Bank of Lithuania

Under the request of “Swedbank”, AB, the Board of the Bank of Lithuania issued permission to it to repay before maturity two subordinated loans obtained from the Estonian bank “Swedbank” AS: one loan in the amount of EUR 60 million (LTL 207.2 million) and another loan in the amount of EUR 70 million (LTL 241.7 million). These loans were received according to the agreements of 8 February 2008 and 31 August 2006 and mature respectively on 1 September 2017 and 12 February 2016.

By taking this decision, the Board of the Bank of Lithuania considered the fact that the capital adequacy ratio of both “Swedbank”, AB and the bank group after the repayment of the said loans will remain significantly higher than the minimum capital adequacy ratio set by the Bank of Lithuania.

At the end of the first quarter of 2012, the capital adequacy ratio of “Swedbank”, AB comprised 19.1 per cent, whereas that of the bank group was 18.4 per cent.

After repaying these subordinated loans, the bank “Swedbank”, AB will reduce borrowing costs and the current significant liquidity surplus.

According to the planned amendments to the European Union legislation, known as Basel III, the highest quality Tier I capital will become the most significant for banks (subordinated loans are attributed to Tier II capital).