect the bank’s overall obligations towards the Latvian state.

The government decided to provide for a closed issue of shares, thus increasing the equity capital of Parex banka by LVL 31.5 million. Following the decision, the bank issued 31.5 million non-voting shares with a face value of LVL 1 apiece. The Latvian Privatisation Agency purchased the issue thus expanding its participation in the bank’s equity capital. Since the registration of these changes, the Privatisation Agency remains the majority shareholder with 77%, while the European Bank for Reconstruction and Development holds 20% of the shares.

The proportion of voting shares will not change – The EBRD’s stake in the bank is equal to 25% plus one share, while the Privatisation Agency controls 70.6% of voting shares.

About Parex banka

Founded in 1992, Parex banka currently employs some 1 900 people at branches all over Latvia and 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. Parex banka has signed up to the European Code of Conduct on housing loans.

Feb 25, 2010
Deposit volumes at Parex banka increase substantially

Parex banka saw an increase in deposits of more than LVL 52 million in February 2010, with deposits increasing in nearly all client segments. Corporate and institutional clients, depositing more than LVL 25 million, mainly granted the increase. The sector of individuals and small and medium companies contributed more than LVL 10 million, while the clients of private bankers deposited more than LVL 9 million.

In line with the market trends, Parex banka will lower interest rates on deposits as of March 1; however, they will remain among the highest in the market. Clients who deposit money by March 1 will continue to receive the high interest rates posted on the bank’s homepage www.parex.lv.

Guntis Beļavskis, head of the Retail and SME Service Sector: “As deposit volumes have stabilised, banks have gradually been reducing their interest rates on deposits since the beginning of this year. Parex banka is no exception in the market, but we are going to continue to offer more advantageous deposit products to private individuals and companies.”

Parex banka has approximately 380,000 clients and a widespread network of branches throughout Latvia – 32 client service centres in Riga and 30 in regions. The bank offers a wide range of services to individuals, companies and clients using private banking services.

About Parex banka

Founded in 1992, Parex banka currently employs some 1 900 people at branches all over Latvia and 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. Parex banka has signed up to the European Code of Conduct on housing loans.

Feb 15, 2010
International deposits increasing at Parex banka

Since November 2009, the volume of international deposits at Parex banka has increased by LVL 20 million indicating a restoration in customer trust and offering positive signals about the bank’s development.

Senior Vice President, head of Private Capital Management Sector, Roberts Idelsons: “Stabilization of the situation in the bank and improving economic situation in the world, including the markets to our East, have allowed Parex banka to gain a substantial increase in the deposit portfolio. Data from the last several months indicate that business volumes and turnover in the non-resident segment are on the rise, and this has had a positive effect on the bank’s financial indicators.”

Services for international customers remain Parex banka’s key area of operations. The bank offers a wide variety of private capital management services ranging from simple options to sophisticated added value services including payment cards and business accounts, deposit services, investment consultations, brokerage services, storage of securities and many others.

Parex banka is ready to offer its customers advice on investment opportunities in such CIS countries as Russia, Ukraine, Azerbaijan, Belarus, Kazakhstan and Moldova, as well as in Western Europe. The first Parex banka’s foreign office was opened in the Belarusian capital city of Minsk in 1993.

About Parex banka

Founded in 1992, Parex banka currently employs some 1 900 people at branches all over Latvia and 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. Parex banka has signed up to the European Code of Conduct on housing loans.

Feb 12, 2010
Parex banka introduces electronic payment option for real estate tax

Parex banka has introduced electronic payment option to accelerate and facilitate the payment of real estate tax through www.epakalpojumi.lv, available to Parex banka’s Internet bank users. Additionally, Parex banka’s customers are able to file electronic requests to receive real estate payment notifications.

Entering the above-mentioned portal, the user will see information about tax payments. Clicking on “Payment via Parex banka’s Internet bank”, the user identification window will open and after entering the passwords, the user will receive a fully completed payment order, which will have to be approved or rejected. Finishing the work, the user will automatically be returned to the E-service page.

