Banks, Financial Services, Latvia

Valerijs Kargins.

"Parex needs another LVL 0.5 billion from the bailout money for stabilization of the situation, and it needs overall supportive attitude from the state," Kargins said.

He also points out that the bank's customers had confidence in the bank until the very last moment. However, as Kargins comments, rumors started to spread from somewhere. "Consequently, state and local governmental enterprises started to withdraw their money. I no dot want to name anyone, but some officials said not very nice things about us. We were actually shocked about such information being spread," Kargins outlined.

The former second-largest share holder at Parex, Viktors Krasovickis, added during the interview, that also the government uttered some awkward expressions about the possible bankruptcy of Parex. However, he admits, he could also feel the government's wish to support the bank.

Krasovickis also stressed that it was a myth that the largest investors at Parex are eastern countries.

"It is a myth that the bulk of our deposits' basis is money from countries in the east. The deposits of residents and non-residents are of approximately equal volume. Furthermore, for example, German customers had approximately LVL 240 million deposits and Swedish depositors – approximately LVL 100 million in Parex. We had attracted approximately half a billion in deposits from Russia and CIS countries," Krasovickis said.

As reported, in order to ensure the bank's liquidity, on December 15, the State Treasury deposited EUR 30 million (LVL 21 million) in Parex. The deposit has been made for a term of one month. On December 12, the State Treasury deposited EUR 20 million (LVL 14 million) in Parex.

Prior to that, in the time period before December 11, the state invested a total of LVL 406.526 million in the bank.

On December 22, during a government session, the Minister of Finance Atis Slakteris (People's Party) was assigned to arrange additional deposit of EUR 287.074 million (LVL 200.7 million) for increasing Parex liquidity.

The state has already taken over 84.83% of Parex' shares that previously belonged to Kargins and Krasovickis. Each of them received one lat each for all of their shares.

Svenska Handelsbanken AB sold its 0.31% of Parex shares for a symbolic price – one euro cent.

Foreign institutional shareholders East Capital Funds own 4.17%, Danske Capital Funds – 2.74%, Julius Baer International Equity Fund – 2.19%, Firebird Funds –  1.82% of the bank's capital shares. Other institutional shareholders own 1.30% and other private shareholders – 2.64% of the shares.

The state hopes to attract a strategic investor to Parex in the shortest possible time.