VILNIUS - Despite seeing nearly a 40 percent slump in profits, the Lithuanian Snoras Bank has said that it is not in danger and even opened new branches amid the impending financial crisis in a bid to increase penetration to clients.
Snoras saw its consolidated net profit for the first three quarters slump by 38.9 percent year-on-year to 29.7 million litas (8.62 million euros), resulting in the group posting a net loss of 11.7 million litas, according to Snoras' financial report for the period.
Snoras played down the drop citing increased investment as responsible.
"One of the main reasons, that has influenced bank Snoras profit, is intense increase of bank's expenses. The main part of the expenses was comprised of Snoras' network development in Lithuania and foreign countries 's Estonia, Cyprus, The United Kingdom and Belgium 's as well as of investment into the main IT systems of the bank," Naglis Stancikas, Snoras First Vice President and Director of the Investment Business Division, told The Baltic Times.
He added that the current investment would lead to long-term profitability for the bank.
He denied that Snoras could suffer the same fate as Latvia's Parex bank, which was recently nationalized.
"One month ago Snoras increased authorized capital by almost two-thirds. This procedure consolidated the bank's capital base, strengthened the trust of investors and clients, and also allowed to expand and propel the bank's activity," he said.
On Sept. 3, Vladimir Antonov, chairman of Snoras' supervisory board, and Raimondas Baranauskas, chairman of the management board, held a combined stake of 93.9 percent in the bank, which is listed on the Vilnius stock exchange.
In the face of the drooping profits, the bank opened nine new sub-divisions in Lithuania, including its first branch in Kaunas.
"Snoras now seeks and pays the most attention to the network's activity efficiency and optimization. The optimization of the bank's network is being implemented through the relocation of mini banks to more convenient and appropriate places," Stancikas said.
The Kaunas branch and 8 mini-banks in the Kaunas, Klaipeda, Alytus, Siauliai, and Utena regions were opened, with two more planned for December.
"Today we can take pride in the most expansive customer service network in Lithuania. Thanks to these efforts, Bank Snoras is even closer to its clients in all regions of the country," Snoras deputy chairman Zorzas Sarafanovicius said in a press release.
Sarafanovicius echoed his colleague, saying the new branches would bring the bank closer to the client.
"The mini-banks are opened in the densely populated zones, in the industrial and dormitory suburbs, the downtown areas, near large commercial locations - in all those places where it is convenient for clients to use the banking services," he said.
Snoras mini-banks offer clients services to accept payments, exchange currency, pay or order cards and make deposits.
Presently the entire Snoras network consists of 10 branches, 11 branch outlets, 230 mini-banks and 338 ATMs. A total of 62 of the ATMs are multi-currency.