Nordea evaluating Parex purchase

RIGA - The Swedish bank Nordea has not confirmed media reports that it is planning to buy Parex bank, calling statements printed in the Swedish newspaper Dagens Nyheter a wrong interpretation of what the bank’s representatives said, reports news agency LETA. Dagens Nyheter wrote last week that Nordea wanted to buy Parex, as does U.S. investment bank Morgan Stanley and British investor Peter Hambro, in order to increase its branch network in the Baltic countries.

While Nordea wants to acquire the retail operations of Parex, Morgan Stanley is interested in managing the troubled assets of Parex and Hambro wants to take over its asset management operations, the newspaper said.
Nordea investor relations head Rodney Alfven said that the Swedish newspaper had wrongly interpreted his comment. According to Alfven, what he told Dagens Nyheter was a general comment, that Nordea would consider all the possible takeover options. For instance, last year Nordea took over two banks in Denmark. Alfven goes on to say that he informed the newspaper that risk analysis must be carried out, the price must be evaluated as well as whether such a takeover would be in line with the bank’s business model.

Nordea spokesman Anders Esplund also categorically denied that Nordea was planning to buy Parex. He said that Dagens Nyheter had printed wrongly interpreted statements by a high-ranking Nordea officer, that Nordea was constantly looking at possibilities in the markets it was represented, and that Parex was also being “looked at.”
On March 23, the Cabinet of Ministers took a decision on the Parex bank restructuring model, separating the ‘good,’ or ‘core’ assets into a new company, the so-called new bank, and the ‘bad’ assets would remain in the existing bank.
This model is in compliance with the European Commission’s guidelines and was recommended to the government by the financial consultant Nomura International, as it has several notable advantages in respect to the recovery of public investments and would be in the interests of the bank’s customers.

Approximately two-thirds of Parex assets, worth around 1.5 billion lats (2.1 billion euros) will be transferred to the new bank. After Parex is broken up, its parts could be sold for between 500 - 700 million lats, reports telegraf.lv.