Lithuania c.bank ready to lend to banks, no need now
VILNIUS, Oct 7 (Reuters) - Lithuanian central bank governor Reinoldijus Sarkinas said on Tuesday the bank was ready to lend up to 1 billion litas ($394 million) to raise the liquidity of banks, but no support was needed at the moment.
More than 60 percent of Lithuania's banking sector is dominated by Scandinavian banks SEB (SEBa.ST), Swedbank (SWEDa.ST) and DnB Nord (DNBNOR.OL). Local banks include Snoras (SRS1L.VL), Ukio (UKB1L.VL) and Sialiu Bank (SAB1L.VL).
"The Lithuanian central bank can lend a substantial sum of money to support the liquidity of the country's banks, if needed," Sarkinas told a meeting of businessmen and banks. "As of today, that sum would be about 1 billion litas."
However, the bank system remained sound, he said.
"Based on today's indicators, none of the banks face bankruptcy," Sarkinas said.
Sarkinas said banks' mandatory reserves deposited at the central bank were 3.4 billion litas, while the minimum level was 3 billion litas.
The capital adequacy ratio was 12 percent as of Sept. 1, while the minimum requirement was 8 percent. The special reserves for non-performing loans were 0.73 percent of the total loan portfolio of 70 billion litas, Sarkinas added.
Officials in Latvia and Estonia have also said that their banks are safe, with reserves above the required level and low levels of bad debt despite an economic downturn. (Reporting by Nerijus Adomaitis; editing by David Stamp)
