Subscription for Coop shares began on November 18. A successful IPO will see Coop Pank list shares on the main list of the Nasdaq Tallinn exchange. Trading of the soon-to-be-listed company's shares will start on December 9.

I plan to subscribe to Coop shares, even though the decision is not an easy one to make as there are good reasons for and against subscribing. I will have to decide inside a week as the subscription period ends on November 29.

Äripäev held a survey among small investors last week and even experienced investors disagreed in their replies.

The bank's ties to the clients of the Coop chain of supermarkets and shops were mentioned as a strength. This cooperation creates good premise for boosting business volumes, and it is hoped Coop Pank might succeed in repeating the success S-Pankki found in Finland. The latter, also owned by cooperatives, was created a dozen years ago during the previous economic crisis and has grown by leaps and bounds in Finland. Heads of Coop Pank make no secret of the fact they are trying to repeat the Finns' success.

Those who do not plan to subscribe say that the timing is wrong. Markets are booming and growth is expected to slow down. To compare various past ratios, Coop's IPO is too expensive compared to competitors.

On the other hand, the price might seem favorable if the investor believes Coop will manage to grow quickly in the coming years. I remember that the share price was considered too high back when LHV was first listed. History has shown that those who subscribed back then made the right investment decision and must regret nothing.

While many investors hope Coop can repeat LHV's success, it is a gamble as the two Estonian banks cannot be more different.

While the history of the Estonian exchange remembers very successful IPOs, investors have also ended up losing money due to excessive issue price.

Money laundering risks

The interest of foreign investors in the Estonian banking market and Coop Pank could be cooled by money laundering topics. While Coop claims it has managed all money laundering risks, all banks claim that, including those that have found themselves in the middle of scandals.

Speaking in favor of Coop is the fact they took over Krediidipank during a time anti-money laundering was already a priority for the financial watchdog and the takeover took place under the agency's watchful eye.

People thinking about subscribing should look beyond Coop's reports and visions for the future. It would make sense to compare Coop to other banks in the region as there might be a cheaper banking sector share available. Several experienced investors have said that LHV and Lithuania's Siauliu bank constitute more attractive investment opportunities where share price is concerned.

We published in Äripäev's Investor section a great comparison put together by LHV that is helping Coop Pank prepare its IPO covering 16 different banks. I suggest people take a look at that list before subscribing. It is possible you will find a more exciting investment opportunity there.

Äripäev's fictional investor Toomas wrote that Coop Pank could be hurt by its recent strategy of attracting loan clients, accepting less-liquid surety outside major centers and considering borrowers' business expenses and receipt of income abroad.

Yes, the economy is doing well right now, but what about should things change? Can clients whose credit rating is not good enough for major banks be expected to service their loans then?

Strong growth ambition

The share of Coop Pank is made attractive by the bank's strong growth ambition. The bank also has a good record for innovation. Instead of bringing its own ATMs to an already saturated market, the bank decided to make use of its network of shops. The latter were integrated into the banking system, making it possible for clients to withdraw cash in Coop shops and make payments.

The subscription decision has a temporal horizon. I would advise against subscribing if one expects the share price to soar in its first days. I would also not recommend investing using savings set aside for specific purchases.

Without certainty Coop Pank will be able to achieve its growth target, one can subscribe in stages, increasing the number of one's shares in line with quarterly results.

Some investors have said they will not be partaking in the IPO but plan to buy shares once the results are in and it has become clear how the share performed in the initial days or weeks of trading

Therefore, there are several ways of becoming a shareholder of Coop Pank and it is not a commodity soon to run out. An IPO is always akin to buying a hog in a sack as the Estonian saying goes. Only once shares become available to trade will it be possible to say whether it was worth the money.

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