CEE's best bank transformation 2016: Citadele Banka
Awards for Excellence 2016
Thanks to high levels of foreign ownership, banking sectors in CEE saw few sizeable failures during the financial crisis. Latvia’s Parex Banka was the exception. Locally owned and heavily dependent on wholesale funding, it suffered a run on deposits after the collapse of Lehman Brothers and had to be bailed out by the state. Large portfolios of bad debts were subsequently hived off into a bad bank and the relatively healthy rump was reborn as Citadele Banka in March 2010, which is the winner of this year’s best bank transformation award for CEE.
The new lender has come a long way since 2010. Parex’s higher-risk business lines and foreign clients were abandoned in favour of a more domestically focused strategy, with the emphasis on retail and SME customers. As the Latvian economy recovered, the strategy paid off. By 2012, Citadele was back in the black, and two years later the bank passed another milestone when it was bought by a consortium of heavyweight global investors – including Paul Volcker and Nassef Sawiris – led by former private equity fund Ripplewood.