Retail investors in Baltic States are without money, Swedbank reports

Swedbank, one of the biggest Swedish investors in the Baltic States, says in a new report that most people living there are without sufficient funds to invest.

Despite an economic recovery in Estonia, Latvia and Lithuania, there is a majority proportion in each of them without access to financial ‘buffers’.

“Those that do have individual savings have relatively little capital,” the bank adds.

The findings come in a report produced by the Institutet för Privatekonomi (Institute for Personal Finance) at Swedbank.

However, the conclusions seemingly contradict Moody’s recent decision to upgrade its outlook on Swedish banks, specifically citing improvements in poor loans relating to exposure to the Baltic States.

The report goes on to suggest that there is a need to change attitudes and habits around savings in the region.

The proportion of those with individual savings varies slightly across the three markets; 78% in Estonia, 61% in Lithuania, and 46% in Latvia. However, most have less than €1,000 in savings.

There is a considerable need to develop relevant information and education among the three populations. For example, nearly a quarter, 23% of those surveyed in Estonia said they do not want to start saving. The figure for Latvia was 18%, while in Lithuania it was 8%.

On a positive note, the bank’s report finds that there are a number of people who while currently not saving could afford to do so in future. Some 11% of people in Estonia, and 4% each in the other two countries, say that they probably could afford to save more.

The Institute has been reporting on personal financial matters in Sweden for several decades. It established a presence in the Baltic States in 2009, with the objective of spreading knowledge about savings.

“It is the chief target in all three Baltic States to give people basic financial knowledge. This knowledge is required to make better financial decisions, and is vital for people’s future finances. Better informed households make better decisions, and in turn have better finances,” said Erika Pahne, economist at the Institute.

The research was done between April to May 2011. About 1,000 people were interviewed in each of the three countries.

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