Latvia sells Citadele bank to Ripplewood

By bne IntelliNews September 17, 2014

Mike Collier in Riga -


Latvia has agreed to sell  its majority stake in  Citadele bank, the rump of  Parex bank which collapsed in 2008, to US private equity firm Ripplewood Holdings.  

Following a closed cabinet meeting on Tuesday, Prime Minister Laimdota Straujuma emerged to tell journalists what had been an open secret for weeks: the buyers would be US private equity firm Ripplewood Holdings. The deal would be signed “by September 30” and was “the best we could hope for” given current market conditions and pressure from the European Commission to offload Citadele, she said, without disclosing the sum. Media have speculated that it could be around the €110m mark, with more recent reports suggesting the price has been driven down further in negotiations.

Standing alongside Straujuma was Ripplewood founder Tim Collins, who added some interesting detail to the deal – apart from how much he was paying. 

“We're delighted to be investing in Latvia and this region. It's not just an investment in a bank but in the entire economy. We believe this is going to be not just a good investment but a very important aspect for the Latvian economy that will produce a significant impact on both Latvia and the region,” Collins said.

“It can contribute across all sectors: consumers, SMEs, it has the potential to make a significant contribution,” Collins said, confirming that it would continue to operate as a general purpose retails bank.

“The investors are myself, my family, the European Bank of Reconstruction and Development [via its existing 25% share in the bank] and then other investors that are long-time investors who invest with us in other parts of the world from Tokyo to Cairo to London.

“They're famous, very successful investors: former well-regarded government officials, entrepreneurs. In the main we selected investors that we believed could not only make an investment but could make a contribution to the institution, which is a tradition we've had for years.

The current management had done “a remarkable job in a difficult environment” Collins said. “We expect them to grow and prosper and lead this bank to be a national champion if not a regional champion.”

A decision would need to be taken on whether to expand the bank's capital, Collins said, and hinted again that it could become a regional force.

“My instincts are that there's a lot of opportunity here... ultimately, without losing focus, I believe there'll be opportunities to expand in the region.”

Interestingly, Collins was also keen to draw attention to how this investment would be different to some others he had been involved in.

“I have invested in a variety of industries all around the world. Some investments have been relatively short for idiosyncratic reasons. One was nine months. Others have been 10, 12, 13 years. This investment is different. Those investments were done in a private equity fund and I decided that to have a longer-term horizon I would invest with my colleagues directly and without the constraints of a private equity fund. This is my capital and our colleagues' capital and it's not constrained by the terms and nature of a private equity fund.”

Rather than creating a special instrument to carry out the purchase he had created “a special group of friends” Collins said. “I'll lead the group of investors that owns 75% plus one share,” Collins said, with the EBRD maintaining its existing 25% stake.

“Ripplewood is an entity that I started 20 years ago that has had a series of private equity funds and a few investments like this that were my capital and others'. That's the new model. The model that I think suits my personality and circumstance better is to have capital that has fewer constraints and can have a longer horizon.”

Formed in 2010 when the government split bailed-out Parex bank in two, Citadele was the “good bank” half with the main assets, while asset recovery company Reverta was formed to try to claw back money for the state. 

It operates 37 branches and client service centres throughout Latvia with offices in Estonia, Lithuania, Kazakhstan and Ukraine, plus asset management offices in Russia, Belarus, Ukraine and a subsidiary in Switzerland.

Related Articles

Austria's Erste rides CEE recovery to swing to profit in Jan-Sep

bne IntelliNews - Erste Group Bank saw the continuing economic recovery across Central and Eastern Europe push its January-September financial results back into net profit of €764.2mn, the ... more

EU, US partly suspend Belarus sanctions for four months

bne IntelliNews - The Council of the European Union (EU) has suspended for four months the asset ... more

bne:Chart - CEE/CIS countries perform particularly well in World Bank's "Doing Business 2016" survey

Henry Kirby in London - Central and Eastern Europe and the Commonwealth of Independent States’ (CEE/CIS) countries performed particularly well in the World ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.