Rauno Klettenberg, the chairman of the management board of the Estonian-owned Holm Bank AS, says that in spite of the coronavirus crisis the bank managed to post an impressive result for 2020: the bank’s total assets grew by 38.5% to reach 77.7 million euros by the end of the year, during which it earned almost 1.1 million euros in profit from its operations on the Estonian, Latvian and Swedish markets.
Klettenberg says that initial growth plans for 2020 had been higher, but that the global crisis forced the bank to adjust them. “Given the overall state of the economy at the moment, we’re very happy with the bank’s annual results,” he said.
The state of emergency declared in March 2020 made clients on all markets more cautious, Klettenberg explained. “Some branches of industry that were hit hard still haven’t recovered from those setbacks,” he added. “More than anywhere else, we’ve seen a slowdown in growth in the business client segment. I’m happy to be able to say though that we’ve managed to increase the number of active contracts in our client portfolio by almost a quarter and that the group’s net lending portfolio grew last year by 28.4%, from 44.6 million euros to 57.2 million euros. That said, our ambitions for this year far exceed that, particularly when it comes to business loans and on foreign markets.”
Klettenberg says that Holm is proud of the fact that it made a success of entering a new market during such a volatile year: the bank is now offering a virtual credit card service to private clients in Sweden. In October 2020 the bank also launched operations in Latvia under the name Holm Bank Latvia SIA and under the Holm trademark, and it has since become the sole shareholder in its Latvian subsidiary.
“The Latvian economy has been a lot harder hit because the restrictions have been in place for such a long time, but our operations there have really taken off,” Klettenberg said. “Last year we grew our net lending portfolio by 250%, which is to say from 2.3 million euros to 7.9 million euros. The financial year did come to an end with a 412,000 euro loss for the subsidiary, but in terms of business development, and given the COVID-19 conditions, that was very much in line with our forecasts and strategy.”
Holm Bank continued to actively promote deposits on its home market as well as in Germany and Austria via the Raisin platform during the year. The value of the bank’s portfolio of fixed-term deposits grew to more than 55.8 million euros by the end of 2020, representing growth of over 57% compared to 2019.
Income earned by the Holm group from interest grew from 10.1 million euros to 14.2 million euros (i.e. by 40%) and its net income from operations grew by almost 50% over the period, reaching 12.23 million euros by the end of the year. The bank’s EBITDA increased by almost 37% from 3.6 million euros to 5 million euros.
For the bank, 2020 came to a close with consolidated comprehensive income of 1.1 million euros, representing a 593% increase on the year before. Taking into account the course of the pandemic, the quality of the bank’s financing portfolio remained at the expected level in 2020, while the share of default loans in the total gross portfolio remained at the level of 7% at the end of the year.
Having acquired its banking licence in 2019, Holm continued to actively invest in 2020. “During the year the bank invested a million euros in fixed assets, the majority of which on IT developments,” Klettenberg explained. “We also invested in expanding to new markets and adding to our team. And those are the areas we’re primarily focussing on this year as well.”
The financial results of Holm Bank can be found (in Estonian) online at here.
Holm Bank AS is an Estonian-owned bank with an operating licence issued by the European Central Bank. Holm owns the Liisi trademark, which last year celebrated its 25th anniversary. Holm Bank’s services include Liisi hire purchase, consumer loans and credit cards, as well as Holm business loans and deposit. In 2020, Holm extended its trademark to Latvia and launched its services on the Swedish market.