2004-11-11
1. The Board decided to approve the Code of Ethics of the Board of the Bank of Lithuania. The aim of this document is to define the principles and rules of activity and conduct of the Chairman of the Board of the Bank of Lithuania, Deputy Chairpersons and Members of the Board in order to ensure their independence, a creative and benevolent working environment, to develop respect towards colleagues and other persons, to increase public confidence in the Bank of Lithuania, and to strengthen the authority of the BoL employee.
The Code regulates the conduct of members of the BoL Board in office and out of office. The document establishes the principles and standards to be followed by the BoL Board members in order to avoid situations that might result in a conflict of public and private interests, not to engage in activities incompatible with the interests of the Bank of Lithuania, not to seek illegal benefit and not to provide possibilities for others to seek such a benefit.
The Code has been developed in observance of the Constitution of the Republic of Lithuania, domestic law, the Code of Conduct of the European Central Bank, other legal acts, and practices in foreign central banks.
The Board of the Bank of Lithuania consists of 5 members: the Chairman of the Board of the Bank of Lithuania, two chairpersons and two members of the Board.
2. The Board of the Bank of Lithuania decided to grant permission to the AB Bank Hansabankas to register the amendment to the Bank’s Statute in connection with a change in the competence of the Bank’s Board approved in the Bank’s extraordinary general shareholders’ meeting on 20 October 2004. The Statute has established the right of the Bank’s Board to make decisions with regard to the issuance of the Bank’s bonds and/or other debt securities, except convertible bonds.
3. The Board of the Bank of Lithuania decided to place an order for the production of 47 million pieces of 1, 2 and 5 centas circulation coins of 1991 issue.
It is expected that by March 2005 the reserve supply of 5 centas coins, by September 2005 1 centas coins, and by the end of 2005 2 centas coins will be exhausted.
According to the data for 1 October this year, 52 pieces of 1 centas coins, 26 pieces of 2 centas coins and 12 pieces of 5 centas coins were issued into circulation per capita in Lithuania. In the EU, there are 39 pieces of 1 euro coins, 33 pieces of 2 euro coins and 29 pieces of 5 euro coins per capita in circulation.
Low-denomination coins do not circulate between the central bank and commercial banks but in retail trade only. In Lithuania, because of the existing pricing low denomination centas coins are increasingly needed for change in the constantly growing number of retail trade centres and other trade outlets. According to the exports, the need for centas results from the permanently growing volumes of retail trade and services. Low denomination coins find their way to children’s piggy banks, many of them are taken away by foreign tourists.
According to the data for the current year, 2.2 million pieces of 1 centas coins, 1 million pieces of 2 centas coins and 0.4 million pieces of 5 centas coins were spent a month on average. In Q3 2004, the need for low denomination coins increased by 1.5 times, compared to the annual average. The growth tendency is forecast for December in particular.
The reserve supply of 1, 2 and 5 centas coins produced over 2005 is forecast to suffice until the end of 2006.
4. The Board of the Bank of Lithuania decided to approve the results of the open tender for the creation of plaster models of the national sides (obverse) of circulation euro and euro cent coins, according to which the author of the work recognized as the best - Antanas Zukauskas - was awarded the first place. The second place was awarded to Giedrius Paulauskis, the third one to Gediminas Karpavicius, the fourth one to Gediminas Karalius, and the fifth one - to Petras Repsys.
The conditions of the open tender approved by the Bank of Lithuania contained a condition, fulfilled by all the artists, to feature a modified symbol of the state emblem, the Vytis, on the national side of denomination coins. 14 authors (or co-authors) participating in the tender presented 54 plaster models to the Bank of Lithuania by 5 October this year. Their technical specifications were checked at the State Company Lithuanian Mint.
The Commission for Currency Design and Production of the Bank of Lithuania selected five best works (three different models by each author) and made a proposal to the Board of the Bank of Lithuania about the final decision.
5. The Board of the Bank of Lithuania decided grant permission to the AB Vilniaus bankas to acquire a qualifying holding of the authorized capital and/or voting rights in the Ukrainian bank AGIO so that the latter becomes associated to it.
The Bank of Lithuania received a request from the AB Vilniaus bankas regarding the above, including the relevant documentation, on 30 September this year.
The decisions regarding the investment by AB Vilniaus bankas in the Ukrainian bank AGIO were adopted by the AB Vilniaus bankas in the meetings of its Supervisory Council on 31 August and of the Board on 6 September this year. According to the decisions of these institutions, the AB Vilniaus bankas intends to acquire up to 100 per cent of the shares (votes) of the bank AGIO and allocate up to LTL 81 million for the investment in the Ukrainian bank (its shares). The AB Vilniaus bankas has informed it would be using own funds for this purpose.
According to an estimate by specialists of the Bank of Lithuania, the acquisition of the AGIO could not have any major effect on the stability and soundness of the operations of the AB Vilniaus bankas. The funds needed for this investment do not exceed the profit of the AB Vilniaus bankas earned over three quarters this year (LTL 97.7 million). Moreover, the AGIO is significantly smaller than the AB Vilniaus bankas and follows the requirements set by the National Bank of Ukraine.
Upon the acquisition of the controlling interest in the Ukrainian bank AGIO, the AB Vilniaus bankas will draw up consolidated financial and supervisory statements of the financial group, including AGIO, and the Bank of Lithuania will conduct consolidated supervision of the AB Vilniaus bankas and its associated financial undertakings.
The Bank of Lithuania has already consulted the National Bank of Ukraine regarding the supervision of AGIO. The National bank of Ukraine has informed about its readiness to start the work on the preparation of a co-operation agreement with the Bank of Lithuania on the supervision of commercial banks.
According to the documents received by the Bank of Lithuania, AGIO is a universal bank with the business focused on retail banking and small and medium-sized enterprises. This trend is planned to remain a priority after the entry of the foreign investor.
AGIO was registered with the National Bank of Ukraine on 2 October 1991 with a registered office in Kiev.
According to audited statements, by the end of 2003 the assets of AGIO amounted to LTL 191.7 million, the portfolio of loans granted to customers to LTL 85.8 million, own funds (shareholders’ equity) to LTL 37 million, share capital to 6.5 million, net assets to LTL 4.1 million (the data provided in financial statements in the Ukrainian hryvnia have been converted to litas at the exchange rate as at 31 December 2003).
According to audited data, by the end of 2003 the assets of the AB Vilniaus bankas group were estimated at LTL 8.6 billion, the portfolio of loans granted to customers - LTL 4.8 billion, own funds (shareholders’ equity) LTL 943.5 million, the size of the share capital was LTL 154.4 million, and its net profit was LTL 132.3 million