Siauliu Bankas, Lithuania’s only local capital bank, and the Invalda INVL group of investment management and life insurance companies have completed the merger of their retail businesses. The end value of the deal is at €41.8mn, BNS, a Baltic newswire, reported.

"If the merger delivers what we expect, we believe we will have a strong player that will deliver what the market and customers need and will bring benefits to employees, customers and shareholders," said Darius Sulnis, CEO of INVL.

Tomas Varenbergas, head of the Investment Management Service at Siauliu Bankas, expects the merger to increase market competition.

As of December 1, in addition to the financial services it already provides, the Siauliu Bankas will manage second- and third-pillar pension and investment funds in Lithuania, as well as expand the life insurance business in the Baltic states, which will be taken over by the life insurance SB Draudimas. The latter is expected to have a 7% share of the life insurance market in Lithuania.

After the transaction, the Invalda INVL group will continue to manage alternative investment funds, other investments, and provide family office services in the Baltic states.

After the final completion of the transaction, Invalda INVL will receive 9.39% of the authorised capital of Siauliu Bankas and become its largest shareholder, increasing its shareholding in Siauliu Bankas to almost 20%.

Girteka Logistics' manager Willgrow will own 8.9% in Siauliu Bankas and the European Bank of Reconstruction and Development will hold a 7.2% stake.

The transaction involves more than 210,000 clients and over €1.2bn of their assets in the Baltic states. The transaction will increase clients' funds and assets entrusted to the Siauliu Bankas group by a quarter to over €6bn, and the number of employees across Lithuania will surpass 1,100.

On November 22, the European Central Bank gave Invalda INVL the go-ahead to acquire a 10-20% stake in Siauliu Bankas, the last of the required supervisory approvals, BNS said.