Parex gets competitive in Estonia

Parex Credit, a subsidiary of Latvia's Parex Bank that is launching operations on the Estonian market, will primarily target the retail banking sector by offering an opportunity to spend up to 60 percent of income on a loan.

Parex Credit said the institution's rate of self-financing would begin at 15 percent and could be zero with additional security.

Manager Jaanus Kart said that in order to be granted zero self-financing, for example, one don't have to be a key client, but that it was additional guarantees that counted.

Commenting on the loan repayment to income ratio, which may reach 60 percent with Parex Credit, Kart said the firm intended to take an individual and flexible approach to each customer - i.e., to look into each person's opportunities, wishes and visions, and make personal offers.

The firm pledges to make a lending decision within 24 hours, and the maximum monthly loan repayment with interest may form up to 60 percent of the borrower's monthly income.

Kart said loan repayments of each person depended on different circumstances: income, number of dependents and risks.

The major commercial banks operating in Estonia - Hansapank, Uhispank, Sampo and Nordea's branch - do not advertise such repayment to income ratios, but at the same time representatives of both Hansapank and Nordea have admitted that loan repayments may exceed 50 percent of income in exceptional cases.