OREANDA-NEWS. December 14, 2007.
1. Permission to register amendments to the Articles of Association of AB SEB Vilniaus bankas
The Board of the Bank of Lithuania permitted AB SEB Vilniaus bankas to register amendments to the latter’s Articles of Association in relation to the change of the Bank’s name, rights arising from shares, and competence of the bodies of the Bank as approved by the general shareholders' meeting on 15 November 2007, reported the press-centre of Bank of Lithuania.

The licence issued to AB SEB Vilniaus bankas under Resolution No. 24 of 29 November 1990 of the Board of the Bank of Lithuania was replaced with a new licence indicating the new name of the Bank: AB SEB bankas. It was laid down that the decision would become effective as of the day of registering amendments to the Articles of Association with the Register of Legal Entities.

2. Permission to register changes to the statute of AB Sampo bankas
The Board of the Bank of Lithuania permitted AB Sampo bankas to register an amendment to the latter's statute in relation to the change of the Bank's office as approved by the decision of its sole shareholder on 9 November 2007.

The licence issued to AB Sampo bankas under Resolution No.32 of 22 December 1994 of the Bank of Lithuania was replaced with a new licence indicating the new address of the Bank’s office. It was laid down that the decision would become effective as of the day of registering the amendment to the Bank’s statute with the Register of Legal Entities.

3. Agreement to reorganise AB Sampo bankas and Danske bank A/S
The Board of the Bank of Lithuania agreed to the reorganisation AB Sampo bankas by merging the latter with Danske Bank A/S and by transferring all rights and obligations of AB Sampo bankas to the branch of Danske Bank A/S established in the Republic of Lithuania.

The Danish bank Danske Bank A/S is the sole shareholder of AB Sampo bankas. The Executive Board of Danske Bank A/S passed a resolution to merge AB Sampo bankas with Danske Bank A/S.

4. Enabling AB SEB Vilniaus bankas to apply the internal ratings-based credit risk measurement approach
The Board of the Bank of Lithuania decided to enable AB SEB Vilniaus bankas to apply the internal ratings-based credit risk measurement approach to the group of institutions’ exposures (except regional and local government exposures), group of corporate exposures (except retail lease exposures, credits on payment cards of natural persons, repurchase transactions concluded with any debtors, and exposures within the group) as of 1 January 2008.

On 11 November 2006 the Board of the Bank of Lithuania approved the General Provisions on the Calculation of Capital Adequacy. The provisions introduce a completely new concept of the credit risk assessment with regard to the requirements of Basel Committee on Banking Supervision, referred to as Basel II, and to the EU directives on the new system of capital adequacy of banks. These rules establish that the provisions concerning the advanced credit risk assessment approach based on internal ratings shall come into effect as of 1 January 2008.

The internal ratings-based (IRB) credit risk assessment approach is a credit risk assessment approach of the EU Member States for the purposes of calculating capital adequacy. This approach is based on determination of credit risk components and application of relevant risk weighting functions for the bank’s exposures, taking into account internal ratings and supervision standards set by the bank itself. Using this approach the capital requirement depends on the level of risk of an individual bank because banks may rely on internal estimates of risk components (probability of default (PD), the loss given default (LGD), and the conversion factor (CF). When using this approach to determine capital requirements, a greater credit risk differentiation is achieved and a more precise quantitative value of the capital requirement is calculated since risk weighting functions are derived through a statistical method.