The chief executive officer of the largest bank in Latvia has resigned according to a company statement released Monday, while attempts to stabilize the Baltic state's second-largest bank have cost more than 1.5 billion dollars, it has been confirmed.
"Maris Mancinskis will become the new Head of Swedbank in Latvia from February 12, 2009. He succeeds Maris Avotins, who resigns from his post and will continue his work for Swedbank Group, said a statement from Swedish-owned Swedbank, which operates in all three Baltic states and is particularly strong in Latvia, reported dpa.
No reason was given for Avotins' surprise resignation, but Swedbank has been reorganizing its Baltic divisions in recent months and the parent company will soon have a new CEO of its own in Michael Wolf, set to replace outgoing CEO Jan Liden in March.
The Latvian operation shed around 10 per cent of its workforce in 2008 as shareholder concerns about exposure levels in the Baltic markets grew on the back of the global economic downturn and the disappearance of the free-flowing credit that fuelled the Baltic economies until the credit crunch.
Despite rumours that Swedbank might close its Baltic operations, the company has repeatedly stated that it has a "strategic long-term commitment" towards the region.
"I believe that we are well positioned and have the internal strengths to successfully manage the bank through difficult next few years and to become stronger and more efficient organization in this process", said Mancinskis, who served as head of Swedbank's Russian operations for two years.
On Sunday night, the chairman of the country's second-largest bank and largest indigenous financial institution, Parex Bank, said the Latvian government had so far spent 820 million lats (1.5 billion dollars) supporting the business, which was forced into government ownership late in 2008.
Chairman Nils Melngailis also said Parex was trying to agree terms with lenders about the repayment of large syndicated loans due on February 19.
He said Parex hoped to return to normal operations in to to three months.
The near-collapse of Parex was one of the reasons behind Latvia's decision to seek a 7.5-billion-euro (9.5-billion-dollar) bailout package brokered by the International Monetary Fund.