TOP ESTONIAN ENTERPRISES

What was the year 2008 generally
like for Swedbank?
Actually, the most important thing was that within
a year, we managed to turn an organisation, the
entire culture of which is built on growth, into an
organisation which could adequately correspond
to the needs of a shrinking market demand without
revolutions and excesses, while at the same
time preserving efficiency. Our revenue decreased
by 2% before provisions and the level of expenditure
remained the same. The operating profit only
decreased by 3% before the provisions, and the
revenue and expenditure ratio, which at the best
times has been 38%, was slightly over 39%. We
have also maintained this figure in 2009. Thus,
within 2008 we managed to create a basis to further
operate as efficiently in the banking environment
in 2009 as before.
In which ways have the world’s financial
markets and the poor state of economy
in Estonia influenced Swedbank?
I remember that at the beginning of 2008, we
held an information day for the employees and
after my first presentation as the manager of
the bank, I felt as if a mean Santa Claus had entered
the room and taken away all the presents.
We then talked at length about the negative outlook
on the developments in the economy and it
was certainly similar to shock – on the one
hand, the increasingly worsening foreign economy
and on the other, the economy in Estonia
after the burst of the real estate bubble. All this
was discussed in the first presentation and the
consequence was not a quick mental turnaround
of the organisation – the change in internal
attitudes to match the environment was a
long and time-consuming process.
What are the most important activities
that you paid the most attention to last year?
It is very easy to answer this question. Those
three main activities were: Credit, Costs and Customers
– three capital C-s. We obviously also had
to respond to changes in the credit portfolio quality
and compensate the decrease in revenue by
decreasing expenditure. The growing market,
which was based on providing services and products,
had now become a customer-friendly market
increasingly more complexly focused on the
needs of the customer. For us, since the spring in
2008 inside the organisation this meant a strong
shift towards the customer-friendly management
model. We have also worked very seriously on improving
service.
How should Estonian manufacturing
enterprises be feeling at the moment?
The worst period for Estonian manufacturers
was this spring, when no more orders were
coming in. If you have no orders but there are
employees and a bank loan, what do you do?
This is a situation in which the society should
have some answers in store to the question:
what to do in difficult times? I am generally not
in favour of aid packages but this was a really
extraordinary situation. In the automobile industry,
for instance, if nobody buys cars today, it
is clear that the cars already purchased will
wear off within about five years and people will
start buying again. The question is what is the
manufacturer supposed to do for the following
two years? In several Estonian manufacturing
enterprises, the situation was similar. By now
the exporters I have been in contact with recently
are saying that there is more work than in
spring. It seems that recovery is taking place at
the moment – I dare not predict whether there
will be growth. The recovery of manufacturing
does certainly not necessarily mean that the
level of unemployment will not increase. We
were afraid of July, but July was not actually
that bad. It was probably the influence of the
summer – some people went home to enjoy
their holiday pay, others did seasonal work. We
will now see in autumn whether the fall will be
painful or not.
What would the economic forecast
of the Swedbank manager be?
I think that it is currently most important that the
situation will probably not get any worse. If there
was a relatively sharp increase in the world’s
stock markets in spring and there were no macro
indicators to back it up, by now macro indicators
have started to support the upturn. It is naturally
different by regions. At the same time, the external
environment has improved, capital markets
have recovered and the availability of money is increasingly
on the rise. It is interesting that the situation
on the capital and money market is
improving on a weekly basis and the credit risk
prices keep falling. This means that the external
environment, particularly the mood in the external
environment, is positive.
If we look at the immediate future in Estonia,
the prices of real estate, for instance, have
dropped so much that the average price per
square metre and the average salary are starting
to come close to each other – this is a level
that could be sustainable. I have talked to developers
and according to them, this is the level
at which we could start building again.
But everyone is currently probably waiting to
see what is going to happen and when the economy
in Finland or Sweden, for instance, will recover.
We might be at a breaking point at the
moment, but we will first have to wait for the autumn
to arrive, it is too early to make far-reaching
conclusions yet. I have previously rather
been known as a person with a negative outlook
but at the moment, I am positively minded about
the future. •
Financial Brokerage Enterprises
Place
Sales Change Net profit Change Return Labour costs Efficiency per Investments %
Enterprise in sales in net profit on equity per employee employee of the first
*group
th. EEK place % place th. EEK place % place % place EEK/month place th. EEK place th. EEK place (0...100)
1 SWEDBANK AS* 15,553,500 1 103.3 10 6,109,100 1 82.9 9 18.8 9 29,579 5 1,868 5 886,200 1 100.0%
2 SMS LAEN AS* 90,415 8 125.4 4 25,186 6 236.2 1 64.0 2 52,377 2 4,305 2 1,429 8 89.2%
3 GILD PARTNERS AS* 156,108 5 116.5 5 67,534 4 83.9 8 63.4 4 56,408 1 2,439 3 3,688 6 65.6%
4 3 STEP IT OÜ 212,103 4 99.5 11 4,242 7 88.1 6 29.5 6 46,055 3 9,222 1 12 61.2%
5 GVANDRON OÜ 2,228 14 144.0 1 525 10 154.0 2 64.6 1 13,370 14 557 12 1,316 10 59.3%
6 MEGARAM OÜ 2,969 12 129.7 2 38 12 100 5 63.8 3 16,748 13 371 14 14 47.4%
7 TAVID AS* 122,173 7 113.3 6 65,710 5 102.1 4 41.5 5 24,360 8 1,164 8 1,332 9 40.6%
8 EESTI KREDIIDIPANK AS 358,390 3 111.0 8 71,421 3 86.4 7 20.5 7 26,640 7 1,765 6 7,883 4 36.0%
9 ERGO KINDLUSTUSE AS* 924,357 2 99.2 12 124,615 2 117.2 3 17.3 10 19,997 10 1,675 7 10,049 3 30.1%
10 PÕLVAMAA HOIU-LAENUÜHISTU TUÜ 2,460 13 111.8 7 122 11 50.0 10 4.5 12 29,430 6 615 11 9 13 26.2%
11 TALLINNA ÄRIPANGA AS* 129,700 6 99.1 13 -7,500 14 -2.2 13 34,766 4 2,027 4 21,900 2 23.2%
12 KINDLUSTUSEST KINDLUSTUSMAAKLER OÜ 15,384 11 108.9 9 532 9 30.0 12 19.2 8 21,542 9 440 13 99 11 21.5%
13 IIZI KINDLUSTUSMAAKLER AS* 84,613 9 126.6 3 -2,911 13 -30.5 14 19,075 12 631 10 4,064 5 17.8%
14 EUREX CAPITAL OÜ* 28,822 10 98.6 14 4,038 8 33.6 11 14.4 11 19,901 11 721 9 2,381 7 15.5%
www.konkurents.ee
1 EUR = 15.6466 EEK; 1 EEK = 0.0639 EUR; based on 2008 data
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