Bank deal should smooth Russian trade

TALLINN - After Estonia's Krediidipank and Moscow Bank signed an agreement that guarantees money transfers between the two countries, trading with Russia should become easier.

Krediidipank's President Rein Otsason and Moscow Bank's Vice President Vadim Trofimov signed the cooperation agreement Jan. 21.

Andrus Kluge, Krediidipank's managing director, said the agreement is aimed at financing trade and guaranteeing export and import transactions of solvent clients.

"This is, first of all, necessary to our food producing companies," said Kluge.

"In earlier times, Russian partners used to pay beforehand because Estonian sellers could not be sure they'd receive their money after the transaction. Now we guarantee that they'll receive their money after the products have been sold in Russia," he said.

Russian entrepreneurs are interested in importing Estonian products, mostly food and agricultural products, and exporting local products to Estonia, Trofimov said in an interview with the Eesti Paevaleht newspaper.

Kluge said the agreement does not bring along any big risks to the bank, as all risks have been protected within the cooperation agreement.

Last year the number of Krediidipank clients increased by almost 50 percent and this year Kluge expects to see the same rise, partly thanks to this cooperation agreement. Although 86 percent of the bank's 15,000 clients are private persons, most of the deposited money belongs to corporate clients.

With 529 million kroons assets worth ($39.5 million), Krediidipank is the fifth largest of the six working banks in Estonia.

Moscow Bank, with its $800 million assets, is one of the five biggest working banks in Russia, said Kluge.