Andro Roos, chairman of Tartu Savings and Loan Association
I happened to hear a news from the big media, which sounded more like a free advertisement for the simple-minded, that a three-star credit institution, considered an Estonian and pro-Estonian bank, is issuing subordinated bonds worth 25-35 million euros for 10 years with an annual interest of 10.5%. Terrible. After all, we are in a quagmire as a society, country, people and people. At the same time, in a moral quagmire. Why do I say that? Let’s discuss together.
First – 10.5% per annum for bond investors. This means that this bank has to borrow 25-35 MILLION – essentially as SMS loans at 12-15% per year. In short, both the bank and the bank’s investors want to get rich at the expense of the most unfortunate in our society. Or can entrepreneurs be found who borrow at such an interest for the so-called promotion of business (read: to keep their noses above the mud of the state)? Bad business. But, of course, the ruling politicians of the Estonian state are turning this business into such. However, do we have to contribute to such wrong trends by investing with the motives of frank greed? Whoever invests in this way contributes to maldevelopment, even if he speaks patriotically. Or am I being too harsh in my assessment?
Second – 10 years?!!? 10 years of such high interest rates – this is a serious interest risk for the bank, which can become a liquidity risk. In 10 years, the euribor will go down, but the interest rate of this bond issue will remain salty. Are there any serious borrowers for such expensive money, e.g. in 5 years? Suspicious. Even ERIAL’s deposit interest was probably more realistic…
And thirdly – this word “subordinate obligation”. This means that if something goes wrong, holders of subordinated bonds are essentially on par with bank holders – meaning they get their money back, if they get it, last in line.
Greed had to drive upaki. We should all look in the mirror, because the fact that the European Central Bank raises interest rates does not mean that we Estonians should go along with it. Wouldn’t it be honorable and wise and exemplary and statesmanlike if we as Estonians act together and say: “No. We don’t want to get rich at the expense of our compatriot! Let the greatness of brotherly love be the throne and crown of our people and country!” This is possible if we find both manliness and humanity in ourselves.
Greed must be suppressed, especially if one wants to be nationalistic, Estonian-minded. Because what a pro-Estonian idea would it be if the actions were not pro-Estonian.
Let’s think. Let’s act.
