Retailer Coop together with Inbank is acquiring Eesti Krediidipank, which will be renamed Coop Pank later this year. The venture hopes to bring everyday banking services back to areas the major banks have left. The business of the new bank is to be based on Coop’s local networks.
The aim of the acquisition was to create a new bank with a distinctly different strategy from the banks currently operating in Estonia, Inbank told the stock exchange on Monday.
The transaction will be made in two stages. As a first step, retailer Coop Eesti will acquire 59.7 percent, and Inbank nearly 10 percent of the shares of Krediidipank. The bank will then acquire Coop Finants, a joint venture of Coop Eesti and Inbank, and Krediidipank Finants, a subsidiary of Eesti Krediidipank and Inbank, as a result of which Coop Eesti will own 55 percent, and Inbank 25 percent of the company.
Eesti Krediidipank will then continue to operate under its current name until autumn 2017. During spring and summer, it will prepare to start offering new services and products at Krediidipank’s offices and Coop stores, as well as through electronic channels. In autumn, the bank will then be rebranded as Coop Pank.
The aim of both Coop and Inbank is to buy out the remaining 20 percent of minority shares of Eesti Krediidipank, and bring in an additional financial investor this year.
Chairman of the supervisory board of Inbank, Priit Põldoja, said that Inbank had worked very well with both Krediidipank and Coop. “The previous good cooperation is a strong foundation for the success of this unique joint venture carried out with Inbank’s initiative and contribution. We have knowledge and experience in the financial sector and technology, while Coop Eesti has strong customer relationships with hundreds of thousands of Estonians as well as more than 350 shops across the country. I believe Krediidipank is a great platform for realizing Coop’s vision in the financial sector,” Põldoja said.
CEO: Strategy is to bring everyday banking back to all areas of Estonia
The Estonian Coop Pank will be headed by Margus Rink, former head of retail banking at Hansapank (now Swedbank). “Coop Pank will be created with a clearly different strategy: we want to provide basic banking services to Coop’s 600,000 customers and small and medium-sized enterprises connected with them, at Coop stores as well as through internet and mobile banking services. Our offer to customers will be based on the synergy between trade and banking, as well as customer benefit,” Rink said in a press release on Monday.
Coop CEO Jaanus Vihand said the aim of the new bank was to bring back daily banking services to places from which large banks had pulled out over the last few years. “Coop is Estonia’s largest and a unique cooperative organization consisting of 19 cooperatives with 80,000 consumer owners and almost 600,000 loyal customers. It’s important to Coop’s owners and loyal customers not to have to travel dozens of kilometers to use elementary banking services,” he said.
As Inbank’s strategy is to grow with its existing products and technology and reach new markets in Europe, in the medium term perspective it will eventually sell its stake in Coop Pank.
Inbank started operating as a bank in April 2015, offering services via its internet bank and a large partner network. Inbank and its subsidiaries have more than 160,000 active customer contracts in Estonia.
The Russian financial group VTB until now owned 59.7 percent of Krediidipank. In November 2016, VTB’s press service told BNS that the group was in negotiations to sell its stake.
Krediidipank earned a profit of 1.8 million euros in 2015. Deposits grew by nearly 29 percent, amounting to €267 million. The growth of deposits boosted the balance sheet total, which surpassed €305 million. The volume of loans increased by €2 million to €153 million. The bank has not yet published its results for 2016.
Editor: Editor: Dario Cavegn
Source: BNS, ERR