NIB concludes a strategy review: More flexibility in lending
NIB has concluded the strategy review which it initiated a year ago. The present business model will remain the foundation of NIB’s operations, but lending activities will be broadened in order to have flexibility and to stay relevant for the Nordic and Baltic countries. “NIB will develop and expand its lending to SMEs and mid-sized corporates in the region. The Bank will also be more flexible in its activities outside its member countries”, Pentti Pikkarainen, the Chairman of the Board, sums up.
The strategy review covered all aspects of the Bank. The Board discussed the Bank’s mission and success factors, lending operations, capital and liquidity, and the implications of possible changes in the strategy.
“The Board has concluded that there is no need for radical changes. NIB will keep its main focus on its current activities. The Bank will continue operating under the current mission, staying safe, sound and profitable”, Mr Pikkarainen says.
“The mission of the Bank is highly relevant; NIB is there to improve competitiveness and environment in the region. Both pillars are of equal importance. We decided that any new initiatives should be taken under this umbrella. We will pay more attention to opportunities related to member country integration, Baltic investments and Arctic region projects”, he continues.
During the coming years, NIB will develop lending activities in two ways. The first route is to better serve SMEs and mid-sized corporates, which are important for growth and jobs in the region.
“Increased lending to SMEs has been under development already for some time. The cornerstone of this initiative is close collaboration with local partner banks. Different products are currently envisaged including risk-sharing options. In the current market situation, no rapid roll-out is foreseen; the purpose is to develop the products so that they are available when needed”, says Henrik Normann, NIB President & CEO.
The other avenue is to increase flexibility in non-member-country lending.
“In recent years, NIB has focused only on a limited group of focus countries when operating outside our region. We will be more flexible in this regard and seek to identify projects through intensified contact with exporting member country enterprises”, he continues.
A thorough review has been conducted to assess the impact of these new initiatives. The Bank’s capital adequacy is expected to remain strong, and increased lending to new client segments and customers should decrease the concentration risk of the Bank’s loan portfolio.
Conclusions of the strategy review in a nutshell:
– The present business model is to remain the foundation of the Bank’s activities.
– In order to have flexibility and stay relevant for the future, complementary new products and associated measures are introduced.
– Competitiveness and environment are seen as equally important parts of the Bank´s mission. The Bank will enhance its efforts to identify bankable projects in the environmental sphere.
– Lending to SMEs and mid-sized corporates will be further developed and may possibly be complemented by support for corporate bond issuance.
– The Bank will no longer limit its non-member country lending activities only to focus countries. The aim is to increase the non-member country lending in the longer term. The countries on which the Bank focuses will be periodically reviewed.
– Within NIB’s ongoing business increased attention will be paid to opportunities related to member country integration, Baltic investments and Arctic region projects.