Russian Banking Eyes on Lithuanian Market

November 14, 2011

It was reported in the Delfi.It recently that a number of Russian banks are investigating the Lithuanian banking system with the idea of opening branches in Lithuania. This was revealed after a meeting between Vitas Vasiliaskas, chairman of the board of the Central Bank of the Republic of Lithuania, and the Social Democrats in the Seimas of the Lithuanian Republic. Unofficially it has been reported that the bank in question is a Russian Investment bank and will represent a real competitor to local commercial banks. The next board meeting will be considering the establishment a Lithuanian branch office of the so far unnamed Russian Bank.

“Whether it is Russia, or China, or Zimbabwe, or Burundu Murundu, or the planet Mars, so to speak, the more competition, the better. In this case I don’t have any preconceived notions,” said Vitas Vasiliauskas.

According to records held by the Central Bank of the Republic of Lithuania, major commercial banks are preparing to trim down personnel and customer service departments, although not as much as some of the world banks have done. Reputedly, some employees have lost their positions since the early stages of the crisis; though, the redundancy of some staff in foreign banks may influence their branches in Lithuania. Lithuanian banks accrued millions in profits and are not considering reducing the number of employees as some of the foreign larger banks do. During the first 10 months of this year, total profits of commercial banks in Lithuania were just above 700 million litas.

Stasys Kropas, President of the Association of Lithuanian Banks, considers that global banks are reducing employee numbers in order to increase authorized capital, while Lithuanian banks will cut down on employees only when it becomes possible to expand electronic banking services.

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