The OP bank is seeking for growth opportunities in Estonia

The subsidiary of the BO Bank, which has been operating in Estonia quite unnoticed, has significantly increased its number of clients and , according to manager Hannes Kaadu (HK), would like to invest even more in exporting enterprises.

Q: The OP Bank subsidiary is completing the construction of its new office. Does this also mean an actual expansion, hiring more people and introducing new services?

HK: This is indeed our direction. My desire is to increase the number of clients above all. But it is typical of corporate banking that the number of staff is not as high as in retail banking. The number of people is not growing as fast as the portfolio. But we will certainly need new staff in the future. We now have a staff of 33.

Regarding the Maakri block we are the financiers. But as the future tenants we and Seesam (an insurance firm in the OP Group) will only cover 10 percent of the floor area.

Q: So far you have been purely a bank serving enterprises. Will this continue?

HK: Yes, for the time being. We are clearly in corporate banking and have no intention of entering retail banking.

Q: How has the client portfolio been increasing?

HK: The bank began operating here in 2011; its leasing business had come some years earlier, so that we have not been in Estonia for very long. As I joined the OP Bank in 2015 the credit portfolio was 300 million euros, we increased it to 500 million within the first year and the current figure is 700 million.

Q: You have not been very visible as a corporate bank. Have you been considering increasing your image or would that be pointless?

HK: We had some advertisements in the airport last year due to the change of name (Pohjola became OP Corporate Bank – ed.) and we planned advertising in the streets as well, but I do not think it would be practical, considering the target group. I like more the idea of being a boutique bank which is known for what it does.

Q: The most interesting speculation I have heard about you is that OP is one of the candidates for buying the Nordea-DNB merged bank. Could that be an interesting idea for you?

HK: I cannot comment it in any way. My task is to grow the OP Bank organically.

Q: I understand that the idea is not completely impossible among the Finnish management.

HK: Well, everybody talks to everybody else here. I have no direct knowledge about what they say, but they are certainly considering all options.

Q: Would that be a good opportunity to enter retail banking business?

HK: The OP Group has currently no plans to adopt retail banking in the Baltic states.

Q: So you do not meet with Erkki Raasuke (head of the merged DNB and Nordea) and discuss it?

HK: I have not met with Raasuke.

Q: When talking to entrepreneurs and banking figures I have understood that there are some expectations regarding you and they are keeping an eye on your bank.

HK: The plan of the OP Bank was simply to enter corporate banking business in the Baltic states. Our present strategy does not say that we should expand into retail banking outside Finland.

Banking and especially retail banking in Europe will be at a turning point due to the coming in force of various directives and OP group is currently focusing on developing its present position in Finland.

As for our activities in Estonia, although our portfolio volume is several hundred million euros, we amount to less than one percent of the group’s overall balance. My goal and what they expect from us is certainly much higher. But the banking business is marathon rather than sprint.

Q: Which sphere has the highest potential in your opinion? Where is the highest growth?

HK. The real estate sector has always been very active in Estonia. I would like to see large investments in other sectors as well, in industry, for instance.

When looking at the Estonian economy, export also has a very important role. The largest trade partner, i.e. Finland’s economy has now begun to grow nicely, which should boost Estonia’s economy as well. I would like to see some Estonian exporting industry invest more in it. We would happily place our money there.

Q: How do you rate Estonia’s general tax environment?

HK: What I wish is that politicians could see the consequences of their decisions. It usually does not happen this way that if I see 100 euros on the table and impose a 10-percent tax, then I receive ten euros.

Changes are necessary for development, but the dynamics can be quite interesting and one has to be able to consider that. For example, the Finnish state decided to increase the car tax a few years ago, believing that since a certain amount of cars is sold annually, the tax rise would bring a certain amount of money to the treasury. But it resulted in lower car sales and the state actually earned less than previously from the car tax and sales tax. To say nothing about the side effects on car-related businesses.