Electronic identification and payment instruments are becoming an integral part of modern everyday life. Expanding the Internet bank services, Parex banka is offering its customers yet another way of making life more convenient, thus, saving the time and money.

In line with the changes to the law on the real estate tax, local municipalities may prepare and distribute real estate tax notifications electronically. Taxpayers – private individuals, who wish to receive the payment notifications electronically, must register their e-mail address on www.epakalpojumi.lv or address their respective municipality, but legal entities must personally arrive at their respective local government agency to file such request.

Feb 10, 2010
Parex Banka Reports Annual Results

During 2009, the economic tendencies continued to affect the financial results of the Parex banka. The bank ended the year with unaudited losses of LVL 107.5 million, of which LVL 103.5 million represent set-asides to cover decreases in the value of the bank’s assets.

Since the state took over the Parex banka, much work has been done to optimise the operating costs. Administrative costs were cut substantially in 2009 – personnel costs were down by 30%, travel expenditures – by 93%, advertising, marketing and representation costs – by 85%, transport costs – by 68%, office supply costs – by 61%, and communications costs – by 28%. Total savings as compared to 2008 reached LVL 32 million.

The Parex banka’s loan portfolio at year’s end reached LVL 1.45 billion, and there were LVL 1.54 billion in deposits. Total assets amounted to LVL 2.48 billion, while the capital and reserves at the end of the year was LVL 156.5 million.

During 2009, the Parex banka has paid LVL 40.9 million in interest to the State Treasury for its deposits and to the Privatisation Agency for its subordinated loan.

On February 15, 2010, the Parex Bank will repay the next tranche of its syndicated loan. The payment will amount to LVL 218 million (EUR 310 million). The bank itself will contribute LVL 116 million of the amount, while the State Treasury will provide LVL 102 million by placing deposit with the bank.

About Parex banka

Founded in 1992, Parex banka currently employs some 1 900 people at branches all over Latvia and 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. Parex banka has signed up to the European Code of Conduct on housing loans.

Feb 9, 2010
Parex banka receives eight Euromoney nominations

International financial magazine Euromoney has published the results of the Private Banking Survey 2010, nominating Parex banka as the best private banking service provider is eight categories. Parex banka has been recognized as the best bank in the following nominations: Range of investment products, Advisory services, Foreign exchange, Precious metal investments, Family office services, Equity portfolio management, Fixed income portfolio management and Offshore services.

Parex banka is the only Latvian bank with local capital, which has been nominated in the Nordic and Baltic region. The bank has been recognized as the 8th best provider of private banking services in the region, which is a much better result than last year, when Parex banka scored the 14th best result.

Bank’s subsidiary in Lithuania Parex bankas has been recognized as the best in Range of investment products nomination and second best in Real estate investments and Offshore services nominations. Estonian branch, in its turn, has been recognized as the second best in Estonia in Offshore services and Privacy and security nominations.

Euromoney's Private Banking Awards are the most prestigious in the growing area of wealth management. They cover over 60 countries each year, as well as global and regional awards. They are voted by the people who know the industry best - the private bankers themselves. Winning an award is a confirmation of excellence in wealth management, which banks use to promote their credentials to clients.

The annual Private banking survey provides a qualitative and quantitative review of the best services in private banking, by region and by areas of service. Factors such as assets under management, profitability, ratio of clients to relationship managers, and services offered, among other things, are all considered in developing the ranking of top private banks.

About Parex banka

Founded in 1992, Parex banka currently employs some 1 900 people at branches all over Latvia and 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. Parex banka has signed up to the European Code of Conduct on housing loans.

Feb 1, 2010
Property Group RB Management (RBM) Leads Completion of Bond Issue

Acme Corporation, one of the companies serviced by RB Management (RBM) property group successfully issued a bond at the end of April. The debt securities were offered to investors with 8% annual yield and maturity in April 2013. The nominal value of the instrument is EUR 6.05 million. It is planned to list the bonds on NASDAQ OMX Riga Stock Exchange. Investors received the bonds in exchange for SIA Apex Investments bonds.

