French, Latvian firms selected for postal bank

  • 2008-02-20
  • Staff and wire reports
RIGA - Latvia's Transport Ministry announced that a French consultancy and a local business conglomerate have been picked to create the country's postal bank, a project that will aim to rescue the Baltic state's moribund postal company.

Transport Minister Ainars Slesers told reporters on Feb. 18 that CVA, a French consultancy that helped create France's postal bank, and Mono, a Latvian multi-business company, had been selected and that both companies were prepared to invest 50 million euros into the project.
According to the scheme, the two companies will establish a bank that will supervise all postal services, banking services and other operations. Slesers said Latvijas Pasts, which is wholly state-owned, would request at least 10 percent of the bank, as well as representation on its board and council.
DnB Nord and Lattelecom also expressed an interest in the project, but DnB eventually decided not to participate, while Lattelecom, the country's dominant land-line telecommunication service pro-vider, withdrew due to a lack of clarity surrounding its own future.

Latvijas Pasts is currently losing money hand over fist 's nearly 14 million euros last year 's and both company bosses and bureaucrats have been at a loss about what to do. Finally last year the government approved the idea of creating a postal bank, despite the tremendous odds.
Slesers believes, however, that the postal bank will become one of the leading Latvian banks with the widest network of branches.
Many were surprised by the final choice, though Slesers defended the winners by saying that Mono had experience in the banking industry. The company, which deals in retail trade, was co-owner of Lateko Banka before it was sold to Icelandic investors, the Baltic News Service reported.
He also said that CVA had extensive experience in creating banks and helped establish a postal bank in France with over 17,000 outlets.

"Everything should be done for the new company 's the postal bank 's to operate with profit. Of course, the presence of losses is evident in the first years of operation, as reconstruction and restructuring of post offices cannot be done on short notice," Slesers said.
All 800 Latvijas Pasts post offices will be handed over to the new company, and all losses as well, the minister said, adding that a financial audit would be performed to get a clearer picture of the company's bill of health.
Edouard Gravereaux, a CVA executive, told journalists that the company's experience would be useful for Latvijas Pasts.

Boriss Ulmans, vice-president of Mono, told the Baltic News Service that the division of shares in the new bank is still uncertain. He said that approximately six months would be necessary to receive the bank license, while establishing the bank itself could last a year.