"The aim of cooperation is to supply Lithuanian consumers with better and cheaper financial products in the areas of long-term savings and life insurance," said Julius Niedvaras, Vilniaus Bankas president.
The two financial institutions are set to start close cooperation in the fields of property management, as well as development and sales of new products, according to the statement. Raimundas Kutra, deputy chairman of Vilniaus Bankas' board, said the two companies had agreed to set up three joint groups to work out possible cooperation models in the areas.
In the field of property management, Vilniaus Bankas, which has all structures necessary for property management, could help Lietuvos Draudimas to use money earmarked for investments in a more efficient way, Kutra said.
"In this case there will be no need for us to create our own structures for investment management - Vilniaus Bankas could manage our investment portfolio. This opens the possibility of synergies," said Kestutis Serpytis, general manager of Lietuvos Draudimas.
Vilniaus Bankas' president said the two companies were not planning any changes in the ownership structure. "We have nothing to sell," he said.
Niedvaras and Serpytis underlined that VB Gyvybes Draudimas, Vilniaus Bankas' life insurance company, and Lietuvos Draudimas would continue to compete against each other on the life insurance market.
It is planned that new products could be launched on the market in late 2001, but Kutra said the first results of the cooperation project might emerge in three to six months.
Consultancy work for the project's development and implementation has been carried out by VB Vilfima, a subsidiary of Vilniaus Bankas, and the law firm FORESTA.
Lietuvos Draudimas, owned by the Danish insurance company Codan A/S, is the absolute leader of the domestic insurance market. The Lietuvos Draudimas Group posted a net profit of 10.5 million litas ($2.63 million) for the first nine months of 2000.
The Vilniaus Bankas Group, 97.9 percent owned by Sweden's Skandinaviska Enskilda Banken (SEB), announced a net profit of 66 million litas over the first nine months of this year.