October 28, Parex banka officially opens a branch in Berlin, Germany, and announces expansion of its operations on the German market. Latvian Parex banka is the first financial institution of the new EU member countries to start operating in the Western European countries.

“Parex banka is glad to announce the launch of direct operations in Germany where we have previously been operating on a cross-border sales basis. Taking into account the active economic relationships between Latvia and Germany, German capital resources and the rapid growth of the Latvian economy, we see good opportunities for the banks development and successful operations in Germany. Latvia’s accession to the European Union has also contributed to the great interest of Germans towards the services provided by Latvian enterprises. All of these factors have had a positive impact on the decision making process culminating in the opening of a branch in Berlin,” comments Gatis Kokins, the Assistant Vice President of Parex banka.

The primary tasks of Parex banka’s Berlin branch include: servicing customer accounts, offering deposits with competitive rates, (e.g. the annual rate on deposits in EUR equals 2.7%), emission of payment cards, internet banking, investment counsellor services and asset management advisory. Currently, the branch employs four staff members, subsequently the number of personnel will be increased.

German citizens have already expressed a high interest in the prospects of investing into the rapidly growing economy of Latvia (GDP growth in Latvia for the first half year of 2005 reached 9.5%, for 2004 – 6.3%) and investing into Latvian and Baltic real estate market, as well as investing in perspective securities of Baltic States, Russian Federation and CIS countries. Currently Germany is one of the largest trading partners of Latvia – export volume to Germany comprises 9.9% (EUR 337 mln), meanwhile the volume of imports – 14.1% (EUR 765 mln).

Parex banka forecasts, that after the launching of the branch, the Bank will be able to attract German clients, who are interested in developing economic relationships with enterprises in the Baltic Region, as well as to offer deposits with competitive rates and high profitability.

Parex banka started research on German market in the end of nineties, opening a representative office in Frankfurt in 1998. Since then Parex has established close business relationships with German banks. The volume of their participation in the syndicated loans, issued for and by Parex banka, totals 171,6 mln. EUR. The bank’s partners from German banking sector include: Landesbank Baden-Wurttembergische, Bankgesellschaft Berlin AG, Bayerische Landesbank, Commerzbank AG, Dresdner Bank AG, Europa Bank AG, DZ Bank AG (Deutsche Zentral-Genossenschaftsbank), HSH Nordbank, Landesbank Rheinland-Pfalz, Landesbank Saar, Landesbank Sachsen Girozentrale, West Merchant Bank Limited, Arab Bank Group.

Parex banka’s subsidiary, the investment company Parex Asset Management is an investment advisor of the Nestor Eastern European Bond Fund, which is currently also offered to German inhabitants. The Fund’s profitability for the last 12 months comprised 8%.