KredEx earnt a profit of EUR 1.2 million
According to the 2017 annual report approved by the Supervisory Board of KredEx yesterday, the foundation earnt a profit of EUR 1.2 million last year. The loan guarantees, loans, venture capital and private equity funds in the enterprise area of KredEx accelerated the development of 722 enterprises and the loan guarantees and grants in the housing area improved the living conditions of 14,738 families.
According to Lehar Kütt, CEO of KredEx, 2017 was a successful year for KredEx in terms of operational volumes, satisfaction of stakeholders and financial results. When compared to the previous year, the volume of guarantees for home loans increased by 24%. With the help of KredEx guarantees in the sum of EUR 33.7 million, banks financed the purchase or renovation of 3,350 homes in the sum of EUR 267 million. Every fifth home loan issued in Estonia used KredEx guarantees. The guarantee volume of enterprise loans decreased by 29% year-on-year. The change mainly results from the exceptional comparison basis of 2016 and the changes in the terms and conditions of the service in 2017. As at the end of 2017, KredEx was providing guarantees to the obligations of 7,274 enterprises, private persons and apartment associations in the total sum of EUR 973 million.
Gross operating revenue for KredEx amounted to EUR 7.5 million, growing by around EUR 400,000 when compared to 2016. This includes revenue related to loan guarantees, which reached EUR 4.3 million, and revenue from interest on loans, which amounted to EUR 1.8 million. As at the end of the year, the net assets of KredEx were EUR 77.8 million, balance sheet total EUR 194.6 million, the balance of guarantee obligations EUR 224.9 million and the loan portfolio EUR 56 million.
To cover potential credit losses arising from guarantees and loans, appropriations of EUR 3.4 million were made in 2017. Losses arising from loan guarantees were covered in the amount of EUR 1.2 million during the year. When compared to 2016, losses were smaller in both the enterprise and housing area. Since its founding in 2001, KredEx has reimbursed losses in the amount of EUR 31.1 million arising from loan guarantees.
Given the growing volume of their activities, KredEx is reassured in planning their operations for the following years by the amendment to the Support of Enterprise and State Loan Guarantees Act that entered into force at the end of the previous year. It increased the total sum of valid enterprise loan agreements with state guarantees provided by KredEx to EUR 220 million and the upper limit for the guarantees to housing loans to EUR 170 million.
“In providing financial services, KredEx is, above all, guided by public interest, assisting companies and residents where the market is not functioning. In order to fulfil its mission, KredEx is taking bigger risks than financial institutions based on private capital, but its goal is to maintain self-sufficiency on average over a longer period. That said, considerable profits or losses may be earnt or incurred in individual years,” explained Kütt. During its whole time of operation, KredEx has earnt a total profit of EUR 9.6 million.
KredEx is a state-owned financial institution helping to improve the financing options of Estonian enterprises, managing credit risks and helping people to build or renovate their homes.