Last update: 28.11.2024 01:30 (GMT+2)
HANSABANK FINANCIAL REPORTS 11.02.2005
CONSOLIDATED FINANCIAL RESULTS, Q4 AND FULL-YEAR 2004
Highlights:
- Loans EUR 5.92 billion, +35% yoy
- Deposits EUR 4.97 billion, +22% yoy
- Net interest margin 3.33%, -32bp yoy
- Operating profit before tax EUR 220 million, +25% yoy
- Net profit EUR 182.8 million, +40% yoy
- EVA result EUR 109.5 million, +89% yoy
- Return on equity (ROE) 24.7%, return on assets (ROA) 2.5%
- Total income up by 17%
- Total operating expenses up by 9%
- Cost-income ratio 45.8%
- Annual results were influenced by low interest rates, strong
volume growth, improving efficiency, and good asset quality.
Chairman of the Board, Indrek Neivelt: “2004 was one of the most
successful years in recent history for the Baltic economies. EU
accession created favourable economic conditions – historic low
interest rates increased consumer optimism and pushed up economic
growth. As a result lending growth exceeded our initial forecast
considerably and reached 35% in 2004. Due to faster than expected
asset growth and improved efficiency our net profit increased by 40%
during the year to 182.8 million euros.
In addition to rapid growth in the Baltic countries we also expanded
our Russian operations. In the first half of the year we set up a new
leasing company in Moscow and in the second half of the year signed an
agreement to purchase a small corporate bank.
Our Group’s market value rose by 80% during the year to 3.05 billion
euros.”
2004 OPERATING RESULTS
The key words for 2004 were intensifying competition, lower interest
rates for our customers and the resulting rapid loan growth, higher
efficiency in the Group and expansion of Russian business operations.
Our Group achieved all targets set for the year and managed to
successfully strengthen its market position even in the increasingly
competitive environment.
Lending and saving
Loans to clients increased by 35% to EUR 5.92 billion in 2004. This
includes a 60% rise in housing loans to EUR 1.48 billion. At the end
of 2004 our Group had 80,000 mortgage customers and we are the clear
leader in mortgage lending in each of the three countries. In Estonia
every second mortgage customer has taken the loan from our bank. In
Latvia every fourth and in Lithuania every third mortgage customer is
our client.
Deposits from clients increased by 22% to EUR 4.97 billion in 2004.
The prevailing low interest rate environment has left its mark on
deposit growth which has remained considerably below lending growth
for a number of years already. On the positive side our clients have
started to diversify their savings between different products and use
alternative savings instruments more actively. Total assets under
management increased by 64% to 0.65 billion in our asset management
unit. By the end of the year close to 700,000 clients had joined one
of our II pillar pension funds.
Revenues and expenses
Total revenues increased by 17% in 2004. One of the key revenue
drivers – lending margins – have become much more favourable for our
customers over the past few years. In 2004 our net interest margin
decreased by 32bp to 3.33%. On the other hand, the negative effect
from decreasing margins is offset by higher volume growth. As a result
interest income growth has gradually recovered and rose to 16% in
2004. Revenue growth was supported also by a 18% rise in net fee
income, which stemmed from an increase in the number of customers and
transaction volumes. The number of active customers increased by 15%
to 2.6 million over the year. The number of payments in our internet
bank rose by 57% to 19.5 million and the number of direct debit
payments increased by 31% to 10.2 million. Our clients are also
changing from cash to card payments. Our POS (card terminal) turnover
increased by 37% to EUR 845 million in 2004.
Faster volume growth also resulted in higher cost growth – operating
expenses increased by 9% compared to 2003. The fastest growth was in
personnel and administrative expenses, which both rose by 14%. The
number of employees in the Group increased by 8% to 6,213. We also
renovated several branches during the year and increased their total
number by 3 to a 283. Part of the growth in expenses resulted from the
expansion of our Russian operations. Our Russian unit’s operating
expenses totalled EUR 2.5 million in 2004.
Asset quality
A considerable part of the increase in net profit came from an
improvement in asset quality. The Group’s net provisions decreased by
EUR 8.4 million or 29% compared to 2003. Loan write-offs decreased by
33% compared to the previous year. At the end of 2004 non-performing
loans, ie loans that are overdue more than 60 days, formed only 0.3%
of total loans.
Dividend
Based on the preliminary financial results the Board’s proposal is to
pay a dividend of 2 kroons (0.127 euros) per share for the year 2004.
The Board will make the final profit distribution proposal to the
annual general meeting after the financial results have been audited.
Hansabank Group will publish the 2004 annual report on week 12, the
latest.
