Banks bait up for the big fish

RIGA - While cameras clicked and reporters pocketed Latvia's trademark Laima chocolates, representatives of Hansabank Latvia and Zemes Bank penned signatures Sept. 11, acknowledging the merger of their parent banks, Estonia's Hansapank and Hoiupank. The merger, still to be approved by the Bank of Latvia and shareholders at both banks, will form the fifth largest bank in Latvia. The merged bank's new name is Hansabank-Latvia.

Economies of scale and combined assets will save money and reduce risk, allowing Hansabank-Latvia to go after a bigger market share in being able to service large corporate accounts, Ingrida Bluma, Hansabank-Latvia's president said.

The merger deal gives all Zemes shareholders 0.3286 shares of Hansabank-Latvia for each share of Zemes Bank they hold. The two banks have scheduled meetings on Sept. 25, at which the merger will be put forth for a vote.

Hansapank and Hoiupank representatives voted Hansabank-Latvia President Ingrida Bluma president of the merged bank. Three members of Hansabank-Latvia's original board, Valdis Purvinskis, Ugis Zemturis and Viesturs Kulikovskis, as well as Zemes Bank First Deputy Chairwoman Irena Krumane, will comprise the board of the new bank.

Hansabank-Latvia has 23 branches across the country and intends to open more, Bluma told reporters.