KredEx makes profit of 0.9 million euros

The KredEx Foundation made a profit of 0.9 milllion euros last year (0.9 million euros in 2012).

“Last year was characterised by active work in operations of financing companies and investments as well as residents’ purchases and reconstruction of homes. In addition to the provision of existing services, we developed several new solutions in the areas of loans, venture capital and sureties. For the development of companies’ operations, loans remain important, whilst the overall risk levels in the economic environment declined and competition amongst banks became more intense last year, as a result of which banks are willing to finance stronger companies on increasingly more attractive terms. It is primarily start-up, small and micro companies that need additional guarantees by KredEx, which make no less than 71.3% of the annual volume of sureties. Furthermore, sureties by KredEx are an important source of help especially for young families when purchasing homes and for the performance of renovations on apartment buildings that are small or that are in remote areas,” said Andrus Treier, CEO of KredEx.

KredEx’ gross operating revenue amounted to 6.5 million euros, down 8.3% from 2012. That includes revenue related to guaranteeing loans, which reached 2.9 million euros, and revenue from interest on loans, which amounted to 2.6.million euros.

To cover losses, there were appropriations of 2.3 million euros in 2013 (3.4 million euros in 2012). Indemnified losses totalled 2.5 million euros in 2013 (3.8 million euros in 2012), with the majority accounted for by losses resulting from guarantees for business loans. Over the course of its entire existence, KredEx has indemnified losses of 22.1 million euros.

In providing financial services, KredEx is above all guided by public interest, assisting companies and residents where the market is not functioning. To accomplish its mission, KredEx has to take sufficient risks yet break even when several years are averaged. That said, considerable profits or losses may be made in individual years. Since its founding in 2000, KredEx has made a total profit of 5.0 million euros.

Last year saw the creation of the first funds under the Baltic Innovation Fund, in which the Estonian state has invested 20 million euros through KredEx. “The objective for the Baltic Innovation Fund is to fund the growth of companies in the Baltic States. During the course of the year, fund managers were issued with the first mandates, with active negotiations in progress to involve private investors. In addition, KredEx is preparing the next fund of funds, intended above all for financing start-up and fledgling companies. The two funds above have a significant effect on stimulating the private and venture capital market, rather inactive to date, by laying a long-term foundation for both attracting investments needed by companies and for rousing investors’ interest in the capital market here,” Treier said.

In the area of entrepreneurship, KredEx provided sureties and financing, totalling 55.2 million euros, for 529 companies in 2013. Support from KredEx enabled companies to attract additional financing of 105.2 million euros in total. The companies supported employ a total of 8484 staff, and there are plans for the creation of 661 jobs as a result of the projects.

In addition to supporting companies, last year KredEx helped 1723 young families, entry-level workers and military veterans to purchase homes and to take out a total of 92.6 million euros in home loans from banks, using 12.9 million euros in sureties from KredEx to that end. Last year, KredEx issued 75 loan sureties for apartment buildings, totalling 4.7 million euros. In 2013, 99 apartment associations used long-term loans at attractive interest rates for renovations, totalling 17.5 million euros. A total of 8.3 million euros was allocated in reconstruction grants for 95 apartment buildings. Since 2001, KredEx’ home loan sureties were used by 22 250 households, with loan sureties to renovate apartment buildings used on 721 occasions.

As of the end of last year, KredEx had an endowment of 70.9 million euros, a balance sheet total of 201.3 million euros and a guarantee portfolio totalling 148.0 million euros.