Acme Corporation consolidates the group’s retail, office and logistics holdings under one umbrella for more efficient reporting and consolidation, as well as offers a better collateralised portfolio for bondholders.

The arranger of the bond transaction was Parex banka. Janis Dubrovskis, Director of Debt Origination, Parex banka said: “In order to successfully close the issue of Acme Corporation bonds we had to negotiate an acceptable solution for all the involved parties – each individual bondholder, Acme Corporation and the senior lender. It was a complicated process. We are glad that bondholders showed trust in the current management and demonstrated their belief in the continued stability of Acme Corporation’s business by signing up for this new bond issue.”

Commenting on the new issue, Jerry Wirth, partner of RBM, said: “We are proud of our team for their hard work and steadfast belief in the portfolio. The success of a new issue in this historically low market is a testament to sound management, a solid track record, and persistence.”

David DeRousse, partner of RBM, added: “From the beginning, our investment criteria called for safe, reliable cash flowing real estate. We believe this philosophy is proving itself now; even in the current market, the companies’ cash flow remains stable. We are pleased that bondholders agree with us, as without their cooperation, we would not have been able to structure a new bond issue that benefits bondholders, the senior lender and the issuer.”

This is the second successful bond retired by RBM Group, with the first being part of a sale of hotel development and RBM Group company SIA Happy Trails to Estonia’s Infortar in December 2007.

About RB Management

Property group RBM is a closely held real estate investment and development concern that has been investing in Baltic real estate since 1995. During this time, RBM has acquired a wealth of experience in acquisitions, sale leasebacks, structured finance and development. With a dedicated and professional staff, RBM has grown their business from a single asset into a diversified portfolio including nine supermarkets, three office buildings, one DIY, leisure properties, and logistics developments. Major tenants include Rimi Latvia, Super Netto, L’Oreal Baltic, TNS Gallup, Unilever, and Olympic Casinos. RBM also provides facilities management services to outside clients.

About Parex banka

Founded in 1992, Parex banka 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. Parex banka is the only partner of American Express in Latvia and Lithuania, allowed to issue American Express credit cards. Since 27 February 2009, the Latvian Privatisation Agency is the majority shareholder of Parex banka.

Jan 29, 2010
Parex banka to issue EUR 175 million in bonds

On 29 January 2010, in an extraordinary meeting of Parex banka’s shareholders a decision was made to issue bank’s debt securities for the total value of EUR 175 million with a 2 year maturity and a 5% coupon. The planned issue date is 15 February 2010 and the bank will have an early repayment rights. The bonds will be issued in several tranches.

The issue of Parex banka’s debt securities will be aimed at facilitating economically favourable and legally stable deposit restructuring. Parex banka’s major depositors who currently have limited possibilities to handle their funds will be offered to acquire securities by means of their funds deposited at the bank. The restructuring of the largest bank’s deposits will have a favourable effect on decisions regarding the cancellation of the imposed restrictions, as well as on the bank’s ability to attract investors and repay the state’s investment. Lifting of the restrictions is one of the prerequisites to re-launch lending, which currently is an essential factor for the stimulation of general economic development.

Currently, the Latvian Privatisation Agency is the majority shareholder of Parex banka, holding 73.4% of the Bank’s shares, but 22.4% are owned by the European Bank for Reconstruction and Development.

About Parex banka

Founded in 1992, Parex banka currently employs some 1 900 people at branches all over Latvia and 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. Parex banka has signed up to the European Code of Conduct on housing loans.

Jan 15, 2010
About amendments to the closed-end investment fund „Parex Baltic High Yield Fund” documents

„Parex Asset Management” IPAS hereby informs that the meeting for the closed-end ”Parex Baltic High Yield Fund” investors took place on December 29, 2009, the agenda of the meeting covered introduction of amendments to the prospectus and fund rules of the closed-end fund ”Parex Baltic High Yield Fund”. Financial and capital market commission registered amendments to the documents of the closed-end fund on January 13, 2010, which will become effective as of February 15, 2010 and according to them Fund’s operating duration has been extended till December 6, 2012.

