Snoras Bank Likely Over-Reported 300 Million Euros in Assets

AB Bankas Snoras over-reported a preliminary 300 million euros ($406.4 million) in assets on its earnings, the Lithuanian Finance Ministry said.

No public money will be required to save Snoras because the bank has sufficient assets to cover insured deposits, the Vilnius-based ministry said in an e-mailed statement today. The country’s deposit insurance facility holds 500 million euros in assets on top of Snoras’ funds.

The Baltic nation’s government took over Snoras on Nov. 16 after the central bank discovered that some securities reported as assets may be missing. The country’s Prosecutor General has opened an investigation into possible fraud and embezzlement at the bank. The amount over-reported equals about 1/8 of its assets.

“Snoras was engaged in gross fraud and knowingly reported false financial statements,” the statement said.

The government is seeking to split Snoras into two banks with good and bad assets. The bad bank will remain under administration, central bank Governor Vitas Vasiliauskas said today. The government will seek an investor for the good bank “as soon as possible,” the Finance Ministry said.

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