[vc_row][vc_column][vc_column_text]The profits of commercial banks in Estonia have surpassed pre-crisis levels, mainly due to the growing volume of loans.
Banks’ lending portfolios are growing thanks to the increasing number of people who decide to undertake the long-planned purchase of residential property, as well as the growing volume of loans to commercial firms.
However, banks have enough funds on deposits to finance any type of loan, reported “The Current Chamber”.
“If last year there was a fear that credit losses might arise during the coronacrisis, then to date they have not been realized, and the profits of banks and leasing companies have remained relatively good.”, comments by Bank of Estonia economist Raido Kraavik.
The situation in Estonian credit institutions resembles climbing the stairs. Last summer, banking sector profits plummeted from €113 million to €66 million as a result of the crisis, but since then profits have been rising: $93 million in the last quarter after €100 million in the first quarter of the year.
However, profits in the second quarter exceeded last year’s level.
“Banks do well when they do well with customers, with the economy. It’s a very logical connection. During the coronary, when customers were anxious and waiting, banks were also quiet. And as customer demand grew, so did bank performance,” Coop Bank Chief Margus Rink explained.
“In the long run, the biggest risk for the bank is credit risk. The question is whether we are properly assessing the risks of the deals we are now making in a very competitive market, and whether the money will eventually come back to us,” he added.
Competition creates market entry for five relatively small banks along with two large Swedish banks. So far, it’s not very big, but people have started distributing to banks, doing calculations on one, and leasing and borrowing at another bank.
Nevertheless, there is still room in the Estonian banking sector to improve the terms and conditions of loans.
[vc_row][vc_column][vc_column_text]On Thursday, the Estonian fintech company Wise (formerly TransferWise) announced entering the London Stock Exchange through the direct listing (DPO).
A highly capitalized company does not intend to raise additional funds on the stock exchange, so a direct listing is planned. “Unlike traditional IPO, a direct listing is a fairer, cheaper, and more transparent way to expand our ownership,” explained Wise.
Direct listing means you can trade existing stocks. The retail remittance platform, established in 2011, has evolved into a global payment network offering international banking services to more than 10 million private and business clients.
[vc_row][vc_column][vc_column_text]Still, the company has been granted a European banking licence does not yet offer a term deposit service. Revolut has submitted a European licence for banking services in Estonia on Monday. At present, the company has 40,000 clients in Estonia, Revolut representatives said in a press release.
In addition, customers can store their funds in a bank account and convert the currency in a mobile application. At present, Revolut does not offer a fixed-term contribution but is considering the possibility of providing this banking service, Ingrid Downaravciene ERR said. Revolut Bank CEO Virgilius Mirkes noted that new products and services would be launched in Estonia shortly.
Last year Revolut started banking activities in Poland and Lithuania, and last week in Latvia. Revolut Ltd – is a British financial technology company that offers banking services including debit card, currency exchange, stock exchange, cryptocurrency exchange and peer-to-peer payments. The company began operations in 2015.
Revolut is famous for exchanging money with no hidden fees, as well as buying cryptocurrency and spending money with detailed analytics. There are more than 15 million customers worldwide.
[vc_row][vc_column][vc_column_text]The situation is stabilising as banking institutions begin to invest in postponed projects.
“Compared to the economic crisis a decade ago, the current viral crisis has had little impact on the financial sector. Despite the uncertainty caused by the pandemic, during the first wave of Covid-19, a change in the credit schedule was desired by a relatively small share of enterprises and individuals, and the «stagnation» of the housing credit market did not last long. Bold to take risks slowly returns to enterprises, delayed investments begin to materialise, and banks dare to finance all this,» — reported on the findings of the Development Monitoring Center report The Impact of the Viral Crisis. Scripts until 2030» expert of this organisation Uku Varblane.
Uku also noted that new financial technologies would set the tone along with traditional banking services in the following years. Upcoming opportunities could offer the internet of things and contactless payments.
However, the insurance sector was affected by the virus.
For example, due to travel restrictions, people no longer needed appropriate travel insurance, and the impact of the crisis on businesses focused on this area was huge. The crisis did not have much effect on the activity and volume of life insurance companies.
According to the expert, the overall change in the financial and insurance sectors in response to the COVID-19 pandemic leads to the development of virtual services.
“Innovation is facilitated by the need to offer customers convenient services in remote or digital form. The development of web channels is especially noticeable in the insurance sphere, where the presence of physical office becomes increasingly rare,» – explained Uku Varblane.
The specialists of LKS Consult OÜ will be happy to assist with company registration in Estonia.[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column][vc_column_text]Coop bank decides to mitigate cryptocurrency regulations and now allows its clients to buy and sell cryptocurrency for personal usage by using Coop bank account.
“Although banks are still very cautious about cryptocurrencies because of the risk of money laundering, we believe that there is no longer a reason to ban Coop Pank customers from buying and selling cryptocurrency for their use,” — said Heikko Meyer, a board member and risk-taker, Coop Bank manager.