Jan 12, 2010
Research: Parex bank shows strong development in online banking services

According to the Baltic online and mobile banking research executed by Metasite Business Solutions, the strongest developing bank among local Estonian banks is Parex Bank, climbing from eight to sixth position during the year.

„Compared to last year, Parex Bank has made an extensive renovation, both internally and externally. We have updated our website and upgraded the Parex Online Banking system. Additionally we have launched unique products on the Estonian market offered only by Parex, like for example the flexible savings product Maxi-account and a term deposit with the possibility to exchange it’s currency during the term – FLEX. With Parex Pension Program we have entered a new, elderly client segment,” said the Development and Marketing Director of the Estonian branch Karl Anton. “New things are yet to come in the nearest future. Our aim is to become one of most advanced small banks in the Estonian market offering the best quality and variety of services,” he added.

According to the research, the qualities that have made the highest increase at Parex are the usability and understanding of the services provided.

The 2009 edition of the Baltic E-Banking Report covers all Estonian, Latvian and Lithuanian retail banks and compares their online and mobile banking services. Each bank is evaluated with the other and results are compared with the results from the last year. This provides a possibility to measure the progress of each bank throughout the year.

About Parex Bank

Parex Bank (AS Parex banka Eesti Filiaal) is servicing clients in Tallinn since 2004. In 2007 a new, full service Client Service Center was opened in Narva, in July of 2008 in Tartu and in August of 2008 in Lasnamäe. Parex Bank offers international and local payments, deposits, leasing & factoring, currency exchange, bank cards and Parex Online Banking. By constantly developing its product range, Parex Bank is an advantageous player in the market, always offering the best services.

Jan 11, 2010
Parex Index: the economic situation is stabilising

Results of the Q4 2009 business activity research Parex Index show that compared to Q3, the mood of businesspeople has not changed much, and there has not been any rapid reduction in the index. This suggests that the economic situation in Latvia is becoming more stable. The study, which was conducted in December in collaboration with the SKDS public opinion research centre, reveals the views of Latvian entrepreneurs about the economic situation in the country. In comparison to November 2009, the index declined by just 0.14 points. As reported earlier, Q3 2009 was the first time since late 2006 that the index increased, which means that in the 3rd and 4th quarter of 2009, entrepreneurs were not as pessimistic as they were in Q2 of the same year.

Changes in Parex Index since Q1 2004

SKDS director Arnis Kaktiņš: “Analysing changes in Parex Index, we have to remember that it is a pre-emptive indicator in respect to a series of Latvian macroeconomic parameters. The index shows the prevailing mood of businesspeople when taking important decisions related to their operations – invest or not invest in their companies, hire or sack employees, expand or narrow operations, etc. The consequences of the decisions taken today will be reflected in macroeconomic indicators only later, and in many cases these will just be the consequences of decisions taken by businesspeople in the past. In this sense, the stabilisation of Parex Index is very good news, indeed, meaning that the economic situation in the country is also stabilising. Thus, we do not expect the macroeconomic indicators to deteriorate very rapidly over the next few months.”

During the fourth quarter of 2009, the future forecast index dropped slightly (by 0.29 points), while the present index did not change.

Changes in the Parex future and presence index since Q1 2004

Trends in the sub-indexes of Parex Index show that since the middle of last year, entrepreneurs have been increasingly positive about the overall economic activities in Latvia. Since Q3 2009, they have also been more positive about economic activities in their specific sector. The sub-indexes apply to turnover, profitability, financial status, employee numbers and investments in each company, and these have experienced marginal changes during the last quarter of 2009.

A rapid increase in optimism during Q4 2009 was seen in the building industry (up by five points) – the sector in which the greatest pessimism had existed ever since mid-2008. Currently, the most pessimistic mood is prevailing in the retail industry, while manufacturing companies are the most optimistic.

