VZCZCXRO5937
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHVL #0858/01 2890832
ZNR UUUUU ZZH
P 150832Z OCT 08
FM AMEMBASSY VILNIUS
TO RUEHC/SECSTATE WASHDC PRIORITY 2937
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 02 VILNIUS 000858 
 
SIPDIS 
 
FOR EEB/IFD/OMA - AWHITTINGTON AND EEB/EPPD - RHUFF 
 
E.O. 12958: N/A 
TAGS: ECON EFIN LH
SUBJECT: THE BANKS OF LITHUANIA ARE PRIMARILY THE BANKS OF 
SCANDINAVIA 
 
¶1.  Begin Summary.  Lithuania's banking sector is composed of 
15 banks, with the majority of assets held by Scandinavian 
institutions.  Entities besides the top 15 hold only 1 
percent of all bank assets.  So far the Scandinavian and 
locally owned banks appear stable.  Nonetheless, in response 
to the worldwide financial crisis the GOL increased deposit 
insurance to the equivalent of 100,000 Euros.  End Summary. 
 
---------------------- 
Are We In Scandinavia? 
---------------------- 
 
¶2.  Lithuania has 15 banks that control approximately 99 
percent of all banking assets in the country.  Nine of the 
institutions are registered as Lithuanian entities, with the 
remaining 6 being foreign bank branches.  SEB, Swedbank 
(previously known as Hansabankas) and DnB Nord, all 
Scandinavian banks, dominate Lithuania's banking system. 
These banks control two thirds of all banking assets in 
Lithuania and also play an important role in the leasing and 
insurance markets.  Unlike their smaller competitors they saw 
continual impressive profit growth in the first half of 2008 
over the same period in 2007, although many smaller 
institutions still recorded profits for the first half of 
¶2008.  Below is a list of the banks that compose the vast 
majority of the Lithuanian banking system, with their 
national origin in parentheses and their approximate 
Lithuanian assets in USD as of June 30, 2008. 
 
-  SEB (Swedish):  9.9 billion USD 
-  Swedbank (Swedish, previously known as Hansabankas):  7.7 
billion USD 
-  DnB Nord (Norwegian majority ownership with some German): 
5 billion USD 
-  Nordea (Finnish):  2.9 billion USD 
-  Danske (Danish):  2.4 billion USD 
-  Snoras (Russian):  2.3 billion USD 
-  Ukio (Lithuanian):  1.7 billion USD 
-  Siauliu (Lithuanian):  833 million USD 
-  Parex (Latvian):  692 million USD 
-  UniCredit (Italian/German):  349 million USD 
-  Medicinos (Lithuanian):  306 million USD 
-  Allied Irish (Irish):  22 million USD 
-  MP Investment (Icelandic):  17 million USD 
-  Balti Investeeringute Grupi Pank (Estonian):  12 million 
USD 
-  Finasta (Lithuanian):  8 million USD 
 
 
¶3.  There are other depository institutions, foreign bank 
representative offices, foreign bank branches, credit unions 
and EU banks providing cross-border services without a 
branch.  Their Lithuanian assets, however, are minor when 
compared with the institutions listed above. 
 
------------------ 
In Sweden We Trust 
------------------ 
 
¶4.  The banking sector in Lithuania appears fairly stable 
compared to Western Europe and may escape the recent 
challenges seen in many countries, including the United 
States.  The Senior Economist of SEB Bank in Lithuania, 
Nerijus Udrenas, told us that financial difficulties in the 
United States would not affect his bank's operations in 
Lithuania, saying SEB has plans to grow not downsize in 
Lithuania.  He admitted that profitability might decline in 
the banking sector in the short term but lending will 
continue with greater investigation of credit recipients 
before loan issuance.  Gediminas Simkus, the Deputy Head of 
the Financial Stability Division of the Bank of Lithuania, 
told us that Swedish Central Bankers remain confident and 
stand ready to provide liquidity if needed. 
 
¶5.  In one discordant note, the head of the local branch of 
Danske bank cautioned that if bank analysts look at the 
Baltic States as one, Lithuania could come under some 
pressure. 
 
------------------------------------ 
No Reason To Put Money In A Mattress 
------------------------------------ 
 
¶6.  Deposits in Lithuania were previously 100 percent insured 
up to a 3,000 Euro equivalent and 90 percent of deposits 
between 3,000 and 22,000 Euros equivalent were insured as 
well.  As part of the reaction to the world financial crisis, 
the government increased deposit insurance to the 
 
VILNIUS 00000858  002 OF 002 
 
 
EU-recommended 100,000 Euros on October 14. 
 
CLOUD