Remembering the first year of activity of EBS, Madis Habakuk has said that their situation was brilliant. “At the end of the first year the profit was 700,000 roubles, which was a huge sum at the time. We created a new position – Vice President in the Field of Commerce, a position that was filled for many years by Merike Varvas. Unfortunately, the story at the time was that investment opportunities were very limited, and it was nearly impossible to buy real estate. So it was that our first investments, in which we bought shares in Tartu Kommertspank and Baltic Union Pank, were unsuccessful. We also purchased a farmhouse, and an apartment in Tallinn. If we exclude the apartment, the remaining purchases were rather conservative, even downright unsuccessful”.
In addition to the brilliant financial results, EBS had, in a short period of time, earned a sound reputation. The following story provides confirmation of this. Tõnu Küttmaa, who joined EBS as its Director of Finance in August 1989, remembers the addition of Rein Kaarepere, who was serving as the assistant to Indrek Toom, Chairman of the ESSR Council of Ministers, at the time of the founding of EBS.
It was through Kaarepere that EBS was able to use the Suurupi school building. A short while later, Rein Kaarepere became the founder and chief executive of one of the first private banks in the Soviet Union. Tõnu Küttmaa remembers that when Kaarepere took over as the director of the Tartu Kommertspank, he visited EBS. “We didn’t have a liquidity problem at the time, but we wanted to conduct a small test. Madis Habakuk asked Kaarepere for a loan of 1 million. Kaarepere thought it over for a little while: “It will take a couple of days to organise”. No business plan or paperwork. Habakuk then added: Not a million dollars, but a million roubles. On hearing that, Kaarepere replied: Oh, in that case you can pick it up in the morning”! He had thought that I was talking about a million dollars”.
Madis Habakuk’s son, Mart, recalls that sending a fax cost 20 USD or more per page and was successful on the eighth attempt. To be honest, it was an expensive and rather bothersome form of information exchange.
“Marshall Fitzgerald had heard about the Internet. Upon closer examination it became clear that there is an alternative to sending faxes, costing nearly nothing. This sounded too good to be true. Although the Internet did come to Estonia and began to spread quickly, including to EBS. Our first e-mail addresses had the ending .su – more precisely ebs.ew.su – which stood for Republic of Estonia Soviet Union,” remembers Mart Habakuk.