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Hansabank Group – a leader in trade financing in the Baltic States

  11.09.2003    

We have asked Mr Druvis Murmanis, Member of the Board of JSC Hansabanka and Head of Corporate Banking Division, to tell us about the role of financial institutions in the development of trade and transit activities in the Baltic States
Development of transit industry has a critical role in the development of economies of the Baltic States. Transit is a vital industry, which experiences a very rapid growth.



How large is the role of development of transit industry in the development of economies of the Baltic States. What is the role of financial institutions to ensure and enhance competitiveness of this industry?

Development of transit industry has a critical role in the development of economies of the Baltic States. Transit is a vital industry, which experiences a very rapid growth. Researches show that this industry has one of the brightest future outlooks in the future and it will substantially increase its competitiveness, as the Baltic States will have joined the EU. Ports are a very important link in the cargo transit in the territory of the Baltic States and there are favourable prerequisites for development of their operations. I can strongly claim that Hansabank Group is a leader in the field of trade financing, namely, financing of transit and port business, import/export financing through all three Baltic States. Hansabank Group has established a special department for financing of transit and commodities in each of the Baltic States. Hansabank Group offers post/receivable financing, stock/inventory financing and pre-financing. Hansabank Group has been actively involved in financing of such commodities as oil and oil products, metal, cotton, grain, etc. which are transported through the Baltic States. Currently loan portfolio of Hansabank Group in the field of trade financing in all three Baltic States accounts for approximately USD 150m. It is expected that as the Baltic States will have joined the EU, its volume will rapidly increase.

Which are the largest projects financed by Hansabank Group in the field of transport and transit industry?

Hansabank Group supports port development in all three Baltic States by making large investments into the arteries of Baltic transit – ports of Riga, Ventspils, Klaipeda, Tallin, etc. Currently the most rapid growth has been experienced by Muga Port in Tallinn City. With the help of financing provided by Hansabank Group new terminals for oil products and coal are being erected, as well as Hansabank Group finances import and export transactions of various groups of commodities (oil products, cotton, metal, grain, etc.). In Lithuania Hansabank Group helps to rapidly develop Klaipeda port, the turnover of which during the latest years has substantially increased thanks to the increase in the volume of dry cargoes, metal, oil products, etc. from the CIS countries. In Latvia Hansabank Group has financed ManTess, Riga Central Terminal, Ventspils Free Port and other objects related to transit business.

What is the policy of Hansabank Group in the field of financing of transport and transit?

Hansabank Group has planned to substantially increase transit transactions performed through the ports of Baltic region. In the near future, Hansabank Group may consider several important financing projects related to the flow of commodities through the CIS ports, for example, Port of Odessa. Hansabank Group has planned to extend the financing volume in Russia. Through the intermediary of Hansa Leasing Russia (a subsidiary that was established last year) has invested several millions of US dollars in the financing of Russian rolling stock.

What kind of changes we may expect as the Baltic States will join the EU? How will these changes impact the financing process of this industry?
I forecast that as the Baltic States will join the European Union, transit industry will experience a rapid growth. The Baltic States will be the eastern border of the EU and European countries still will be large consumers of Russian raw materials, therefore the importance of advantageous geographical location of the Baltic States will certainly grow. Development of transit industry will be fostered by availability of resources from the European structural funds because a large part of these funds are envisaged for financing of logistics and establishment of cargo distribution hubs. As it is known EU funds will be available on very favourable conditions which will enable businesses to get back even 50-70% of the invested funds. I believe that transport and transit industries in the Baltic States have a huge growth potential, especially in the sectors related to transportation of goods by water which is still the cheapest kind of transportation. This is proved by the continuously increasing interest of Russian companies about the business development through the ports of Baltic States.






























































































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