OREANDA-NEWS. The financial data aggregated on 1 September 2008 indicate that Parex banka’s loan portfolio this year has increased by 12% reaching LVL 1,854 million. LVL 1,236 millon have been issued in loans to Latvian and foreign enterprises. In the segment of loans, Parex banka holds 12,6 % of market share in Latvia, reported the press-centre of Parex banka.

Traditionally maintaining the total loan portfolio of the Bank at high level, Parex banka has reached the above indices due to its professional activities in the financial markets of neighbouring countries, int. al. in Russia. Thus, for instance, a remarkable loan was granted by the Bank for the construction of large-scale oil and gas extraction fields in the Autonomy of Yamalo – Neneck.

In the same region, Parex banka has also provided funding for the construction of liquidized gas production plant, which will start operating in April – May 2009. The total amount of both loans issued by the Latvian commercial bank is more than USD 200 million. The funding will be provided in several stages.

The loans are with a maturity date of 7 years and a floating margin. Considering the tendencies governing the fluctuation of the oil prices in the world’s market, the oil extraction is becoming increasingly cost effective. The pay-back term of the project is expected even earlier than previously predicted.

Commenting on the developments, Vladislavs Skrebelis, Vice-president of Parex banka, said: “We believe that the Russian market is enduring the current rocking in the world financial markets more easily than the USA or Western Europe.

The high level of self-sufficiency of Russian market, its considerable capitalisation and plentitude of energy resources speak in favour of its stability. Unlike other foreign investors, we are not afraid to finance projects involving transport and energy, as we realize the high level of credibility of these areas as opposed to speculations on stock markets or handing out mortgage loans.”

At present Parex banka is involved in financing the construction of one of the largest brick production plants in Russia. The production capacity of this plant will be more than 100 million bricks per annum. The total amount of the project is estimated at EUR 75 million, of which 50 million will be granted by Parex banka.

In addition to the loan quality, the loan portfolio of Parex banka stands out for its notable diversification. Thus, e.g. the amount of loans granted to the residents of Latvia account for 64% of the portfolio. By sector – 22% of loan portfolio comprise loans related to real estate purchase or maintenance, 13,9% are loans to the sector of financial intermediaries, 8,6% - loans to transport and energy projects, 9% - loans to trade sector. 33% of all loans are issued to private individuals in Latvia and abroad.