EESTI ÜHISPANK

COMMENTARY TO FINANCIAL RESULTS



REPORT FOR THE  1ST HALF-YEAR OF 2000



The consolidated net profit of Eesti Ühispank for the first  half-year

of 2000 was 45.5 million kroons. The group's total assets grew  during

the 2nd quarter by 0.3% (51 million), totalling 15.287 billion  kroons

as of 30 June.



The growth of Eesti Ühispank  group's total assets in the  2nd quarter

was substantially  influenced by  repayment of  the external resource.

Having  adequate  liquidity,  the  bank  repaid  along  with  maturing

foreign loans  some loans  also prematurely  (e.g. high  interest rate

call-option bonds). In total, issued bonds were redeemed in the  total

amount  of  470  million  kroons  and  credit lines were repaid in the

amount of 400 million kroons in the 2nd quarter.



At the  same time  the volumes  of other  financing sources increased:

payables  to  credit  institutions  increased  by  321.9  million  and

clients' deposits show a continuous  growth. Deposits grew by 1.6%  or

137.8 million  kroons, whereas  the growth  pace exceeds  the pace  of

total assets growth  (deposits growth from  the beginning of  the year

9.4%  (722  million),  total  assets  2.1%  (317  million)). Also, the

deposits base  has become  stronger: deposits  of private  individuals

grew by  10.4% in  the 2nd  quarter. Considering  also that  corporate

deposits  are  growing,  it   counterbalances  eventually  the   24.5%

decrease in government deposits (-240 million).



While demand  deposits increased  and time  deposits decreased  in the

2nd   quarter   and   the   more   expensive   external  resource  was

(prematurely) repaid  on the  account of  the cheaper  resource, there

has been a structural shift towards the cheaper resource.



The group's owners' equity increased in the 2nd quarter mostly on  the

account of earned profit and as  of 30 June 2000 capital adequacy  was

13.36 %, and 13.24% for the bank.



Loan portfolio  grew by  2.8%, i.e.  271.6 million  kroons, during the

2nd quarter, and  reached 9.88 billion  kroons. As the  loan portfolio

growth is  partly caused  by restructuring  of loan  bonds into loans,

the actual loan portfolio (loans and loan bonds) growth formed 1.7  %,

which can be  more or less  compared to the  growth pace of  deposits,

exceeding the  growth pace  of total  assets.   At the  same time, the

ratio of doubtful receivables to  the loan portfolio has decreased  to

2%  due  to  transferring  fully  provisioned  loans to an off-balance

sheet  account.  The  group  formed  additional loan provisions in the

extent of 25 million kroons.   The percentage of Eesti Ühispank's  net

loan portfolio in assets has grown by 1%, forming 63.4% as of the  end

of the 2nd quarter.



In the  2nd quarter  Eesti Ühispank  group received  a profit  of 61.3

million kroons from its regular  operation, i.e. 37% more than  in the

1st quarter (44.8 million). The  group's operating profit for the  1st

half-year was  106.1 million  kroons, i.e.  41% more  than in  the 1st

half-year of 1999.  The major part, 53.7%, of the group's income  from

main areas  of activity  was received  from net  interest income;  net

service  fee  income  formed  24.1%,  financial income 11.3% and other

income  10.9%.  An  indication  of  rising  efficiency  and a positive

tendency for Eesti Ühispank  group's profitability is the  decrease in

operating  expenses:  in  the  1st  half-year  the  group's  operating

expenses decreased  by 22.5%  and the  bank's expenses  by 13.3%.  The

ratio of the group's operating  expenses to income has fallen  to 76%,

compared  to  84%  in  1999.   The  consolidated  net  profit of Eesti

Ühispank group was further  influenced by provisioning of  receivables

and  amounts  received  for  off-balance  sheet  loans totalling -27.8

million  and  value  adjustments   of   investments  totalling   -29.7

million.  As a  result of these, the  group's net profit in  the first

half-year was 45.5 million  kroons, remaining practically the  same as

in the 1st half-year of 1999 (44.9 million kroons).

Report is unaudited.



Ülo Suurkask

Vice President

Head of Financial Accounting Division

Tel.+372 6657 200





Urmas Neetar

head of reporting dept.

6 656 390