Banks, Deposits, Financial Services, Lithuania, Real Estate

The present turmoil may encourage people to seek alternatives to deposits, the real estate company Akorus Real Estate sales manager Donatas Kojala said. Real estate may be one of the asset classes which may see growth in demand, he added.

The Finance Ministry reports that the Snoras bank has insured deposits worth LTL 4.84 billion (EUR 1.4 billion) that have to be refunded to the depositors. "Over a certain period of time, a large amount of money, by Lithuanian scale, will return to Lithuania's market. Probably, the largest amount of the funds will be directed away as deposits in other commercial banks but I do not think that all the previous deposits will become new deposits again. It is very important when and in what pace the state is going to repay the deposits to citizens. If the process takes time, the trust in the deposits and their insurance system may highly go down. This will encourage depositors to withdraw their money from other banks. In my opinion, part of the funds should be directed to the real estate sector. Even a small amount of the deposits that presently total about LTL 34 billion (EUR 9.8 billion) in deposits could be a push for the Lithuanian real estate market which is struggling to recover," stated Kojala.