Hansabank Group’s Q4 interim report is published today on the bank’s
internet home page: <a href='http://www.hansagroup.com' target='_blank'>http://www.hansagroup.com</a>
OPERATING RESULTS, Q4 2004
- Loan growth 8% qoq, +35% yoy
- Deposit growth 4% qoq, +22% yoy
- Net interest margin 3.22%, -8bp qoq, -23bp yoy
- Net profit EUR 48.7 million, +/-0% qoq, +54% yoy
- Return on equity 24.4%
- Revenues EUR 111.9 million, +4% qoq, +22% yoy
- Expenses EUR 58.3 million, +21 qoq, +14% yoy
- Cost-income ratio 50.4%
The same trends that have influenced the Baltic banking market
throughout the year, continued also in the fourth quarter. The main
growth engine is lending growth, particularly in the retail segment.
Higher economic activity and personal income increase the demand for
more diverse banking services. Better economic environment and more
diversified lending structure improve our asset quality.
The Group’s net profit totalled EUR 48.7 million in the fourth
quarter, which exceeds previous year’s fourth quarter result by 54%.
Operating profit before provisions increased by 32% over the year.
Part of the growth resulted from EUR 2.9 million of one-off expenses
in the fourth quarter of 2003. These were related to the pension II
pillar campaign and reduction of the branch network in our Lithuanian
unit. Additionally, our Estonian unit’s net provisions were below
their normal level by approximately EUR 5 million. Excluding these
items, annual growth rates were 27% for net profit and 24% for
operating profit.
Our Lithuanian business unit improved the most in terms of
profitability. In the fourth quarter of 2004 their profit rose to EUR
6.1 million while a year earlier they had incurred a EUR 0.2 million
loss. The Estonian net profit increased by 30% to EUR 33.8 million in
one year. However, EUR 5 million of that growth came from one-off
provision write-backs. Excluding those, annual profit growth was 11%.
Latvian net profit increased by 46% to EUR 8.9 million compared to
last year’s same quarter. The Russian result decreased from EUR 2.1
million to EUR 1.3 million due to start-up costs.
Revenues
Total revenues increased by 4% qoq to EUR 111.9 million in the fourth
quarter of 2004, annual growth was 22%.
The main growth engines were rapid loan growth and increased customer
activity. Total loans increased by 8.5% or EUR 0.5 billion to EUR 5.9
billion during the fourth quarter. Close to half of the growth came
from the retail segment. During the quarter our clients signed close
to 6,000 new mortgage loan agreements and over 20,000 credit card
agreements. Faster lending growth increased net interest income by 21%
yoy and 4% qoq to EUR 64.5 million. Nevertheless, as the average
lending margin continues to decrease, revenue growth is still slower
than lending volume growth. The average yield of the loan portfolio
decreased by 11bp during the quarter to 5.81% and the net interest
margin reduced by 8bp to 3.22%. The latter was negatively influenced
also by the EUR 750 million Eurobond signed in October which increased
the quarterly interest expense on debt securities by 35% qoq.
Client deposits increased by 4% EUR or 0.2 billion to EUR 5.0 billion
during the fourth quarter. Half of the growth came from the Lithuania
business unit, where deposits increased by EUR 128 million during the
quarter. The remaining half divided equally between Estonian and
Latvian units. A slight increase in the average cost of deposits also
pushed up the interest expense on deposits which rose by 10% in the
fourth quarter. Annual deposit growth was 22% and deposit interest
expense increased by 6%.
Net fee income rose by 20% yoy and by 9% qoq to EUR 32.8 million in Q4
2004. Higher growth in the last quarter is primarily explained by
seasonal factors as clients use banking services, especially
settlements, more actively. In addition to more favourable interest
rates our clients have benefited also from lower fees. The 20%
increase in fees is slower than growth in loans as well as the number
and volume of transactions over the same period.
The fastest growth, both in the last quarter as well as over the past
year was in fees related to investment services. Custody, equity
trading and investment services fees increased by 64% yoy and by 29%
qoq to EUR 3.6 million. Although these fees currently form less than
10% of total fee revenue, they hold significant growth potential
considering the growing popularity of investment products and the
successful pension reform in all three countries.
Lending fees increased by 26% yoy and by 15% qoq to EUR 10.6 million.
Settlement (cash services and transfers) fees rose by 19% yoy and by
10% qoq to EUR 10.7 million.
Growth in the largest fee item – card fees – remained modest in the
fourth quarter and reached 3%. Annual growth of card fees was 22%.
