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Medicine Bank Earned LTL 23.93 Million of Profit before Tax and Provisions in 2011, and Started a Successful year of 2012

According to the audited data, UAB Medicine Bank’s 2011 profit before tax and
provisions totalled LTL 23.93 million, i.e. the increase in profit before tax and
provisions in 2011 amounted to 13.85%, compared with 2010. However,
in 2011 the bank formed LTL 48.27 million of special provisions for problem
loans, and recognized loss on the Bank Group's investment in the bankrupted
AB Snoras Bank, so the Medicine Bank finished the year of 2011 at a loss - the
audited net loss amounted to LTL 24.34 million.


According to Gintaras Treinys, the Head of Administration and Chairman of the
Board of the Medicine Bank, the Medicine Bank's net interest income increased
by LTL 5.15 million in 2011, which made 21.44% of growth. In 2011, net fee and
commission income increased by 8.87%, compared with 2010, and over the
year of 2011 the bank received earnings of LTL 12.39 million from fee and
commission income.


The Bank continued to evaluate the available financial and investment assets by
applying the principle of conservatism, so during 2011 it formed an additional
LTL 48.27 million of special provisions for loan portfolio and investments. The
bank and its group chose a conservative method for assessing the risk of
investment into AB Snoras Bank: these investments were recognized as having
100% risks and were written off, thus making loss of LTL 31.46 million.


During 2011, the Medicine Bank signed new loan agreements amounted to
LTL 147 million and at the end of December its net loan portfolio was LTL 456.83
million (at the end of 2010 – LTL 500.00 million). The growth of loan portfolio
was slowed down by clients’ more responsible awareness about the business
development prospects and lending commitments.


At the end of 2011, the amount of client deposits was LTL 653.15 million (at the
end of 2010 – LTL 677.67 million), while the amount of bank term deposits
amounted to LTL 480.99 million (at the end of 2010 – LTL 485.01 million).


In late December, the bank provided financial services to more than 40 thousand
individual and business clients, while the number of clients increased by 14% in
In 2011, the Medicine Bank’s operating expenses decreased by 2.2% in
consistently optimizing the activities of the bank branches. While the operational
efficiency increased, the bank's cost-to-income ratio (CIR) improved in 2011, and
reached 49.4% (in 2010, this figure was 52.8%). The bank's staff changed
insignificantly during 2011: from 482 employees at the end of 2010, up to 487
employees at the end of 2011.


On 31 December 2011, the Medicine Bank’s assets were LTL 798.88 million (at the
end of 2010 it amounted to LTL 853.78 million).
In 2011, the Medicine Bank complied with all the prudential norms established by
the Bank of Lithuania. The Bank's capital adequacy ratio on 31 December 2011
amounted to 12.46% (the ratio set by the Bank of Lithuania must be no less than
10%), liquidity - 51.95% (the ratio set by the Bank of Lithuania must be no less
than 30%).


“The Bank's activities were success during the first quarter of this year: clients’
bank deposits grew by LTL 38 million, deposit portfolio reached LTL 691.2 million.
During the first three months of the year, the loan portfolio increased by 3.6% - up
to LTL 473.25 million. The Medicine Bank’s assets grew by 5.4% since the end of
2011 - up to LTL 842.05 million, while the net profit during the first quarter of this
year was LTL 3 million", - said G. Treinys, Chairman of the Board and Head of


The major shareholder of the Medicine Bank is Saulius Karosas, a Lithuanian living
in Switzerland, who owns 87.82% of the Medicine Bank’s shares. Western
Petroleum Ltd. owns 9.87%, other shareholders - 2.3% of the bank's share capital.

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