The loan portfolio of the Estonian-owned Holm Bank grew by 8.2% to 62 million euros in 2021, which Rauno Klettenberg, the chairman of the bank’s management board, says is a good result considering the unpredictability of the economic environment. The bank’s customer base grew to 680,000 during the period.
The total consolidated assets of the company increased by 14.4% over the year, from 77.7 to 88.9 million euros, while its total income earned from interest rose to 14.7 million euros, a 3.8% improvement on the same figure for 2020. The bank’s comprehensive income at the end of 2021 was 1 million euros.
“Despite the ongoing pandemic, 2021 can be considered a good year for the Holm group, since our financial results were in line with our expectations,” Klettenberg explained. “We were able to reduce our proportion of non-performing loans and guarantee the stable quality of our loan portfolio as a whole. The growth in our portfolio of small loans is worth highlighting, as it increased by 50.1% over the year and formed 46% of our total loan portfolio by the end of 2021, outstripping both our hire purchase and credit card products.”
Holm extended its loan services to medium-sized and large companies during the year. Klettenberg says that this new step in the business-client segment was motivated by the availability of the required capital and due to the changes in the financial environment brought about by the coronavirus crisis. Sales of business loans in 2021 exceeded expectations, with the portfolio almost doubling.
Although the reporting period saw the termination of the bank’s Swedish operations, the group in fact exceeded its financial obligations at every level. A more conservative approach to budgeting and checks on expenditure ensured an end result that was 35% better than expected at the group level and 59% better at the unconsolidated level.
“We were optimistic when we launched our digital credit card solution in Sweden, but when we analysed the profits on our 18 or so months of operations there, the credit risks they involved and the need for additional investments accompanying our setting up a Swedish unit, withdrawing was the right decision,” he said.
The bank’s Latvian subsidiary, Holm Bank Latvia SIA, grew its loan portfolio by as much as 84.1% in 2021, from 7.9 to 14.6 million euros, although still running at a loss in its second year of operations. This was the result of a remarkable increase in the number of small loans issued. Klettenberg describes the growth of the company as remarkable and indicative of the bank’s potential on the Latvian market. “On both of our markets, here in Estonia and in Latvia, we’ve been constantly coming up with new offerings with which we’ll be capable of providing an even wider range of products and services in the future,” he said. “We’ve retained all of our clients and felt it important, in the unpredictable times we find ourselves in, to continue to take a flexible approach that allows them to successfully implement their plans.”
Klettenberg says the bank has gone into 2022 full of optimism. The forecast rise in consumption and the new services offered by Holm will create the right conditions for continued growth in the bank’s loan portfolio on its markets.
Holm Bank’s financial results can be reviewed here.
Holm Bank AS is an Estonian-owned bank with an operating licence issued by the European Central Bank. It operates under both the Liisi and Holm trademarks. Its services include term deposits, physical and virtual credit cards, private and business client financing and hire purchase. The bank also offers term deposits in Germany and Austria via the Raisin platform and is the sole owner of Holm Bank Latvia SIA, which operates as a financial services provider in Latvia.