Expenses
Operating expenses increased by 14% yoy and by 21% qoq to EUR 58.3
million in Q4 2004. Fast growth in the last quarter of the year is
seasonal – in the third quarter expenses are usually below the average
result while in the fourth quarter they are above.
Personnel expenses reached EUR 27.1 million in Q4 2004. Both, annual
as well as quarterly growth rates were 11%. A significant part of the
growth came from an increase in the employee performance pay reserve.
Administrative expenses increased by 28% yoy and by 22% qoq to EUR
11.5 million. In the fourth quarter our Latvian business unit started
to move to the new headquarters, which has temporarily increased the
cost on supplies and other office expenditures. In the fourth quarter
the Group paid EUR 0.9 million to outside consultants for two ongoing
strategic projects. We are enhancing the Group’s management reporting
system and developing a performance and talent management system.
IT expenses (does not include IT related personnel expenses and
depreciation) increased by 11% yoy and by 28% qoq to EUR 5.0 million.
Several one-off expenses caused the high quarterly growth rate. Of the
EUR 1.1 million quarterly growth EUR 0.8 million came from renewal of
software licenses and purchasing new hardware for the Latvian
headquarters.
Other expenses rose by 29% yoy and by 71% qoq to EUR 10.6 million. The
fastest growth has been in expenses related to promotion, sponsorship
and charity. The total volume increased by EUR 1 million to EUR 2.3
million in Q4 2004. The EUR 0.9 million increase in advertising
expenses to EUR 2.7 million is seasonal and caused by various year-end
campaigns.
Similarly to the previous years, the Group’s cost-efficiency weakened
in the fourth quarter. The cost-income ratio increased to 50.4% and
the cost to assets ratio rose to 2.81%. Nevertheless, both ratios have
improved considerably if compared against the Q4 2003 result when the
respective ratios were 54.1% and 3.22%.
Asset quality
Asset quality indicators improved in the fourth quarter. Loans overdue
more than 60 days reduced by 17% to EUR 17.0 million in three months.
The Group’s risk cost was –0.06% in Q4, which means that recoveries
exceeded write offs. Due to these positive developments the Estonian
business unit reduced its provisioning level. As a result, loan and
guarantee provisions halved compared to the previous quarters,
totalling EUR 5.6 million in the fourth quarter. The ratio of loan
loss allowance to total loans decreased by 5bp during the quarter to
1.25%.
Based on the changes to international reporting standards (IAS 39,
revised) the Group will have to revise its provisioning principles
from 2005 onwards. The Group has so far calculated provisions based on
estimated losses. According to the new requirements, provisions may
only be based on loss events. As a result the Group will release
approximately 20% of the loan loss allowance recorded in the balance
sheet in the first quarter of 2005. This is a preliminary estimate and
the Group may release additional provisions over the following
quarters. All provision releases will be booked in retained earnings
of previous periods.
The other change concerns goodwill amortisation. Starting from 2005
goodwill will no longer be amortised on a monthly basis, but re-valued
based on an annual asset impairment test. The Group’s goodwill
amortisation cost was EUR 7.9 million in 2004.
ESTONIA
- Loan growth 7% qoq, 27% yoy
- Deposit growth 3% qoq, 16% yoy
- Net interest margin 3.08%, -12bp qoq, -77bp yoy
- Net profit EUR 33.8 million, +29% qoq, +30% yoy
- Return on equity 54%
- Revenues EUR 52.8 million, +8% qoq, +11% yoy
- Expenses EUR 21.5 million, +7% qoq, +10% yoy
- Cost-income ratio 41%
Estonian fourth quarter result was influenced by the provision write-
back. This increased the quarterly net profit by approximately EUR 5
million. As a result, Estonian net profit increased by 29% or EUR 7.6
million in one quarter to EUR 33.8 million in Q4 2004.
Revenues
Revenues of the Estonian business unit increased by 8% in one quarter
to EUR 52.8 million. The main growth drivers were faster lending
growth and positive developments on the securities market.
Rapid lending growth had a positive influence on fee as well as
interest revenues. Estonian loan portfolio increased by 7% or EUR 177
million in one quarter to EUR 2.79 billion. More than half of the
growth came from retail lending, which increased by EUR 102 million to
EUR 1.18 billion in Q4. Hansabank signed more than 2,000 new mortgage
loan contracts in Estonia in the fourth quarter, taking the total
number of mortgage customers to 43,000.
Despite a 7% increase in total loans, net interest income rose by 1%
only to EUR 29.5 million in Q4. Growth was slowed by a temporary
increase in the average cost of deposits. The net interest margin
reduced by 12bp to 3.08% due to faster growth in interest expense.
Annual reduction of the margin now stands at 77bp.
Net fee income rose by 12% to EUR 16.9 million over the quarter. Fee
growth was primarily driven by fast lending growth and increased
securities trading by our customers.
Rising securities markets also had a positive impact on our trading
and insurance revenues, which increased by 26% to EUR 4.4 million and
by 100% to EUR 0.8 million, respectively in Q4 2004.
Expenses
Estonian business unit’s operating expenses increased primarily due to
seasonal factors by 7% to EUR 21.5 million in Q4. The fastest growth
was among other expenses which increased by 78% to EUR 3.2 million
compared to Q3. Growth was primarily driven by marketing, promotion
and sponsorship expenses, which increased by 55% to EUR 1.7 million
and a two-fold increase in training expenses which rose to EUR 0.3
million.
Personnel costs rose by 12% to EUR 8.7 million due to an increase in
the employee performance pay reserve.
Our Estonian unit has the best cost-efficiency in the Group. The ratio
of operating expenses to average assets has continuously remained
below 2.5%; in Q4 2004 the ratio was 2.3%. Estonian cost-income ratio
was 41% in Q4.
Asset quality
We have seen a continuous improvement in asset quality in Estonia.
This has allowed us to gradually reduce the provisioning level - the
ratio of loan loss allowances to total loans reduced by another 13bp
to 1.31% at the end of December. In the fourth quarter, the Group
successfully completed the work-out of certain problem loans, which
resulted in provision write-backs (approximately EUR 5 million). As a
result, fourth quarter net provisions were on the positive side by EUR
2.6 million, compared to an average cost of EUR 3.1 million for the
first three quarters of the year.
LATVIA
- Loan growth 7% qoq, 41% yoy
- Deposit growth 6% qoq, 28% yoy
- Net interest margin 3.66%, +26bp qoq, +18bp yoy
- Net profit EUR 8.9 million, -34% qoq, +46% yoy
- Return on equity 32%
- Revenues EUR 28.3 million, -7% qoq, +30% yoy
- Expenses EUR 16.6 million, +36% qoq, +35% yoy
- Cost-income ratio 58%
Our Latvian business unit’s financial results were influenced by
several one-off items in the second half of 2004. In the third quarter
revenues were higher by EUR 2.5 million due to extraordinary income
from the sale of assets and expenses lower by EUR 0.9 million due to a
release of provision (positive settlement of a court dispute, recorded
under other expenses). Fourth quarter expenses were pushed up by the
opening of the new headquarters in Riga. As a result, fourth quarter
net profit decreased by EUR 4.6 million or 34% to EUR 8.9 million
compared to Q3 2004. Annual growth of the fourth quarter profit was
46%.
Revenues
Revenues in our Latvian business unit decreased by 7% to EUR 28.3
million in one quarter. Without the extraordinary income in the third
quarter, revenues grew by 1%. The main reasons for sluggish growth
were a 12% decrease in trading revenues to EUR 3.8 million and a 1%
increase in net fee income to EUR 7.6 million. Net fee growth was
slowed down by a 25% rise in fee expenses.
Net interest income rose by 8% to EUR 16.7 million over the quarter.
Growth was driven by fast lending growth throughout the year. Latvian
lending portfolio increased by 7% in the last quarter and 41% over the
past year to EUR 1.37 billion. The EUR 93 million growth in the fourth
quarter divides equally between the retail and corporate segments.
Retail customers signed over 1500 new mortgage contracts during the
fourth quarter, taking the total to 20,000. In Latvia the decrease in
lending margins has almost stopped during the past few quarters, which
is quite different from the Estonian developments. The main reason
behind this is the higher share of US dollar based loans and the rise
in dollar interest rates by more than 1.5pp over the past 9 months. As
a result the average yield of the loan portfolio increased by 6bp to
6.40% and the net interest margin by 26bp to 3.66% in the fourth
quarter.
Expenses
Latvian expenses grew by 36% to EUR 16.6 million in Q4 2004. Growth
was driven by higher performance pay reserve payments, opening of the
new headquarters, as well as a lower than usual expense level in Q3.
The fastest growing item was other expenses, which tripled compared to
the previous quarter to EUR 2.6 million. EUR 0.9 million of the growth
came from a one-off provision write-back in Q3. Marketing, promotion
and sponsorship expenses increased by 73% to EUR 1.9 million.
Personnel expenses grew by 19% to EUR 6.2 million due to higher
performance pay reserve payments.
Due to above average expenses in the fourth quarter Latvian quarterly
cost to asset ratio rose to 3.6% and the cost-income ratio to 58%. For
the full year Latvian cost-income ratio remained below the 50% target
at 47%.
