LITHUANIA/ESTONIA - Following the acquisition of the Lithuanian savings bank, Lietuvos Taupomasis Bankas (LTB), by Estonia’s Hansapank, questions have arisen about the size of the possible merger between the Swedish banks FöreningsSparbanken (Swedbank) and Svenska Enskilda Banken (SEB).

Together, the Swedish financial services giant would have a monopoly in Lithuania of more than three quarters of the financial market.

Swedbank owns a majority share (57%) in Hansapank and SEB owns Lithuania’s largest bank, Vilniaus Bankas. Hansapank already has a subsidiary in Lithuania, Hansabankas, which is going to be merged to the newly acquired LTB, which will have a 36% share of the country’s deposit market. Meanwhile, through Vilniaus Bankas, SEB has a 41% share of the market.

The board of the Lithuanian central bank, Lietuvos Bankas, has released a statement on the possibility of the merger and its consequences on the Lithuanian market, noting: “in the event of merger between Swedbank and SEB, AB Hansapank or its legal successor shall sell the shares of the Lithuanian Savings Bank held by it or its legal successor within two years after concluding the contract on the purchase of the Bank, if this is required by the Bank of Lithuania on the grounds of excessive risk concentration in the Lithuanian banking system.”

Estonia’s largest bank, Hansapank is buying a majority share in the Lithuanian savings bank, LTB from the government. Lithuanian State Property Fund has signed an agreement with Hansapank for the sale of 90.73% of shares in the country’s second largest bank for a total of LTL150m.

Currently, LTB’s total assets amount to LTL3.43bn (e980m), Hansapank Group has assets of e2.9bn and Swedbank has total assets of e105bn.

The two Swedish banks do not have any current plans on the integration of their Baltic subsidiaries in case the merger plans go forward.

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