He adds that recently the interest and trust of investors has arisen towards cryptocurrencies, especially bitcoins.
Still, changes do not apply to service providers of crypto wallets and other intermediaries who receive funds from third parties to obtain cryptocurrency for them.
“Service providers will continue to be subject to stricter rules that would preclude them from using the Coop bank platform, as such activities require a separate licence. Cryptocurrency carries a higher risk, and banks are required to develop appropriate measures and procedures and train personnel to reduce it,” — Miae explained.
[vc_row][vc_column][vc_column_text]As cryptocurrency gaining more and more popularity, the Estonian Ministry of Finance considers adapting the law allowing crypto transactions to become more transparent.
Despite some Estonian banks offering the opportunity to buy corporate stocks selling bitcoins, investors approach the opportunity carefully. It could be explained by the instability of the crypto market that is poorly predictable with an uncertain reputation. In addition, the law regulating cryptocurrency is not fully adjusted.
“From the law’s perspective, this is still a grey area, as it is only partially regulated. Compared to banks, classical investment companies, securities exchanges, the cryptocurrency law does not work at such a level. We now have a regulation that firms offering major cryptocurrencies and platforms are required to register with the Money Laundering Data Bureau,” — says Treasury Department Chief Thomas Auwert.
Currently, around 400 companies are offering different services related to cryptocurrency. However, this year, some severe changes to crypto regulations could be implemented, allowing to combat crimes.
“Enterprises that offer services should be regulated, those who offer intermediary services or creation of virtual wallets. This should make clarifications to the industry. At present, apart from issuing a license from the Bureau, there are no more rules on money-laundering,” — says cryptocurrency expert Asse Souga.
At the moment, it is possible to invest in Bitcoin through LHV bank by opening a particular investment account.
There are some legal nuances unique to crypto business that are not inherent in any other type of business. As with any other type of e-business, setting up banking for a virtual currency company is straightforward. The purpose of this blog post is to break down the issue and provide a solution.
Cryptocurrency businesses have yet to be legally regulated in many jurisdictions around the world. The cryptocurrency market in Estonia is strictly regulated by law. The government regulations in Estonia are credible, stable, and provide complete legality to crypto businesses.
Crypto entrepreneurs still face challenges when it comes to opening bank accounts. As no Estonian banks deal with high-risk businesses (crypto, gambling, gaming, CBD, adult, etc.), it is not possible to open an account at one of them. It is quite common for the owners of crypto businesses to run fraud operations and break the law by sponsoring terrorists, for example.
More and more cryptocurrency businesses continue to develop and emerge, despite traditional banking institutions’ slow adaptation to virtual currencies’ contemporary world reality. Getting a banking account is an important step for any crypto company since it is required to operate, serve customers, and receive payments.
Also, high-risk industries tend to be more complicated and costly to open and maintain compared to other businesses. Obtaining all the necessary documents and complying with all regulations is the most challenging part of the process.
When it comes to crypto businesses, which face a higher level of risk, risk assessment is also important, as it helps prevent unexpected problems. A risk assessment and a detailed market overview can be obtained by consulting professionals.
Using this method, LKS Consult OÜ will find the most convenient and profitable solution for your crypto-company, saving you time and money. Our research identified the best bank/payment service provider to open an account for high-risk companies after comparing a large number of them.
Country
Onboarding time
Minimum deposit
Onboarding fee
Lithuania
From 7 business days
From 0
From 400 EUR
United Kingdom
From 1-2 business days
From 0
From 500 EUR
Dubai
From 3-5 business days
From 1,500 EUR
500 EUR
Puerto Rico
4-5 business days
From 0
750 USD
Dominica
From 2 business days
From 0
From 3,000 EUR
Offshore
From 5 business days
From 1,000 EUR
none
*In accordance with the bank’s specifications, the final terms may differ.
Besides consulting firms, LKS Consult OÜ offers other services as well. A third party will evaluate your case on a case-by-case basis with a more in-depth understanding of your circumstances. There are a number of variables to consider when choosing a service, including the onboarding fee, onboarding time, deposit, and other terms.
On Thursday, the Estonian fintech company Wise (formerly TransferWise) announced entering the London Stock Exchange through the direct listing (DPO).
Still, the company has been granted a European banking licence does not yet offer a term deposit service. Revolut has submitted a European licence for banking services in Estonia on Monday. At present, the company has 40,000 clients in Estonia, Revolut representatives said in a press release.
The situation is stabilising as banking institutions begin to invest in postponed projects.
Coop bank decides to mitigate cryptocurrency regulations and now allows its clients to buy and sell cryptocurrency for personal usage by using Coop bank account.
As cryptocurrency gaining more and more popularity, the Estonian Ministry of Finance considers adapting the law allowing crypto transactions to become more transparent.