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Lithuania to Lend Deposit Insurer $310 Million for Ukio
Lithuania’s government agreed to lend as much as 800 million litai ($310 million) to help the state deposit insurance fund meet obligations related to insolvent lender Ukio Bankas AB.
The money will help finance the transfer of some of Ukio’s assets to Siauliu Bankas AB, avoiding a larger payout to depositors of 2.7 billion litai due if Ukio is liquidated, the government said today in an e-mailed statement from the capital, Vilnius. The loan, due Feb. 1, 2019, will have an interest rate of 2.801 percent, according to the statement.
Finance Minister Rimantas Sadzius said yesterday that the loan would be between 500 million litai and 600 million litai. Its exact size will depend on details of the asset sale that Ukio’s administrator is negotiating with Siauliu, the government said.
Lithuania’s central bank revoked Ukio’s license on Feb. 18, saying the lender’s liabilities exceeded its assets, some of which Siauliu is seeking to buy. The country’s deposit insurer is “rather empty” following the 2011 bankruptcy of Bankas Snoras AB, Sadzius said yesterday.
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