Lithuanian authorities suspend activities of SNORAS, country's 5th largest bank
16.11.2011, 17:51On 16 November, Lithuania's central bank Lietuvos bankas decided to appoint a temporary administrator of Vilnius-listed AB bankas SNORAS and apply temporary preventive measures to ensure protection of the bank's assets, reports www.news2biz.com.
The bank operations which have been suspended after the appointment of temporary administrator will be renewed next Monday.
In its statement, the central bank says that "The analysis of information compiled for supervisory purposes revealed a poor quality of the assets of SNORAS Bank, and that the evaluation of assumed risk was inappropriate due to the lack of responsibility. The bank ignored the instructions of the Bank of Lithuania to reduce operational risks or treated these instructions formally.
The decision was taken to effectively protect the interests of the bank clients and public interests, to ensure the confidence in the domestic banking system and its stability. The enforcement measures provided for in the Law on Banks have been used after having evaluated the bank's financial situation, its activity in recent years, and the latest inspection results.
The Board of the Bank of Lithuania also decided to submit to the Government a conclusion saying that the most effective solution of the bank's problems later is the use by the Government of its right laid down in the Law on Financial Sustainability and take over the bank's shares for public needs. The said measure, if implemented, can ensure maximum protection of depositors' interests and minimize potential loss by the state.
Temporary administrator Simon Freakley, Zolfo Cooper LLP, senior partner, has been appointed to take over the functions of SNORAS Bank's Supervisory Council, its Board and heads of its Administration."