Notification of a material event

Medicinos Bankas would like to inform you that should the Bank of Lithuania (BL) decide to start applying the sectoral systemic risk buffer (SyRB) of 2 per cent to the housing loan portfolio, this capital requirement would supplement the countercyclical capital buffer (CCyB) rate and would be used on a similar basis; however, the capital buffer would be calculated not from the amount of all exposures but from the amount of exposures to natural persons secured by mortgages in Lithuania.

The sectoral SyRB would increase the resilience of the financial system in the face of increased risks due to possible overheating of the housing market and strengthen the focus of banks and central credit union groups on the risks posed by the rapid growth of mortgage lending.

It is envisaged that the reserve requirement will not apply to institutions with a very small share of the sector’s mortgage loan portfolio, i.e., whose mortgage loan portfolio is less than EUR 50 million, and the requirement could take effect on 1 July 2022.

In this case, this requirement would not apply to Medicinos Bankas temporarily, until its mortgage loan portfolio reaches the minimum portfolio size of EUR 50 million set by the BL. If this requirement were applied by the decision of the Board of the Bank of Lithuania, it would lead to a small overall increase in capital requirements for Medicinos Bankas of up to 0.14 per cent, i.e., about 0.14 per cent of all risk-weighted exposure amounts.

For more information, please contact: Aleksejus Tonkich, Member of the Board, Director of Financial Service, Deputy Head of Administration, tel. + 370 698 34055, email aleksejus.tonkich@medbank.lt