Latvian government completes reorganisation of Latvian Mortgage Bank

On June 13, 2013 the Latvian banking regulator, the Finance and Capital Market Commission, approved the acquisition of the loan portfolio of the state-owned Latvijas Hipoteku un Zemes Banka (Latvian Mortgage Bank) by Rietumu Banka which completes the final phase of the Latvian Mortgage Bank’s reorganisation process.

During the first phase, completed June 22, 2012, the bank sold parts of its assets to Swedbank and SEB Wealth Management. Swedbank acquired the bank’s commercial assets, including individual and corporate loans, accounts and deposit services and leasing, while SEB Wealth Management made the best offer for the second-pillar pension plan management package.

As part of the last phase of the reorganisation, Rietumu Banka acquired the bank’s commercial assets, containing loan agreements as well as contracts ensuring the bank's right to demand in regard to the execution of the respective loan agreements.

‘We are pleased with the work we have done together with our colleagues from Latvijas Hipotēku un zemes banka and the consulting company Superia in the preparation of this transaction and negotiating its conditions. I believe this has been beneficial for all parties, and corresponds to the strategy of the state in the bank sector, as well as the business profile of Rietumu Bank, the interests of which in Latvia are aimed at servicing corporate business and large projects,’ notes Renats Lokomets, Board Member of Rietumu Bank.

On April 12, 2011, the Latvian government approved a plan for the gradual transformation of Hipoteku Banka, which, among other things, provides for the sell-off of the bank’s commercial assets that have no relation to the functions of a development bank.

At the end of 2012, Hipoteku Banka ranked the 11th largest bank in Latvia by assets, according to the data of the Association of Latvian Commercial Banks.

Superia Corporate Finance acted in partnership with Blackstone as financial advisors to the Latvian government in the reorganisation process.

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