During the first 10 months of the year, communications costs were reduced by 30%, and office expenditures were cut by 60% in comparison to the same period of time in 2008. Major savings between January and October were also ensured by a 92% cut in travel costs, an 83% drop in advertising and marketing expenditures, a 75% drop in representation costs, a 72% decline in security services, and a 68% reduction in transport expenses. Spending on electricity and heat declined by 39% and 41% respectively. The average monthly wage fund at the bank has declined by 46% after a staff reduction of some 800 people and a review of all employee wages. Moving to new archival facilities allowed the bank to reduce costs by 72%, while moving to the new head office building will allow to save as much as LVL 2.7 million a year.

 

Tīna Ķuze, head of the Operational Sector: “Within the framework of the implementation of structural reforms at the bank, which allowed us save substantial amount of money, we assessed functions, optimised procedures, thus, making processes more effective. Furthermore, we conducted new price surveys among suppliers and certain services are now being outsourced.”

 

Parex banka’s main priorities during the first half-year of 2009 were to ensure sustainability and prevent the outflow of deposits, as well as to reach new agreements with the providers of syndicated loans. Afterwards, the bank entered the stabilisation phase, improving basic indicators, attracting the European Bank for Reconstruction and Development into its shareholder structure and entering into negotiations with other potential investors. Furthermore, the management of the bank has begun the work on the restructuring of the bank.

 

Founded in 1992, Parex banka currently employs some 1 900 people at branches all over Latvia and offers universal banking services throughout the Baltic region, the CIS and other European nations such as Germany, Switzerland and Sweden. Parex Group companies operate across the banking, finance, leasing, asset management and life insurance sectors. Currently, the Latvian Privatisation Agency is the majority shareholder of Parex banka, holding 73.4% of the Bank’s shares, but 22.4% are controlled by the European Bank for Reconstruction and Development. Parex banka has signed up to the European Code of Conduct on housing loans.

 

 

For more information:

Inga Saleniece, acting director

Corporate Communications Department

Telephone: +371 67778870 or +371 26564629

E-mail: pr@parex.lv