On July 27-29, 2010, the Government of Latvia approved all necessary decisions for further restructuring of the JSC Parex banka, and the restructuring plan was submitted for approval to the European Commission. The purpose of the plan was to provide for maximum distribution of burden, and reduce the required state aid. The bank’s restructuring was completed on August 1, 2010. After the split-up, a part of assets have been retained in the so called ‘solution bank’ which continues to work under the name of Parex banka.
The new bank, named Citadele Bank, appeared in the Latvian Commercial Register on June 30, 2010. The bank obtained banking licenses from Estonian and Swedish financial and capital market regulatory authorities, to launch full banking operations in those countries as of August 1. On August 2, it was said that the work on selling the bank Citadele could begin in the nearest future, and it is planned to send offers to potential investors.
On July 30, an agreement was signed by the bank Citadele, the Latvian Privatisation Agency and the European Bank for Reconstruction and Development. According to this agreement, the EBRD will own 25% of share capital plus 1 voting share of the bank Citadele.
The EBRD and Parex banka agreed that the subordinated loan issued by the EBRD to Parex banka, the total amount of which will be EUR 22 million, will be transferred to Citadele.