Riga - A senior official of the European Bank of Reconstruction and Development (EBRD) confirmed Wednesday that the bank was interested in taking a stake in Latvia's troubled Parex Bank.

Speaking to reporters after a meeting with Latvian Prime Miinster Valdis Dombrovskis, the EBRD's Varel Freeman said the bank would confirm the exact nature of its investment in coming weeks.

However, Dombrovskis revealed the EBRD was willing to commit 100 million euros in order to become a minority shareholder in the bank, which was forced into state ownership in late 2008 after it ran into serious liquidity problems as a result of the global credit crunch and a sharp downturn in the overall economic situation in Latvia.

Freeman would not confirm the 100-million-euro figure but described it as "reasonable."

Parex was the largest home-grown bank in a Baltic banking scene dominated by Scandinavian financial groups and its near-collapse shocked the region after it had spent years as a high-flying bank with an ability to attract sizeable deposits from rich Russians as well as local clients.

Founders Valery Kargin and Viktor Krasovickis sold their 85 per cent stake to the Latvian state for just 1 lat (1.80 dollars) each. Prominent local businessman Nils Melngailis was put in charge and has so far proved effective in improving Parex's prospects.

Melngailis said the interest shown by the EBRD sent out a signal that Parex has a future.

The EBRD has invested in numerous other businesses in the region and already owns a minority stake in Lithuania's Siauliu Bank. (dpa)