Located in Northern Europe, Lithuania is one of the Baltic States and a memberof the European Union since 2004.
Lithuania is a developed country with high-income economy.Main industries of Lithuanian economy are electronics, machinery, food processing, production of furniture and textiles.
Lithuanian banking sector is relatively small, highly concentrated,with high share of foreign capital and is dominated by Scandinavian banks.
Lithuania joined the Euro Area on 1 January 2015. The preceding national currency, Lithuanian litas (LTL), was replaced by Euro.
|Nominal GDP (2016)||Nominal GDP per Capita (2016)||Real GDP Growth (2016)|
|38.6 bln EUR (+0.04%)||13 500 EUR (+0.05%)||2.3 % (2015: 1.6 %)|
According to Eurostat, nominal GDP of Lithuania in 2016 was 38.6 bln EUR.
Lithuania outperforms the European Union in terms of real GDP growth with the average annual differential coming to 1.2% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 2.3% which was above the Euro Area average (1.8%) and above the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.
Chart 1. Real GDP Growth in Lithuania. Source: Eurostat, International Monetary Fund.
In 2016, nominal GDP per capita in Lithuania was 13 500 EUR.
Lithuania has a below-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, fell behind that of the European Union by -18.3% over the past 10 years (2006 - 2016). GDP per capita at PPP in 2017 - 2022 are IMF's estimates.
Chart 2. GDP Per Capita at Purchasing Power Parity in Lithuania; European Union = 100.
|CPI, MoM (Sep 2017)||CPI, YoY (Sep 2017)||CPI, Year Average (2016)|
|0.8 % (Aug 2017: 0.0 %)||4.6 % (unchanged)||0.7 % (2015: -0.7 %)|
According to Eurostat, inflation rate in Lithuania in 2016 expressed as annual percentages of average consumer prices was 0.7% which was above the Euro Area average (0.2%) and above the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.
Chart 3. Inflation Rate in Lithuania. Source: Eurostat, International Monetary Fund.
|Unemployment Rate (2016)|
|7.9 % (2015: 9.1 %)|
|Government Bond Yield (Sep 2017)|
|0.31 % (unchanged)|
Chart 4. Government bond yield of Lithuania. Source: Eurostat.
|A- (high credit quality), outlook stable||A3 (upper medium grade), outlook stable|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Lithuania signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Lithuania and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 1 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
There are also several agreements between Lithuania and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):
Lithuania signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Lithuania has signed bilateral agreements with 56 jurisdictions to automatically receive information:
Lithuania has signed bilateral agreements with 62 jurisdictions to automatically send information:
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
|FATCA Status in Lithuania|
|IGA in effect since 26 August 2014, Model 1|
Lithuania has FATCA agreement with the U.S. in effect since 26 August 2014 (Intergovernmental Agreement Model 1). Financial institutions operating in Lithuania are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Lithuanian financial accounts hold in U.S. financial institutions will be reported to Lithuanian authorities.
|Financial Market Development|
|4.1 (max 7.0), 59th out of 138 countries|
|4.8 (max 7.0), 72nd out of 138 countries|
According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in Lithuania is scored 4.1 out of maximum 7.0 and ranked 59th out of 138 analysed economies, trustworthiness and confidence of financial market is scored 4.3 (65th place).
Chart 5. Financial Market Development in Lithuania. Source: WEF.
Soundness of banks is scored 4.8 bringing Lithuania into the 72nd place.
Chart 6. Soundness of Banks in Lithuania. Source: WEF.
|Maximum Protected Amount|
|100 000 EUR|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Lithuania are summarised in Table 1.
|Scheme Participants||all credit institutions operating in Lithuania (including branches of foreign banks), branches of Lithuanian banks abroad|
|Eligible Depositors||natural persons, legal entities|
|Covered Accounts||all deposit accounts|
|Maximum Protected Amount||100 000 EUR|
|Paid In Currency||EUR|
Table 1. Deposit guarantee scheme in Lithuania.
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
|Local Currency (Euro)||Foreign Currency|
|Aaa (prime)||Aaa (prime)|
Local currency (Euro) deposit ceiling for Lithuania is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).
|Average Deposit Rate (Aug 2017, EUR)|
|0.19 % (Jul 2017: 0.15 %)|
Chart 7. Deposit Rates in Lithuania. Source: ECB.
|Number of Banks|
|Consolidated Assets (2016)|
|25 753.97 mln EUR (+9.89%)|
|Recent Changes (2016)|
|new banks: 0, closed banks: 2|
Currently there are 85 credit institutions operating in Lithuania.
In 2016 consolidated banking assets in Lithuania were 25 753.97 mln EUR. The consolidated banking assets' evolution is shown at Chart 8 below.
Chart 8. Consolidated banking assets in Lithuania.
Recent structural changes (2013 - 2016) of the banking sector of Lithuania are summarised in Table 2.
|Number of Opened Banks||1||1||2||0|
|Number of Closed Banks||3||3||1||2|
Table 2. Recent structural changes in the banking sector of Lithuania.
The list of the most recently opened banks in Lithuania is provided in Table 3.
|Telia Finance AB Lietuvos filialas „Telia Finance Lietuva” (new)||October 2015|
|Scania Finans Aktiebolag Lietuvos filialas (new)||July 2015|
|Nordea Bank AB Lietuvos skyrius (closed)||March 2014|
|Kredito unija „Saulėgrąža” (new)||August 2013|
Table 3. The most recently opened banks in Lithuania.
All the credit institutions operating in Lithuania can be classified into several categories. Table 4 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||7|
There are 7 branches of foreign banks from 5 different countries in Lithuania. Table 5 shows the number of branches grouped by the country of origin.
|Country of Origin||Number of Branches|
|2||AB SEB bankas|
|3||Luminor Bank AB|
AS Swedbank is a universal bank offering retail, private and corporate banking products and services to both private individuals and companies with the focus on private individuals and SMEs.
In 2016 total assets of AB „Swedbank“ were 7 326,79 mln EUR. In 2016 the bank's net income was 89,98 mln EUR.
AB „Swedbank“ participates in deposit guarantee scheme of Lithuania. This scheme covers accounts up to 100 000 EUR per bank per depositor.
SEB Banka provides a broad range of retail, private and corporate banking products and services to natural persons, business entities, corporations and institutions.
In 2016 total assets of AB SEB bankas were 7 524,08 mln EUR. In 2016 the bank's net income was 94,49 mln EUR.
AB SEB bankas participates in deposit guarantee scheme of Lithuania. This scheme covers accounts up to 100 000 EUR per bank per depositor.
AB DNB Bankas was a universal bank providing a wide range of retail, private, corporate and investment banking products and services to individuals, business entities and municipalities. AB DNB Bankas also mediated for asset management, lease and insurance provides real estate brokerage services. In 2017 AB DNB Bankas was superseded by Luminor Bank AB, a joint venture of DNB and Nordea. Luminor Bank provides banking products and services to all customer groups with a special focus on small and medium-sized companies, as well as affluent private clients.
In 2016 total assets of AB DNB bankas were 3 995,39 mln EUR. In 2016 the bank's net income was 22,60 mln EUR.
AB DNB bankas participates in deposit guarantee scheme of Lithuania. This scheme covers accounts up to 100 000 EUR per bank per depositor.