Find out more about European Merchant Bank (EMBank), legal structure, board members and how we do business ethically, in compliance with regulations.
History of EMBank
|Dec 14, 2018||May 2, 2019||Feb 5, 2020||Jan 15, 2021|
European Merchant Bank has been licensed by European Central Bank (ECB) for the provision of the following banking activities:
■ Receipt of deposits and other repayable funds within the meaning of Articles 3(1)(1) and 2(17) of the Law on Financial Institutions and according to Article 4(5)(1) of the Law on Banks;
EMBank eligible capital increased to EUR 3.3 Mio.
EMBank eligible capital increased to EUR 10.3 Mio.
EMBank eligible capital increased to EUR 15.3 Mio.
Founded as a specialized Bank in December 2018, European Merchant Bank UAB (hereinafter referred to as the EMBank or the Bank) is registered and located at Gedimino pr. 35, Vilnius, Lithuania.
On the 14th of December 2018, the European Central Bank (ECB) has authorized EMBank for the provision of the following banking activities: receipt of deposits and other repayable funds; payment services provided in Article 5 of the Law on Payments; issuance of electronic money and lending activities. Currently, EMBank’s economic activities include acceptance of deposits from natural persons, lending and payment services to the legal persons. All of the previously indicated services are supervised by the Bank of Lithuania. Furthermore, the Bank has passports to twenty-six countries within European Economic Area (EEA) the Member States for its activities.
Management and Organisation
The Supervisory Board forms the overall strategy and vision of the Bank and sets out policies that reflect the goals and objectives set. All members of the Supervisory Board have knowledge and expertise relevant to the Banking industry and the services offered by the Bank.
- Ekmel Cilingir – Chairman of the Board.
- Vygintas Bubnys – Independent Member of the Supervisory Board.
- Vaineta Barevičiūtė – Independent Member of the Supervisory Board.
The Bank’s Management Board comprises four members. The regular members are Chief Executive Officer as Chairman (CEO), Deputy CEO, and C level managers.
Click here to access the organizational chart.
For efficient and effective governance, the Bank is ensured by committees.
There are 4 committees in the Bank:
- Audit Committee
- Asset Liability Committee (ALCO)
- Information Security Committee (ISC)
- Credits Committee
The Audit Committee
The primary function of the Audit Committee is to assist the Supervisory Board in fulfilling its oversight responsibilities for financial reporting processes, the effectiveness of internal controls, the internal audit process, and monitoring over compliance with laws, regulations, and the Bank’s policies and procedures. In this respect, Audit Committee assists the Bank’s Supervisory Board to:
- Assess the state and efficiency of the Bank’s internal control processes and system, risk management and propose measures of improvement.
- Coordinate and assess the work of the Bank’s Internal Audit Department.
- Discuss the work performed by external auditors, to plan the need for and recommend external auditors.
- Ensure compliance with the laws and legislation of Lithuania, the Bank’s Articles of Association, the strategy, and activity policy prescribed by the Bank’s Supervisory Board.
- Monitor and consider the effectiveness of the whistle-blower scheme in the Bank.
Click here to access the charter of the Audit Committee.
Internal Audit Department
For ensuring even-better governance at the Bank level, European Merchant Bank UAB’s Internal Audit Department plays an important role. It represents an independent and objective assurance and consulting function as the third line of defense. Through the application of a risk-based methodology, IAD evaluates and examines whether proper measures are taken to ensure ‘control’ in the organization and its activities.
The ALCO Committee
The ALCO Committee’s primary duties and responsibilities are to assess the adequacy and monitor the implementation of the Bank’s Asset, Liability, Liquidity, and Fund Management Policy. The ALCO Committee meets bi-weekly and focuses on the following:
- To oversee the key balance sheet assets and liabilities. To be responsible for executing the respective policies to have healthy management of financial statements in line with the budget.
- To receive and review reports on liquidity, market risk, and capital management.
- To supervise, deposit-loan pricing of treasury department for the local and global market.
- To drive the policy for sustainable funding for the balance sheet.
- To ensure compliance with Banks policy and regulatory requirements
- To review and supervise and monitor concentration risk arising from both borrowers and depositors.
- To review requirements set by external regulators.
- To supervise Capital Markets & Treasury Department, allocate the bank’s remaining assets and liabilities to meet risk and profitability objectives. Monitor performance and risk of the Bank’s investment portfolio, including equity securities held at fair value, and strategies including portfolio activity, unrealized gains and losses, portfolio yield, duration, and total return, and credit quality.
