Finance Minister of Estonia: We depend on the success of the whole region

“There will be demand for NIB’s financing in the future in the Nordic–Baltic region and more widely”, says Sven Sester, Minister of Finance of Estonia, who chaired the annual meeting of NIB’s Board of Governors in 2016. As regards his own country, he says that Estonian companies have benefitted significantly from NIB’s financing.

NIB Newsletter asked Mr Sester to comment on the Bank’s annual results and share his view of the future.

How would you comment on the Bank’s results in 2015?

“The year 2015 has been another successful year for NIB. It ended up with a record profit of EUR 215 million, compared to the previous year’s EUR 210 million. Lending activity was high in 2015, and the overall risk position remained strong. NIB’s loan portfolio is of high quality.”

NIB’s tagline is “financing the future”. How do you see the megatrends affecting the Nordic–Baltic region for the next ten years?

“The external environment is changing all the time, so it is difficult to forecast trends ten years ahead. Considering the Bank’s objective and activity in the past, I believe there will certainly be demand for the Bank’s financing in the future in the Nordic–Baltic region and more widely. Of course, influences derived from migration, terrorism or the economic situation can lead to challenges to the Bank’s activities. In order to preserve its AAA rating, NIB should maintain the high quality of its loan portfolio.”

How should NIB prepare for these megatrends?

“NIB should continue being as flexible as always and keep monitoring the global situation to be prepared for possible contingency situations. It may be necessary to consider adjustments to the Bank’s policies according to events taking place globally.”

The Baltic countries joined the Nordic Investment Bank in 2005. After more than ten years, how has the experience been and how do you see the results?

“Estonia has had very good cooperation with NIB. Estonian enterprises have benefitted from NIB a lot. For example, Elering, Tallinn Harbour, Tallinn Water, Tartu University Hospital and others have been able to modernise their infrastructure and increase the quality of their services thanks to NIB financing. At the end of 2015, Estonian lending exposure amounted to EUR 221 million. We certainly intend to continue our good cooperation in the future.”

Looking at the NB8 region as a whole with all the differences between the countries, how do you see the significance and future of Nordic–Baltic co-operation?

“There will be always differences between the needs and challenges of the member countries, but as we are generally like-minded countries with steady integration, I believe our cooperation will continue in a good spirit.”

What are the biggest opportunities and challenges for the Estonian economy in the coming years?

“When we talk about challenges in Estonia, we are dependent on the success of the whole region. When our economic partners are doing fine, we perform better. For the immediate period, increasing the productivity of the Estonian economy is a priority, along with moving up in the global value chain, guaranteeing competitive compensation for the labour force and keeping the best brains and hands at home. As for the longer term, we have to be ready to adjust to new demographic and environmental circumstances. This requires targeted actions and accompanying investment projects from both the public and private sectors. And there NIB can contribute.”

The Board of Governors decided to initiate the alignment of the Bank’s authorised capital. Why was it done and what does it mean for the member countries?

“The purpose of the alignment would be to adjust the portions of paid-in, callable and authorised capital. The capital portions have been aligned in the past, but for some reason this was interrupted in the last capital increase in 2011. Now, all the member states agree that it should be adjusted. The aim is that each member country’s share in percentage of paid-in capital would be equal to its share of callable capital and authorised capital. The member countries also agreed to introduce regular capital distribution reviews, which we support as well.”

NIB is celebrating its 40th anniversary this year. What is your message to the Bank? How do you see the Bank ten years from now?

“The 40th anniversary is of course a remarkable achievement. I congratulate the Bank! NIB will remain an important financial institution in the Nordic–Baltic region. I welcome also NIB’s long-term goal of increasing lending to non-member countries, as it helps to diversify NIB’s loan portfolio and responds better to clients’ needs.”