A Swedish-owned SEB Bank, one of the largest banks in Lithuania, plans to consolidate its three Baltic banks with headquarters in Tallinn.
According to Sonata Gutauskaitė-Bubnelienė, head of SEB Lithuania, the decision was made following the assessment of the predictability of the business environment.
“All three countries were assessed, and various aspects were analysed, including financial, non-financial, regulatory, as well as the stability and predictability of the business environment. This combination of various factors led to this decision,” she told LRT RADIO on Thursday.
Gutauskaitė-Bubnelienė said the consolidation will not affect customers in Lithuania.
“I can definitely say that this will have no effect on clients, and they will not feel anything different. On the contrary, I would say that this change, when it is made, will mean that we will be one of the largest banks in the Baltic states in terms of our capital base and funding capacity,” she stressed.
The bank’s new structure will be operational in early 2027, subject to approvals from local financial regulators and the European Central Bank.
Reputational damage
According to Rolandas Valiūnas, board chairman of the Investors’ Forum, SEB’s decision may encourage other investors to leave Lithuania.
“I think it will cost dearly. And not directly because of the taxes paid by banks or other things, but every investment that goes elsewhere does not fall into the long line of taxes reaching the budget, and surely someone will see SEB’s decision and choose Estonia or some other country because they would think Lithuania is not predictable enough,” Valiūnas told LRT RADIO.
“The main negative consequences are through reputation, which will certainly be affected, and the well-paid jobs will go to Tallinn,” he added.
For his part, Lithuanian Prime Minister Gintautas Paluckas said his government will fight to keep the Swedish-owned bank in Vilnius.
“Maybe not all is lost yet. Maybe we have some tools – both a stick and a carrot. We can try to persuade, press SEB to stay in Lithuania,” he told reporters.
Paluckas said that he had an online meeting with SEB executives in Sweden last week.
“From what they said and their body language, I understood that interim decisions have already been made. But we’re not giving up and will try to fight,” the prime minister said
Paluckas said he had information that Estonia’s top officials had travelled to Stockholm on more than one occasion to negotiate for SEB’s Baltic headquarters to be located in Tallinn.
Meanwhile, Lithuania’s former Finance Minister Gintarė Skaistė said that SEB’s plans to consolidate its operations had been known for some time and that all three Baltic countries had negotiated with the bank over the headquarters’ location.
“This decision [to move the headquarters to Estonia] is more about optimising the bank’s corporate governance and what conditions the bank has there,” she told reporters.
Lithuanian President Gitanas Nausėda said he sees “no drama” in SEB’s decision.
“I won’t argue with them [SEB], I have a different opinion. I think the business environment is better in Lithuania right now, the macroeconomic situation is better in Lithuania,” Nausėda, who was SEB Lithuania’s chief economist until his election as president in 2019, told reporters in Brussels.
“But they run the bank, they make decisions. In any case, SEB’s footprint won’t disappear as they will continue their operations. Someone leaves, someone comes. Commerzbank is opening its office and is going to expand in Lithuania. I do not see any particular drama here,” he added.
Speaking with the Estonian public broadcaster ERR on Wednesday, Estonian Finance Minister Jürgen Ligi said SEB chose Tallinn for its headquarters because Estonia did not impose additional taxes on banks.
Lithuania imposed a bank solidarity levy in response to windfall profits enjoyed by the banks thanks to the interest rate hikes by the European Central Bank. The proceeds are to be used for defence infrastructure.
No request yet
The Bank of Lithuania will have to assess SEB’s planned merger of its three Baltic banks and grant the necessary approval, Gediminas Šimkus, the central bank governor, has said.
According to him, the Bank of Lithuania has not yet received an official request from SEB regarding the planned changes.
“The question is open but not yet answered. The Bank of Lithuania will carefully analyse and assess SEB’s information once it is submitted when there is an official request from the bank,” he told reporters.
Šimkus added that as the regulatory and supervisory body, the Bank of Lithuania would assess various aspects of the planned changes, including the protection of consumer interests, financial stability, and other public interest factors.
The governor did not comment on SEB’s decision or its impact on Lithuania’s investment environment.
“The decision was made by SEB Bank. It’s up to SEB to comment on the reasoning and motivation,” he said.
Šimkus said that if SEB merges the three Baltic banks into one, the deposit insurance contributions SEB currently pays into a separate fund in Lithuania will be transferred to Estonia.
He noted that the deposit insurance contribution in Lithuania is the same as in Latvia and Estonia – it amounts to 0.2 percent of total deposits.
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