Eesti Ühistupank (Estonian Cooperative Bank) was established on Tuesday by 119 individuals and 34 corporations.
This is the first cooperative bank in Estonia since the country regained its independence in 1991.
Taavi Aas, acting mayor of Tallinn and member of the bank's board, said the aim is to launch a universal quality bank with a wide base of investors, which focuses on serving Estonian people and companies.
Mae Hansen, the chairman of the board, added that the cooperative bank makes decisions with local development in mind and it helps to diversify the situation in Estonian loan market.
“Almost 90 percent of the market is dominated by four banks and these are all based on Nordic capital,” Hansen told ERR. “Imagine the situation if the next financial crisis is to take place in the Nordic countries. It will have a tremendous effect on our market. That's why we need to diversify, and having a cooperative bank, which is based on local capital, is of great help here,” she explained.
The cooperative bank is the initiative of the City of Tallinn, but includes founding members from all over the country. Tallinn City Council allocated 5 million euros of city funds to the establishment of the bank last week. The Reform Party faction of the city council called the allotment a waste of tax payers' money.
Once the bank gets an approval from the Financial Supervision Authority, it will start handing out loans to private persons and companies, as well as agricultural, energy and housing societies. The bank should open its doors next fall.
The CEO of the new cooperative bank is Ülle Mathiesen.
Editor: M. Oll