Improved Citadele back on the market

  • 2011-08-10
  • From wire reports

FOR SALE: Citadele headquaters in the center of Riga.

RIGA - When Latvia’s Citadele Bank will be sold, the state “will definitely recover its 103 million lats (152.8 million euros) investment in the bank’s share capital and the rest of its deposits in the bank will be repaid,” said Citadele Bank board chairman Juris Jakabsons during a press conference on Aug. 5, reports Jakabsons added that he believes that the state will also benefit from the fact that the bank’s shares will not be sold for a low price.

According to Jakabsons, the state’s support to Citadele initially amounted to approximately 290 million lats. Investment into share capital was 103 million lats, while 50 million lats was deposited by the Latvian Privatization Agency and the European Reconstruction and Development Bank. Deposits by the State Treasury were 131 million lats.
Currently, the total amount has been reduced to around 240 million lats, which will “definitely be repaid,” he says. Jakabsons also emphasized that the bank is paying interest rates for the state’s investment, and therefore the state “does not suffer any losses.”

Citadele Bank is also looking for a strategic investor who would be interested in the bank’s further development, pointed out the head of Privatization Agency’s Commercial Department, Vladimirs Loginovs.
Loginovs emphasized that the goal of the Citadele sale is to find a better investor.

In the first half of 2011, Citadele operated with 200,000 lats in profit, said the bank’s management on Aug. 5.
Citadele’s total assets stood at 1.25 billion lats at the end of June, whilst the bank’s loan portfolio amounted to 641 million lats; capital and reserves at 84 million lats. The total amount of deposits at the bank reached 1.0 billion lats.
Board chairman Jakabsons pointed out that the bank’s financial results in the first half-year are even better than anticipated in the bank’s restructuring plan.

On Aug. 8, 2008, the government had to step in to bail out the ailing Parex Bank, as the bank collapsed under mismanagement by its previous owners - Viktors Krasovickis and Valerijs Kargins.
On June 29, 2010, Citadele received its banking license from the Financial and Capital Market Commission. On Aug. 1, 2010, Citadele began its operations. At the same time, the technical split of Parex Bank was performed and, as a result, a part of the bank’s assets and liabilities - the so-called ‘good’ assets - were transferred to Citadele bank.

According to data from the Association of Latvian Commercial Banks, Citadele had a 6.5 percent market share of Latvia’s banking sector in the second quarter of 2011, making it the sixth largest bank in Latvia.