The Bank of Lithuania permanently terminated the license of Ūkio bankas


On 12th February, 2013, following the inspection report, in order to protect the best interests of the general public and bank’s customers, the Bank of Lithuania declared temporary restriction of the operation of one of Lithuanian banks – AB Ūkio bankas, and also appointed a temporary administrator hereof, Mr Adomas Audickas.

The Bank of Lithuania states that the decision to restrict the bank’s operation was made after assessing risky tendencies of Ūkio bankas during the recent years, actions of shareholders that were harmful to the bank, non-compliance with the instructions of the Supervision Service and the consequent rising threat to the stable and reliable operation of the bank. The decision was approved once it was clear that any other statutory enforcement measures would not be sufficient in this case.

After the conclusions and proposals presented by the temporary administrator, the Bank of Lithuania recognised Ūkio bankas insolvent and permanently terminated its license. Seeking for restoration of the stability and reliability hereof, the Bank of Lithuania decided to transfer the assets, rights, transactions and liabilities of the insolvent bank to another bank operating in Lithuania. Following the instructions of the Bank of Lithuania, the temporary administrator of Ūkio bankas started the negotiations with AB Šiaulių bankas which resulted in an trilateral agreement of the temporary administrator of Ūkio bankas, AB Šiaulių bankas and the State enterprise Indėlių ir investicijų draudimas (Deposit and Investment Insurance).

The parties agreed that AB Šiaulių bankas will take over the liabilities of Ūkio bankas to its customers not exceeding the insurance compensations in the case of an insured event, as it is provided by in the Law on Insurance of Deposits and Liabilities to Investors of the Republic of Lithuania, and the customers would regain the possibility to dispose their funds (deposits) under the conditions laid down in their agreement with problematic bank at AB Šiaulių bankas.

However, it is obvious that the existing insurance mechanism will only compensate the damages of the insured part of deposits and the recovery of the amount exceeding the insured part of deposit would only be possible by actively participating in bank’s bankruptcy procedure. Therefore, many clients are contacting us regarding the upcoming process of bankruptcy of so called “bad assets” of AB Ūkio bankas, the possible outcome and consequences to their businesses. Considering this, we have prepared a set of various legal measures in order to protect our clients’ best interest and we are ready to represent you in and all issues related the insolvency of Ūkio bankas.

Should you have any additional questions regarding this matter, please do not hesitate to contact TRINITI partners: Mr Linas Sabaliauskas or Ms Vilija Viesunaite in Vilnius; Mr Sandis Petrovičs in Riga; and Mr Tõnis Tamme in Tallinn.