Lithuania's Siauliu Bankas to take over troubled Ukio

STOCKHOLM Sun Feb 24, 2013 6:45am EST

Related Topics

STOCKHOLM Feb 24 (Reuters) - Lithuania's Siauliu Bankas has agreed to acquire the assets and liabilities of Ukio Bankas, which was placed in administration last week.

The country's central bank restricted operations at Ukio and appointed an administrator after Lithuania's No.4 bank ran into financial trouble. Ukio's main shareholder - with a 65 percent stake - is Vladimir Romanov, owner of cash-strapped Scottish soccer club Hearts.

"The most important task now is to resume the provision of services to the former customers of Ukio Bankas," Audrius Ziugzda, CEO of Siauliu Bankas, said in a statement.

"This will require considerable effort and time, which we are prepared to give."

Siauliu Bankas is 20 percent owned by the European Bank for Reconstruction and Development (EBRD), which will provide 20 million euros ($26.32 million) in subordinated debt to strengthen Siauliu's capital base, facilitate the takeover process and help to stabilise Lithuania's financial sector.

Vitas Vasiliauskas, chairman of the board of the Bank of Lithuania, said that almost all account holders would be covered under the transfer of Ukio's activities to Siauliu.

"This means that the most important short-term goal has been reached - the absolute majority of people and companies will be able to again, without any disturbances, dispose of their funds, which are held at Ukio Bankas," he said in a statement on the central bank's website.

The central bank has said that Ukio had deposits of 3.4 billion Lithuanian litas ($1.3 billion), making it the fourth-biggest deposit taker behind the local subsidiaries of Scandinavian groups SEB, Swedbank and DNB . By assets, Ukio is the country's sixth-largest bank.

Siauliu Bankas will acquire assets and liabilities amounting to 2.7 billion litas.

Edinburgh-based Hearts, one of Scotland's top soccer clubs, has debt of about 24 million pounds ($38 million) and in December agreed to pay 1.5 million pounds to settle a tax dispute. The club also cleared a separate tax bill of 450,000 pounds which lifted the immediate threat of liquidation.

Fans have set up a foundation to try to save the club and have asked Romanov to allow them to take it over.

The club has distanced itself from the troubles at Ukio, saying that Romanov's shareholding in the soccer club was via a completely separate investment company. But it also said that Ukio provided the club with banking services and loans. ($1 = 2.6233 Lithuanian litas) ($1 = 0.7598 euros)

(Reporting by Mia Shanley; Editing by David Goodman)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.