White collars have been talking about the possible bankruptcy of Lite Bank for a week. If it were to start on the last day of the month, February 29. Reason?
Leasing went under the hammer – Lite Bank sold the majority of shares in its leasing company. Inexpensive and for one purpose only – to save equity.
Banks that started the procedure for taking over SKOKs are victorious in the years of struggle with SKOKs. Not everyone – some credit unions fall forever, only the better ones are taken over by banks. But … The market is holding its breath, because here, Lite Bank sells more than half of its shares in its Leasing company on February 10, and the small sum of money from the transaction is to save the bank’s poor situation.
The sale of one of Lite Bank’s flagship ships is a surprise for a large part of the market. Especially that for 50.72 percent shares in Leasing, the banking group gets only USD 218 million from LC Corp BV. It shows that neither Leasing was in such a good financial condition as it would appear from the press releases of the Leslie group, nor the group itself is in the best condition.
The transaction is to be closed by the end of the first quarter of this year at the latest. According to the plan to strengthen the bank’s capital position and raise capital ratios, the effect of this transaction will be to increase the CAR and CET1 ratios. The bank will continue its close cooperation with Leasing.
– The concluded agreement is part of a comprehensive strategy aimed at achieving the capital ratios expected by the Polish Financial Supervision Authority by 30 June this year. At present, we are halfway to meet the regulator’s requirements – said the president of Lite Bank, on the eve of transactions preceded by difficult negotiations. – The Bank will continue its close business cooperation with Leasing and strengthen its position on the automotive business financing market.
The transaction is part of the strategy of strengthening the Bank’s capital position, which the Management Board presented to the Polish Financial Supervision Authority.
The Bank estimates that, taking into account the unaudited result for 2015 and including the transaction amount in the company’s equity, Lite Bank’s capital ratios would reach a total capital ratio of 14% and a Tier1 capital ratio of 11%, which means an increase by more than 1 percentage point, and in the CET1 ratio at the individual level by over 1.5 percentage point (from 9.4% as at 31.12.2014). The levels of capital ratios obtained are also the highest that Lite Bank has had in recent years.