OREANDA-NEWS. April 01, 2010.  The most important aspects of Parex banka operations in 2009 were stabilisation of operations, the involvement of the European Bank for Reconstruction and Development as a shareholder, and improvements of liquidity position, according to the audited annual report of the Bank that was released on Wednesday, 31 March 2010. At the end of 2009, the Bank’s liquidity ratio was 51%, and the volumes of deposits show that clients are remaining loyal and that the Bank’s operations are becoming more stable.

Stabilisation of the Bank also reflected in the reports of international rating agencies. Thus, on 30 July 2009, international rating agency Moody’s Investors Service approved Parex banka’s long-term rating at the previous level with a stable outlook; thus, accomplishing the investigation process launched by Moody’s in December 2008 with an initial assumption of a potential downgrade.

Despite the global financial crisis and changes in the bank’s operations and due to continuous support from the Government, Parex banka successfully concluded negotiations with its syndicated lenders, restructuring the outstanding loans and the repayment terms.

Among Parex banka’s top priorities in 2009 was concluding the deal with the European Bank for Reconstruction and Development (EBRD) about its involvement in the shareholder structure, signalling about the vitality and development potential of the institution, stabilisation of Latvia’s financial system, and the investment environment in Latvia. Finalising the deal, on 3 September 2009, 25 percent and one share of Parex banka were transferred from the Latvian Privatisation Agency to the European Bank for Reconstruction and Development.

Parex banka has also defined its main strategic priorities: the restructuring of work organization to reach maximum efficiency and economy, as well as provision of independent bank’s funding and capital adequacy. Risk control and management were also improved. Major work was devoted to organizing the bank’s business and dividing it into three major directions – retail services, corporate services, and private capital management, identifying priorities for development in each of three areas.

In 2009, the administrative costs of the bank have declined by 39% in comparison to average monthly indicators in 2008. By the end of 2009, the savings amounted to LVL 32,286 thousand, compared to the administrative costs in 2008. Furthermore, the average monthly wage fund at the bank has declined by 46% after a staff reduction of 25% and a review of all employee wages. In 2010, the bank will continue to reduce and optimise costs so as to improve its cost to income ratio.

In 2009, Parex banka has added 16,080 new customers to its customer base. Currently, the bank has 379,971 customers, of those 5,134 legal entities and 94,862 individuals proved their trust in the bank in 2009 by increasing the level of their partnership with the bank. Parex banka has signed up to the Code of Conduct on housing loans, undertaking to implement it by 1 July 2010.