Bigbank issued bonds in the amount of 5 million euros
Bigbank AS issued subordinated notes in the amount of 5 million euros in December with a term of 10 years and a fixed interest rate of 6.5% p.a. The private placement was organised in cooperation with LHV pension funds and its objective was to reinforce Bigbank’s capital base in compliance with the bank’s strategy and growth objectives.
“Our cooperation with LHV Varahaldus was fast and professional – it brought us great joy to see investments to local markets, which means that it is also beneficial for the customers of Estonian pension funds,” said Sven Raba, Chairman of the Management Board of Bigbank.
Bigbank’s vision is to become the most recommended provider of digital financial services in all the countries in which it operates. “In order to reach the strategic objectives of the bank, we have focused on improving the quality of our credit services and customer satisfaction more than ever before in the last few years. We have targeted our services at customers with a lower credit risk and have significantly lowered the interest rates of our loan products. As a result, we have managed to gradually increase the volume of loans granted by the bank and substantially improve the quality of the loan portfolio. The subordinated bonds help us expand our principal activities as they also qualify as Tier 2 equity,” added Raba.
Romet Enok, Portfolio Manager for LHV, pointed out that the investment in Bigbank AS bonds increased this year’s volume of investment decisions of LHV pension funds that are related to Estonia to 170 million euros. “This year, we have acquired the bonds of five banks operating in the Baltic States, and I believe that next year, we will continue developing the local bond market. In case of the Bigbank investment, it is noteworthy that the capital involved will improve the export of financial services from Estonia. The bonds are rendered attractive by the high equity share, the changed focus of the company and its international grasp. For pension assets, this investment provides a higher expected yield than international bond markets,” added Enok.
Bigbank AS (www.bigbank.ee) is a specialised bank based on Estonian capital that focuses on consumer credits and fixed-term deposits. In addition to its activities in Estonia, the bank has branches in Finland, Sweden, Latvia, Lithuania and Spain, and also offers its products as cross-border services in Austria, Germany and the Netherlands. The loan portfolio of Bigbank AS increased by 54.9 million euros, i.e. 15.1% in the first nine months of 2017, amounting to 418 million euros by the end of the third quarter of the year. By that time, the Group had a total of 163,000 loan contracts, 35,000 of them in Estonia, 73,000 in Latvia, 27,000 in Lithuania, 12,000 in Finland, 8,000 in Spain and 8,000 in Sweden. The Group has three customer service offices, including one in Estonia, one in Latvia and one in Spain. As of the end of the third quarter of 2017, Bigbank had 435 employees, including 212 in Estonia, 74 in Latvia, 78 in Lithuania, 22 in Finland, 35 in Spain and 14 in Sweden.
AS LHV Varahaldus manages actively and passively managed second and third pillar pension funds. The pension funds managed by LHV have 178,000 customers and the volume of assets exceeds one billion euros. According to the data of the Estonian Chamber of Commerce and Industry, LHV pension funds are the biggest investors in the Estonian economy. The share of LHV funds amounted to 82.65% of all pension fund investments in the third quarter of 2017.
Further information:
Sven Raba, Chairman of the Management Board of Bigbank AS
E-mail: [email protected]