RIGA - An Irish national has purchased a 33.1 percent stake in Rietumu Banka, one of Latvia's fastest growing financial institutions.
For an undisclosed sum, Dermott Desmond bought most of the shares of a new issue, as well as shares owned by the bank's first president, Anatolijs Levins, bank officials told the press on Aug. 29.
"We are satisfied with closing such an important deal for the bank's development because this is one of the most important events in the history of this bank," said Leonids Esterkins, the bank's council chairman who also now owns a 33.1 percent stake.
Desmond said that Esterkins had informed him about the chance to invest in Rietumu Banka.
"Rietumu Banka will be used as a launching pad for other investments in Latvia," he said, adding that this was his first investment in the country.
Board member Aleksandrs Kalinovskis said the bank would further expand its influence in the CIS and Baltic markets now that a new investor has been found.
For years, Rietumu owners had been scouting for a strategic investor but without result. Kalinovskis said that the bank has dropped its intention to sell a 20-percent stake to the European Bank for Reconstruction and Development.
"Such an offer was not accepted because this offer was better price-wise," he said, adding that Rietumu Banka would continue cooperating with the EBRD on various projects in the sphere of loans and syndicated loans.
The bank's supervisory council will change after the transaction, with Desmond and another individual selected by him to join the four-member council.
The new stock emission raised Rietumu Banka's share capital to 22.5 million lats (32 million euros). Desmond and Esterkins both hold 33.1 percent stakes, while Arkadijs Suharenko owns 17.5 percent, Vitalijs Lipanivs 8.9 percent, and Michael Bourke 3.5 percent.
In all, the bank has 20 shareholders, all of whom are private individuals.
Rietumu Banka posted earnings of 10.5 million lats in the first seven months of the year, up some 43 percent from the same period last year. At the end of July, the bank's assets amounted to 698 million lats, up 18 percent from the end of 2004.
Meanwhile, an official said the bank was considering the acquisition of a bank in Russia, Lithuania or Estonia in order to expand operations.
Spokesman Sergejs Grod-nikovs told the Baltic News Service this week that Rietumu Banka was thinking over various options, though he declined to provide details. "It is too early now to speak about a particular bank and the sum of the deal, but as soon as the deal becomes clearer, we will inform [the public] about it," he said.