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Wednesday 20.06.2018 | Name days: Rasa, Rasma, Maira
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Competition Council allows Swedbank to purchase Mortgage Bank assets

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The Competition Council (CC) has allowed Swedbank to purchase part of Mortgage and Land Bank assets – loans and deposits, and Swedbank leasing received green light for the purchase of 100% of shares of Hipolizings.

As it was reported in the CC, this decision was made because these deals will not affect competition and will not negatively affect the market and clients.

The assets that will be transferred to Swedbank make up only a part of the portfolio of the bank’s loans and deposits. The remaining assets and obligations will either be sold to other investors or will remain in in the Mortgage Bank.

The government made the decision to reform the Mortgage Bank into a development bank in 2009. The strategy regarding the sale of the bank’s commercial part was approved in November 2011. Swedbank received three packages of Mortgage Bank assets in Jun; one more was received by SEB Wealth Management, which is part of SEB Bank group.

Swedbank offered the most beneficial offer on the purchase of those bank segments, which operate with commercial loans for private and legal persons, servicing payments and deposits, as well as the banks leasing company.

The offer of SEB Wealth Management was the most beneficial in terms of acquiring the 2nd level pension plan management package.

The process of client transfer will be carried out in next six months, and the entire process is expected to conclude by the end of the year.

The Finance Ministry promised to reveal the costs of these deals after the conclusion of the entire process, when the decision regarding the two remaining packages of commercial assets of the Mortgage Bank will be made. Negotiations concerning their sale are still continuing.

The Mortgage Bank was founded in 1993. The main function of this bank is the support of small and medium business, as well as aiding economic activity in Latvia’s regions.

In 2011, the Mortgage Bank operated with profits of 1.73 million LVL. The volume of its gross assets decreased by 7% to 755.5 million LVL, while its loan portfolio – by 13% to 519.2 million LVL. In the first quarter of this year’s profit was 0.34 million LVL.

Ref: 103.109.109.2472


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