Parex to return €565 mln in 7 years

RIGA — Parex Bank, which nationalized in 2008 to prevent it from going belly-up in light of the financial crisis, is promising to return 400 million lats (€565 million) to the Latvian government over the next seven years.

The money will be made from the sale of government shares of Citadele Bank, the solvent portion of the bank that is now operating and Parex Bank’s separated bad assets as debt. The Latvian government owns 81 percent of Parex and the European Bank for Reconstruction and Development.

“We would be aiming for somewhere in the region of 400 million lats,” Christopher Gwilliam, Parex chairman said to Bloomberg in an interview this week. “Something a bit over that would be a really good result.”

This may not be enough for the government to profit from the Parex bailout, having already spent €1 billion boosting Parex’s liquidity and providing state guarantees, forcing it to take an international bailout from the International Monetary fund and other lenders as well.

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