Small banks in Estonia have aggressively gone after depositors abroad, often offering better rates than what they advertise at home. Banks say this allows them to quickly boost deposits volume when necessary.
Coop Pank offers its customers a rate of return of 2 percent on a fixed-term deposit for one year in Estonia. Inbank and Holm Bank offer 2.6 percent on an annual deposit. While this is more than the near-zero rates from a few years' ago, it is possible to secure a better rate from the same banks and under similar conditions.
Small Estonian banks have been using the Raisin platform and its German portal weltsparen.de for securing additional deposits for years. Looking up the annual deposit rate offered by Coop Pank via the German website brings up a rate of 2.61 percent, while it is 2.7 percent for Inbank and Holm Bank. This is more than customers are offered direct in Estonia.
Inbank CFO Marko Varik told ERR that a better rate is currently offered in Germany by coincidence. "It was the other way around a week or two ago," he said.
He said that Inbank is using the Reisen portal because Estonian depositors are not actively trying to find better returns after years of zero-interest conditions and are content keeping their money in large banks.
"The deposits are there in Estonia, while it's difficult to attract that money being the smallest player on the market," he remarked.
Coop Pank also said that flexibility is the main reason it is going after the money in Germany.
"Things are clearly rates-dependent there. An attractive rate will immediately see cash rolling in, while you can just shut it down when you're done, without insulting the customer. The thing with local customers is that you have to offer them the full service. We have a mission with our clients [in Estonia]. We have no such mission with German customers," Coop Pank CEO Paavo Truu told ERR.
From the bank's point of view, there is no difference between direct deposits and those handled through the broker. The Guarantee Fund protection always applies.
Coop said that around €200 million of its €1.4 billion deposits portfolio has been sourced through Reisen.
Marko Varik said that while he is not sure he can reveal the exact figure due to stock market rules, just €60.3 million of Inbank's total deposits of €618 million come from Estonia. It has raised €265 million in deposits from Germany and €251 million from Poland.
FSA perceives risks
The Estonian Financial Supervision Authority said that depending too much on platforms could entail risks. "The FSA keeps a close eye on banks' liquidity management to make sure they have enough assets to meet obligations," its press representative Kaisa Gabral said.
"FSA stress tests consider that deposits sourced through platforms can be fickle. The authority has pointed out that going after deposits using various platforms could be subject to disruptions. At the same time, such deposits make it possible for banks to diversity risk and find alternative ways to manage liquidity," Gabral said.
Editor: Huko Aaspõllu