EBRD strengthens capital base of Siauliu bank

By Axel  Reiserer

The EBRD is supporting the transfer of assets from Lithuania’s troubled Ukio bank to Siauliu bank with a €20 million subordinated debt facility. The funds will strengthen the capital base of Siauliu bank for the integration of the new assets.

The administrator for Ukio bank has reached an agreement with Siauliu bank on the transfer of assets and liabilities of Ukio bank, following suspension of operations last week by the Bank of Lithuania.

Ukio bank had been the country’s fourth-largest bank in terms of deposits and sixth-largest bank in terms of total assets. A swift resolution was imperative to avoid any destabilising impact on Lithuania’s financial sector and after intense negotiations Siauliu bank and the administrator announced an agreement yesterday.

The EBRD expressed its full support for the transaction and Sylvia Gansser-Potts, EBRD Director, Financial Institutions, added: “We welcome this news and appreciate the swift resolution of a troubled bank. This has ensured stability in the sector and we are pleased that EBRD will also be able to provide necessary financial support to strengthen Siauliu bank.”

Audrius Žiugžda, CEO of Siauliu bank, said: “The most important task now is to resume the provision of services to the former customers of Ukio bank. This will require considerable efforts which we are prepared to make.” The bank also expressed its view that the successful integration of the assets will eventually benefit the whole economy through greater stability and secure access to finance for Lithuanian businesses.

Siauliu bank is a Lithuanian commercial bank with operations throughout the county and currently has 55 branches. The EBRD is the single biggest shareholder with a 19.6 per cent stake. Siauliu bank is especially focused on lending to small and medium-sized enterprises.