Click here to access the charter of the ALCO Committee.
Information Security Committee (ISC)
The ISC roles and responsibilities shall be as follows:
- Developing and facilitating the implementation of information security policies, and procedures to ensure that all identified risks are managed within the Bank’s risk appetite.
- Approving and monitoring major information security projects and the status of information security plans and budgets, establishing priorities, approving procedures.
- Supporting the development and implementation of a bank-wide information security management program.
- Reviewing the position of security incidents and various information security assessments and monitoring activities across the bank.
- Reviewing the status of security awareness programs.
- Assessing new developments or issues relating to information security.
- Requirement for generating effective metrics for measuring the performance of security control.
- Reporting and or presenting to the Management Board on information security activities, at least quarterly basis.
- Conducting regular ISC meetings (at least quarterly)
Click here to access the charter of the Information Security Committee Committee.
The specific authority and responsibilities of the Committee shall include, but are not limited to, the following:
- Approve credit proposals under the limit set to the Committee and make recommendations regarding credit proposals to the upper authorization level – Management Board and Supervisory Board.
- Monitor overall credits concentration limits, including credits to one borrower, by industry, by product, etc.
- Monitor the Bank’s credit products, origination volumes, market area, and credit facilities development.
- Monitor the Bank’s quality of both credits portfolio and individual credits, credits portfolio tendencies, expected credit losses, collateral policy.
- Recommend to the Management Board for approval of Credit risk/Lending policies, procedures commensurate with the Bank’s specific risk tolerances and strategic goals and monitor the implementation of lending policies.
- Periodically review the Bank’s credits grading system and monitor the performance of the system, including a review of classification reports, external credit reviews, and examination reports.
- Perform a periodic review of the Bank’s high-risk and non-performing credits. Review collection practices and strategies, as appropriate.
- Prepare and make periodic reports to the Management Board, as required.
- Annually review the Charter and recommend changes to the Management Board as needed.
Click here to access the charter of the Credits Committee.
The Supervisory Board
Supervising the policy of the Management Board and the general affairs of the Bank and supporting the Management Board with advice is the Supervisory Board’s task, as stated in European Bank’s articles of association and the Charter of the Supervisory board in line with the rules in Lithuania.
The Supervising Board of EMBank UAB comprises three members:
- Ekmel Cilingir –Chairman of the Board.
- Vygintas Bubnys – Independent Member of the Supervisory Board.
- Vaineta Barevičiūtė -Independent member of the Supervisory Board.
Click here to access the charter of the Supervisory Board.
The Supervisory Board is supported by Audit Committee.
Its main objective is as follows:
Audit Committee advises the Supervisory Board on and supervises the status of and developments in, the Bank’s risk management system, internal control systems, and compliance-related matters. It also performs a review of the European Merchant Bank’s financial statements and the reports of the external auditor. Moreover, it discusses the relationship with the external auditor, including his independence, remuneration, and other non-accounting-related activities executed for the Bank.
The Management Board
The Management Board of European Merchant Bank is jointly responsible for the management of the Bank, it includes realizing the Bank’s targets and strategy, and the policy and results arising thereof. Compliance with all relevant laws and regulations, management of the risks attached to our banking activities, and the funding of the European Merchant Bank in line with the approved risk appetite are within the responsibilities of The Management Board.
Click here to access the charter of the Management Board.
PURPOSE AND OBJECTIVES
The purpose of the Remuneration Policy (the “Policy”) is to define core principles of remuneration of employees of European Merchant Bank, UAB (the “Bank”). The Policy establishes the basic principles of remuneration in order to reward sustainable long-term value creation in line with the interests of shareholders, investors, and customers to enable the Bank to attract, retain and train talented employees with the right competence. The Policy is compulsory to all employees in the Bank. Employees are subject to inform the pay system without discrimination of age, nationality, race, social status, religion, etc. The Bank aims to assimilate a multinational company structure with talented employees and aims to work in cooperation.
The Remuneration Policy and practices under this policy are implemented in accordance with the provisions of the Labor Code of the Republic of Lithuania.
The salary which the Bank offers to employees is competitive and reflects the employee’s experience. Performance of the individual employee, the individual’s respective team/business line, and the whole team builds cash-based compensation. To attract and motivate employees and build long-term commitment, the Bank knows that long-term equity-based compensation is an essential element. The remuneration system must not counteract the company’s long-term interests.