Asset quality
Latvian asset quality is stable and the ratio of loan loss reserves to
total loans is maintained around the 1.3% level. Net provisions
totalled EUR 1.2 million in the fourth quarter, which is roughly half
of the average quarterly cost during the first nine months of the
year.
LITHUANIA
- Loan growth 12% qoq, 46% yoy
- Deposit growth 8% qoq, 25% yoy
- Net interest margin 2.67%, -2bp qoq, +26bp yoy
- Net profit EUR 6.1 million, -8% qoq
- Return on equity 16%
- Revenues EUR 27.4 million, +9% qoq, +43% yoy
- Expenses EUR 18.0 million, +13% qoq, -1% yoy
- Cost-income ratio 60%
Lithuanian business results improved throughout the year. Lending
growth was the fastest in the Group and the business unit increased
its operating profit each quarter. Lithuanian operations’ net profit
was EUR 6.1 million in Q4 2004, decreasing by EUR 0.5 million compared
to Q3 result. The decrease was caused by higher net provisions and a
seasonal increase in operating expenses. A year earlier the Lithuanian
business unit posted a EUR 0.2 million loss due to one-off expenses.
Revenues
Lithuanian business unit achieved both, the fastest lending and
revenue growth in the Group. Fourth quarter revenues increased by 9%
qoq and by 43% yoy to EUR 27.4 million. The loan portfolio rose by 12%
qoq and by 46% yoy to EUR 1.57 billion. Unlike in Estonia and Latvia,
in Lithuania corporate loans remain the main growth driver and still
account for 2/3 of total lending growth.
Net interest income increased by 6% qoq to EUR 15.2 million.
Lithuanian lending margins are the lowest of the three Baltic
countries and have not decreased substantially over the past year. As
a result, net interest income and lending growth rates are on very
similar levels. Average yield of the loan portfolio decreased by 40bp
to 4.94% while the net interest margin has remained steadily around
the 2.7% level; in the fourth quarter net interest margin was 2.67%
Net fee income increased by 15% to EUR 8.3 million in Q4 2004. The
growth was equally spread between the main banking services:
settlements, cards, loans and securities.
Expenses
Lithuanian operating expenses increased due to seasonal factors by 13%
to EUR 18.0 million in Q4 2004.
IT expenses increased by 18% to EUR 3.3 million, administrative
expenses by 15% to EUR 3.0 million and other expenses by 23% to EUR
3.7 million. Similarly to other business units, above-average growth
in other expenses resulted from year-end marketing and sponsorship
campaigns which increased the relevant cost items by 57% to EUR 1.1
million.
Lithuanian cost to assets ratio was 2.9% and cost-income ratio was 60%
in Q4 2004.
Asset quality
Lithuanian asset quality is the best in the Group. Non-performing
loans (overdue more than 60 days) totalled EUR 1.1 million at the end
of the year and formed only 0.1% of total loans. Although Lithuanian
net provisions increased by 17% qoq to EUR 2.7 million, it was caused
by faster lending growth and asset quality indicators actually
improved during the quarter.
RUSSIA
- Loan growth +14% qoq, +33% yoy
- Net interest margin 5.71%, -43bp qoq, +66bp yoy
- Net profit EUR 1.3 million, -46% qoq, -38% yoy
- Return on equity 37%
- Revenues EUR 3.8 million, +3% qoq, +36% yoy
- Expenses EUR 1.1 million, +83% qoq, +267% yoy
- Cost-income ratio 29%
For the past year most of Hansabank’s focus in Russia has been on
launching leasing and corporate banking operations in the Moscow, St.
Petersburg and Kaliningrad regions. To that end we have set up a
leasing company in Moscow and Kaliningrad and will soon open a leasing
branch also in St. Petersburg. In September 2004 Hansabank also signed
the purchase agreement of Kvest bank, a small Moscow-based corporate
bank. We expect to close the transaction in the first quarter of 2005
and after that start to offer corporate banking services in Russia
under our own name.
Russian lending growth slowed to 33% at the end of December with total
loans amounting to EUR 203 million. This corresponds to 3% of the
Group’s loan portfolio. In the medium-term the Board has limited the
Group’s Russian exposure to 10% of the Group’s risk weighted assets.
Annual revenue growth was 36% and revenues totalled EUR 3.8 million in
Q4 2004. At the same time start-up costs have increased operating
expenses by close to three times to EUR 1.1 million. Most of the
growth has come from building our Russian team and hiring new people.
