VILNIUS - The U.K.'s Financial Services Authority (FSA) has barred Lithuania's Snoras bank from opening a branch in the country because "it repeatedly gave misleading and incomplete," answers to the regulator.
The FSA also criticized the largest shareholder of the Lithuanian bank, Vladimir Antonov, for providing the authority with misleading information.
Snoras, which was first refused a U.K. license in February 2008, claims it was discriminated against and that the FSA's reservations about anti-money laundering and financial crime controls at the Vilnius-based bank are unjustified.
A legal document supplied to TBT by the FSA showed that it didn't consider the bank ready for the U.K.
"The Authority took such action because it considered that Bankas Snoras was likely to fail to deal with the Authority in an open and cooperative manner in relation to matters for which the Authority, as host state competent authority, is responsible. These include anti-money laundering requirements, and systems and controls to prevent the bank being used for financial crime," the document said.
Snoras was tight lipped on the decision.
"Unfortunately we cannot comment on situation, as judicial procedures are implemented - AB bank Snoras has appealed the decision of the Financial Services Authority to the Financial Services and Markets Tribunal," Naglis Stancikas, Snoras Bank First Vice President and director of the Investment Business Division, told The Baltic Times.
According to the FSA, Snoras failed to mention that it had been refused permission to take retail deposits in Russia and had been fined by the Lithuanian banking regulator.
When the FSA asked about the Russian deposit insurance scheme, the owner of the bank and his colleagues did not give adequate answers.
"Mr. Antonov and Mr. Safonov, then the chief executive of Conversbank (U.K.) Limited, gave a misleading and incomplete answer to a question about the Deposit Insurance Scheme at a meeting with the Authority's Supervision staff on June 15, 2006," the legal document said about Snoras Bank's majority owner Antonov.
"The failure to demonstrate an open and cooperative manner was also evident in subsequent correspondence where the same information was deliberately concealed," the document said.
Antonov, a Russian national, also owns Conversbank, a Russian bank that aimed to enter the U.K. market via the acquisition of another company, which it then renamed.
The FSA attacked Antonov's record, which it accused of being incomplete. The businessman held a 68.65 percent stake in Snoras as of Jun. 30.
"These failures are not an isolated instance but are examples of an ongoing pattern of behavior by institutions controlled by Mr. Antonov," the FSA said.
The FSA can refuse any bank permission to operate in the U.K., but rejected banks are entitled to appeal to the Financial Services and Markets Tribunal, which Snoras has done.
Snoras refused to comment by the time TBT went to press about their specific plans for the U.K. market. It is unclear whether they are trying to target existing Lithuanian customers or gain new British customers.