EBRD on Citadele: Circle closing on a ‘milestone restructuring story’

Take note – story published 9 years and 8 months ago

The Privatization Agency spoke with visiting European Bank for Reconstruction and Development (EBRD) representative Jean-Marc Peterschmitt about the five-year long restructuring plan for Parex Bank, which has spun off the ‘good’ bank Citadele and ‘bad’ bank management firm Reverta in a scheme that seems soon bound for favorable closure. The pending deal to reprivatize Citadele is currently being watched with great hopes by all of Europe for its valuable lessons to be learned, said Peterschmitt.

Peterschmitt stressed that Latvia is currently enjoying some of Europe’s fastest economic growth after being one of those which suffered “quickly and sharply in the financial crisis, took very resolute measures and rebounded very quickly.”

He lauded the “return of confidence in Latvia,” saying that “looking at this over the last five years, it’s been a tremendous success story.”

Peterschmitt explained how important it was to make the “crucial separation” of “good loans and matching deposits from those assets that were problematic, so that the good part could continue to lend and service consumers and enterprises and keep the lifeline alive.”

“Where we are today is a far better place than what would have happened had we just let Parex fail, there is absolutely no debate about this.”

He also said that there was “proof that it was the right way to go,” because “other banks in Europe have chosen to take the same path as well.”

“It worked and paid off because we’ve had a government partner that’s been clear and committed to the process, we’ve had a supervisory council providing input and oversight to the process, committed staff and management in both Reverta and Citadele,” he went on to say.

He said he looked forward to the reprivatization of Citadele “that will allow us to close the circle.”

“I’m sure investors will find a valuable franchise platform for regional growth and to continue to serve the needs of Latvian and regional enterprises and consumers,” when the Citadele sell-off has been completed, he said in closing.

Peterschmitt is convinced the process, in its final pre-closure stages, was being “watched across Europe as a milestone restructuring story.”

 You can catch the entire interview in English here on LSM.


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