Latvia's Rietumu Banka buys Saules Banka

RIGA - Latvia's Rietumu Banka and Saules Banka will merge by summer 2001
aiming to form one of the leading banks in the Baltic states in the
corporate banking market, both banks' officials have announced.

The Bank of Latvia's board issued a permit for Rietumu Banka to
acquire 100 percent of Saules Banka's shares Dec. 21, thus giving the
green light to the deal.

The total value of the deal is confidential and won't be disclosed
for the time being, said Michael Bourke, Rietumu Banka's president.

As a result of the takeover, the banks will form the largest
corporate bank not only in Latvia but in the entire Baltics, Bourke
told journalists.

He said that by merging with Saules Banka, Rietumu Banka will
significantly expand its assets, range of services and add to its
client base as well as acquire a number of highly qualified experts.

The total assets of Rietumu and Saules banks exceed 310 million lats
($500 million) and the bank that would emerge as a result of the
merger would be the fourth largest in Latvia in terms of assets.

"We are satisfied that we have succeeded in finding such a partner
which itself has recently found an experienced and strong bank -
Islandsbanki FBA - as the strategic shareholder," said Saules Banka's
president Edgars Dubra. The board of Islandsbanki FBA, Iceland's
leading bank, approved the purchase terms of 56.2 percent in Rietumu
Banka. It was reported that the value of the deal was $27 million.

"As a result of the deal, Rietumu Banka will be able to take over
Saules Banka's highly developed network of payment cards and
automatic teller machines as well as the remarkable niche of
corporate clients whereas clients of Saules Banka will be able to use
Rietumu Banka's payment system as well as experience and
possibilities in the securities and money market," said Rietumu
Banka's vice president Alexander Kalinovsky.

Saules Banka is owned by Estonian Uhispank which belongs to Sweden's
Skandinaviska Enskilda Banken. "The deal will accelerate the
consolidation of banks in Latvia," SEB Baltic Holding president Mats
Kjaer told the Baltic News Service. The SEB strategy provides for the
group's banks to operate only in local markets, and therefore
Uhispank has been continuously looking for a buyer for Saules Banka.