Banking and bookkeeping in Latvia: Stabilization of bank sector in Latvia results with success

Stabilization of bank sector in Latvia results with success

The asset management company Reverta is the former Parex Bank after reorganization.  „Professional work,  economic processes in Latvia and in the world, crisis in the eurozone, the unstable political and economic situation in the world, and the slow recovery of Latvia’s economy – these factors are all quite logically reflected in the development of the business projects of our clients, as well as in the real estate market. For that reason, we predict that the company will continue to generate losses as planned for the next few years,” the company’s board chairman Christopher Gwilliam said.

Real estate in Latvia , Raverta group business

The number of real estate properties taken over by Reverta has increased, and during the reporting period the company focused increased attention on the economically advantageous sale of these properties. Reverta has set up a team of real estate sales specialists, and the validity of this decision has been seen in positive trends in relation to the sale of real estate. On June 30, the Reverta Group’s property portfolio included a little over 1,000 units. Of these, 900 were in the hands of Reverta and its subsidiaries, while the others were undergoing registration, the company points out.
“There has also been a gradual increase in the number of transactions in which the purchase of the property is financed by a lending institution, and that may point to favorable trends in the Latvian economy,” the company says in its financial report. Although, the real estate market remains fairly inactive, and buyers have demonstrated interest in only a limited number of specific real estate segments.
Approximately one-half of the properties, judging from their value, are flats and private homes, 23 percent are commercial properties, four percent are development projects, and the rest of the objects are plots of land.

Conclusion
Reverta concluded the first half of 2012 with a planned loss of 45.1 million euros – a loss which, as has been traditional, has been made up of set-asides for toxic loans, as well as the fact that interest expenditures have exceeded interest revenues. It must be noted that because Reverta manages toxic assets, the true measuring stick is the amount of money that has been recovered. The specifics of the company are such that profits are not expected for the next several years, the bank says.
During the first six months of 2012, the asset management company Reverta (formerly Parex Bank) has done well at restructuring its loans and at selling individual demand rights, and that has allowed it to repay 36.6 million euros to the Latvian Finance Ministry ahead of schedule, reports Nozare.lv.
12.5 million euros represent interest on the state’s deposit at the former Parex Bank, while 24.1 million euros represent the basic sum - the principal - of the deposit. In addition to that sum, Reverta repaid another 16.1 million euros to the ministry in August, once again doing so ahead of schedule. Again, 8.6 million euros represented interest, while 7.5 million euros represented the basic deposit. During the first half of 2012, Reverta devoted substantial attention to debt collection and related issues.