2013-07-19
The amendments to the Credit Union Loan Assessment Requirements approved; Permission to acquire AB bank Finasta shares not granted; The rules for implementation of the requirements of the Republic of Lithuania Law on Collective Investment Undertaking Subjects for Informed Investors approved; The Board of the Bank of Lithuania resolution “On specialized banking and risk management requirements” recognised as invalid
1. The amendments to the Credit Union Loan Assessment Requirements approved
The Board of the Bank of Lithuania approved the new wording of the Credit Union Loan Assessment Requirements. The amendments lay down more detailed and conservative credit union loan grouping and assessment requirements. This will allow to more objectively calculate potential losses and more accurately reflect asset value in financial statements.
The Requirements also regulate the loan impairment (special provisions) calculation methodology.
2. Permission to acquire AB bank Finasta shares not granted
The Board of the Bank of Lithuania did not satisfy the request from the acting in concert EurEst Capital OU and other legal and natural persons to acquire 100% of the shares of AB bank Finasta.
EurEst Capital OU and the acting in concert legal and natural persons presented the notification of the intention to the Supervision Service of the Bank of Lithuania on 29 April 2013. Following the Law on Banks of the Republic of Lithuania and in order to ensure reliable and prudential management of the bank to be acquired, as well as the likely impact of the acquiring entity on the Bank, the Bank of Lithuania assessed the potential investors according to the financial credibility, impeccable reputation, and other criteria provided for in the Law.
In the assessment of data received it was established that the entities intending to purchase AB bank Finasta provided to the Bank of Lithuania insufficient information, whereas the data presented did not substantiate the financial credibility of the entities acting in concert, including the possibility to enhance and maintain the required capital level of AB bank Finansta or provide other financial aid, should such a need arise.
3. The rules for implementation of the requirements of the Republic of Lithuania Law on Collective Investment Undertaking Subjects for Informed Investors approved
The Board of the Bank of Lithuania approved, in accordance to the Republic of Lithuania law on Collective Investment Undertaking Subjects for Informed Investors, the rules for operating enterprises: the rules for acquisition of a block of shares in a management company, rules for breakdown of collective investment subject investment risk, rules on requirements for management company and investment heads and approval of their candidacy, as well as rules on the requirements for informed investors applied in accordance to that same law.
In accordance to these rules, an informed (professional) investor can be an individual who in writing would confirm their status and commit to invest no less than EUR 125,000. In addition, such an investor should fulfil at least one of these requirements: 1) their personal net assets should be no less than EUR 250,000; 2) personal income for two years until investment in collective investment undertaking subjects should be no less than EUR 50,000 (EUR 75,000 with spouse); 3) net financial assets should amount to EUR 150,000.
4. The Board of the Bank of Lithuania resolution “On specialized banking and risk management requirements” recognised as invalid
The Board of the Bank of Lithuania recognized the Board’s 26 May 2005 Resolution No. 88 “On specialized banking and risk management requirements” as invalid. Such a decision was made taking into account that with the entry into force of the Directive 2009/110/EC on establishing electronic money institutions, pursuit and prudential supervision, its provisions were transferred to the Law on Electronic Money and Electronic Money Institutions. The previous Directive 2000/46/EC, according to which electronic money institutions were recognised as credit institutions (in Lithuania — specialised banks), was recognised as invalid.