Teksts
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In overall terms, the activities of the Parex Bank have been in
line with the bank’s restructuring plan, and although the bank
finished the reporting period with a loss of LVL 5 million, the
result is better than had been planned. This can be
attributed to several major Loan restructuring transactions that
were successfully entered into during the reporting period.
This substantially improved prospects for recovering certain loans,
and it also allowed the bank decrease previously recognised
impairment losses. The possession for unperforming loans were
reduced, and that also reduced Q1 2011 losses for the bank.
Given that the Parex Bank is a specific resolution bank, these are
financial results which must be viewed positively. It must be
noted here that the final indicator of Parex Bank operations is the
amount of money that is recovered by the year 2017.
“I truly welcome any of our achievements, because the work that we
are doing together is not just complicated from the professional
perspective, but also difficult. It seems that there are
people who still do not appreciate the importance of the work that
we have done or the fact that we are a completely new team which
has just one goal – recover the state’s investment as much as
possible,” says Parex Bank board chairman Christopher Gwilliam.
The losses suffered during the reporting period in 2011 were caused
by two material – interest expenses exceed of interest income, and
net loss on available for sale financial assets and financial
liabilities. Since the restructuring of the bank, it has become a
unique institution in the Baltic States in that it has only
problematic loans with respect to which there already have been
repayment problems in the past. Debt collection has been
begun in many cases – those in which neither interest nor the
principal sum have been repaid to the bank in a longer period of
time. This is why interest income from the Parex Bank’s loan
portfolio is much lower than is the case at any other credit
institution which has both good and problematic loans. Still,
the Parex Bank is doing everything that it can to increase interest
income as much as possible.
Because the Parex Bank continues to have obligations toward
providers of syndicated loan, the Finance Ministry, and the
depositors of subordinated capital, the volume of the bank’s
interest expenses is fixed, and it respectively exceeds bank’s
interest income.
During the first quarter of 2011, the priority for the Parex Bank
in the context of this overall goal was to collect the money needed
to repay its syndicated loan of LVL 164 million. This was an
enormous challenge for the bank’s management and employees, and all
of our material and non-material resources were devoted to the
accumulation of the necessary sum of money. Between August 1,
2010, and the end of the reporting period, the Parex Bank engaged
in relentless and serious work to recover LVL 125 million.
The sum was mostly based on a restructuring of unpaid loans and on
the sale of the bank’s securities portfolio. It must be
stressed that the Parex Bank’s management engaged in a very
thoughtful strategy of operations which allowed the bank to avoid
any forced sale of its assets. The real estate market remains
inadequate in terms of fairly low prices, and so the Parex Bank is
actively managing its properties so that when the situation
improves, the properties can be sold in line with market prices and
in line with the interests of all taxpayers and
shareholders.
About Parex banka:
Since 1 August 2010 Parex banka is operating as a resolution bank
and it has ceased rendering such classical banking services as
account and deposit services, issuing loans etc. The main objective
of Parex banka is maximum recovery of the state investments. In
order to achieve its goals, the operation of Parex banka is focused
on efficient loan restructuring, debt recovery and real estate
management. Majority shareholders of Parex banka are the
State of Latvia which is represented by Privatization Agency and
the European Bank for Reconstruction and Development
(EBRD).
Additional information:
Marita Ozoliņa-Tumanovska
Head of Communication and Marketing Department
Telephone: 67779142 or 29287169
E-mail: Marita.Ozolina@parex.lv
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