AB Ukio Bankas, the Lithuanian bank that’s lost more than half its value in a year, fell the most in 13 years after majority owner Vladimir Romanov said he was ceding ownership of the debt-laden Zalgiris basketball club.
The shares plunged as much as 21 percent, posting the steepest intraday drop since February 2000. They closed down 17 percent at 0.081 euro in Vilnius, valuing the bank at 29.4 million euros ($39 million). Volume of 2.5 million shares was the most in a year, according to data compiled by Bloomberg.
Romanov, who owns 64.9 percent of Kaunas-based Ukio Bankas, will relinquish ownership of Kaunas Zalgiris basketball club because the city council refused to provide enough financial support for the team, Verslo Zinios newspaper reported on its website today. Romanov also controls Edinburgh soccer club Heart of Midlothian Plc through Ukio Banko Investicine Grupe, a sister company of the lender.
“Investors don’t like all the media reports about the bank’s main shareholder,” Tadas Povilauskas, an analyst at Finasta investment bank in Vilnius, said by phone. “If he can no longer afford to support his sports club, he probably also wouldn’t be able to support the bank if needed.”
The falling share price, which dropped 25 percent this week, has also triggered bank calls for additional collateral from some investors, who’ve “had to either pay in or close their positions,” according to Povilauskas.
Ukio Bankas in October reported a group net loss of 44 million litai ($17 million) for the first nine months of 2012. Since then, it has had to assuage investor concerns about the quality of its loans, the valuation of real-estate it owns and probes of Russian money that was laundered through its accounts.
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