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Estonia's Tallinna Pank receives new funding from EBRD
One of Estonia's leading banks, AS Tallinna Pank will receive a DM 5 million (ECU 2.6 million) 10-year subordinated loan from the European Bank for Reconstruction and Development (EBRD) to increase its capital base. This will be the second financing that Tallinna Pank has received from the EBRD.
"The loan will enhance Tallinna Pank's capital base, enabling the continued expansion of the bank's business activities, including its private sector loan portfolio. It will also strengthen Tallinna Pank's position in the Estonian banking market and promote competition", said Jonathan Harfield, Head of the EBRD's Tallinn Office.
Last June the EBRD extended a DM 12 million credit line to Tallinna Pank to provide Estonian private sector enterprises with new medium-term financing. The credit line has now been fully disbursed to 12 sub-projects in food processing, trade, real estate and manufacturing.
The growth of Tallinna Pank's deposit base, together with the recent success of Estonian banks in accessing two to three-year money on the international markets, means that capital, rather than term-funding, will be the principal constraint to Tallinna Pank expanding its private sector portfolio and business operations. Consequently, the bank requested the EBRD to provide the subordinated loan to expand its capital base.
Founded in May 1990, Tallinna Pank is now the fourth-largest bank in Estonia by shareholders' equity and by asset size, with a total market share of 10 per cent. It is 94 per cent privately-owned and its shares are quoted on the Tallinn Stock Exchange. The bank offers its corporate and retail clients a wide range of financial products at competitive rates.
At the end of January 1997, the EBRD's exposure in Estonia was ECU 149 million, of which ECU 50 million was in the financial sector.
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