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Despite run, bright prognosis

  • 2003-02-27
VILNIUS

Vilniaus Bankas, Lithuania's leading commercial bank controlled by Sweden's SEB, is anticipating a net profit of 138 million litas (40 million euros) for 2003, up by 9 percent from an audited net profit of 126.5 million litas in 2002.

A draft estimate for 2003, which was presented to the bank's shareholders, stipulates that Vilniaus Bankas' operating revenues will reach 366.3 million litas, while its loan portfolio will go up by 81 percent from 3.2 billion litas to 5.8 billion litas.

The bank's deposits will increase by 65 percent from 4.6 billion litas to 7.6 billion litas in 2005 compared with 2002, despite a run on the bank's deposits due to rumors of insolvency that caused a major stir on the eve of the presidential run-off poll in early January.

Experts surmised that as much as 20 million litas were pulled from the bank as a result of the rumors.

For 2002 Vilniaus Bankas had projected an annual profit of 138.9 million litas, but in the words of bank President Julius Niedvaras, the bank failed to achieve the profit target due to lower-than-expected net interest income and net foreign exchange gain.

The board of Vilniaus Bankas had already said it will recommend channeling the total 2002 earnings (126.5 million litas) into its reserve capital in lieu of paying out dividends.

In 2002, the group's assets rose by 7 percent to 6.6 billion litas, investments into government securities increased by 25 percent to 1 billion litas, net loans to customers grew by 17 percent to 3.1 billion litas, and deposits went up by nearly 10 percent to 4.5 billion litas.

As of late 2002, Vilniaus Bankas had a 38 percent market share in terms of assets and a 39 percent market share in terms of loans and deposits each.