AS HANSAPANK

ANNOUNCEMENT

03.03.99				

 

 

AUDITED RESULTS OF HANSA CAPITAL

 

Since the beginning of the year, total assets of the Group have 

increased by EEK 2,930.8 million, i.e. 76.7%.

The largest single item on the asset side is the leasing 

portfolio, which forms EEK 5,194.3 million or 88.0% of 

financial investments. From the beginning of the year, its 

share has increased by 5.4%. This has happened on the account 

of a decline in the share of the factoring portfolio, of which 

majority comes from Estonia.

The share of the factoring portfolio has decreased from 8.2% to 

4.6%, although the volume of the portfolio has shown an 

increase by EEK 27.2 million and reached 270.8 million in 1998. 

The share of the consumer factoring portfolio decreased from 

1.8% to 0.5% and totalled EEK 29.9 million in 1998.

As at the end of year, receivables from customers of Hansa 

Capital Group outside Estonia amounted to EEK 1,763.8 million 

or 29.9% of total receivables.

Due to a change in the provisioning policy, the amount of 

allowances for credit losses had increased by EEK 166.3 

million, having reached EEK 185.6 million by the end of year 

and making up 3.0% of the financial investments' portfolio. At 

the same time actual credit losses in 1998, 22.9 million EEK of 

receivables, were written off.

Net income of Hansa Capital Group for 1998 constituted EEK 

151.3 million, exceeding net income earned during 1997 by 

61.3%.

Hansa Capital Group's net income, after the consolidation 

process, is made up of EEK 26.3 million net income of SIA Hanza 

Lizings, 12.2 million of UAB Hanza Lizingas, 1.9 million of OÜ 

Balti Realiseerimiskeskuse and 98.8 million of AS Hansa Capital 

itself (without profit under the equity method).

Total income (interest income and fees) for the year amounted 

to EEK 795.0 million. During the year 36.4% of the total income 

(interest income and service fees) was earned outside Estonia 

(30.2% in 1997). When compared to the total interest income of 

1997, Hansa Capital Group's interest income has risen by EEK 

376.7 million, or 125.3%, amounting to EEK 677.5 million 

(without revenues from financial instruments).

Income from leasing operations continues to account for the 

largest part, i.e. 83.8%, of total income (interest income and 

service fees). A remarkable increase in the share of income 

from other services in the total income from 5.9% last year to 

10.2% may be observed. This may be attributed to the rapid 

growth of car rental services in the Baltic states.

Interest expenses (without revenues from financial instruments, 

which lowers the level of interest expenses) reached EEK 352.6 

million for 1998. Interest expenses rose by 138.0%, compared to 

the last year's interest expenses. Interest expenses on loans 

formed the largest share in total interest expenses – 62.5% 

(66.0% in 1997). The share of interest paid to Hansabank has 

decreased from 77.4% last year to 54.5%, resulting from a 

growth in loan resources obtained from other financial 

institutions.

Net interest income, according to the results of 1998, 

constitutes EEK 324.8 million, which is almost 2 times more 

than in 1997. Since interest income has somewhat outgrown 

interest expenses, net interest income formed 47.9% of interest 

income (50.7% in 1997). As a result of relatively small 

interest expenses, the average cost of interest-bearing 

liabilities fell from 9.6% to 7.8%. On the other hand, the 

average interest-earning assets' profitability fell in 1998 to 

14.3% from its last year's level of 15.8%. As a result, the 

Group's spread decreased from 7.2% in 1997 to 6.6% in 1998.

As a result of the above changes, the Group's net interest 

margin, which is the ratio of net interest income to average 

total assets,

fell to 6.9% in 1998, while in 1997 the ratio was 7.5%. The 

backslash occurred primarily due to lower average interest 

rates of financing products. Due to the decline in net interest 

margin and changed provisioning rate, there has been a decline 

in the Group's return on average assets – from 4.1% to 3.1%.

Due to the expanding operations of Hansa Capital Group, income 

from operations showed remarkable growth in 1998 and totalled 

EEK 169.3 million. Income from operations increased, as 

compared to the total income of 1997, by 45.9%.

Operating expenses of the Group totalled EEK 372.3 million 

during 1998. The vast growth by 111.5%, as compared to 1997, is 

primarily attributable to additional provisions. Personnel 

expenses account for EEK 58.4 million or 15.7% of total 

operating expenses. Administrative expenses reached EEK 35.0 

million, i.e. 9.4% of operating expenses (21.7% in 1997).

 

Estonia

The portfolio of Estonian operations doubled over 1998 due to 

the merging process with Hoiupanga Liisingu Group. Estonian 

portfolio increased by 2,172.3 million and totalled 4,079.5 

million (netted with provisions). The most significant and also 

a positive change was a decline in prepayments to suppliers in 

1998 by 156.1 million or 42.4%. Total income from Estonian 

operations increased by 262.0 million over 1998 and stood at 

EEK 500.4 million.

 

Latvia

The Group's Latvian portfolio increased by 269.1 million 

(54.1%) over the year and amounted to EEK 766.4 million at the 

end of 1998. Total income from Latvian operations amounted to 

EEK 152.8 million. The changes due to the merging process 

affected considerably SIA Hanza Lizing's financial statements.

 

Lithuania

The Group's Lithuanian portfolio increased by	108.5 million 

(23%) over 1998 and amounted to EEK 579.9 million at the end of 

the year. Total income from Lithuanian operations reached EEK 

106.2 million.

 

 

 

Financial Highlights

					 31.12.98	 31.12.97

At period end (EEK in thousands)		

		

Total assets 				6,754,382	3,823,542

Financial investments			5,904,880	2,956,936

   Estonia				4,141,038	1,907,223

   Latvia				  787,097	  497,376

   Lithuania				  683,067	  471,343 

   Ukraine				  270,975	   47,517

   Russia				   22,703	 	0

Prepayments to suppliers		  239,619	  573,809

Provisions				 -185,569	  -19,299

Loan resources				6,165,151	3,375,405

Owners' equity				  177,070	  147,617

Provisions to receivables ratio		     -3.0%	     -0.7%

For the period (EEK in thousands)		

Interest income and fees from services 	  795,031	  341,579

   Estonia				  500,369	  238,350

   Latvia				  152,843	   67,023

   Lithuania				  106,169	   34,829

   Ukraine				   34,372	    1,377

   Russia				    1,278		0

Net profit after taxes and allocations	  151,275	   93,776

NIM					      6.9%	      7.5%

ROA					      3.1%	      4.1%

Number of employees			      247	      133

 

 

 

 

Additional information

Tarmo Rooteman

Financial Director

Tel. +372 6131 494

e-mail    Tarmo.Rooteman@hansa.ee

 

Kalle Kask

Head of Analysis Department

+372 6131 714

e-mail    Kalle.Kask@hansa.ee

 

 

AS HANSAPANK

 

 

Margus Kisel

Analyst

Tel. +372 6131 569