OREANDA-NEWS. June 02, 2010. Parex banka has announced the financial results for first quarter of 2010, stating that the main focus of Parex banka‘s management was on the restructuring of the Bank, with the principal restructuring goals of the Bank to stabilize the enterprise’s operational activities, create a stable bank with long-term potential, and increase the interest of private investors in the Bank, reported the press-centre of Parex Banka.

Parex banka’s restructuring plan was developed by international financial consulting firm Nomura International plc. On 23 March, the Latvian Cabinet of Ministers (Government) approved this restructuring plan and it was submitted to the European Commision for approval on 31 March 2010. According to the plan a part of Parex banka’s assets will be used for the creation of a new bank with a stable financial base, which will make it easier to attract investors and repay the resources invested into the Bank by Latvian state institutions at the earliest possible convenience, while the Resolution bank will be able to sell its assets in the market over the long term, with the goal of ensuring a maximum return on the investment made by Latvian state structures.

During the 1st quarter of 2010, Parex banka received the authorization of the International Monetary Fund and the Latvian Financial and Capital Market Commission (FCMC) to increase the credit limits of the Bank’s largest, loyal corporate clients. The Bank also signed an agreement with the European Investment Bank on the granting of EUR 100 million in credit resources for loans to small and medium enterprises, and signed a trade finance agreement with the European Bank for Reconstruction and Development (EBRD); thus, enabling its corporate clients to lower the cross-border deal risks.

Parex banka’s liquidity indicators are improving and currently its liquidity ratio already exceeds 60%. During the first three months of this year, the volume of deposits in the Bank continued to increase and compiled data indicate that the total volume of deposits at the end of March exceeded LVL 1 billion, not including the deposits placed into the Bank by the Latvian State Treasury; thus, enabling the Bank to anticipatory repay LVL 117.6-million loan to the Bank of Latvia prior the final maturity. Since the beginning of this year, the total volume of client deposits in the Bank and in the Group has grown by LVL 131.2 million and LVL 149.8 million, respectively. Although an increase in deposits can be observed in all of the Bank’s business segments, the largest increase of LVL 59.5 million has been in the corporate client segment.

On 31 March 2010, the Parex banka’s loan portfolio was LVL 1.42 billion, while that of the Group was LVL 1.62 billion. Total assets amounted to LVL 2.44 billion for the Bank and LVL 2.59 billion for the Group. The volume of capital and reserves was LVL 160.3 million for the Bank and 142.2 million for the Group at the end of the 1st quarter of 2010. During the first three months of 2010, the Bank continued to fulfil the Latvian regulations governing capital requirements.

The Bank and the Group ended the 1st quarter of this year with total net losses of LVL 26.7 million and LVL 30.8 million, respectively. However, the losses before provisions, depreciation and taxes were LVL 9.9 million for the Bank and LVL 10.5 million for the Group. The financial results continued to be significantly affected by the supplemental accumulation of asset impairment provisions of LVL 19.0 million by the Bank and LVL 20.8 million by the Group.