Business optimism during the last quarter of 2009 increased in the Riga metropolitan area (up by 4.47 points). It dropped by 4.21 points in Latgale and remained unchanged from the 3rd quarter in other regions of Latvia.

Enterprises with relatively large turnovers and employee numbers, as well as businesspeople whose companies are entirely owned by foreign capital have been comparatively more optimistic in 2009.

Full report

About Parex Index

The first business activity index in Latvia – Parex Index – was established at the beginning of 2004 by Parex banka in cooperation with SKDS, the leading centre of market and public opinion research. The main purpose of the research is to establish a single index describing Latvian entrepreneurs subjective appraisal of the economic situation of the State. The index is calculated based on the poll and the analysis of the opinions of 750 Latvian businesses of different size and from different industries. The index reflects the opinion and the forecasts of the business community on the level of economic activity of the country and in their particular industry, as well as an evaluation of different indicators of company operations, such as profitability, turnover, financial position, number of staff, and investment level. If the index value exceeds 50 points, this is an indicator of certain level of optimism regarding the issue; in turn, the value below 50 points depicts pessimism.

About Parex banka

Founded in 1992, Parex banka currently employs some 1 900 people at branches all over Latvia and 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, the Latvian Privatisation Agency is the majority shareholder of Parex banka, holding 73.4% of the Bank’s shares, but 22.4% are controlled by the European Bank for Reconstruction and Development. Parex banka has signed up to the European Code of Conduct on housing loans.

Jan 11, 2010
On amendments in the investment plan prospects of the state founded pension scheme managed by "Parex Asset Management" IPAS

On December 29, 2009 "Parex Asset Management" IPAS signed an agreement with the State social insurance agency: according to this agreement amendments were made in the prospectuses of “Parex Active pension plan” and “Parex Universal pension plan” of the state founded pension scheme. According to the amendments:

  • The contact information of the Asset Manager and Custodian were updated;
  • The information about payments for investment plan management was changed;
  • The information about the Council and Board members of the Asset Manager and Custodian, also about certified auditor was changed;
  • Due to the changes in the legislation of State founded pensions, the changes were made in the investment policy of investment plan and investment restrictions;
  • The information about Asset Manager’s established investment funds was supplemented/ updated.

Amendments to the prospectuses “Parex Active pension plan” and “Parex Universal pension plan” of the state founded pension scheme regarding payments for management of the state founded pension scheme investment plans and changes in the investment policy of investment plans and investment restrictions is effective as of January 1st, 2010.

Prospectuses of the investment plans are available in the Internet (www.manapensija.lv) and on the web page of “Parex Asset Management" IPAS (www.parex.lv).

Jan 1, 2010
On the parliamentary amendments to the Law on the Personal income tax

Dear Customer:

We would like to inform you that as of 1 January 2010, Parex banka is ensuring the automatic withholding of the individual income tax from interest income on deposits, also providing for the transfer of the tax to the national budget.

Amendments to the law on the individual income tax approved by Parliament on 1 December 2009 provide, inter alia, that individuals are subject to capital gains tax*:

Income from capital that is not capital gains
As of 1 January 2010, a 10% tax rate is being applied to the following types of income from capital:

  • Dividends;
  • Interest income on deposits and alike, a well as income related to interest income;
  • Income from deposits in private pension funds;
  • Income from the concluded accumulation life insurance contracts.

Income from capital gains
As of 1 January 2010, a 15% tax rate is being applied to the following types of income from capital gains or income from capital assets:

  • Stock, capital shares, debentures, and investments in general partnerships;
  • Investment fund participation certificates;
  • Debt instruments and other money market instruments;
  • Other financial market instruments;
  • Real estate (including the right to use real estate);
  • Objects of intellectual property.

Detailed information on the parliamentary amendments to the Law on the Personal income tax


*Please note that this letter is for your information only. The explanations are based on the parliamentary amendments to the law on the individual income tax that were approved on 1 December 2009.  We recommend addressing your tax consultant about specific cases in this regard.