Lithuanian government closes doors to Hansapank

  • 2001-01-18
  • BNS
VILNIUS - The Lithuanian government headed by Prime Minister Rolandas Paksas is set to pursue a new strategy in negotiations over the sell-off of the savings bank Taupomasis Bankas, Lithuania's largest state-owned bank, the daily Lietuvos Rytas reported Jan. 15.

Proposals by the Estonian bank Hansapank, the winner of the tender, will no longer be considered and from now on the negotiations will be conducted according to the scenario proposed by the government.

Ona Jukneviciene, a Paksas adviser, said that negotiations on the sale of a stake in Taupomasis Bankas would be conducted in a different way, the daily reported.

"We are not examining proposals of the buyer anymore," Jukneviciene said.

Arunas Siksta, chairman of the board of Hansabankas, a subsidiary of Hansapank that operates in Lithuania, declined to comment on the negotiations.

According to Lietuvos Rytas, the bank's non-liquid assets, worth 60 million litas ($15 million), will stay in the bank. The bank's bad loans, amounting to 50 million litas, will remain in Taupomasis Bankas and become the government's concern.

Moreover, the former government, expecting to attract a greater number of investors, decided to raise the interest rate of government securities, which are in the bank and are worth 500 million litas, from 3.5 percentage points to about 8 percent. This move did not attract any more potential buyers and did not make Hansapank pay more for a stake in Taupomasis Bankas.

Official negotiations with Hansapank were supposed to begin Jan. 10, and the sell-off was expected to be completed by the middle of February.

Hansapank, the largest bank in the Baltic countries, was announced the winner of the tender to acquire a stake in Taupomasis Bankas on Dec. 29. The winner was named after the government, and later the privatization commission, had lowered the minimum selling price of the bank.

According to unofficial data, the price for Taupomasis Bankas was reduced from 200 million litas to about 150 million litas, with the government taking on no additional liabilities related to the bank's non-liquid assets and bad loans.

Swedbank, the majority owner of Hansapank with a holding of 57 percent, said it fully supported the plans of Hansapank in acquisition of Taupomasis Bankas.

In comparison with the Baltic banks controlled by Skandinaviska Enskilda Banken, Swedbank has been in a clearly weaker competitive position in Lithuania. Taupomasis Bankas is Lithuania's second largest bank after Vilniaus Bankas, owned by SEB, in terms of total assets.

With a successful turnaround of Taupomasis Bankas, Hansapank will gain access to Lithuania's lucrative retail market, where it should be able to capitalize with its extensive product line. Taupomasis Bankas currently holds 47 percent of individual deposits in Lithuania.