The volume of money deposited in the Balti Investeeringute Grupi Pank AS, which raised its interest rate on fixed-term deposits at the beginning of March to 8 percent, has reached three times the forecast amount within the first two weeks.
The marked interest of depositors has also led to growth in BIG's deposit portfolio and the bank hopes to achieve a deposit turnover market share in Estonia in kroon deposits with a term of more than 6 months of 15 percent in March as opposed to the 2 percent it has had thus far. The growth in market share is primarily the result of the addition of new depositors and those who have terminated their deposits elsewhere due to low productivity and come over to BIG. The average deposit amount in BIG remains around 60,000 kroons.
Kaido Saar, a member of the management board of BIG, says that the interest from clients exceeded all of the bank's expectations. "Talk of low interest in depositing simply doesn't reflect the real situation," he said. "It's more a case of productivity not living up to their expectations."
Saar says that in spite of the volume of deposits, BIG is not planning to lower the rate of interest it is offering.
On 3 March 2008 BIG raised its interest rate on one-year fixed-term deposits to 8.0 percent, which is 2-3% higher than ordinary deposit interest rates. The offer applies to deposits in Estonian kroons with a fixed term of one year and a minimum deposit value of 5000 kroons. Depositors do not have to be existing BIG clients or open a BIG settlement account - the offer is open to everyone.
Returns on fixed-term deposits are exempt from income tax. The terms and conditions of BIG deposits are set out in more detail on the bank's website at www.hoius.big.ee.
Balti Investeeringute Grupi Pank AS is one of the largest banks in the Baltic States specialising in lending to private clients and is the leader in the small loans sector of the Estonian market. BIG has set itself the goal of offering the most productive fixed-term deposits on the Estonian market. The minimum deposit term is six months while the maximum is three years.
As of the end of 2007, BIG employed a total of 494 people in 38 branches throughout the Baltic States. Moody's Investor Service, the international rating agency, has awarded BIG a credit rating of B1, with prospects for the rating remaining stable. BIG's bonds are listed on the Tallinn and Stockholm Stock Exchanges.
For further information please contact:
Kaido Saar
Member of the Management Board of BIG
Telephone: +372 630 9927
E-mail: kaido.saar@big.ee
