Latviski English По-русски
Tuesday 20.02.2018 | Name days: Smuidra, Vitauts, Smuidris

Parex CEO: if money is recovered, the employees have to get bonuses

(+1 rating, 1 votes)

The employees of Parex Bank should be paid premiums if most of the money that the state has invested, is recovered, the new CEO of Parex Bank Christopher John Gwilliam informed BNN.LV.

He indicates that it is going to be a difficult task to recover at least a part of the money, but almost impossible to regain the whole amount of it, adding that Parex Bank can no more be considered as an actual bank, it is more like a work-out bank.

C. Gwilliam makes a lasting impression – he is joyful yet deeply engaged in work at the same time.

First month in Latvia… What conclusions have you drawn? What are the impressions of Latvia?

I feel very good here. To be honest, I did not know much about Latvia before; however I had read about it, because I am interested in the history of Europe and its development in general. There is very nice climate here, even though when I arrived, it was too hot for me, it was in July. I cannot wait for severe and long winter. I prefer snow and cold weather, as well as storms.

I am having the greatest problem with finding an appropriate apartment, because I like if there is a balcony. However it turns out that there are only large flats with balconies in Riga, but I do not need a large one. What regards Latvia, it can be seen and felt that recession has affected the country. I have an impression that the situation is getting better though. The fact that the traffic on the bridges increases serves as an example (Parex headquarters is located at Suspension Bridge (Vanšu tilts)).

It sounds like you like challenges. Is Parex Bank a challenge? Why did you decide to work there?

Parex Bank is definitely a challenge. I enjoy challenges and this could be one of the most impressive ones of all I have ever had. I have never worked as an investment banker in the classical sense due to which I have never favored fulfilling duties only because of bonuses. I did not consider it as a good system of the financial world.

I have always been interested in completing the task without desiring bonuses that had gained huge popularity in the financial world. Once I even argued with my colleagues about the specification of a banker’s work, as I was convinced that bankers should not be paid bonuses.

The nature of a bankers’ work requires completing tasks as well as possible without thinking about any additional payment. And if they manage to do it, it will also be reflected in their salaries, but not in a form of premiums, because the system of them ruined the financial world and market. The whole world could witness this some time ago – we saw to what extent  people took risks and speculated, in order to get bonuses and how awfully wrong everything turned out after all.

Then you are against bonuses and you will not receive them in Parex Bank after achieving certain objectives?

I did not say that I am against bonuses in general. I said that I was against them in the financial world previously in connection with the speculations. I believe that if a person completes a very complex task and achieves the set goals – he or she deserves a bonus. Paying premiums for speculative transactions is something quite different. Once we have touched upon the topic – there is huge and complicated work ahead of Parex Bank. If we achieve good results, which means, if we recover a big part of tax payers’ money – the employees should get bonuses. This is, of course, a very sensitive issue but this is my opinion. It still must be considered very carefully. This theme has not been discussed completely yet, not to mention the fact that there is no agreement reached on the premiums. However, I would strongly recommend that Parex employees receive bonuses, in case we accomplish this extremely difficult task to recover the most part of the state investments. If we fail in doing this – there will not be any additional payment. I am positive that it will be extremely difficult to convince the government that the employees have earned a premium, if an outstanding work is accomplished. People have to understand that it will be very difficult to regain Parex money. It would be almost as a miracle if we managed to recover all of the investments. The more money we get back, the greater is the achievement. I remind one more time – I do not think that the premiums should be paid right away. They ought to be paid only if excellent results are achieved. There will not be any bonuses if we do not manage to reach the objectives.

Parex Bank can no longer be considered as a bank in its classical sense…

That is right. The only thing we do is saving money for the state. We could be regarded as a sort of cash recovery bank or institution (work-out bank). I am not sure I should say this, but we are not a full-service bank indeed. The only «service» we provide is collecting money for the state.

How do you evaluate the possibility to recover the investments, now when you have got acquainted with the situation?

The situation of Parex is very serious. It is a bank with many bad loans and assets. If we managed to get back even a part of the money, it would be a great achievement. It is unlikely that we will ever be able to operate with profit. Great success would be maximizing the returns from the assets. We are going to do everything possible not to suffer losses. It would be an overexaggeration to talk about profit in such a situation.

What is the most realistic scenario, how much of the invested money could be recovered?

I am here for already a month now, but I still cannot answer the question. It is impossible. I have already examined many assets. It will be hard work to get back even a part of the money.

What is the reason exactly you were appointed as the new Parex CEO?

I would like to think that it was because of my experience and skills. Obviously I made the correct impression.

