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Small Bank Upstarts Not Saddled by Bubble-Era Debt
Small banks in Estonia have increased their loan volumes in the financial crisis while bigger banks have lost some of their market share and loan portfolio.
Chairman of SEB's management board Riho Unt told ETV that large banks are seeing high depreciation on their portfolios as demand is low.
"Major banks have issued a great many loans, but it has not been enough to cover the decrease in their portfolio. The numbers are in favor of smaller banks," said Unt.
The Estonian branch of the Italy-based pan-European lender UniCredit, for instance, began operating in the first year of the recession and was not burdened by risk amassed in the bubble years.
"In Estonian terms, we lack the negative experience of when the market collapsed in 2008. Many customers had a difficult time but we were starting from a blank slate," said director of the UniCredit Bank branch Taavi Laur.
Laur said the growth in lending in the recession does not mean greater risk.
"There are customers in the case of which we found that they had been treated unfairly or we appraised their credit risk differently from from other banks. Maybe there are differences in the credit policies of Scandinavian banks and banks on the Continent," says Laur, who said he thought it a good development that the role of Scandinavian and other banks be balanced in the sector.
Despite the trend, the loan portfolios of small lenders like UniCredit, Big, DnB Nord or Krediidipank are still 15-25 times smaller than those of Swedbank.