Holm Bank, an Estonian-owned bank, has announced a public offer of subordinated bonds, under which it plans to raise up to two million euros at a fixed interest rate of 9.5% to strengthen its capital base and continue to grow its loan portfolio.
In the offer, which will start on 10 May and run until 24 May, both retail and institutional investors will be able to subscribe to unsecured subordinated bonds with a 10-year maturity. The annual interest rate on the bonds is 9.5% and interest payments are made twice a year. The offer consists of 2000 bonds with a nominal value of 1000 euros. Bond trading is planned in Nasdaq Tallinn’s First North multilateral trading facility.
“Holm has been preparing to attract investors since acquiring a banking licence in 2019,” said CEO Kaspar Kalvet. “We have invested heavily in development, which has enabled us to launch a range of new modern loan products in Estonia and Latvia. 2023 was the most successful year in our operational history, with Holm’s net loan portfolio growing by 41%, deposits growing by 49%, and a record net profit of 1.6 million euros. The issuance of AT1 bonds, which are part of the tier 1 additional own funds, also took place.”
Based on the loan volume growth rate in 2023, Holm is the fastest-growing bank in Estonia among the banks supervised by the Financial Supervision Authority, Kalvet says.
“Our loan volume has grown by an average of 36% per year over the past five years,” explained Kalvet, “and this momentum is evidently not slowing down in the coming years. We are entering the next phase of growth as we plan to expand our diverse portfolio in both Estonia and Latvia, increase Holm brand awareness, and multiply our profitability. We want to give all interested parties the opportunity to share in the success we plan to achieve on this journey.”
He emphasised that the bank’s main competitive advantage is in focusing on specific services with high demand and growth potential. “This has given us the flexibility to respond quickly to our clients’ expectations. We have been able to launch several new loan products in a short period while maintaining the high quality of our loans. Our non-performing loan ratio is low and the share of secured loans is growing over time,” Kalvet added.
Holm will issue bonds with a maturity of 10 years, and the bank has the right, but not the obligation, to redeem the bonds early after five years, subject to the approval of the Financial Supervisory Authority. The offer is the first part of the unsecured subordinated bonds programme approved in May 2024, under which Holm can raise up to eight million euros in total.
Holm Bank AS is an Estonian-owned bank with an operating licence issued by the European Central Bank. The bank owns the trademarks Liisi and Holm. The bank’s services include term deposits, physical and virtual credit cards, retail and corporate financing, and hire purchase. It also offers term deposits in Germany and Austria and owns Holm Bank Latvia SIA, which operates as a financial services provider in Latvia.