Latvians are always interested in salary issues. What is your pay at Parex?

I was warned that this is a topical question in Latvia and that it will definitely be asked. This information will be publicly accessible, when the time comes – when we have completely agreed upon it. What I can say is – that I would be paid better if I worked in London in a similar post. I took up the position not because of money, but of different reasons. First of all, because I had a feeling that this job was meant for me. Returning to the question… I am surprised how much information on private entities and their pay is publicly available. It is quite strange.

Do you feel any pressure at work taking into account your responsible post and the political background?

The work will be difficult for sure. When thinking about these processes and the background I start doubting whether I have asked enough (laughing).

What are the biggest obstacles of Parex Bank at the moment?

I do not think it is a secret that the System of Justice is slow in Latvia. We have discussed this issue with the Ministry of Justice. It is difficult to explain, but it could be that the judges do not have enough specific experience of difficult and complex tasks. The case of Parex is the first precedent in Latvia. There are many new processes and regulations that have to be introduced. This definitely delays the recovery of the investments. However this is not meant as criticism to judges. It is simply that the whole system has to be reconsidered and people and institutions in responsible posts have to have an appropriate experience.

What are the positive aspects of Parex? What could help you to achieve the objectives?

People! We are a great team! The bank employs experienced and motivated people with knowledge of finances. We have also maintained good work relationship with «the other bank» or «the good bank» (Citadele). We have to rely on them in connection with IT and other services. As for the employees – we still have to work on their way of thinking and the philosophy – from classic bank employees, they have to become financial experts in recovering investments. It will take some time.

Leave a reply

  1. Nyvaeh says:

    A few years ago I’d have to pay smoenoe for this information.

    Thumb up 0 Thumb down 0

Bank of Latvia governor: I have received death threats

«This situation is incredibly complicated. This situation is quite possibly the most complicated one I have ever been in. I feel a great deal of support from people I don’t know, as well as my friends and family members. I have decided to not back down – I am innocent. The the people attacking my reputation have only one goal in mind – to have me step down,» said the governor of the Bank of Latvia Ilmārs Rimšēvičs during a press conference on Tuesday, 20 February.

Proportion of people working in Latvia’s culture sector is larger than the average in EU

The number of people working in Latvia’s culture sector is equal to 4.5% of the total number of employed people in the country. This proportion is also larger than the average one across the European Union, according to data published by Eurostat.

Ministry: idea for compulsory secondary education should be put on hold for now

Considering that Latvia’s Education and Science Ministry has several ongoing industry reforms, it would be best to put the proposal for compulsory secondary education on hold, said Education and Science Minister Kārlis Šadurskis during a meeting of Saeima’s Education, Culture and Science Committee.

Association: ECB should become more involved in resolving Latvia’s financial scandal

Association of Latvian Commercial Banks sees a need for the European Central Bank (ECB) to become more involved in the discussion and help resolve the situation, considering evaluation of ABLV Bank’s business model is in direct competence of ECB.

Hesburger to invest 11.5 million euros in Baltics this year

The largest fast food catering restaurant network in Finland and Baltic States – Hesburger – plans to invest approximately EUR 11.5 million in business development this year. EUR 5.5 million are planned to be invested in Latvia’s market, says Hesburger Development Director Ieva Salmela.

Air temperature drops below -30° C in certain parts of Northern Europe

On Tuesday, 20 February, air temperature in central and northern parts of Finland dropped to -27° C… -31° C in morning hours. In Norway, close to the Finnish border, air temperature has dropped as far as -34° C, according to data from meteorological stations.

FCMC suspects someone may want to undermine Latvia’s financial sector

It is not impossible that someone may want to undermine Latvia’s financial sector, said chairman of Latvian Finance and Capital Market Commission Pēters Putniņš in an interview to Rīta Panorāma programme on Tuesday, 20 February.

European exchange indexes decline; Wall Street enjoys a holiday

European exchange indexes declined on Monday, 19 February. No trading was performed at American stock markets, because the country was celebrating President’s Day.

Party: Latvian banking system’s crisis threatens Skanste neighbourhood's development

There are serious risks associated with European Union’s co-financed project for the revitalization of Skanste neighbourhood, including construction of Skanste tramway line, says member of Riga City Council and For Latvia’s Development party Viesturs Zeps.

Public opinion: KGB documents should be made publicly accessible immediately

Latvia’s society believes the KGB documents should be made publicly accessible immediately. In addition, residents say they are confident in their ability to discuss those documents without the country’s supervision, which takes the form of expert opinions prevailing over society’s moral views, as stated by guest researcher of History Institute of the University of Latvia M. His. Marta Starostina.

