According to Harmo Vark, Chairman of Optiva Pank's management board, the name change is a logical sequel to the bank's change in ownership last summer when Sampo-Leonia, one of the biggest Scandinavian financial groups, bought a majority share.
The Finnish Sampo-Leonia also owns the biggest non-life insurance company in Estonia - Sampo Eesti Kindlustus.
Sampo purchased a controlling stake in Optiva Pank from the Central Bank of Estonia last June that has increased to 93 percent.
The name change will also affect the bank's leasing and property management subsidiaries, which will be called Sampo Varahaldus and Sampo Liising beginning next year.
In the first half of this year, Optiva Pank's market share was about 5 to 7 percent. Its biggest competitors, Hansapank and Uhispank, control about 55 percent and 30 percent of the market respectively.
Olavi Laido, Sampo-Leonia's head of the Baltic region, believes the name change will also contribute to the development and cross-selling of common products.
The headquarters of Optiva Pank and Sampo Eesti Kindlustus were the first two branches of the two companies to start with the sales of unified banking and insurance services. The same principle will be applied to all banking and insurance service halls of Tallinn, Tartu, Parnu and Narva during this year and at other places by next year.
Mika Vilkki, director of business functions at Sampo Eesti Kindlustus said the company has 15 offices in Estonia. Optiva Pank, meanwhile, has eight branch offices in Estonia, five of which are in Tallinn and the rest in Tartu, Parnu and Narva. Two joint banking and insurance offices will be opened at the new shopping centers in Tallinn in October.
Sampo Eesti Kindlustus has about 330,000 clients in Estonia, while Optiva Pank has about 29,200.
"Given that unified developing and sales activities reduce production costs, the client will be able to benefit from expanded choice options and, more generally speaking, the whole market situation will improve," stated Laido.
According to Laido, Sampo-Leonia views the Baltics as their home markets and is planning to further expand to Lithuania and Latvia, where it already has a small market share.
"The group's goal includes a position among the three biggest and most profitable Baltic financial groups by the end of 2005. In the field of insurance, Sampo-Leonia aims to achieve this goal by as early as the end of 2003," said Laido.
"We want to become the best choice for a company which operates in all three Baltic states, so that the company will not have to deal with different institutions in each country," said Laido.
Laido said that the company had been trying to buy big insurance companies in Latvia and Lithuania, but when they did not find any, they decided to move on by themselves.
"If we find something appropriate on sale, we buy it, if not, we have to do it by ourselves," said Laido.
In Latvia, Sampo operates under the names Sampo Latvija and Sampo Latvija Dziviba (life insurance), both of which control about 2 percent of the market. In Lithuania, Sampo Lithuania operates in six towns and controls about 5 percent of the market.
Before the acquisition of the non-life insurance company of Hansapank and taking over the non-life portfolio of the bankrupt Polaris in 1999, Sampo's market share in Estonia was about 5 percent as well. Hansapank's Eesti Kindlustus, the oldest insurance company in Estonia, was the biggest non-life insurance company when Sampo acquired it. Thanks to the acquisitions, the Sampo Group grabbed nearly one-third of the Estonian non-life insurance market in 1999 and now holds about 40 percent of the market.
Sampo's share of the lifeinsurance premiums in the Estonian market is about 2 percent and growing, said Vilkki.
"Of course, it would be much faster to buy a portfolio, but we decided to start this business ourselves," said Vilkki.
Hansapank did not sell its life insurance company to Sampo when Sampo acquired Eesti Kindlustus and is now the market leader in the life insurance market. The other two big life insurance companies belong to Seesam and Uhispank.
Like Hansapank, Uhispank also sold its non-life insurance company Leks last year to the international insurance company BICO, which is now the biggest competitor to Sampo with 30 percent market share. Seesam, which controls more than 10 percent of the non-life insurance market, holds third position.
"The banking sector was not interested in offering non-life insurance services at that time, because it was difficult and it did not fit with the bank's everyday business," said Laido.
"We want to offer good services to our clients and become a good alternative to big banks," said Laido.
Priit Potisepp, head of insurance company Hansapank Kindlustus, said that if Sampo Pank will take advantage of the synergy that comes from combining banking and insurance services, it will become very successful in Estonia.
"The experiences of Hansapank and Uhispank life insurance have proved this fact," said Potisepp.
Sampo-Leonia is a new financial institution in Finland, which combines the biggest Finnish insurance company Sampo and the second biggest Finnish bank Leonia. The two companies decided to merge last October, but the merger will officially be concluded by the end of 2000.