Citadele bank privatisation milestone in Latvia's recovery: EBRD vice-president

  • 2015-04-21
  • from wire reports and TBT staff, RIGA

The privatisation of Citadele Bank is a very visible milestone in the recovery of Latvia's economy from the devastating financial crisis, said Phil Bennett, First Vice President of the European Bank for Reconstruction and Development (EBRD), following the Latvian state's sale of its majority share in the bank. 

"It sends a strong signal to investors, demonstrating the comeback of the country as one of the fastest-growing economies in Europe. Citadele is a solid financial institution with a sound business model and high standards of corporate governance. The EBRD has agreed to remain a shareholder, working to continue this successful development. Strong banks, such as Citadele, are a vital part of a robust economy because only they can provide the funds needed to grow businesses, especially in the small and medium-sized enterprise sector where Citadele excels," says Bennett.

EBRD welcomes the closing of the agreement to privatize Latvia's Citadele Bank. As of April 20, Citadele is majority-owned by a group of international investors led by the U.S. investment firm Ripplewood Holdings and Tim Collins, founder and CEO of Ripplewood. The EBRD, which became a shareholder in the predecessor to Citadele in 2009, has agreed to retain a 25 percent stake alongside the Ripplewood-led investors. The remaining 75 percent had formerly been owned by the Republic of Latvia.

Following a comprehensive and multi-tiered bidding process, in accordance with international standards and EU requirements, the government of Latvia decided in September 2014 to sell its majority stake in Citadele to a group of investors led by Ripplewood. A purchase agreement was subsequently signed between the Latvian Privatisation Agency and the buyer. The final agreement has now come into force with today’s closing.

The EBRD joined the efforts of the international community to mitigate the severe impact of the global financial crisis on Latvia, becoming a shareholder in Parex bank - at that time the country's second-largest lender - in September 2009. After a successful restructuring the institution was split in August 2010 into Citadele, which was prepared for privatisation, and Reverta, which manages the troubled assets.