Rauno Klettenberg: Overcoming difficulties makes life interesting

CEO of Holm Bank Rauno Klettenberg commends the efforts of the Holm team in the past year and assures that despite uncertain times, they have done a good job together. Learning from previous crises and focusing on maintaining credit quality has kept the bank safe. In his end of the year interview, Klettenberg summarises the main successes and takeaways before stepping into the new year.

He quotes the well-known Canadian cultural critic and psychologist Jordan Peterson, saying that if all challenges and obstacles are removed from a person’s path and there is no hardship in their life, they will stop developing and may therefore become dissatisfied. “Success is sometimes more important than a constant feeling of happiness, as I have also experienced in my life. Unexpected situations, internal stability and dedication is what help you to achieve your goal,” says Klettenberg when summarising the past year.

Of keywords characterising 2021, the Holm CEO first highlights the pandemic and expectations that are constantly moving up and down. This had a direct impact on certain sectors and their workers. All businesses and households have tried to keep themselves going, but restrictions have left a mark on income.

“In this time of uncertainty, Holm’s focus has mainly been on credit quality. We have managed to improve it – the share of non-performing loans has decreased. We cooperated actively with our clients, we were flexible and found mutually suitable solutions. This year’s results were largely due to flexibility. Clients continue to be able to service their loans and dare to include us in making their good plans a reality,” explains the Chairman of the Management Board of the Estonian bank based in Haapsalu.

The bank started the year with a loan portfolio of 58 million euros, which grew to exceed 65 million euros already by the end of August. The volume decreased somewhat in September and October, as a significant share of people used their II pension pillar funds to repay their loans early. At the same time, the Latvian market, which was not influenced by the developments concerning the pension pillar, continued to grow strongly, thus boosting the total volume.

In terms of corporate loans and the deposit segment, Holm’s situation has been encouraging throughout the year. As a result, the bank closes the year with a moderate profit. “Our portfolio and the share of new sales are growing,” says Klettenberg with clear satisfaction with the general developments.

But what taught him the most important lesson this year? “The foreign market. We had our ambitions, but the approach to expansion must be balanced. We did not enter any new markets this year, but next year, we are planning to make some progress while maintaining our current, more analytical expansion strategy. We have managed to grow rapidly in Latvia and our aim there is to increase our market share more forcefully and efficiently. In Estonia, however, our market share is quite large and the competition strong, which results in more organic growth opportunities and slower growth. In terms of growth ambitions, one has to look across the border,” Klettenberg describes the plans of Holm Bank.

Growing economy

According to the CEO of Holm, the economy as a whole has emerged well from the crisis. “This is evident in the small share of loans on a grace period. This applies to the whole market, including us. The numbers show that people have been bolder in making investment decisions than a year ago,” says Klettenberg.

According to him, the financial sector is going strong and there are fewer systematic risks. The volume of private deposits is consistently high and banks are ready to grant loans for financing different projects. This has given a boost to the real estate sector in particular, where prices are soaring owing to low home loan interest rates and pension pillar money used for down payments.

“People have free money and are looking for investment opportunities – several IPOs have shown that there is also a great demand for new equities on the exchange. Investing in real estate is easy and understandable. At the same time, the European Central Bank has made several decisions that aim to cool down the overheating economy and curb the inflation – the coming year will likely see a certain decrease in the growth rate,” Klettenberg notes.

The favourable economic environment has also encouraged Holm to continue with its investments. The bank has invested in increasing its team and product and service development. The largest of our investments were made in technology – we continued updating our new self-service environment, which had begun already last year, and we are transferring an increasing number of products to the new platform. This has made the process of applying for loans considerably easier and more convenient for our clients. IT continues to be one of our most important development areas in 2022 – our team recently welcomed a new head of IT, who has extensive experience in the sector and a new vision and our plans are quite ambitious,” the CEO of Holm confirms.

According to him, Holm’s upcoming service developments will above all be related to offering simpler and more convenient loan products and card solutions. In addition to improving the existing services, the bank is about to launch a virtual card, which offers a much wider range of applications.

A well-functioning professional family

Since receiving the banking licence in 2019, the Holm team has grown a lot and even though Klettenberg believes that each new employee has made the organisation more professional and capable, having a larger staff has increased the need for carefully considered cooperation and organisation of communication.

“We have a very hard-working and active staff, and everyone makes an effort to ensure that our joint activities result in us being able to offer our clients a better service. Our recent satisfaction survey showed that even though our team is generally close-knit, there is certainly room for improvement and deliberation with regard to the cooperation of individual teams. My new year’s wish is to cooperate more smoothly within the organisation and improve the way we include each other in processes – this would help all departments and employees to create more synergy and maintain the general atmosphere and positive mood,” says Klettenberg.

According to him, the initiatives launched in the past months, for instance, monthly joint activities to improve health and well-being, have boosted the team spirit and hopefully, this will be continued with the joint events to be held next year for getting acquainted with each other’s hobbies and interests.

“We spend a considerable part of our day working among our colleagues. I’m genuinely delighted to see how well our people get along and how everyone finds support and acknowledgement from others in terms of both work-related issues and personal concerns and joys. We have developed into a well-functioning professional family – the kind that makes facing new adventures in the next year more exciting,” says the CEO of Holm.