Debt recovery

During the execution of the restructuring programme of the banks in 1996–1999, Turto Bankas took over or bought for VVP the assets of four commercial banks. To hasten the liquidation of banks that has been going on since 1995–1997, since 2002 Turto Bankas has taken over the non-realised assets of another ten bankrupted commercial banks free of charge. All these banks have been dissolved and de-registered; however, the debt recovery from the bank’s debtors is ongoing.

The outstanding balance of non-performing assets in this category amounted to EUR 29.5 M at the end of the first quarter of 2026.

Article 33(16) of the Law on Tax Administration of the Republic of Lithuania establishes the right of the tax administrator, in accordance with the procedure determined by the Minister of Finance, to transfer the recovery of taxpayers’ tax arrears to the centrally managed state asset manager either on the basis of representation or through the assignment of claims. Based on this provision, the State Tax Inspectorate and the Customs Department of the Republic of Lithuania have transferred the recovery of tax arrears to Turto bankas.

In addition, debt recovery activities are carried out under an assignment agreement transferring claims to Turto bankas, which was concluded pursuant to Resolution No. 472 of the Government of the Republic of Lithuania of 5 April 2002 “On the Assignment of the Guarantee Fund’s Claims to the Joint Stock Company Turto bankas and the Partial Amendment of Resolution No. 685 of 7 June 2001 ‘On the Establishment of the Guarantee Fund’”, which remained in force until 30 March 2013.

At the end of the first quarter of 2026, Turto bankas was recovering tax arrears and claims from 27 debtors. The outstanding balance of transferred tax arrears amounted to EUR 2.5 million.

Pursuant to Resolution No. 1459 of the Government of the Republic of Lithuania of 23 December 2014 “On the Amendment of Resolution No. 590 of 30 May 2005 ‘On the Approval of the Rules for the Repayment to the State Budget of the Republic of Lithuania of Financial Assistance Paid and/or Used in Violation of Legal Acts’”, it was established that institutions administering European Union financial assistance funds shall transfer claims to Turto bankas against project implementers who improperly used support funds received and failed to return such funds to the state budget within the deadline set by the administering institution. In accordance with this provision, claim assignment agreements have been concluded with various institutions.

At the end of the first quarter of 2026, Turto bankas was recovering debts from 197 debtors who had improperly used European Union financial assistance funds. The outstanding balance of transferred claims amounted to EUR 26.1 million.

Resolution No. 1316 of the Government of the Republic of Lithuania of 18 December 2019 “On the Gratuitous Transfer of Claims of a Bankrupt Bank, Bankrupt Credit Union and Bankrupt Central Credit Union to the Centrally Managed State Asset Manager” established that Turto bankas is the institution to which unsold and unassumed claims are transferred free of charge.

At the end of the first quarter of 2026, Turto bankas was recovering debts from 7 debtors arising from claims taken over through civil lawsuits submitted by bankrupt credit unions. The outstanding balance of transferred claims amounted to EUR 18.1 M.

In total, the portfolio managed by Turto bankas, consisting of loans administered under mandate agreements, transferred claims for recovery, and non-performing assets taken over from liquidated banks, amounted to EUR 85.2 M at the end of the first quarter of 2026.

The legal entity or natural person of the Republic of Lithuania, in accordance with the contract concluded with the state or in accordance with other binding debt documents, has received a loan from the loan funds received on behalf of the state:

• having assumed an obligation to the state in regards to the use and repayment of the loan;
• or having received a loan in accordance with the contract concluded with domestic or foreign creditor;
• or in accordance with other binding debt documents, the execution of which is guaranteed by the state (save for commercial banks and municipalities, until the full execution of obligations without a written permission of the Ministry of Finance or Turto Bankas).

When this company administers the loans and other property obligations transferred by the Ministry of Finance, and without coordinating the conditions for the performance of these actions, it shall not have the right to:

• reorganise the company;
• decrease the authorised capital;
• sell or in any other way transfer, lease or pledge fixed assets;
• warrant or in any other way guarantee the execution of obligations of other operators through their own assets;
• grant loans (save for consumer credit);
• invest assets to other economic operators;
• assume new obligations by issuing debt securities, signing loan contracts, financial lease contracts or other binding debt documents.

Turto Bankas, has recovered debts to the state and administered the loans, state guarantees and other property obligations that the Ministry of Finance of the Republic of Lithuania transferred to it in accordance with the assignment contracts. It sells the claim rights in accordance with the debts that were transferred to it for recovery, and takes over the property of debtors or third persons to the ownership of the state. If Turto Bankas were unable to sell it in accordance with the procedure indicated in the Civil Procedure Code of the Republic of Lithuania and/or Law on Enterprise Bankruptcy of the Republic of Lithuania, then Turto Bankas administers and sells it by following the Government of the Republic of Lithuania Decree No 262 ‘On the Approval of the Procedure Schedule of the Sale Through Public Auction of Property Belonging to the Debtors or Third Persons That Was Taken Over on the State Right of Claim and to the Ownership of the State’ of 18 March 2015.

By following the Law on Controlling Investment Companies of the Republic of Lithuania No IX-1710 of 4 July 2003 (link) and Government of the Republic of Lithuania Decree No 1165 ‘On the Approval of Rules for Dissolving the Investment Joint Stock Companies’ of 15 September 2004 (link), Turto Bankas was appointed to be the liquidation administrator of 112 investment joint stock companies through court orders. The liquidation procedures of all companies have been completed; they are de-registered from the Register of Legal Entities.