Teksts
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Today, on 22nd of November, the Cabinet of Ministers
supported the model for Parex banka’s further activity which
provides for the Bank’s change of status and resignation from its
credit institution license. If Parex banka’s shareholder meeting
adopts this decision, the Bank is going to resign from its credit
institution license and, in accordance with the restructuring plan
approved by the European Commission (EC), it will continue
processing assets in order for the State to cover the maximum
amount of funds invested in bailing out the Bank. The new
functioning model will be introduced after a permit is received
from the Finance and Capital Market Commission (FCMC).
The government assessed several possible models for Parex banka’s
further activity, including maintaining the Bank’s status, however
it was concluded that the most suitable and advantageous option
would be restructuring and giving up its credit institution
license. This is in line with the goals set forth in the
restructuring plan and this enables the State to undertake
additional liabilities in the future for meeting regulatory
requirements. During the decision making process on the change of
status, the fact that Parex banka does not function as a classical
bank since August last year, i.e. it does not provide lending
services and does not accept deposits from clients, was taken into
consideration. Parex banka’s activity is mainly related with asset
management since last August therefore, correspondingly to the
tasks determined in the restructuring plan, maintaining the Bank’s
status is not necessary in order to meet the restructuring plan’s
goals. The fact that Parex banka's restructuring plan approved by
the EC did not provide for full restoration of the Bank's activity
was also taken into account.
Parex banka’s change of status will enable to cut costs related
with maintaining its credit institution license. Giving up the
license means that meeting requirements for capital sufficiency
will no longer be binding for Parex banka and the Bank will no
longer have to pay the financial stability duty to the FCMC and
make contributions into the deposit guarantee fund. Thus the
government will not need to perform further capitalization of State
investments which was provided in the restructuring plan in order
to ensure the Bank’s activity in accordance with the requirements
applied for credit institutions. Similarly the Cabinet of Ministers
resolved that capitalization of the funds invested by the Ministry
of Finance will take place this year which means investing 19.8
million Lats into the Bank’s share capital. This sum is
significantly smaller than the one planned initially. The Bank’s
share capital is not increased at the budget expense, it takes
place by means of capitalizing the deposits made by the Ministry of
Finance instead. Besides, the State does not plan to make any new
investments in Parex banka in the future.
The Bank’s shareholder meeting is yet to pass a decision on the
Bank’s restructuring. If shareholders resolve to support
restructuring, the Bank will have to give up its license in the
beginning of the next year and settle liabilities with holders of
private deposits. The Bank has already settled its liabilities
toward syndicated lenders in the amount of 164 million Lats this
year without additional support from the State; this was one of the
restrictions in the Bank's change of status. The Bank possesses
sufficient amount of funds in order to be able to perform its
liabilities and continue its activity without a credit institution
license. The structure of Parex banka’s assets and liabilities will
be preserved after its change of status. The change of status will
not bring along any changes in liabilities for the Bank's clients
and, just like previously, the Bank will continue recovering issued
loans and ensure maintenance and selling of assets. The composition
of shareholders will not change upon the restructuring of Parex
banka. Presently the split-up of Parex banka’s shareholders is as
follows: LPA – 83.07%, EBRD – 13.61% and 3.32% – minority
shareholders.
Additional information:
Marita Ozoliņa-Tumanovska
Head of Communications and Marketing Department
Tel. 67779142 or 29287169
e-mail: Marita.Ozolina@parex.lv
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