SKB Bank Equity Investment

signed

The proposed project is the participation in the capital increase of Siauliu Bankas (“SB”), the sixth largest Lithuanian bank in terms of assets and an important provider of banking services to Lithuanian small and medium sized enterprises (“SMEs”). SB, which is based in Siauliai, in the north of the country has grown its operations significantly over the past few years. It now has a network of 47 branches in all regions of Lithuania. The EBRD will participate in the capital increase pro-rata to its equity stake of 16%. The additional investment by the EBRD will provide capital and support for the continued expansion of SB. EBRD’s participation in this project represents an important stepping stone in SB’s transformation into a strong national bank. As a lender, and through a technical co-operation programme, over the last four years, the Bank has helped SB develop as an active regional bank, by expanding its services for small businesses. Through good customer service and close co-operation with clients, SB has been able to meet the needs of many small companies in the Siauliai area. The EBRD now intends to participate further in this process, as SB seeks to export its business model of serving SME’s to other regions of Lithuania. The EBRD will therefore provide additional capital and active support to realise the full growth potential of the bank. In doing so, the EBRD will enable SB to reach out to more small businesses, particularly in rural areas. This should have positive effect on the development of the SME economy in Lithuania. Furthermore, the EBRD as a shareholder will continue to promote good corporate governance standards in this bank including fostering of transparency, accountability and responsibility amongst the shareholders, Bank Council members, managers and employees. Finally, the EBRD’s experience in many previous equity investments and in transition will be shared with SB and this co-operation should positively contribute to the growth and development of SB. AB Siauliu Bankas (“SB”) is the sixth largest bank in Lithuania with total assets of € 358 million and equity of € 36.8 million. SB is rated B+ (stable) by Fitch IBCA and Moody’s Ba3. Equity. €1.5 million. Screened FI. SB is familiar with EBRD’s environmental requirements from earlier operations with the Bank including the SME credit line. The Bank provided SB with Environmental Due Diligence Training in March 2001, Project monitoring based on annual environmental reports from SB to the Bank has shown that SB has satisfactorily adopted and implemented the EBRD Environmental Procedures for Small and Micro Loans. SB has also participated in financing environmental improvement projects through its co-operation with the Lithuanian Environment Protection Investment Fund. In the context of this Project, SB will have to apply EBRD’s Environmental Procedures for Local Banks to the full range of its commercial lending activities, including compliance with EBRD’s Exclusion and Referral List, providing annual environmental reports of all its lending activities to the EBRD and requiring all its borrowers to comply, at a minimum, with Lithuania health, safety, environmental and public consultation requirements. None. Mr Donatas Savickas Member of the Board, Deputy Chairman of the Board 149 Tilžės Street Siauliai LT-76348 Lithuania Telephone: +370 41 595 602 Fax: +370 41 430 774 Email: d.savickas@sb.lt Web: www.sb.lt