I hope that Estonia’s tax environment will remain as simple as possible and will make investing here worthwhile.

Read other news on the city site of Tallinn.

postimees
OPbank opportunitiesinEstonia
If you notice an error, highlight the text you want and press Ctrl + Enter to report it to the editor
I recommend
No recommendations yet

Comments

Post your comment to communicate and discuss this article.

Politics
Chairman of the Estonian Chamber of Commerce and Industry and one of the owners of construction group Nordecon, Toomas Luman, finds that a prime ministerial candidate should first and foremost be able to answer the question of what will become of the demographic crisis in Estonia. The businessman sees controlled introduction of foreign labor as the solution. A digital construction cluster was created in Estonia a few years back to bring innovation to the s...
Society
Last year saw 27,125 registered offenses, up 0.5 percent from the year before. Violent crime was up by 12 percent to 8,249 offenses. PHOTO: Dominic Lipinski / PA Wire / Press Association Images / Scanpix Growth was biggest for domestic violence – the police launched criminal proceedings in 3,607 cases that constitutes an increase of more than one-third – annual growth of 37 percent from 2,632 cases in 2017. At the same time, reports of domestic violence we...
Society
TALLINN - Ahead of the withdrawal of the United Kingdom from the European Union, tens of thousands of British citizens have chosen the citizenship of some other country, but only one Brit has recently chosen an Estonian citizenship. Spokespeople for the Ministry of the Interior told BNS that only one British citizen submitted an application for Estonian citizenship last year and the applicant was also granted the citizenship. Before that, no Brits had soug...
Society
TALLINN - Experts from Finland, Denmark, Norway and the Netherlands highlighted the importance of decentralization and granting local governments greater decision-making powers at a conference titled "Strong local government -- strong state?" in Tallinn on Wednesday.  All Nordic countries have chosen a model granting local governments significant decision-making powers, thus the central government does not prescribe how local governments are to fulfill the...
Society
The language learning application Drops by game developer Planb Labs, established in Estonia by Hungarian founders, was named Google Play's best app of 2018. With the number of downloads surpassing 10 million, Drops was named Google's app of the year as the revenue of Planb Labs, a company registered in Estonia, increased fivefold, CNBC said. The developer's revenue grew from €335,000 in 2017 to €1.7 million in 2018. The company's shareholders include Hung...
Society
TALLINN - The Estonian Health Board has banned the distribution of chlorine dioxide, also marketed as the Miracle Mineral Supplement (MMS), the A-component of an unused product, meaning the sodium chlorite solution, must be taken to a hazardous waste collection facility. Ester Opik, head of the Health Board's North regional department, said that the banning of the distribution of the product was caused by the fact that MMS, distributed as a cosmetics produ...
Society
Nature cannot abide a vacancy, as the saying goes. If just one year ago, Estonia was battling the sale of MMS and the practice of giving it to children, a new “miracle cure” called Advanced TRS has appeared on the market now. Even though the make-up of the substance is different, the promise to cure autism and cleanse the body of heavy metals, which kind of extreme detox is accompanied by severe side-effects, sounds all too familiar. TRS is recommended to...
Society
Allied NATO battalions will soon mark two years serving in the Baltics. They have worked better than expected but would need prepositioned heavy weaponry and a functional contingency plan in case of a crisis, a report by the International Center for Defense and Security (ICDS) finds. “We do not know how Russia would have acted had we not welcomed allies in Estonia, Latvia, Lithuania and Poland in 2017. I’m afraid they would have tested our resolve,” one of...
Society
The time of filing income tax returns is nearly upon us. The new income tax system, in effect since last year, will obligate many women who went on maternity leave toward the end of the year to make additional income tax payments, while those who give birth in the middle or at the beginning of the year have no such obligation. What this means is that some women will owe the state simply for giving birth “at the wrong time”. Laura Roop, who went on maternit...