The number of employees increased from 3 in the beginning of the year
to 21 at the end of 2004. During the first half of 2005 our Russian
team will more than double.
1 EUR = 15.6466 EEK
Mart Tõevere
Head of Corporate Communications and IR
Tel. +372 6131 569
CONSOLIDATED BALANCE SHEETS
(in millions of euros, unaudited)
31.12.04 30.09.04 31.12.03
Assets
Cash 161.8 144.6 159.9
Due from Central Bank 395.6 387.7 361.8
Due from other financial 854.0 653.1 564.9
institutions
Treasury securities 379.6 442.7 361.9
Trading securities 62.9 78.4 93.0
Investment securities 187.5 183.9 151.2
Loans 5,924.0 5,461.8 4,395.5
- Allowances for credit losses -74.1 -71.1 -60.8
Net loans 5,849.9 5,390.7 4,334.7
Tangible assets 109.6 111.0 117.3
Intangible assets 23.8 25.2 18.1
Prepayments and accrued interest 124.4 132.1 165.4
Other assets 70.2 73.5 80.4
Total assets 8,219.3 7,622.9 6,408.6
Liabilities
Due to Central Bank and government 7.1 84.6 50.0
Due to other financial institutions 487.9 490.6 461.0
Deposits 4,972.0 4,769.7 4,076.7
Demand deposits 3,577.9 3,451.0 2,890.7
Time deposits 1,394.1 1,318.7 1,186.0
Debt securities issued to the 1,527.1 1,074.9 775.3
public
Accrued liabilities 143.9 130.3 134.9
Appropriations 132.9 121.9 47.5
Deferred tax liability 2.0 1.2 1.4
Other liabilities 122.0 147.5 138.8
Total liabilities 7,394.9 6,820.7 5,685.6
Minority ownership 9.4 9.7 8.3
Subordinated liabilities - 18.6 44.0
Shareholders' equity
Common stock 202.8 202.8 50.7
Share premium 30.2 29.4 181.0
Treasury stock -0.2 -0.2 -0.5
Reserves 29.8 29.9 29.5
Other restricted equity 6.4 6.4 6.4
Currency translation reserve -15.8 -7.4 -11.2
Retained earnings 561.8 513.0 414.8
Total shareholders' equity 815.0 773.9 670.7
Total liabilities and shareholders' 8,219.3 7,622.9 6,408.6
equity
CONSOLIDATED INCOME STATEMENTS
(in millions of euros, unaudited)
2004 2003
Interest income 362.7 316.9
Interest expense -121.9 -109.0
Interest income, net 240.8 207.9
Fee and commission income 155.6 130.3
Fee and commission expense -34.8 -28.1
Fees and commissions, net 120.8 102.2
Net result from financial 39.3 36.7
operations
Net income from insurance 5.8 1.7
activities
Other income 14.1 11.7
Total income 420.8 360.2
Operating expenses
Personnel expenses 97.5 85.5
Data network expenses 16.1 14.8
Administrative expenses 38.7 33.8
Other expenses 30.4 27.4
incl. goodwill amortisation 7.9 6.3
Depreciation 18.1 22.5
Total operating expenses 200.8 184.0
Operating profit before provisions 220.0 176.2
Losses on loans and guarantees -34.2 -41.7
Recovered loans 13.2 12.3
Profit from associates under the 0.2 0.3
equity method
Profit before income tax 199.2 147.1
Income tax -14.3 -15.3
Profit after income tax 184.9 131.8
Minority interest -2.1 -0.9
Net profit 182.8 130.9
CONSOLIDATED INCOME STATEMENTS - QUARTERLY
(in millions of euros,
unaudited)
Q4 2004 Q3 2004 Q2 2004 Q1 2004 Q4 2003
Interest income 98.1 93.4 88.3 82.9 80.3
Interest expense -33.6 -31.4 -29.1 -27.8 -27.1
Interest income, net 64.5 62.0 59.2 55.1 53.2
Fee and commission income 42.8 38.7 40.4 33.7 35.1
Fee and commission expense -10.0 -8.7 -8.9 -7.2 -7.7
Fees and commissions, net 32.8 30.0 31.5 26.5 27.4
