Finnvera, a financing company owned by the Finnish state, has managed better than expected in regard to pre-war guarantees provided to Russian firms.
When Russia launched its full-scale attack on Ukraine in early 2022, Finnvera had guaranteed credit for Russian companies to tune of some one billion euros. The firms had taken out up to 700 million euros in loans.
The export credit agency’s risk of massive credit losses grew as sanctions closed payment channels and the Russian administration began to take a more negative attitude towards Finland and Finnish firms that sought to leave the country.
Finnvera estimated that losses could rise to at least 250 million euros.
Less than €100m outstanding
Instead, Russian companies have been paying off their loans at a rapid pace, according to Jussi Haarasilta, Finnvera's Executive Vice President, Large Corporates.
"The liabilities were quite substantial, around a billion euros at the end of 2021. By the end of 2022, however, the amount was down to 420 million euros, and by the end of last year it was just under 100 million," he told Yle.
In other words, the situation is much better than expected.
"Yes, at the moment. Of course, we’re happy about that," said Haarasilta.
The rate of payment has also been surprising.
"You could say so. Repatriation of receivables in such problematic situations is often a long process," he noted.
Finnvera has mainly lent to large companies in the telecommunications, forestry and shipyard industries. In the past, their ownership was often connected to the Russian state.
Reputation matters
So what spurred their willingness to pay?
"It’s common that companies operating on the international financial market try to stick to their commitments for reputational reasons," explained Haarasilta.
He declined to say how much remained of the nearly 100 million euros left in outstanding debt at the end of last year.
"Of course, we hope that we’ll be able to announce even better numbers. We’re still working hard on this," he added.
According to its website, Finnvera strengthens the operating potential and competitiveness of Finnish enterprises by offering loans, domestic guarantees, export credit guarantees and other services associated with the financing of exports. Its supervisory board includes half a dozen MPs, including its chair, Sofia Vikman (NCP).
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