TALLINN - Businesses in the Baltics should brace themselves for a wave of rapid wage increases, the chairman of the region's largest banking group, Hansabank, warned this week. Jan Liden, president and CEO of Swedbank, owner of the Hansabank group, rejected any suggestion that the inevitable wage increases should be initiated by businesses in order to "take care" of their employees, who have begun to feel the pinch of inflation and rising property prices.
"Wages will rise faster than you think. Many people have tried to describe the exact timeframe. I can't, but it will be a very short time," said Liden, who is also chairman of the supervisory council of the Hansabank Group.
He said his own business, one of the larger employers in the region, understood the need to remunerate its staff well. But he said wage increases should be market-driven, not business-led.
"I don't think it's a single corporation's responsibility for the economic development of a country," Liden told The Baltic Times. "We want the very best from our employees, and we have to remunerate them well. But it's not our responsibility to see that the Estonian people have higher salaries," he added.
As Liden explained, the market economy is supply-and-demand driven, and in Estonia there are "talented, well-educated people in a growing economy."
"That is where we will see the market mechanics at work," he told members of the Swedish Chamber of Commerce at Tallinn's Hotel Olympia on Aug. 21.
He told local business leaders that Hansabank had no intention of changing its name to match that of its Swedish parent company, Swedbank.
"We want to make it clear that the two banks are the same bank, but we have no goals of changing the name any time in the near future. Hansabank will merely be seen as part of Swedbank," Liden said.
Hansabank became a fully-owned subsidiary of Swedbank last year, although the company has held a 50 percent stake in the Baltic bank since 1998.
In other regions, such as Russia, the company's subsidiaries will soon begin adopting the Swedbank brand. But as Liden explained, the name Hansabank 's or Hansapank in Estonia and Hansabanka in Latvia 's was already recognized as a strong and trustworthy brand in the Baltics and should therefore remain.
Speaking about his company's expansion plans, Liden said he hoped to push further into the Polish, Ukrainian and Russian markets but said the bank "still has a lot of things to do in the Baltics."
"Although we have vigorously entered the credit card market, we are not yet market leaders. This is our goal for both the Nordic and Baltic regions," Liden said.
While the bank was happy about its strong position in northern Europe, it had no plans to become a "global bank."
"I don't see us as a global bank. Rather, I think we can be a vehicle for global banks who need a local bank for their banking needs. Others will need to draw on our local strengths," he said. "The Nordic and Baltic areas and parts of Russia are quite enough."
Liden did not discount that the group was a potential take-over target for a larger financial corporation, but did stress that banking was business best conducted at the local level.
"We have long-range owners who understand that banking is a long-term business. We want to be with a customer for decades. Serious problems have developed when banks don't understand that."