Banks, EU – Baltic States, Financial Services, Lithuania, Loan

"We see this year as a year of opportunities and we want to increase our loan portfolios."

The Lithuanian banking industry, led by the Scandinavian subsidiaries of SEB and Swedbank, suffered losses last year as the second-deepest economic recession in the Baltic region undermined loan quality. Bankruptcies, falling real estate prices, rising unemployment and wage cuts are increasing overdue loans and provisions, reports LETA/ELTA citing Bloomberg.

Snoras's loan portfolio grew in the first two months, said Stancikas.

Real-estate borrowing accounts for 30% of total corporate loans, the biggest share in the portfolio.

"The economic situation is no longer worsening," he said. "We are feeling the first positive signs such as an improvement in real estate."

The yield on the Snoras three-year Eurobond maturing on May 21 rose 0.31%age points today to 15.53%. The yield has fallen from 120.97% in April, 2009.

Snoras plans to sell additional shares to the public to raise about 23 million euros (31.3 million dollars) in the first half of the year to help boost capital. The shares rose 2.7% to 1.14 litas in Vilnius trading on March 10, marking the biggest one-day gain since February 10.

"The price of our bonds fell significantly when the market turmoil began," Stancikas said. "We bought our bonds at a cheaper price than the nominal on the secondary market and made a profit. This helped us absorb some of the losses during the crisis."

Stancikas said the bank still needs to buy back a portion of the bond that's "significantly" smaller than the full size of the 175 million euros in debt. The bank has enough funds to buy back remaining debt, he said.

Snoras is also considering a new bond sale this year, a decision on which will depend on the market, Stancikas said.

The bank is 67% owned by Vladimir Antonov, a 34- year-old Russian nationality person, who resides primarily in London. Chairman of the bank Raimondas Baranauskas holds 25%.