2017-11-10
Licence revoked for Vilniaus kreditas credit union due to insolvency; the court is asked to announce its bankruptcy
The Board of the Bank of Lithuania recognised the credit union Vilniaus kreditas as insolvent and revoked its licence of a credit union for good, thus it has no right to provide financial services. The Bank of Lithuania will apply to the Vilnius District Court regarding initiation of bankruptcy proceedings for this union.
Such a decision was taken because this credit union's assets are lower than its liabilities and it has not complied with the major capital related requirements – capital adequacy requirement and maximum exposure to a single borrower requirement. Complying with them was required by the Supervision Service of the Bank of Lithuania in May 2017, when it appointed a temporary representative for supervision of activities; however, this obligation was not discharged. The information provided by this credit union and information available to the Bank of Lithuania provides no grounds to believe that it could resume stable and sound activities. Finding a potential investor, who would help solve financial issues, has also failed.
Asset quality review of Vilniaus kreditas has revealed the need for its asset value adjustment, as as result of which losses grew and the adjusted capital contracted accordingly. According to the data from the credit union as of 30 September 2017, its assets amount to EUR 21.28 million and liabilities – EUR 21.59 million, capital – minus EUR 0.38 million, i.e. its assets are lower than liabilities by this amount. On 30 September 2017, the credit union incurred EUR 2.85 million losses, due to which its equity capital became negative.
In terms of asset size, this is the ninth credit union in Lithuania (out of 690). Its membership comprises over 2 thousand.
Recognition of this credit union as insolvent is an ensured event, thus its depositors will be paid out respective claims. Insurance claims for Vilniaus kreditas depositors will be paid and calculated following the existing legal acts. In case of such insured event, 100 per cent of the deposit amount, not exceeding EUR 100,000, will be paid out. A claim for a customer shall be paid within 20 business days of the announcement of the insured event (10 November 2017).
Shareholders of Vilniaus kreditas credit union may ask for information on the phone 8-662-51200.
More information of deposit insurance can be found on the website of the public company Deposit and Investment Insurance (http://www.iidraudimas.lt) or by phone (8 5) 213 5657.