Danske Bank withdrawal from Lithuania: what local customers need to know
Danske Bank Group announced that it is stopping onboarding new local customers in Lithuania and plans to exit from serving local business and private banking customers. Although it was announced that it means no immediate changes for current local customers, customers are free to look for other banking services.
Customers were informed that over the next few months the bank is going to provide some additional information, however some of the clients are already advised to look for other banking solution for their businesses.
Even though Danske states that it will terminate a major part of operations in Lithuania gradually, there is a possibility of Danske transferring its portfolio to any other bank as it happened before with the retail portfolio transaction. However, considering current messages it would seem wise to look for other banking solutions right away.
If Danske proceed with gradual termination of operations, here is what will happen.
Firstly, the bank is going to stop providing new services and current agreements should not be amended and/or extended by Danske. Hence, if e.g. anyone has intentions to change their financing conditions, it seems that the most assured way is to find a new bank refinancing current credit.
Secondly, clients should be concerned about the speed of the termination process. The faster Danske proceeds, the less time is left for the clients to find new banking solutions for their daily matters. Developed businesses may use various banking instruments from Danske (some of them may be rather sophisticated) and it may be a tough exercise to find an alternative provider quickly. Since companies cannot tolerate uncertainty, the best choice seems to look for a new bank as soon as possible.
Lastly, looking for alternative bank solutions may cause financial inconveniences for the companies and Danske at least could apply some fees to customers in the stage of closure of banking activities.
For now, Danske Bank has announced that existing local customers will be served within current obligations. Loans will therefore mature in accordance with existing terms and conditions, and deposits and other service agreements will remain in force. Existing day-to-day private banking and business products will continue to be supported until further notice.
Danske Bank announced plans to inform its local customers about any coming changes in the customer relationship well in advance.
It was announced that the decision to reposition business activities in the Baltic countries will have no consequences for the Group's shared service centres - Danske Group IT Lithuania and Global Services Lithuania. The growth of Danske Bank global services and IT centres in Lithuania will continue as planned. During the past years, Danske Bank has employed more than 2,300 employees in Lithuania.