Net result from financial 10.6 9.6 8.5 10.6 9.0
operations
Net income from insurance 1.9 1.3 1.7 0.9 0.2
activities
Other income 2.1 5.0 3.9 3.1 1.8
Total income 111.9 107.9 104.8 96.2 91.6
Operating expenses
Personnel expenses 27.1 24.4 23.5 22.5 24.4
Data network expenses 5.0 3.9 3.9 3.3 4.5
Administrative expenses 11.5 9.4 8.9 8.9 9.0
Other expenses 10.6 6.2 7.4 6.2 8.2
incl. goodwill amortisation 1.9 2.0 2.0 2.0 1.5
Depreciation 4.1 4.4 4.6 5.0 5.0
Total operating expenses 58.3 48.3 48.3 45.9 51.1
Operating profit before 53.6 59.6 56.5 50.3 40.5
provisions
Losses on loans and guarantees -5.6 -10.7 -9.5 -8.4 -11.0
Recovered loans 3.9 3.1 3.2 3.0 3.4
Profit from associates - 0.1 0.1 - 0.1
Profit before income tax 51.9 52.1 50.3 44.9 33.0
Income tax -2.7 -2.9 -7.2 -1.5 -1.1
Profit after income tax 49.2 49.2 43.1 43.4 31.9
Minority interest -0.5 -0.5 -0.5 -0.6 -0.3
Net profit 48.7 48.7 42.6 42.8 31.6
COUNTRY-BASED BALANCE SHEETS, 31.12.2004
(in millions of euros, Est Lat Lit Rus
unaudited)
Assets
Cash 55.6 41.5 64.7 -
Due from Central Bank 228.9 64.1 102.6 -
Due from other financial 562.8 62.8 259.1 8.0
institutions
Treasury securities 7.4 247.3 124.9 -
Trading securities 22.6 9.1 31.2 -
Investment securities 54.8 0.2 132.5 -
Loans 2,789.5 1,366.0 1,565.8 203.1
- Allowances for credit -36.6 -17.7 -16.9 -2.8
losses
Net loans 2,752.9 1,348.3 1,548.9 200.3
Tangible assets 26.6 44.7 38.1 0.2
Intangible assets 2.2 1.3 20.3 -
Prepayments and accrued 69.3 20.4 23.4 14.2
interest
Other assets 66.6 9.6 6.5 0.5
Total assets 3,849.7 1,849.3 2,352.2 223.2
Liabilities
Due to Central Bank and 3.3 0.4 3.4 -
government
Due to other financial 408.8 443.6 404.7 128.2
institutions
Deposits 2,171.5 1,125.3 1,633.3 43.9
Demand deposits 1,643.1 789.8 1,117.3 29.7
Time deposits 528.4 335.5 516.0 14.2
Debt securities 1,527.1 21.2 - -
Accrued liabilities 78.2 30.9 36.6 1.4
Appropriations 65.5 2.7 66.6 0.1
Other liabilities 61.9 46.7 19.3 1.1
Minority ownership 0.1 - 0.8 8.5
Subordinated liabilities - 12.1 - -
Internal funding adjustments -716.7 44.3 31.4 22.2
Shareholders' equity 250.0 122.1 156.1 17.8
Total liabilities and 3,849.7 1,849.3 2,352.2 223.2
shareholders' equity
*The deposits under the Russian business unit are collateral deposits
provided by Russian customers.
COUNTRY-BASED INCOME STATEMENTS, Q4 2004
(in millions of euros, Est Lat Lit Rus
unaudited)
Interest income 47.3 24.6 22.2 4.3
Interest expense -17.8 -7.9 -7.0 -1.1
Interest income, net 29.5 16.7 15.2 3.2
Fee and commission income 21.4 10.1 11.0 0.5
Fee and commission expense -4.5 -2.5 -2.7 -0.1
Fees and commissions, net 16.9 7.6 8.3 0.4
Net result from financial 4.4 3.8 2.2 0.2
operations
Net income from insurance 0.8 - 1.1 -
activities
Other income 1.2 0.2 0.6 -
Total income 52.8 28.3 27.4 3.8
Operating expenses
Personnel expenses 8.7 6.2 6.4 0.2
Data network expenses 4.8 3.0 3.3 -
Administrative expenses 3.0 3.4 3.0 0.2
Other expenses 3.2 2.6 3.7 0.3
incl. goodwill amortisation 0.1 0.2 1.5 -
Depreciation 0.6 0.6 0.7 -
Group overhead adjustment 1.2 0.8 0.9 0.4
Total operating expenses 21.5 16.6 18.0 1.1
Operating profit before 31.3 11.7 9.4 2.7
provisions
Losses on loans and guarantees 0.6 -2.2 -3.7 -0.4
