Snoras moves to fill lending gap

VILNIUS - Snoras Bank, Lithuania’s fifth biggest bank by assets, wants to boost its loan portfolio this year as rival Scandinavian subsidiaries continue to tighten credit, reports Bloomberg. “We are trying to benefit from the situation when the Scandinavian banks are not as active,” Snoras Deputy Chairman Naglis Stancikas said from Vilnius. “We see this year as a year of opportunities and we want to increase our loan portfolios.”

The Lithuanian banking industry, led by the Scandinavian subsidiaries of SEB and Swedbank, suffered losses last year as the second-deepest economic recession in the Baltic region weakened loan quality. Bankruptcies, falling real-estate prices, rising unemployment and wage cuts are increasing overdue loans and loss provisions.

Snoras’s loan portfolio grew in the first two months, said Stancikas. Real-estate lending accounts for 30 percent of total corporate loans, the biggest share in the portfolio. “The economic situation is no longer worsening,” he said. “We are feeling the first positive signs, such as an improvement in real estate.” The yield on Snoras’ three-year Eurobond maturing on May 21 rose 0.31 percentage points on March 10, to 15.53 percent. The yield has fallen from 120.97 percent in April 2009.
Snoras plans to sell additional shares to the public to raise about 23 million euros in the first half of the year to help boost capital.

“The price of our bonds fell significantly when the market turmoil began,” Stancikas said. “We bought our bonds at a cheaper price than the nominal price on the secondary market and made a profit. This helped us absorb some of the losses during the crisis.”

He said the bank still needs to buy back a portion of the bond that’s “significantly” smaller than the full size of the 175 million euros in debt. The bank has enough funds to buy back remaining debt, he said. Snoras is also considering a new bond sale this year, a decision which will depend on the market, Stancikas said.

The bank is 67 percent owned by Vladimir Antonov, a 34-year old Russian who resides primarily in London. Chairman Raimondas Baranauskas holds 25 percent.