Siauliu Bankas Jumps on EBRD-Backed Bid for Ukio: Vilnius Mover

Siauliu Bankas AB rose the most in three years in Vilnius trading after the Lithuanian lender announced plans to buy assets from rival Ukio Bankas AB, whose operations were suspended yesterday.

The shares surged as much as 13 percent, the biggest intraday gain since December 2009, and closed 10 percent higher at a nine-month high of 0.267 euro. The volume of 345,009 shares was equivalent to 837 percent of the three-month daily average, according to data compiled by Bloomberg.

Lithuania’s central bank appointed a temporary administrator at Ukio yesterday to assess its financial condition and recommend restructuring, nationalization or bankruptcy within a week. Siauliu plans to negotiate a possible takeover of Ukio’s banking business with the country’s central bank, the Siauliai, Lithuania-based lender said on its website today.

The European Bank for Reconstruction and Development, which is Siauliu Bankas’s largest shareholder with a 19.6 percent stake, said it would provide subordinated debt to strengthen the lender before a possible Ukio deal.

Restoring Trust

“We welcome this swift move as a decisive step toward the consolidation of the local banking sector and the strengthening of its stability,” EBRD Managing Director for Central and South Eastern Europe, Jean-Marc Peterschmitt, said in a statement e-mailed from London.

Separately, Siauliu Bankas said that starting today it would make advance payments of pensions to clients of Ukio Bankas, whose accounts there were frozen, offering to open accounts for pensioners and give them bank cards free of charge.

Selling Ukio, or the healthy parts of it, to Siauliu Bankas is one of several options that the Bank of Lithuania will consider for resolving the Kaunas, Lithuania-based lender’s situation, central bank Chairman Vitas Vasiliauskas told reporters today in Vilnius.

A decision is possible as soon as Feb. 16 and would be based on the administrator’s report, Vasiliauskas said. Initial estimates put Ukio’s total assets at about 3.5 billion litai ($1.4 billion), offset by problem loans of about 1.6 billion litai that the bank had given to companies related to its majority owner Vladimir Romanov, the central banker said.

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