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EBRD loan supports growth of Rietumu Banka
Syndication allows first exposure to commercial debt market
The EBRD is extending a €60 million loan to Rietumu Banka, Latvia’s fifth
largest bank in terms of assets. €20 million of the loan will be for the
EBRD’s own account and €40 million syndicated among a number of commercial
banks. The loan will support the growth of Rietumu Banka as a financial
intermediary focused on medium-sized enterprises, while the syndication will
help it gain its first exposure to the commercial debt market.
Strong economic growth over the past year has led to a rapid expansion of
Latvian enterprises. As a consequence their credit needs have grown, which has
created a challenge for local banks in terms of capital constraints. Fresh
capital and term funding is needed to allow the expansion of the banking
sector in line with the overall economy.
Rietumu Banka, established in 1992, has positioned itself as a corporate and
investment bank and as a bridge between east and west as many of its customers
operate in Latvia, the Baltics, Western Europe, Russia and other CIS
countries. The bank’s strategy has identified the mid-sized corporate sector
as a target segment which coincides with the EBRD’s strong support for this
sector.
Salvatore Candido, EBRD Director for the Baltic States, said the syndication
of the loan is expected to enable Rietumu Banka in the future to source
additional and longer maturity funding from the commercial market. This will
remove a major impediment for growth and help Rietumu Banka’s sustainable
development on the increasingly competitive Latvian banking market.
Rolf Fuls, Senior Vice-president of Rietumu Banka said: “Rietumu Banka’s
approach to lending is highly selective: the Bank supports perspective and
innovative projects of our customers, requiring not only financial resources
but also consulting services and professional expertise. In recent years
Rietumu Banka has had notable success in the area of lending and due to this
fact the Bank stands strongly among the most profitable financial institutions
of the region. The new loan will facilitate active development of the
corporate lending segment - this is especially significant both for the bank’s
customers and for further successful economic growth of Latvia in general.”
To date the EBRD has invested more than €300 million in Latvia and helped
mobilise a further €650 million of co-investment. The Bank plays a significant
role in providing early and on-going support to banks, SMEs, the insurance
sector, leasing and equity funds.
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