Unicredit: It's difficult to compete with Scandinavian banks in Baltics

Photo: SCANPIX

Even though Unicredit's business in all the three Baltic countries has been profitable, its competition position and growth outlooks are not sufficient compared with the Scandinavian banks active in the region, the head of the Estonian branch of Unicredit said commenting on the bringing together of Unicredit's Baltic operations in Latvia.

"Unicredit's market share doesn't exceed 2 percent in any of the three Baltic countries, it is difficult to ensure efficient and organic development of the organization because of the high saturation of the market," the head of the Estonian branch, Taavi Laur, told Eesti Paevaleht.

He said there was little demand among the corporate customers active in the region for cross-border banking services.

The bank has close to 530 customers in Estonia, mostly businesses. "Considering that our market share in Estonia has not been remarkable, we do not believe that it will have a lot of effect on the loan market," said Laur.

Customers in Estonia can move their loan agreements to the Latvian head office and also deposits can either be moved to Unicredit Latvia or they will be paid out to the depositor.

"In the future customers will be served under the European Union's cross-border service permit," Laur added.

Unibredit Bank said last week that its branches in Lithuania and Estonia would be closed down. The group expects to complete the centralization in the middle of this year and in the future the bank will serve its clients in the Baltic countries through the new centralized structure.

Besides its Baltic head office in Riga, Unicredit has representations in Tallinn and Vilnius, as well as offices in the Lithuanian cities of Klaipeda and Kaunas.

Unicredit Group posted a net profit of 1.1 billion euros for the first half of 2012, compared with a loss of 9.21 billion euros sustained in  2011.

The Estonian branch netted 1.647 million euros on operating revenue of 3.228 million euros in January-June 2012.

Headquartered in Milan, Italy, Unicredit Group is a leading European banking network with strong local roots in 22 countries that has 9,600 branches and more than 150,000 employees.