LHV pension funds invested in Bigbank’s bonds

29. December 2017

In December, Bigbank AS issued 5 million € worth of subordinated bonds with a maturity of ten years and having a fixed interest rate of 6.5% per annum. The placement of bonds was organised in conjunction with LHV pension funds and the goal is to strengthen the capital base of Bigbank in line with the strategy and growth objectives of the bank.

"Cooperation with LHV Varahaldus was quick and professional – it is a great pleasure to see active contribution to the local market from which customers of Estonian pension funds will also benefit," said Sven Raba, Chairman of the management board of Bigbank.

It is the vision of Bigbank to become the most recommended digital financial services provider in all of its countries of operation. "In recent years, we have been focusing more than ever on improving the quality of our loan services and increasing customer satisfaction with a view to achieving the bank's strategic goals,. We have channeled our services to clients with lower credit risk and have significantly lowered the interest rates of our loan products. As a result, the bank has succeeded in gradually increasing the volume of loans issued by the bank and significantly improving the quality of the loan portfolio. Subordinated bonds support the expansion of the core business as they are also eligible for Tier 2 own funds, "added Sven Raba.

The portfolio manager of LHV, Romet Enok, pointed out that the investment decisions of LHV pension funds this year increased to 170 million € as a result of the investment into Bigbank’s bonds. "Over the past year, we have acquired bonds of five Baltic banks and believe that next year we will continue to develop the local bond market. As regards the Bigbank investment, it is worth noting that the capital involved will support the export of financial services from Estonia. Bonds are attractive for their large share of equity, a change in the corporate focus and international reach. The investment offers a higher expected return for pension assets than international bond markets,” added Romet Enok.

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