OREANDA-NEWS. September 01, 2015. During the first six months of 2015 Joint-Stock Company Reverta has recovered EUR 20.6m from difficult loans. EUR 9.7m was paid to the State Treasury during the first half of the year and another EUR 12.8m was paid after the end of the reporting period – in August 2015.

“Since 1 August 2010, when Reverta commenced recovery of state aid paid to Parex banka, this has been the most difficult and complicated period with respect to loan workout and recovery. The Russian-Ukrainian conflict, the unstable geopolitical situation, as well as the economic situation in Latvia and the world have significantly decreased the value of assets and encumbered possibility of recovery. Nevertheless, we are pressing for every cent to decrease state loss as much as possible. Our performance shows that we can solve even seemingly hopeless situations”, says Solvita Deglava, Chaiperson of the Management Board of Reverta.

Since 1 August 2010 to the end of the reporting period Reverta has recovered a total of EUR 625.5m and the State has received a total of EUR 569m in the form of various payments, including direct payments to the Treasury in the amount of EUR 323.2m.

During the reporting period Reverta’s activities were still being affected by unfavourable external conditions, especially Russian-Ukrainian conflict, as a result of which the amount of funds recovered from the CIS portfolio has sharply decreased. Recession of Russian economy and devaluation of rouble made it difficult for clients based in Russia and other CIS countries to repay their loans, besides, often borrowers used the situation to their advantage by trying to hoard their assets and ceasing payments.

Similarly to previous years, the loan recovery process is being significantly encumbered by the overloaded and inefficient Latvian court system. Average period of disposal of a case is 5-7 years, during which the value of the pledged objects significantly decreases along with the amount recovered from their sales. The lengthy proceedings also consume a considerable amount of human resources: at the end of the reporting period there were 2440 court proceedings in various stages and 2009 credit card cases on Reverta’s agenda. During the first half of the year Reverta has participated in 621 court hearings.

During the reporting period Reverta continued energetic sales of real estate properties and decreased the amount of the real estate portfolio from approximately 584 objects at the beginning of this year to 390 objects at the end of the reporting period. 125 properties were sold during the first half of the year as compared to 254 deals concluded in the same period last year. The decrease in the number of sales deals is due to the current structure of Reverta’s real estate portfolio – the liquid properties have been already sold whereas the remaining ones do not belong to the segment of the most demanded properties. A total proceeds from the sales of real estate properties during the reporting period was EUR 5.7m.

On 30 June 2015 Reverta’s total assets were EUR 194.9m, of which EUR 134.7m was made up by loan portfolio.