Fixed remuneration or monthly salary is determined in the employment contract which reflects the level of the employee’s professional experience and responsibilities set by the job description and role charter. Fixed remuneration is not related to performance. Job charters created for every department and role are reviewed by the head of department and Management Board and then published in the related company folders.
The Management Board is responsible for the implementation of the Remuneration Policy and approval of respective internal procedures. The Finance Department will coordinate the implementation of the Remuneration Policy within the Bank.
REMUNERATION OF RISK-TAKERS
The variable remuneration component for Risk takers (including the deferred portion) must be allocated and/or paid out only in case the Bank’s financial situation is sustainable and is related to the performance results of the unit (department) or the respective person. If the Bank’s financial performance results are negative or below the set business targets, the Bank, without breaching the requirements set by the legislation of the Republic of Lithuania, must reduce the payment of the variable remuneration component, including the deferred portion, for a certain period. The potential risk related to the employee’s performance results, the payment of the variable remuneration component in cash or allocation in non-financial instruments is deferred.
REMUNERATION POLICY MANAGEMENT AND CONTROL
Supervisory Board reviews Remuneration Policy once a year after Management Board reviews and submits suggestions. The Internal Audit Department of the Bank must check the implementation of the Policy principles at least once a year. The Policy is submitted to the Bank of Lithuania every year before 30 April of the current year, if changed. The Bank must submit the information about the employees whose professional activity and/or decisions may have a significant impact on the Bank’s risk profile to the supervisory institution within 5 business days after such amendments are approved by the Bank. Supervisory Board and Management Board should ensure Policy complies with related laws and regulations.
Lithuanian Law on Banks and Corporate Governance
Law on Banks of Republic of Lithuania No IX-2085 entered into force on 30 March 2004 and is regulating the procedure for setting up, licensing, pursuing of business and restructuring as well as supervising of the banks established in Lithuania as well as foreign banks operating in the Republic of Lithuania, in order to ensure a stable, sound, efficient and safe banking system.
Please refer to the below link for further information on the Lithuanian Law on Banks and relating secondary legislation:
Lithuanian Corporate Governance
In Lithuania, the Banks form and carry out their activities in accordance with Civil Code No. VIII-1864 of the Republic of Lithuania, Law on Companies of the Republic of Lithuania No VIII-1835, Law on Banks of the Republic of Lithuania No IX-2085, and other applicable laws and secondary legislation regulating applicable corporate governance rules and principles.
For further information, you may reach Law on Companies of the Republic of Lithuania from the below link:
The Bank’s focus on long-term value creation is inherent to its private ownership structure.
Long-term sustainability is given a prominent role in determining the Bank’s strategy and in the decision-making process. On an annual basis, the strategy is being reviewed and where necessary updated (as a result of the most recent strategic discussions, the Bank will particularly focus on digital banking and fintech projects). Inter alia through the regular updates that are given on the implementation of the Bank’s strategy, the Supervisory Board monitors the implementation thereof.
It is of great importance for the Bank to be continuously informed about the latest (technology) developments in this rapidly changing society. In order to adequately anticipate this, internal training is being organized, external seminars/courses are attended.
EMBank has established an Internal Audit department in accordance with the principles and best practice provisions of the Law on Banks.
EMBank’s risk management framework is comprehensive and managed by an independent risk management function under the direct responsibility of the Chief Risk Officer. Risk management plays a central role in the bank’s decision-making process.
Grant Thornton Baltic UAB has been appointed as the Bank’s external auditor. The Audit Committee discusses the Bank’s audit plan and any findings of the external auditor.
Effective Management and Supervision
The composition of the Supervisory Board and Management Board is very well balanced inter alia taking into account the specific knowledge and experience of each of the members. According to EMB articles of association, Supervisory Board has 3, Management Board has 4 members.
The respective interests of the Bank’s main stakeholders (being EMBank‘s clients, employees and business partners, the shareholders as well as society) are taken into consideration in the decision-making process.
Conflict of Interest Policy
EMBank has effected procedure suitable for managing potential conflicts of interests. Such arrangements have to be complied with for professional integrity – and transparency reasons.
The generic arrangements aim at setting criteria and controls that identify and govern potential conflicts of interest arising from, amongst others, different functions and units of the Bank (including Personnel) and its Clients.
The Bank has specific arrangements in place to ensure proper management of potential conflicts of interest in related party transactions. These arrangements include procedures to identify, authorize and report related party transactions to Legal Counsel and Supervisory Board.