Q: Could you provide us with a brief historical background of Hansabank?
A: Hansabank started operations as an independent bank in January 1992 with 13 employees. Now the Hansabank Group employs more than 3,000 professional and innovative persons in Estonia, Latvia and Lithuania.
Q: Who was the founder of Hansabank and what was the concept of the bank?
A: Estonia lacked high quality banking services in the post-1989 period when trade relations were being liberalized. In June 1991, when Hansabank started as the Tallinn representation of another bank, Estonia was still a part of the former Soviet Union. We regained independence later, in August. A couple of weeks after setting up Hansabank we had tanks in the streets of Tallinn and Mikhail Gorbachev had been detained in the coup. Later Boris Yeltsin gained control and the situation normalized.
In 1992 we started independent operations and the initial idea was to be a corporate and investment bank. The bank was founded by 9 private individuals.
Q: Was it fully based on private capital?
A: Yes, the bank´s starting capital was modest indeed. It was quite inexpensive to start a bank back then - the minimum capital requirement was 3 million rubles (USD 15.000). The beginning was successful and in 1994 we held our first international share issue increasing the bank´s equity capital by EEK 100 million, which accounted for 30 percent of the shareholders´ equity at the time. The same year we took a loan from the EBRD. In 1996 we bought a bank in Latvia, today's Hansabanka, and in July 1998 we merged with Eesti Hoiupank (the Estonian Savings Bank). In the autumn of 1998, Swedbank bought 52.6% of Hansabank. Last July we started operations in Lithuania and are now operating in all the three Baltic states.
Q: What is your market share in Estonia and the Baltic countries?
A: In Estonia we control 55 percent of the market in terms of assets and 58 percent in terms of deposits. In Latvia we are currently No 3, and shall be No 2. We have just started in Lithuania. All in all, our market share in the Baltic states is around 25 percent.
Q: What was the drive behind Hansabank when it was originally founded? What kept you going and motivated?
A: I was not a founder of Hansabank. I started with the bank in June 1991. The underlying reason why we have been able to obtain such strong position is innovation and focus on delivering high quality financial solutions to our customers. Our IT products are the best - we possess the newest technology and we have had an online system since the very beginning. Today we have 120,000 Internet bank customers.
Q: You were the first bank to introduce fees for your Internet banking services. Why did you opt for that?
A: Internet banking is a very valuable service and we have invested a lot into the development of new added value functions. I think that it was a mistake that the fees were not introduced in the beginning when the Internet banking service was launched. It is always more difficult to put a price on a service than to increase the initial price.
Q: Usually it is the other way round. You start with a fee and make it more attractive by reducing the price.
A: It was a mistake that we started with a free service. Why did we introduce a fee? Because development is expensive and all new Internet services are costly. It is a product and every product has a value.
Q: What is the difference between your bank and other Estonian banks? Why do the customers to come to you?
A: Hansabank has a history of innovation and good service. When we merged with Hoiupank (the Estonian Savings Bank), it owned an extensive retail banking network and we merged the two assets. Last year was very difficult for our biggest competitors. There are several reasons why we are more successful.
Q: What are you doing to stay ahead of competitors?
A: We want to be the best in the Internet business
and we are investing heavily into it, However, we
do not think that Internet will take over all business.
I believe that a great challenge for us is combining
the infrastructure we currently have - 129 branches,
351 ATMs and the Internet. We have excellent staff
everywhere in Estonia and with that asset we can
create new values. |
Q: You are one of the largest organisations in Estonia. Could you tell us about your financial indicators in 1999?
A: Our profit stood at EEK 815 million, which is more than USD 50 million. Our group's assets amounted to USD 2.2 billion. The second largest banking group in the Baltic states has USD 1.3 billion in assets.
Q: You are a listed company. How has your stock been performing over the last two to three months?
A: After the Russian crisis the price of the shares plummeted to less than EEK 50 at the end of 1998. This was below their book value. Now it is around 135.
Q: Has it helped to raise capital?
A: We raised capital in 1998.
Q: Do you focus more on corporate or retail clients?
A: We are more of a universal bank. In Lithuania we are more corporate, in Estonia and Latvia we are a universal bank.
Q: Could you share your views on the economic situation in Estonia with our readers?
A: We have had difficult times but these are over now. The year 1997 was successful for the Baltic countries because of the boom in Russia and a bulk of our exports went there. After the Russian crisis in 1998 we posted negative growth, but now the economy is recovering and we are optimistic about the developments. The potential of Estonia is that we have a big port in Tallinn. Being a small country with a population of 1.4 million we have to learn to make business. Take the Netherlands, Singapore and Hong Kong - they all have big neighbors and good port facilities. Germany uses the ports of the Netherlands while China makes use of Singapore and Hong Kong. I think that could be an option for Estonia - to be a thoroughfare on the way to the St. Petersburg area. We have the necessary equipment, warehouses and the railway. We are the gateway to Russia.
Q: What do you think of joining the European Union?
A: That would give us extra stability. Estonia is going to be a member of the EU and at the same time we are geographically very close to the northwestern region of Russia.
Q: What role would you like Hansabank to play in the future?
A: In Estonia, we want to maintain our market share and promote the economy. In Latvia and Lithuania, we aim at increasing the market share. In our view, low standards of living compared to the European average and small salaries are a major problem for Estonia. Hence, we want to promote exports and economic growth. It is very important to increase salaries and retain our human resources.
Q: What are you as a bank doing to make sure that foreign investors know about your products and how will you accommodate them once a they are here?
A: It is a long story. Promoting ourselves and improving our services - this is a daily job.
Q: Are you ready for the influx?
A: We are ready to compete with everyone.
Q: You have been the chairman of the bank since January 1999. What has been your greatest challenge as a chairman?
A: Last year was interesting for the bank. We finished the merger we had started in 1998; we introduced our modern and universal bank-positioned brand and new corporate identity and the new values of the organisation. We launched operations in Lithuania and increased our market share in Latvia. We are proud that we have been capable of maintaining such a big market share in Estonia. Last year we posted a profit of EEK 815 million while our biggest competitor here in Estonia made EEK 100 million - eight times less. That is an achievement.
Q: What would be your message to the readers of Forbes Global?
A: Estonia is a small country but we have a lot of unused potential here. I believe that Estonia is like Hong Kong or Singapore 20 years ago. |
