OREANDA-NEWS. May 20, 2011. The Cabinet of Ministers supported sales strategy for State-owned shares of SC “Citadele Bank” in order to recover the State funds invested in the Bank with maximum efficiency, ensure high quality bank services for clients and ensure stability of the country's financial system, reported the press-centre of Citadele Bank.

“The decision adopted on sales strategy for government-possessed Citadele's shares and clarity acquired in this matter are praiseworthy steps. First and foremost, this is good news for the Bank's clients and all inhabitants of Latvia for this step serves as proof that a stable investor will be sought for the Bank which is going to invest funds in further development of the Bank and its new products. This is a message for inhabitants of Latvia and economy on the whole that the State can recover funds once invested in the Bank in foreseeable future,” says Juris Jakobsons, Chairman of Citadele Bank's Board of Directors.

“The process of change in ownership of the Bank will not influence the Bank's activity – Citadele will continue to work and develop, servicing retail customers as well as enterprises and institutions, and also working capital management sector. We highly appreciate the support of the State and the whole society in ensuring the Bank's activity and stability of the State finance. We are also interested in the State's recovery of funds invested in the Bank as soon as possible in order for these funds to be channelled for more urgent necessities of people.

Now when Citadele Bank is working independently and solidly, income exceeds expenses and the bank is developing new products, it is a much more advantageous time for initiating selling of Citadele's shares than the period immediately after development of the new Bank when work in several types of services had to be started almost from scratch. Attraction on a quality and diligent investor will only be beneficial to Latvia's economy,” says J. Jakobsons.

Presently 75% of Citadele Bank's shares are possessed by the Privatization agency on behalf of the Latvian State and the owner of 25% plus one share is the European Bank for Reconstruction and Development (EBRD).

As announced previously, during its first half year of activity, Citadele Bank reimbursed a total of 44.9 million Lats invested by the State already twice prior to term.

State investments in Citadele Bank presently are as follows: 77.3 million Lats in the Bank's core capital; 98.2 million Lats in the shape of term deposits; subordinated loan of 45.2 million Lats.

Citadele Bank is the largest local Bank in Latvia with branch offices in other countries. According to data of 31.12.2010, Citadele is the third largest bank in Latvia in terms of attracted deposits (10.4% market share), the fifth largest bank according to the amount of assets (6.9% market share) and loans issued (5.2% market share). The Bank's liquidity is stable and it significantly exceeds minimum requirements. The aim of Citadele Bank is to become the most valuable financial group in the Baltic States.

Citadele Bank is a universal bank in terms of the range of services offered. Main types of its services are the following: servicing of current accounts; payment cards; consumer loans and mortgage loans; term deposits for retail customers and enterprises; distribution of American Express credit cards in Latvia and Lithuania; development of 2 nd and 3 rd level pension savings; provision of loans and refinancing services to enterprises; guarantees and letters of credit; leasing and factoring; 3 rd level closed pension funds for enterprises; life insurance; private banking services and Concierge service; investment of funds in more than 20'000 local and foreign investment funds.

About Sales Strategy for State-Owned Citadele Bank's shares
Sales strategy of State-owned Citadele Bank's shares provides transparent and competition- facilitating sales approach and it will take place in line with the restructuring plan approved by the European Commission.

Sales strategy of State-owned Citadele Bank's shares, including criteria for assessing investors' proposals, was developed by “Nomura International plc”, international financial consultant.

During the sales process, investors will have an opportunity to submit initial proposals and if the latter comply with the sales strategy approved by the government, investors will be invited to carry out an in-depth study and to submit binding proposals. The sales process, including procedures for preparing the selling as well as negotiations with investors and assessment of proposals, will be organized by “Nomura International plc”, international financial consultant, and VAS “Privatizacijas agentura”.

Sales of State-owned shares of a/s “Citadele banka” will be launched after a decision is adopted by the government. The sales process, according to plans, is going to take from six to twelve months.

“Nomura” is one of the largest investment banks in the world and is a provider of consultancy services with representative offices in 18 countries. The enterprise has extensive regional experience in selling assets and banks, including selling of “Vojvodjanska bankas”, the largest State—controlled bank in Serbia, and “NKBM”, second largest bank in Slovenia.