Desmond buys stake in Latvian bank

Patrick McLoughlin, Reuters

Reitumu said Desmond bought 33.1% from a small number of existing shareholders, including one of the bank's founders, Tony Levin. No value for the purchase was given.

Rietumu Banka had 726 million Latvian lats (E1 billion) in assets at the end of July and is roughly half the size of the Baltic state's biggest bank, Parex.

The total amount of deposits in July was E631 million, representing a year-on-year increase of 41%.

Desmond said that he bought into the bank because he was impressed with what his friend and the bank's chairman, fellow Irishman Michael J Bourke, had done in developing the business.

"This opportunity came through one of my former colleagues and I like what he has done with the bank," Desmond said.

He added that he had no further plans to increase his stake in Reitumu or in additional holdings in any other banks.

A senior bank official said he would not comment on the value of the deal, but added it was significant in terms of the Latvian banking industry.

"We can say that it is probably the biggest amount invested in the Latvian banking sector in recent years," said Reitumu vice-president Aleksandrs Kalinovskis.

Reitumu has offices and branches throughout Latvia one of the EU's fastest growing economies as well as offices across the Baltics, other former Soviet states and in Russia.

"I am impressed by Latvia's rapid pace of development and by its emergence as a financial centre for the region," the new shareholder said earlier in a statement.

Desmond, who owns London City Airport and is the biggest shareholder in Scottish soccer club Glasgow Celtic, will join Rietumu's supervisory council.

No changes in the bank's management structures were planned, Rietumu said.