Parex banka establishes subsidiary for real estate management

Parex banka has established a subsidiary, SIA NIF (“Nekustamo īpašumu fonds”, or “Real Estate Fund”), which will professionally manage assets that are not related to the Bank’s core business. This applies to the Bank’s real estate, problematic loans, and expropriated properties. Documents to register SIA NIF were submitted to the Latvian Company Register on September 17.

Subsidiaries to this enterprise are to be established by mid-October, and each of these will deal with a particular area of real estate – commercial properties, land, and housing. This process is in line with the Bank’s confirmed restructuring policy.

Druvis Mūrmanis, Senior Vice President and head of the Corporate and Institutional Banking Sector, has this to say: “Our goal in establishing these companies is to ensure separate and professional management of properties that are not related to the Bank’s basic operations and have been expropriated. These properties will be sold over the course of three to five years, when we expect the real estate market to revive. This will allow us to recover losses which we incurred as the result of stagnation in the real estate market.”

About Parex banka:

Founded in 1992, Parex banka currently employs some 2,000 people at branches all over Latvia and offers universal banking services throughout the Baltic region, the CIS and other European nations such as Germany, Switzerland and Sweden. Parex Group companies operate across the banking, finance, leasing, asset management and life insurance sectors. Parex banka is the only partner of American Express in Latvia and Lithuania, allowed to issue American Express credit cards. Currently, the Latvian Privatisation Agency is the majority shareholder of Parex banka, holding 70,3% of the Bank’s shares, but 25% are controlled by the European Bank for Reconstruction and Development. Parex banka has signed up to the European Code of Conduct on housing loans.