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Friday 20.07.2018 | Name days: Ramona, Ritma

Moody's cancels all Parex Bank ratings

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The international credit rating company Moody’s has withdrawn all the ratings assigned to Parex Bank, indicates the rating agency’s report.

Parex Bank has mentioned the future action specifics as the reason for declining Moody’s services a month ago, namely, the bank does not plan to attract new depositors, receive deposits, give credits, as well as, accept payments, but only intends to recover the debts.

Nevertheless, Moody points out in the report that it had already notified on August 6th about the option to reduce the Parex Bank ratings, taking into account the reorganization of the bank and the uncertainty about its future activities, in particular, the distribution of assets and liabilities between Parex Bank and the newly established A/S Citadele Bank, as well as, about the state investments in the bank.

Moody’s claims that the Parex Bank’s credit rating has been revoked because the information is too insufficient and irrelevant for the agency to continue the rating.

Moody’s had given Parex Bank the financial stability rating E with a stable outlook, the long-term local currency deposit rating B2 with negative outlook, and the long-term foreign currency deposit rating B2 with negative outlook.

The communications and marketing manager of Parex Bank Marita Ozolina-Tumanovska previously explained that the bank had carried out a full assessment of the usefulness of Moody’s services and concluded that its services should be declined.

One of the significant aspects of the decision taking process was the posibilities of Parex Bank administrative cost reduction.

«The services provided by the rating agency Moody’s, are, undoubtedly, valuable and even of vital importance in cases when the company is willing to attract additional funding, or, for instance, potential depositors. However, we do not plan to carry out these actions, because they are not in accordance with the defined objectives and tasks of Parex Bank, » explained the Chairman of Parex Bank Kriss Gviljams.

As it was reported, the restructuring process of Parex Bank was finished in August 1st, and Parex Bank is now resuming its business activities in line with the set objectives and functions, and its key task is the recovery of state investments.

According to the Parex Bank transaction strategy, its future action will be focused on the credit restructuring, as well as, on the securement of the taken-over debt settlements, mainly real estate, effective management. After the situation has stabilised in the property market, Parex Bank intends to sell them profitably in the interests of all shareholders, reminded Ozolina-Tumanovska.

Two enterprises have been established as the result of this restructurization – most of the assets of the former bank were transferred to the new A/S Citadele Bank, while the non-profile assets were left to Parex Bank or the solutions bank.

It was already reported that in November 8th, 2008 the government decided to save financial difficulty-ridden Parex Bank and acquired the bank’s controlling interest for two lats from its major shareholders and managers Valerijs Kargins and Viktors Krasovicks.


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