OPTIVA PANK

COMMENTARY TO FINANCIAL RESULTS



OPTIVA GROUP UNAUDITED FINANCIAL RESULTS FOR 9 MONTHS 2000



The  consolidated net profit of Optiva Group for the first nine months of 2000

was  14.3 million EEK, with net profit for the third quarter representing  4.5

million  EEK. Group's net profit increased by 4.3 million EEK, or 43.0%,  over

the  first  nine months of 1999. Optiva Group's total assets increased  during

the last quarter by 355.4 million EEK, or 10.8%, totalling 3.6 billion EEK  at

the  period  end. The rapid increase was primarily caused by  an  increase  in

clients' demand and time deposits. Total assets have grown by 534 million,  or

17.2%, and clients' deposits have increased by 73.1% over a year.



Funding

At the end of the third quarter, total liabilities amounted to 3,306.1 million

EEK, up by 351.0 million EEK, or 11.9%, over the given time period.



In  the third quarter, interest-bearing liabilities grew by 264.1 million EEK,

or  10.2%, with clients' deposits accounting for the largest increase  figure.

Clients'  demand deposits increased by 151.1 million EEK, or 15.7%,  and  time

deposits by 176.6 million EEK, or 31.2%, during the third quarter. At the  end

of  September 2000, clients' demand deposits amounted to 1,114.1  million  EEK

(60%  of total deposits) and time deposits totalled 741.9 million EEK (40%  of

total  deposits).  Total clients' deposits amounted to  1,856.1  million  EEK,

increasing  327.7 million EEK, or 21.4%, in the third quarter. At the  end  of

September,   clients'  deposits  represented  65.0%  of  all  interest-bearing

liabilities, compared with 50.3% at the end of 1999.



During  the  third quarter, loans from other banks decreased by  92.0  million

EEK,  or 15.6%, as a result of repayments, while debt securities increased  by

28.3 million, or 12.4%.



Clearing  accounts increased by 96.8 million EEK, or 34.0%, during  the  third

quarter.



At  the  end of the third quarter of 2000, Group equity represented EEK  331.6

million, or 9.1% per cent, of Group assets. Group's capital adequacy was 13.9%

at the end of September.



Assets

In  the  third  quarter of 2000, Group's interest-bearing assets increased  by

344.3  million  EEK, or 11.9%. The increase in interest-bearing assets  mainly

resulted  from a loan portfolio growth of 187.0 million EEK, or  9.7%,  and  a

debt  securities  portfolio growth of 114.3 million EEK, or  51.2%.  The  debt

securities  portfolio  mainly  increased on account  of  the  debt  securities

liquidity portfolio.



At  the end of the third quarter, liquid assets amounted to 859.2 million EEK,

representing 23.6% of Group total assets.



Demand  and  time deposits with other banks increased in the third quarter  by

50.4  million  EEK,  or 6.7%, amounting to 799.0 million EEK  at  the  end  of

September.



At  the  end  of  the  third quarter, Group's net loan portfolio  amounted  to

1,974.8  million  EEK, while the reserve for possible loan losses  represented

6.3% of the gross loan portfolio. The net loan portfolio represented 54.2%  of

total assets at the end of September.



Income, expenses

The  total revenue of Optiva Group for the first nine months of 2000  amounted

to  167.6 million EEK. Net interest income after loan provisions accounted for

37.6% (last year 20.8%), commissions and service fees received for 31.6% (last

year 25.7%), income from currency exchange for 21.3% (last year 15.3%), income

from  investments  in shares for 2.6% (last year 27.8%) and other  income  for

6.8% (10.4%) of total revenue.



Income  from traditional bank services has been growing over a year. Comparing

the  previous  year's  nine month results to this year's,  the  share  of  net

interest  income after loan provisions has increased from 20.8%  to  37.6%  of

total  income  (change in absolute value +30.3 million EEK or 92.7%)  and  the

share  of  commissions  and  service fees  has  risen  from  25.7%  to  31.6%,

respectively.



In the first nine months, net interest income totalled 63.0 million EEK, while

loan provisions for possible losses represented 26.3 million EEK. Compared  to

last year's nine months, net interest income increased by 16.2 million EEK, or

23.1%.



Increase in commission fees and foreign exchange income originated from a fast

growth  in the customer base and customers' transactions. Growth processes  in

the  Estonian  economy as well as on foreign markets have also supported  such

trends. Compared to the previous year's nine months results, income from  fees

and  commissions  increased by 12.5 million EEK, or  30.9%,  and  income  from

foreign exchange rose by 11.7 million EEK, or 48.4%.



The  decline in income from investments was 39.2 million EEK, or 89.8%. During

the  same  period last year, Optiva Group earned an extraordinary income  from

investments.  A  second  reason in the decline in  investments  income  was  a

decrease of 28.9 million EEK, or 24.4%, in the investment portfolio over  last

year's September.



Group's  non-interest expenses totalled 115.2 million EEK, with the  share  of

personnel  expenses representing 47.0% (last year 47.6%), other administrative

expenses  33.7%  (last year 36.2%), commissions and service  fees  paid  11.8%

(last year 9.1%) and other expenses 7.5% (last year 7.1%).



In  non-interest  expenses, commissions and service  fees  paid  rose  by  3.9

million  EEK, or 40.4%, personnel expenses by 3.3 million, or 6.4%, and  other

administrative expenses by 1.0 million EEK, or 13.4%, compared to last  year's

nine months.



Efficiency

Group's return on equity for the present year's nine months was 5.7% (3.9% for

the same period last year) and return on assets 0.5% (0.4% for the same period

last year).





Ruth Laidvee

Market Communications Director

+372 6 302 105