Virginijus Rimkunas, Industrial bank's board chairman, did not disclose the details of negotiations because he said the bank is also involved in talks with other foreign banks.
Parex spokesman Maksim Ter-Oganesov could only confirm that talks with Industrial bank were under way. He said the negotiations had been going on for some time and now Parex is choosing between buying a local bank or setting up a subsidiary in Lithuania.
The daily Lietuvos Rytas reported that the talks between Parex and Industrial bank had been well advanced, but the parties disagreed over the number of shares to be sold. Parex is not satisfied with 50 percent of shares and wants to buy the whole bank, said the paper.
Last year, Industrial bank failed to increase its share capital from 27 million litas ($5.1 million) to the planned 50 million litas. The Viachema holding company now owns 88.2 percent of the bank's shares.
The bank had 909,000 litas in unaudited net profits over the first nine months of 1998.
Parex is still interested in the privatization of Lietuvos Zemes Ukio Bankas (Agriculture Bank) and plans to participate in a repeated tender for the bank's privatization.
"If Agriculture Bank is cleaned, as it has been promised, Parex is prepared to pay more," the Latvian bank's spokesman said.
Parex offered only 2 million litas during the first Agriculture tender last year.