Chair of the Management Board of Finantsinspektsioon, Kilvar Kessler, presented the Finantsinspektsioon annual report for 2017 to the Riigikogu today, and gave the Estonian financial sector grades of A and C+, noting that those relatively good marks could change if the serious risks to the sector materialised.
The banks in Estonia and most of the other regulated financial intermediaries are well capitalised and stand on a strong financial footing. Finantsinspektsioon has directed them to build up large enough buffers to cover any losses that could arise from risks materialising in the future. The loan portfolios of the banks are of high quality, the combined ratio of insurers is remarkably good, and the fixed costs of fund managers are falling in relation to income from service fees.
The return on equity of the sector is generally a two-digit percentage, which is a good result in European terms. Prudential ratios are met with reasonable margin. For just its financial figures the regulated financial sector in Estonia gets a clear grade A.