The approval was given by a meeting of the FKTK council on April 24.
"FKTK, in evaluating the submitted documents, has become convinced that the bank's stability and solvency is not affected by the planned reorganization by adding the Lithuanian subsidiary AB Citadele, nor is the protection of the collective interests of investors and depositors [impacted]," FKTK said in an announcement.
As a result of the reorganization, AS Citadele banka will change its Lithunian presence from a subsidiary bank to a branch of the Latvian bank. It will also have a branch in Estonia. The main supervisory institution of the bank across the Baltics will be FKTK.
Citadele Bank’s Chairman of the Management Board Guntis Beļavskis explained the rationale behind the change when the application was made, saying:
“To put it simply, the reorganization of Citadele bankas in Lithuania means changing its legal status from subsidiary to branch. This decision was made to enable the introduction of new digital banking services to Lithuania more quickly and to improve the operational efficiency of the Group”.
All assets and liabilities of AB Citadele bankas will be transferred to the new branch of AS Citadele banka. The reorganization is expected to be completed during the first half of 2019.
Formed from the wreckage of the notorious Parex bank, Citadele is now owned by a consortium of international investors and is regarded as one of the more stable banks in the country and not involved in the current scandals involving the future of the non-resident banking sector. Indeed FKTK selected Citadele to disburse payments to account holders of ABLV bank, which is being liquidated.