• Corporate clients
• Saving and investment
• REPOs

REPOs

A repurchase (REPO) transaction means an agreement between the bank and the client on the basis of which the client assigns financial instruments to the bank and the bank transfers to the client’s monetary account the amount of funds equal to the sales price. On the day of agreement maturity the client undertakes to buy back from the bank sold financial instruments at a higher price and the bank undertakes to return financial instruments to the client.

What are the benefits of a redemption (repo) transaction?                                                   

• Interest on the transaction is lower than on a consumer credit;
• There is no need to provide a certificate on received income;
• The client reserves the right to all cash flows related to the financial instruments assigned to the bank as well as property and non-property rights;
• Useful in terms of taxation as the repurchase transaction is not an assignment of financial instruments;
• The money to the client’s bank account is transferred on the day of transaction conclusion.

How to conclude a repurchase (repo) transaction with Ūkio bankas?

• To come to AB Ūkio bankas branch or client service unit where investment services are provided and enter into the Agreement on the Provision of Investment Services (if this agreement has not been concluded);
• To get acquainted with the risk typical of redemption transactions;
• To fill in an application form of the required format and coordinate the final terms of repurchase agreement with the bank’s broker;
• To transfer the financial instruments assigned to the bank to own account with Ūkio bankas;

• An agreement on repurchase of the financial instruments which are joint community property may be concluded only together with the spouse unless you have authorization from the spouse to dispose of financial instruments.

What are the terms for concluding repurchase trasnactions with Ūkio bankas?

• Repurchase transactions may be concluded for equity securities listed on the stock exchange and investment funds units registered in Lithuania. A list of financial instruments the bank concludes redemption transactions for is available here.
• The maximum period of repurchase transaction is one year. The exact term of repurchase transaction is determined for each transaction separately.
• A repurchase transaction may be terminated before expiry without paying any fees.
• Upon the expiry of the term, the transaction may be extended for a period not longer than 6 months. The exact extension term is determined for every transaction separately.
• A fee of LTL 40 is applied for agreement processing and extension.

What is the risk of a repurchase (repo) transaction?

Ūkio bankas draws your attention to the fact that before concluding a repurchase transaction you have to get acquainted with the risk arising from this transaction. It is important to know that upon entering into the repurchase transaction you run a risk of incurring loss that may exceed the amount of invested funds. Upon a decrease of the financial instrument’s market price the bank has the right to demand from you additional collateral and if you fail to provide it in a timely manner, the bank will sell your financial instruments to cover your debt. A general description of the risks characteristic of repurchase (REPO) transactions is available here.

Repurchase transaction amount calculator

Repurchase (REPO) agreements are concluded only for financial instruments acceptable to Ūkio bankas. Amount paid out under the agreement depends on the risk of financial instrument intended to transfer and term of the agreement. You may use repurchase transaction amount calculator and find out the actual amount you may borrow for owned financial instruments.