DnB NORD Bankas ups initial margin ratio for repo deals

DnB NORD Bankas, the leader of the country’s in investment products market, raises initial margin ratio for repurchase deals (repo deals) for most actively traded Lithuanian and Estionian shares. Currently the customers of DnB NORD Bankas will be offered to make repo deals using 70 percent initial margin ratio.

“The recent bull trend in the Baltic markets lifted the liquidity significantly and as a result, investors are looking for a bigger leverage. Therefore we decided to increase the initial margin ratio to 70 percent from previous 50 percent that provides triple leverage and offering more opportunities for investors to earn more in a rising market,” says Mindaugas Tutlys, Manager of DnB NORD Bankas’ Capital Markets Unit.

In a repo deal the client borrows funds by temporarily selling securities to the bank and repurchasing the same securities for a pre-agreed price in the future. The loan amount depends on the market price of the financial instrument and the initial margin ratio set by the bank.

In bull markets repo deals are frequently used as financial leverage enabling investors to boost the yield of their portfolio. Because of the higher market risk inherent in such deals, AB DnB NORD Bankas offers this service to advanced investors only.

AB DnB NORD Bankas is the only bank in the local market which offers repo deals online. As a result of such online service, clients can respond fast to market swings and make appropriate investment decisions. Using the same on-line platform clients can trade securities online at particularly favourable commission fees. Information about the fees and interest rates for repo deals are presented on the web page www.dnbnord.lt

AB DnB NORD Bankas is a universal commercial bank that provides comprehensive range of banking services to individual and corporate customers. The bank is part of Denmark-based DnB NORD banking group that was established by the Norway’s largest bank DnB NOR ASA and North Germany’s largest bank Norddeutsche Landesbank Girozentrale (NORD/LB).