Meridian Seeks Investors After Split on Russia SanctionsAaron Eglitis
Latvia’s Meridian Trade Bank AS is seeking investors after its former Russian parent was sanctioned by the U.S., board member Maija Treija said.
“We are in a period of finding a new investor,” Treija said in an interview in Riga, adding that Meridian is not subject to a U.S. blacklisting. Talks are under way with potential investors and a deal must be completed within a year, she said, declining to provide further details.
Meridian changed its name and ownership this year as the U.S. imposed sanctions on its Russian parent, SMP Bank, to increase pressure on President Valdimir Putin’s inner circle after the seizure of Crimea from Ukraine. SMP’s owners, Putin allies Arkady Rotenberg and his brother Boris, were blacklisted in March. A month later the U.S. sanctioned the Russian bank.
Meridian said on April 28, the day U.S. sanctions were broadened to include SMP, that its Russian parent had cut its holding to 49 percent from 96 percent the week before. It announced the name change to Meridian from SMP on May 7, and said on May 14 that the Russian company had sold its entire stake in the Latvian bank.
Meridian decided to act after the Rotenberg brothers were sanctioned, which led to a 7 percent drop in deposits, Treija said. The latest round of sanctions hasn’t had much of an impact on the deposit base, she said.
“This was a signal -- there was enough time to carry out all the necessary work before the second sanctions,” she said. “We were already completely free from SMP Bank’s influence.”
Meridian is now 50 percent owned by six people on the management board or council, and 48 percent owned by the bank itself. The bank will have to sell its own holding within a year, said Treija, citing Latvian commercial law.
Latvia, part of the 28-nation European Union, had its credit rating raised by both Standard & Poor’s and Moody’s Investors Service in the past three weeks.
The bank’s dollar accounts with Deutsche Bank AG were suspended for a “day or two” after the sanctions, and are now reopened, Treija said, which shows the lender is not subject to U.S. sanctions since the ownership change.
“We apply any sanctions where appropriate and as directed by the relevant authorities,” said Deutsche Bank spokeswoman Kathryn Hanes, while declining to comment on the relationship with Meridian.