OREANDA-NEWS. February 22, 2013. The Bank of Lithuania recognised Ukio bankas as insolvent and permanently terminated its license. Taking into account the conclusion and proposals presented by the temporary administrator regarding the restoration of the stability and reliability of Ukio bankas, the Board of the Bank of Lithuania decided to transfer the assets, rights, transactions and liabilities to another bank operating in Lithuania, reported the press-centre of Ukio Bank.

The decision was adopted after considering that the proposed restructuring method of the problematic bank would require the least monetary resources and allow most of the Bank’s depositors, over a short time, to regain the possibility to dispose of the funds held at the Bank and other financial services.

The Board of the Bank of Lithuania stated that the transfer of the Bank’s assets, rights, transactions and liabilities would better protect the confidence of the shareholders in the stability and reliability of the banking system, as well as other public interests, rather than liquidation of Ukio bankas because of bankruptcy.

After assessing the conclusion of the temporary administrator, as presented in his report, that the liabilities of Ukio bankas are larger than its assets, the Board of the Bank of Lithuania acknowledged Ukio bankas as being insolvent and permanently terminated its operation license.

Taking into account that a solution for the issue of Ukio bankas must be found quickly and effectively, the Board of the Bank of Lithuania denoted the temporary administrator Adomas Audickas to begin negotiations with Siauliu bankas regarding the transfer of the assets, rights, transactions, and liabilities of Ukio bankas. The decision was adopted taking into account that other banks and branches of foreign banks operating in Lithuania, although they were invited to do so, did not present the temporary administrator with offers that were analogous and compliant with requirements that are established in the Republic of Lithuania Law on Banks, on the transfer of the liabilities, assets, rights, and transactions of Ukio bankas.

The Bank of Lithuania will offer the state company Indeliu ir investiciju draudimas the opportunity to be involved in the financing of the transfer of the Bank’s assets, rights, transactions and liabilities.

In performing the restructuring of Ukio bankas, the Board of the Bank of Lithuania denoted the temporary administrator to perform a preliminary assessment of the assets, rights, transactions and liabilities of Ukio bankas that will be transferred to another bank, as well as present the conclusions of this assessment.

According to the Republic of Lithuania Law on Insurance of Deposits and Liabilities to Investors, the establishment of a bank’s insolvency and termination of its license is an insured event, but with the transfer of liabilities to another bank, customers regain the possibility to dispose of their funds (deposits), under the conditions laid down in their agreement, at the bank that took over the obligations.

The liabilities, or part of them, have to be transferred from the problematic bank to another bank without exceeding the limit as provided in the Republic of Lithuania Law on Insurance of Deposits and Liabilities to Investors.