RIGA - Finland's Sampo Bank announced this week that it has signed an agreement for the acquisition of Maras Banka, a bank specializing in mortgage lending to individuals and owned by businessman Vilis Vitols.
Sampo Bank board member and Maras Banka council chairman Georg Schubiger said that the bank's new owners planned to transform Maras into one of Latvia's largest universal banks in the next three - five years.
"Following the acquisition, Sampo Group will have banking operations in all three Baltic countries. By expanding to the fast-growing Latvian banking market, Sampo Group will strengthen its position in Latvia, where it already has property and casualty and life insurance companies," Sampo said in a statement.
Vitols abstained from commenting, though Maras Banka President Niks Bulmanis, who is Vitols' son-in-law, said it was an important event in the development of the bank.
"In order to make a step forward and compete successfully on the Latvian banking market by offering our clients a wider range of services, large investments - both technological and financial - are needed. Joining the respectable Sampo Group is Maras Banka's chance for development and growth,," said Bulmanis.
He said that benefits to Maras Banka's clients from the change of ownership will include new, high-quality services along with existing perfect client service available not only in Latvia but also within the entire network of Sampo affiliates."In addition to existing business directions, Sampo bank will also work in insurance and various types of saving clients' money, pensions included," he added.
Commenting the deal, Bulmanis said the Maras Banka's owners originally did not intend to sell the bank. "Sampo found us," he said. "We were not even thinking about selling."
Bulmanis said he would become a council member for the bank, which for now will retain its name but could be renamed in future. Bulmanis will be replaced as Maras Banka board chairman by Lithuania's Sampo Bankas deputy board chairman Robertas Cipkus, who will also keep his office in Lithuania.
Schubiger will become Maras Banka's council chairman, replacing Vitols' wife, Marta Vitola.
Sampo Bank said in a report to the Helsinki Stock Exchange that the parties have agreed not to make the price of the transaction public since it still needs approval by the Latvian financial regulator, which will take two months.
Maras Banka was founded in April 1997 and as of September 2004 ranked 22 among Latvia's 23 banks. It posted a profit of 481,200 lats (700,000 euros) over the 10 months of this year, a 51 percent growth year-on-year.
The Sampo Group has been increasingly ambitious on Baltic financial markets, offering the full range of services to businesses and individuals. In Lithuania the Sampo Group's assets include Sampo Bank, life insurance arm Sampo Gyvybes Draudimas, general insurer If Draudimas and the leasing arm Sampo Banko Lizingas. In Estonia its assets include Sampo Baltic Asset Management, Sampo Elukindlustus (Sampo Life Assurance) and Sampo Liising (Sampo Leasing).