Coop Pank AS application for obtaining an additional license for issuing covered bonds
Today, May 13th, 2024, Coop Pank AS submitted an application to the Financial Supervision Authority for an additional activity license enabling the issuance of covered bonds. Obtaining an additional license is subject to regulatory approval and can be expected to take up to six months.
After obtaining an additional activity license authorizing the issuance of covered bonds, the bank decides on the issue, volume and other conditions of the covered bond issue in accordance with the market situation and the bank's financing needs at the time.
The purpose of issuing covered bonds is to diversify the bank's financing structure and raise stable long-term funds. At the expense of the included funds, the bank can finance additional lending activities and reduce the volume of more expensive term deposits. The more expensive deposits attracted through the current deposit platforms can be reduced at the expense of capital raised with covered bonds issued on the collateral of housing loans. Reducing the financing cost enables the Bank to offer cheaper loans to customers.
According to Paavo Truu, CFO of Coop Pank, the volume of Coop Pank's housing loan portfolio has grown large enough to offer the bank the opportunity to issue covered bonds. At the same time, in the longer term, it will lead to more stable funding for financing customers. The first step in issuing covered bonds has been taken by submitting an application for an additional activity license.
Coop Pank, based on Estonian capital, is one of the five universal banks operating in Estonia. The number of clients using Coop Pank for their daily banking reached 191,800. Coop Pank aims to put the synergy generated by the interaction of retail business and banking to good use and to bring everyday banking services closer to people’s homes. The strategic shareholder of the bank is the domestic retail chain Coop Eesti, comprising of 330 stores.
Additional information:
Paavo Truu
CFO
Phone: 5160 231
E-mail:
