Bigbank was issued a precept by the Estonian Financial Supervision and Resolution Authority (FSA) on Monday after an onsite inspection revealed that the bank's credit risk management and control wasn't in full compliance with legal requirements.
During the onsite inspection, the FSA assessed the general governance, compliance function, the management and control of IT risk, credit risk and liquidity risk, and the accuracy of reporting and system of suitability assessments of the bank's management bodies and key function holders, Bigbank said in a market notice published Monday evening.
Based on the FSA's assessment, the credit risk management and control of Bigbank AS, which is headquartered in Tallinn, did not fully comply with the requirements set out in applicable legislation.
"Bigbank takes all applicable and current regulatory requirements with the utmost seriousness," said Mart Veskimägi, member of the board and head of risk management at the bank. "To date, we have already eliminated several deficiencies, enhanced internal processes and updated internal regulations. We have an action in place, which has been coordinated with the FSA, to address and rectify all identified shortcomings."
According to the FSA's own press release, several of Bigbank's internal regulations did not comply with requirements, nor did the bank always follow existing internal regulations. The precept only addressed the shortcomings identified in credit risk management and control, however, where shortcomings were identified in the methodology used for the calculation of discounts, among other things.
By law, the FSA has the right to publish on its website the contents of precepts issued to creditors, including the type and scope of any rule breaches, the details of the individual responsible for the breach as well as information regarding challenges to or repeals of its decisions. Precepts may be appealed at Tallinn Administrative Court within 30 days of notification of the administrative decision.
Bigbank AS is an Estonian capital-based bank specializing in loans and deposits for private and business customers. In addition to operations in Estonia, the bank also has branches in Finland, Sweden, Latvia, Lithuania and Bulgaria, and offers its products on a cross-border basis in Austria, Germany and the Netherlands as well.
Bigbank's total assets exceed €2 billion.
Editor: Aili Vahtla