Latvia’s second largest bank, Parex Bank, is slated to receive assistance from the EBRD. The state of Latvia owns nearly an 85% stake in the bank which has suffered drastically during the economic downturn. If approved by authorities, the deal would give the EBRD 25% plus one of the total shares of Parex in exchange for an €84.2 million equity investment.
An additional subordinated loan worth €22 million would be made as Tier 2 capital. Parex Bank’s board would include a representative of the EBRD.
Parex Bank (www.parex.lt)
With headquarters in Riga, Latvian based Parex bank operates branches in Berlin, Stockholm, and Tallinn, and maintains representative offices in Baku, Kiev, Moscow, and Tokyo. Along with Swiss subsidiary AP Anlage und Privat Bank and Lithuanian subsidiary Parex Bankas, the company employs 2,600 people in 14 countries. The bank was nationalized by the Latvian government in 2008, in the wake of the global financial crisis.