Estonia, Financial Services

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LHV buys loan portfolio of Versobank for EUR 18.4 mln

BC, Tallinn, 20.12.2018.Print version
LHV Pank, banking arm of the listed Estonian financial services group LHV Grupp, is about to acquire the loan portfolio of Versobank for approximately 18.4 mln euros, reported LETA/BNS.

AS LHV Pank and Versobank AS, a bank under liquidation, on Wednesday entered into an agreement whereby AS LHV Pank will acquire the loan portfolio of Versobank AS for approximately 18.4 mln euros. The exact price will be determined as at Jan. 1, 2019. The price will be paid in a lump sum upon closure of the transaction, LHV told the stock exchange on Thursday.

The loan portfolio is acquired as a loan portfolio company, consisting of loan and collateral agreements and two employees related to the portfolio. The loan portfolio contains loans to Estonian companies in the amount of approximately 17 mln euros as well as loans to Estonian resident private customers in the amount of approximately three mln euros.

"We are actively seeking possibilities to grow our business. Increasing the loan portfolio is of critical importance for us in order to increase interest income and raise efficiency, given the existing cost base," said Erki Kilu, chairman of the management board of LHV Pank.

Kilu said that although the loan portfolio of Versobank is not big, it is a well secured portfolio with an interest rate that meets LHV's expectations.

"Furthermore, acquisition of the loan portfolio gives us real experience of how the loan and collateral information systems work also in case of acquired agreements," he added. 

According to the concluded agreement, the transaction is to be closed presumably on Jan. 28, 2019, and the precondition of the closure of the transaction is satisfactory results for AS LHV Pank of the loan portfolio audit.

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