Parex Bank announced that its audited profits have fallen year-on-year, though its assets, the largest among Latvian banks, increased by a whopping 40 percent in 2002.
At a press conference on March 6, bank shareholders announced that 2002 profits amounted to 9.3 million lats (14.6 million euros), down from 11.7 million lats in 2001.
Board chairman and shareholder Valerijs Kargins said that bank shareholders - of which there are two - have decided not to pay dividends and will plow all profits into own capital in order to secure faster growth.
Kargins also stated that the bank is not actively searching for a strategic investor. In his estimation, Latvia's accession to the EU and the contagion affecting international banks have prevented Parex's shareholders from doing so. Kargins and Viktors Krasovickis each own 50 percent of the bank's shares.
At the end of last year Parex Bank's assets stood at 922.8 million lats, up by 40 percent year-on-year.
Deposits held by the bank increased by 45.5 percent to 775.7 million lats, even though the bank had planned only 21 percent growth of deposits, according to Kargins.
Parex's credit portfolio reached 334.9 million lats as of the end of 2002, an increase by 29.4 percent from 2001, while loans to residents made up 77 percent of the total.
Kargins said that in 2002 the bank increased fixed capital by 20 million lats and now boasted the largest paid fixed capital among Latvian banks - 50 million lats.
"[The bank's] rapid growth is due to stable growth of the Latvian economy. We have to agree with the IMF opinion that after accession to the EU and NATO Latvia will have very good prospects for medium-term development," said Kargins.
He also said that Parex Bank was strengthening its positions on the payment card market, where it currently holds a 25 percent stake. By late 2002 Parex Bank had issued over 222,000 cards, signaling a 25 percent growth rate.
Further growth of 36 percent is planned this year.
"In 2002 the Parex Group continued expansion on the Western and CIS markets. We already start feeling the effects from operations by our London office as credit lines opened to Parex Bank by international financial institutions in London have doubled," said Kargins.
"Our strategy for the coming year is strengthening (our) leader position on the local market using potential of the Baltic economy," said Kargins.
Parex Bank in Lithuania owns the insurance company Baltic Polis and Parex Bankas, while last October it opened representation in Estonia, which it plans to transform into a branch.