The two Latvian-born, Russian-speaking biznismeni hit it off immediately in 1987 when they met at an informal gathering of entrepreneurs in Riga. Before long they hatched their first venture together under perestroika. Sniffing a huge opportunity in the loosening of foreign travel restrictions for citizens of the former Soviet Union, they opened Parex travel agency. The venture was profitable, but Kargin, now 42, and Krasovitsky, 49, had bigger ambitions. In 1990, they persuaded the Soviet authorities to give them the first private foreign exchange license in the former Soviet Union. Although their virtual monopoly in currency trading lasted just six months, it enabled the pair to accumulate tens of millions of dollars, enough to establish Parex Bank in 1992.
In the tumultuous years that followed, Kargin and Krasovitsky proved their financial mettle. Parex survived not only Latvian banking crises in 1993 and 1995 but also the catastrophe of 1998, when the collapse of the Russian ruble caused trade with Latvia to grind to a halt and plunged its economy into recession. While other banks were struggling for their lives, Parex actually posted a profit in 1998.
Today, Parex is by far Latvia's largest bank, with assets of $1.7 billion. It has expanded its operations beyond Latvia to Estonia, Lithuania, and other former Soviet republics. It has offices in London, Stockholm, and Frankfurt.
In the past 12 months, Parex has moved beyond retail and corporate banking and into investment banking. Kargin and Krasovitsky have lead- managed numerous syndicated loan deals and bond issues by Western, Russian, and Kazakh borrowers. They still own Parex's unlisted stock and are easily the richest people in Latvia.
Their success is all the more surprising because neither have banking backgrounds. Kargin got a journalism degree at Latvia State University in 1983 and worked at the Riga City Committee of the Youth League before being swept up in perestroika. Krasovitsky earned a 1975 degree from Riga Polytechnic Institute in automation and computer technology and worked for a decade as head of the computer technology department at a high-tech emerging company, before meeting up with Kargin.
For its next act, the pair plans to take advantage of the Baltic states' pending admission to the European Union to expand their bank's reach in Western Europe. "Joining the EU is our next big opportunity. There will be more business for us both at home and abroad," says Kargin. Given its enormous success, no one would dare accuse Parex Bank of overreaching.