For Latvia’s Development: the prime minister is gone, but finance minister claims otherwise

«What we have observed in the past several days is that Latvia’s financial sector has received several heavy strikes as a result of the government’s uncoordinated and chaotic actions. Prime Minister Māris Kučinskis has evidently ‘disappeared’ and offers no clear plans to resolve the crisis, whereas Finance Minister Dana Reizniece-Ozola says different things in every interview. Such behaviour will not help resolve the crisis. It could instead pull the country’s financial sector in a much deeper crisis,» says chairman of For Latvia’s Development Juris Pūce.

Bank of Latvia provided ABLV Bank with a loan of 97.5 mln euros in exchange for securities pledge

The Bank of Latvia has provided ABLV Bank with a loan worth EUR 97.5 million in exchange for securities pledge, as confirmed by the financial institution.

Prime Minister: Bank of Latvia governor is not allowed to take official post

As a security measure, the governor of the Bank of Latvia Ilmārs Rimšēvičs has been applied with a prohibition to take post, said Latvian Prime Minister Māris Kučinskis after a meeting of the Cabinet of Ministers.

Poland's halt to logging in ancient forest came after irreparable damage

Although Poland has stated logging in the old-growth Bialowieza forest has been stopped, Warsaw has failed to reveal the amount of trees already cut down.

«A good friend» pays 100,000 euro bail for arrested governor of the Bank of Latvia

Corruption Prevention and Combating Bureau (CPCB) has applied a bail of 100,000 euros for the arrested governor of the Bank of Latvia Ilmārs Rimšēvičs. The bail has already been paid to the State Treasury account, as confirmed by his lawyer Saulvedis Vārpiņš.

NP: ABLV blames Latvian officials for misleading foreign institutions

Last week, the reputation of Latvia’s second largest bank – ABLV – was seriously impacted. It is believed that money laundering was this bank’s main operation, and that it failed to comply with the prohibition on cooperation with North Korea. The bank is also accused of bribery. US Department of the Treasury Financial Crimes Enforcement Network rarely speaks so directly of any credit institution, says Nekā personīga programme.

Changes to third-country student residence in Estonia to add more responsibilities to university staff

The Estonian government has backed planned amendments are to the Aliens Law implementing an EU directive into Estonian law, which change how third-country nationals on enter and reside in Estonia if they are study or performing research work.

Russia criticises U.S. charges of Russian meddling in U.S. election

The Foreign Minister of Russia, Sergei Lavrov, has criticised the charges announced by the U.S. Federal Bureau of Investigation, against 13 Russian nationals and three companies for election meddling.

Government plans to form four riot prevention units in Latvian regions

The State Police plans to form four riot prevention units in Latvia’s regions, says Chief of State Police Ints Ķuzis.

Syrian Kurdish fighters under attack by Turkey announce deal with Syrian government forces

The mainly Kurdish militia in the north-west of Syria have announced having reached an agreement with the Syrian government for the latter to deploy its soldiers in order to help Kurds repel the current Turkish attack.

NCP: it is highly important to replace management of Bank of Latvia and FCMC

Considering recent events, which have not only impacted the country’s finance sector but also its international reputation, the New Conservative Party (NCP) demands immediate measures to be undertaken to replace the management of the Bank of Latvia and the Finance and Capital Market Commission. On top of that, it is also necessary to perform radical changes in the organization and supervision of those institutions, says NCP chairman Jānis Bordāns.

Air temperature in Latvia to gradually decline this week

On Monday, 19 February, atmospheric pressure will increase slightly in the north. With that, it is expected to snow only around Kurzeme’s south-west. Air temperature in most of Latvia will stay at -1° C… -6° C. In Kurzeme, however, air temperature will be around 0° C… +1° C, as reported by State Environment, Geology and Meteorology Centre.

Week in Lithuania. Lithuania celebrating centennial of statehood

Leaders of European countries gathered in Vilnius on Friday, February 16, to celebrate the 100-year anniversary of restored statehood, and festive events were taking place in many cities and towns of Lithuania.

BNN summary of the week: minister threatened with dismissal; ABLV Bank scandal

BNN offers a summary of this week’s topical news in a variety of categories: Change; Fight; Court; Problem; Decline; Commentary; Future; Proposal

SRS uncovered violations in 169 inspections at catering companies last year

In 2017, the State Revenue Service (SRS) performed a total of 989 inspections at 212 catering companies. This includes 182 thematic inspections for 125 taxpayers. Violations were uncovered in 169 inspections. The most common violation was manipulation with cash registers, according to information published by SRS.

Most read

Most commented