Parex Bank not to be sold in 2009

RIGA - Latvia is not likely to sell the ailing Parex Bank this year, said Andris Siksnis, the head of the Latvian branch of Nordea bank..

"My personal opinion is that not this year. In the coming 15 months it will be difficult to sell Parex Bank as there are too many uncertain factors about Latvia's economic situation and the bank," he said.

Siksnis said that if the new government and the new Parex Bank's administration will operate actively, it will bring some clarity and transparency and the bank resumes its active work, a successful sale cannot be excluded. "However, the current situation is very complicated," he said.

Parex, Latvia's second largest bank, sought government assistance to stave off financial trouble brought about by the global financial crisis. At the end of 2008, the Latvian government decided to take over a controlling stake in Parex Bank through the state-owned Mortgage Bank.

The Latvian state now holds 84.83 percent of Parex Bank shares that had belonged to the bank's founders, major shareholders and top executives Valerijs Kargins and Viktors Krasovickis.

The minority shareholders have kept the remaining 15.17 percent of Parex Bank shares so far. The government's goal is to find an investor for the bank some time in future.

The state-owned Parex Bank shares have now been transferred from the Mortgage Bank to the Latvian Privatization Agency.