The last two years have taught us all the importance resilience and adaptability. These two lessons were first taught by the COVID-19 pandemic and the constraints it imposed and now by the war Russia is waging on Ukraine. As a systemically important bank we have experienced these crises hand in hand with our customers, supporting them with both capital and advice in these difficult times.
The question is: How can we predict the impact of these latest developments and use the moment of enormous uncertainty to our advantage?
The good news: companies in the Baltics are resilient
Companies in the Baltic countries have faced uncertainties and crises to a greater extent than most of their European competitors. It was therefore to no surprise that the Latvian economy weathered the economic effects of the COVID-19 crisis better than many. We see the same business resiliance now as Latvian corporates and entrepreneurs have been quick on their feet and successfully adjusted to the new situation.
However, we are still in the early phase of this crisis and we have not yet seen much of its financial effect on the Latvian and European economy. But just as our customers, SEB is a resilient and stable, placing us as one of the strongest banks in Europe. We will use our financial muscles to stand by and support our customers, as this storm increases.
From supply chains to energy
At the height of the COVID-19 pandemic, companies faced disruptions in their supply chains. Now new problems have emerged. For example, we see that construction companies are running out of metal due to new sanctions. This situation also creates challenges for the Latvian transit industry, not to mention the new increases in gas and fuel prices. This situation once again encourages companies to find new ways and to seek for new sources and counterparties in their supply chains.
SEB was one of the first banks to address the challenges of climate change and to support our customers to invest in a green transition. The war in Ukraine has only added to the importance of this transition.
I am glad that SEB in Latvia is offering our customers new opportunities to implement green energy. We were therefore early with launching green financing products for corporates and have just launched green mortgages to support households who wish to build or live in a more energy efficient home.
One of the newest solutions is the green microcredit for small and medium enterprises with special conditions for the purchase of solar panels and charging stations for electric cars. We will also continue supporting our large corporate customers in their efforts to transform internally and transition to a sustainable business model.
Painful in the short term, beneficial in the long term
I will not hide the fact that the sanctions will have a painful short-term impact on the Latvian and Baltic economies. However, in the long run, this situation will encourage both the private and public sectors to move toward more sustainable, reliable markets and business partners. While Latvia shares a border with Russia and both countries have been important business partners for a long time, I would like to point out that we must strive to secure growth by cooperating with the member states of European Union, as well as looking for opportunities in other markets.
Every decision in business, such as the cooperation partners, chosen market, and the potential customers, have an impression not only on the company itself but also on society as a whole. Therefore, it is important that you are aware of your personal responsibility in a broader context every step of the way.
We at SEB also feel responsible to both our customers and the public, so our long-term goals in this market remain unchanged. We will continue to stand by our customers when they need to reorient themselves in these difficult times and look for new markets and business partners. We exist to positively shape the future with responsible advice and capital. Today and for generations to come.
Head of the Baltic Division of SEB