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Latvian bank to receive EBRD equity investment
Latvijas Zemes Banka (LZB), one of the Latvia's leading commercial banks, is to receive an equity investment from the European Bank for Reconstruction and Development (EBRD). By acquiring two million shares, representing between 22 per cent and 23 per cent of LZB's total share capital, EBRD is strengthening LZB's capital base thereby enabling the bank to increase corporate lending and other business activities in Latvia. The transaction will be EBRD's first equity investment in a Latvian commercial bank.
"By taking a significant minority shareholding, the EBRD should enable LZB to win greater confidence both domestically and abroad", said George Krivicky, Director of the Baltics Team at EBRD. "LZB's need for new capital is consistent with its medium-term strategy of maintaining a leading position in the Latvian financial sector by providing clients with quality services and a comprehensive range of products", he continued.
Founded in 1989, LZB was one of the first commercial banks in Latvia, and initially focused its business towards the agricultural sector. However, over recent years, the bank has attracted a diversified client base becoming one of Latvia's leading corporate and retail banks.
In February 1995, a US $10 million (ECU 7.5 million) loan agreement was signed between the EBRD and LZB in the form of a credit line to LZB, 35 per cent of which was financed by the Baltic Investment Special Fund. As of 31 March, 67 per cent of the credit line had been disbursed.
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