RIGA: Sweden's Swedbank and SEB are to buy some of the commercial banking assets of a Latvian state-owned bank, which will then be turned into a development institution, the Finance Ministry said on Friday.
The Latvian government said earlier this week it had agreed to sell some of the assets of state-owned Mortgage and Land Bank as it pushed ahead with a clean-up of its banking sector after a deep recession during the 2008/2009 financial crisis, but did not name the buyers.
The Finance ministry said in a statement contracts about the sale of Mortgage and Land Bank's commercial assets were signed on Friday and the deal would close within the coming six months.
It said the financial details of the transactions would only be disclosed after the deals were finalised.
Swedbank had made the best offer for assets concerning commercial loans, payment and deposit services, as well as a leasing company while SEB Wealth Management had provided the best offer for the Mortgage and Land Bank's second tier pension plan management assets, the ministry said.
The centre-right government has said it will sell most of the assets of Mortgage and Land Bank by the end of 2013, after it decided in 2009 to turn the bank into a development bank and stop its commercial activities.
Latvia's banking sector is dominated by Swedish banks and Swedbank and SEB are the top two banks by asset size. Both banks came under pressure in 2009 as a credit bubble burst in the Baltic state which slumped into a withering recession.
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