On transformation of the Mortgage Bank into a development bank

The Ministry of Finance has drafted a report for the Cabinet of Ministers on the
implementation progress of the concept on „Transformation of the state-owned JSC
„Mortgage and Land Bank of Latvia” into a development bank”. The report outlines
the measures to be accomplished in order to transform the Mortgage Bank into a  
development bank. The government meeting scheduled for the 25th of May will     
examine the report. The concept approved by the government stipulates           
establishment of the development bank on the basis of the Mortgage Bank by end  
of 2013.                                                                        
The transformation framework of the Mortgage Bank encompasses the following     
measures:                                                                       
to draft a law on development bank and make amendments to the existing          
regulatory acts;                                                                
to phase out the commercial segment of the Mortgage Bank by 31 December 2013;   
to detach the impaired assets of the bank in the bank's daughter company in     
order to optimize work with the impaired assets;                                
to examine the possible alienation of the impaired assets management company in 
favour of the state or private investor if specific financial indicators are    
present;                                                                        
to proceed with examination of the options for accelerated alienation of the    
commercial segment of the Mortgage Bank;                                        
to pass a decision at the end of the transformation process about the status of 
the development bank (credit institution or financial institution).             
During the transformation process the Mortgage Bank will continue servicing its 
customers and guarantee meeting of its obligations. At the same time the sum    
total of the deposits will be gradually reduced by 2013 in proportion to        
liquidity adequacy requirements of the Financial and Capital Market Commission. 


More detailed information:                                                      
Sandra Eglīte                                                                   
Public Relations specialist                                                     
Phone: +371 6777 4244                                                           
E-mail: sandra.eglite@hipo.lv