RIGA - A Rietumu Banka-owned investment company acquired a large stake in a local knitwear producer for an undisclosed price.
RB Securities, an investment company owned by Rietumu, announced that it had acquired 10.3 percent in the Ogre knitwear producer. A Rietumu Banka spokesman confirmed the deal but refused to provide any details.
Ogre, whose shares are listed on the Riga Stock Exchange, is reported to having financial difficulties. The company posted a 1,100 lat (1,167 euro) loss in the first quarter of the year on sales of 1.5 million lats.
The company's results in 2003 were not available, but Board Chairman Janis Davidovics said that turnover last year was roughly equal to that in 2002, or 18 million lats.
This year Ogre is expecting sales to grow to some 18 million lats due to new clients.
Ogre exports 25 percent of output to the United States, 20 percent to France, 15 percent to the U.K., 15 percent to Denmark. Fifteen percent of output is sold in the Baltic states.
Other large shareholders in Ogre included Vasilijs Melniks, Baltijas Holdings and Logus Limited.
Rietumu Banka announced this week that its earnings amounted to 5.2 million lats (7.9 million euros) in the first five months of the year, two times what it was over the same period last year. In May alone the bank posted a profit of 1.2 million lats.
Aleksandrs Kalinovskis, the bank's first vice president, said the growth was due to the bank's strategy.
"The positive five-month results became possible not because of major successes in any separate field of activities but because practically all spheres of our business are growing even faster than planned," he said.
Rietumu Banka's assets (including assets under management) have increased 20 percent since the beginning of the year to 546 million lats at the end of this May. Year-on-year growth amounted to 31 percent.
At the end of this May the bank held 461 million lats in deposits, up 9.5 percent from early this year and up 30 percent year-on-year.
Rietumu Banka is part of the Rietumu Group, which also includes the investment and brokerage company RB Securities. The group's total assets reached 678 million lats in the first five months of 2004, growing 31 percent year-on-year.
A bank spokesman said that RB Securities was doing well, and its assets in May 2004 topped 145 million lats, up 35 percent from May 2003. The firm's five-month profit this year amounted to 1.3 million lats.
At the end of April Rietumu Banka was the fourth largest bank in Latvia in terms of assets.
