An Estonian Mystery

Although critics have for years predicted the collapse of Bigbank, Estonian-owned bank that started as a provider of small unsecured consumer financing, the bank reported much better 2009 results than any other bank in Estonia. In addition to making a nice profit, Bigbank doubled its volume of deposits and redeemed about 600 million kroons worth of international bonds before due date.

“At current projections we are not seeing a need to raise additional financing and plan to redeem our bonds by due date.”

Targo Raus


Moreover, while at the beginning of 2009, Bigbank was burdened by 1.5 billion kroons in issued bonds, the figure fell by half by the end of the year, the Estonian newspaper Äripäev writes.

“At current projections we are not seeing a need to raise additional financing and plan to redeem our bonds by due date,” said Targo Raus, CEO of Bigbank.

When Äripäev two years ago asked Raus about what would be the worst case scenario for Estonia, Raus said:

“It is if the economy would collapse and about 20% of people would be unemployed.”

Now Raus says that he believes the unemployment situation to have hit rock bottom; “I think most of the layoffs have been made and the initial impact of unemployment has been seen.

The bank’s consolidated net profit in 2009 amounted to 117.1 million Estonian kroons compared with 144.7 million kroons in 2008.

During the year the bank opened a branch in the Finnish market and launched offering of cross-border deposit services in the German and Austrian markets.

At the end of 2009, the bank’s loan portfolio was on the level of 2.053 billion kroons, a 10.3% decrease year-over-year. The loan portfolio showed a 17.0% growth in the Lithuanian market.

Looking by countries, loans issued in Estonia constituted to 47.1%, in Latvia to 40.6% and in Lithuania to 12.3% of the total loan portfolio.

The amount of term deposits reached 1.173 billion kroons at the end of 2009 compared with 630.6 million kroons at the end of 2008.

Targo Raus

Chairman Targo Raus said that on the background of the tough macroeconomic developments the bank was implementing a conservative management policy and at the same time managed to maintain proper profitability and enter into new markets.

“Our goal in 2010 is to continue the bank’s geographic and service range expansion in foreign markets,“ Raus says.

Bigbank is a specialised credit institution based on Estonian capital, which has branches in Finland, Latvia and Lithuania and provides its services on cross-border basis also in Austria and Germany.

As of the end of 2009 the bank employed 394 people and had in total 28 offices.

The bank’s bonds are listed on Stockholm Stock Exchange.

Source: balticbusinessnews.com

Financial Statement.

Related by the Econotwist:

The Latvian Solution: Go Blonde!

Standard and Poor’s: The Baltic Are Stabilizing

Swedbank Buy Greek Bonds With Estonian Money

Estonia Put Pressure On Journalists

Baltic Countries Remain In Recession

Estonian Company Claims $130mill from SEB

How To Make A Rat Look Like A Puppy

Swedbank In Estonia: “Daylight Robbery”

Swedbank Reports Record Loss of SEK 10,5bn

“SEB Robbed Customers,” Whistleblower Says

Bankrupt Baltic Baker Charged With Million-Dollar Fraud in U.S.

Nordic Central Banks Agree On Baltic Bank Bailout

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