The European Central Bank has fined SEB’s Baltic operations a total of EUR 1.24 million for failing to adequately address deficiencies in credit risk assessment practices, including a EUR 490,000 penalty for the bank’s Lithuanian branch.
According to the ECB, internal models used by SEB banks in Estonia, Latvia and Lithuania for calculating the Margin of Conservatism – a measure meant to ensure cautious risk evaluations – did not meet regulatory requirements. The ECB said the banks also failed to remedy the shortcomings within the required timeframe.
The penalty against SEB Lithuania is the largest of the three, with SEB Estonia fined EUR 410,000 and SEB Latvia EUR 340,000.
The ECB assessed the severity of the violation as “moderately severe”, assigning it a two out of five on its internal scale.
In a statement on its website, SEB Lithuania said corrective actions have already been taken.
From July 2022 to September 2024 – a 26-month period – the three SEB banks did not implement sufficient measures to meet the ECB’s requirements, despite being given additional time to comply.
While the banks have the right to appeal the decision before the Court of Justice of the European Union, SEB Lithuania has said it does not intend to challenge the ruling. (LRT)