RIGA - Talks between the European Bank for Reconstruction and Development and Rietumu Banka on the purchase of a 20 percent stake in the bank could reach a conclusion, representative in the Baltic states, Salvatore Candido, said this week.
He admitted that negotiotions have been prolonged but have never stopped completely. "I can confirm that we are still contacting the bank," he told BNS.
The EBRD board agreed in March 2003 to buy 20 percent in Rietumu Banka, one of Latvia's fastest growing financial institutions, and was prepared to pay 7.9 million lats (11.24 million euros) for the stake.
At the time EBRD officials said the investment would allow the bank to expand its operations by boosting the number of outlets and corporate banking. The project was designed to develop a model for helping so-called niche banks to expand lending to small- and medium-sized enterprises, thereby contributing to overall growth of the economy.
But bank officials have said that the price originally offered by the EBRD, though attractive, quickly became obsolete due to the rapid rise of both the bank's assets and profits. The owners were willing to bring the EBRD on board, but they wanted a more attractive price for the one-fifth stake.
Rietumu Banka is the fourth largest bank in the country by assets. Its share capital is 20.7 million lats, and owners include Leonids Esterkins (33.78 percent), Anatolijs Levins (26.68 percent) and Arkadijs Suharenko (19.11 percent).
In 2000 Rietumu Banka launched talks with Islandsbanki-FBA, the largest bank in Iceland, but to no avail. The initial plans were to sell 56.2 percent in the bank to the Icelandic investor, but later this figure reduced to 12.5 percent. In the end, no agreement was reached.