AB Ukio Bankas, the Lithuanian bank controlled by Edinburgh soccer club Heart of Midlothian Plc owner Vladimir Romanov, fell to an eight-year low as investors speculated about the unprofitable lender’s rescue or demise.
The shares fell as much as 16 percent today in Vilnius, the biggest intraday drop since February 2000, closing down 12 percent at 0.095 euro. The company’s value of 32.9 million euros ($44 million) is less than half what it was a year ago. Volume of 1.7 million shares was the most in a year, according to data compiled by Bloomberg.
“Everyone knows the bank’s in poor shape and there are lots of rumors about what will happen,” Andrius Suminas, a broker at Swedbank AB in Vilnius, said by phone today. “Retail investors jump on every little bit of bad news and when the price dips assume somebody must know something they don’t.”
Ukio Bankas in October reported a group net loss of 44 million litai ($17 million) for the first nine months of 2012. Since then, it has had to assuage investor concerns about the quality of its loans, the valuation of real-estate it owns and probes of Russian money that was laundered through its accounts.
More than 1 million shares of Ukio Bankas last traded on Dec. 19, when news portal Eversus.lt said the Lithuanian central bank wants to merge Ukio Bankas with AB Siauliu Bankas with aid from the European Bank for Reconstruction and Development. The portal didn’t name a source and the institutions it mentioned declined to comment or denied knowledge of the matter when contacted by Bloomberg.
Romanov owns 64.9 percent of Ukio Bankas shares, according to a note in the bank’s earnings report. He is also chairman of the board and at least part owner of a sister investment company, Ukio Banko Investicine Grupe, or UBIG.
UBIG, which controls Scottish football team Hearts, on Jan. 8 took advantage of a new Lithuanian law allowing the company to pledge all of its assets as collateral for a purpose it has not disclosed, the delfi.lt news portal reported today, citing the company register. Since Dec. 7, Ukio Bankas has owned a company that owns 17 percent of UBIG shares, while Romanov owns another 17 percent directly, delfi.lt said.
The Bank of Lithuania is currently conducting an annual inspection of Ukio Bankas, the results of which will be made public in due course, central bank spokesman Giedrius Simonavicius said by phone today.
The Kaunas-based lender is due to report preliminary fourth-quarter results on Feb. 28 and audited full-year financial statements on March 8.
“Current moves in the share price are being driven by strongly negative sentiments and speculation among small local investors, with no sign of activity by institutional investors,” Swedbank’s Suminas said.