Recovered loans 1.9 1.0 1.0 -
Income from associated - - - -
companies
Profit before income tax 33.8 10.5 6.7 2.3
Income tax - -1.6 -0.5 -0.6
Profit after income tax 33.8 8.9 6.2 1.7
Minority interest - - -0.1 -0.4
Net profit 33.8 8.9 6.1 1.3
COUNTRY-BASED BALANCE SHEETS – ESTONIA
(in millions of euros, 31.12.04 30.09.04 30.06.04 31.03.04 31.12.03
unaudited)
Assets
Cash 55.6 45.8 48.5 41.8 51.6
Due from Central Bank 228.9 256.4 190.8 199.7 179.6
Due from other financial 562.8 391.2 498.1 400.1 401.2
institutions
Treasury securities 7.4 9.3 8.3 8.2 7.9
Trading securities 22.6 14.9 15.4 16.4 10.3
Investment securities 54.8 55.0 52.8 48.3 43.6
Loans 2,789.5 2612.2 2,439.5 2,273.5 2,201.6
- Allowances for credit -36.6 -37.5 -35.7 -34.4 -32.8
losses
Net loans 2,752.9 2,574.7 2,403.8 2,239.1 2,168.8
Tangible assets 26.6 27.3 26.1 32.6 32.9
Intangible assets 2.2 1.7 2.1 2.6 3.0
Prepayments and accrued 69.3 71.4 71.2 79.4 96.8
interest
Other assets 66.6 61.1 165.1 59.9 53.5
Total assets 3,849.7 3,508.8 3,482.2 3,128.1 3,049.2
Liabilities
Due to Central Bank and 3.3 3.6 3.9 4.3 16.3
government
Due to other financial 408.8 381.3 371.6 380.3 353.6
institutions
Deposits 2,171.5 2,118.3 2,046.5 1,919.5 1,895.4
Demand deposits 1,643.1 1,618.2 1,564.9 1,377.6 1,423.6
Time deposits 528.4 500.1 481.6 541.9 471.8
Debt securities 1,527.1 1,074.9 1,122.7 777.1 775.3
Accrued liabilities 78.2 71.7 67.5 58.5 79.8
Appropriations 65.5 59.5 55.4 49.1 44.7
Other liabilities 61.9 74.6 69.1 63.7 53.8
Minority ownership 0.1 0.8 0.7 0.6 0.6
Subordinated liabilities - 15.3 15.3 40.8 40.8
Internal funding -716.7 -525.8 -501.7 -377.4 -443.3
adjustments
Shareholders' equity 250.0 234.6 231.2 211.4 232.2
Total liabilities and 3,849.7 3,508.8 3,482.2 3,128.1 3,049.2
shareholders' equity
COUNTRY-BASED INCOME STATEMENTS - ESTONIA
(in millions of euros, Q4 2004 Q3 2004 Q2 2004 Q1 2004 Q4 2003
unaudited)
Interest income 47.3 45.2 44.4 42.7 43.3
Interest expense -17.8 -16.1 -15.6 -15.0 -14.6
Interest income, net 29.5 29.1 28.8 27.7 28.7
Fee and commission income 21.4 19.0 20.4 16.5 17.8
Fee and commission expense -4.5 -3.9 -3.7 -2.7 -3.9
Fees and commissions, net 16.9 15.1 16.7 13.8 13.9
Net result from financial 4.4 3.5 3.2 4.6 3.8
operations
Net income from insurance 0.8 0.4 0.7 0.3 0.3
activities
Other income 1.2 0.9 1.7 1.4 1.0
Total income 52.8 49.0 51.1 47.8 47.7
Operating expenses
Personnel expenses 8.7 7.9 7.9 7.4 8.4
Data network expenses 4.8 4.4 4.4 4.1 4.1
Administrative expenses 3.0 3.3 3.2 3.1 3.2
Other expenses 3.2 1.8 2.1 1.5 2.2
incl. goodwill 0.1 0.1 0.1 0.1 0.1
amortisation
Depreciation 0.6 0.5 0.5 0.6 1.1
Group overhead adjustment 1.2 2.1 1.5 1.7 0.5
Total operating expenses 21.5 20.0 19.6 18.4 19.5
Operating profit before 31.3 29.0 31.5 29.4 28.2
provisions
Losses on loans and 0.6 -4.6 -4.7 -4.5 -3.7
guarantees
Recovered loans 1.9 1.7 1.2 1.4 1.4
Income from associated - 0.1 0.1 - -
companies
Profit before income tax 33.8 26.2 28.1 26.3 25.9
Income tax - - -5.1 - -
Profit after income tax 33.8 26.2 23.0 26.3 25.9
Minority interest - - -0.1 -0.1 0.1
Net profit 33.8 26.2 22.9 26.2 26.0
COUNTRY-BASED BALANCE SHEETS - LATVIA
(in millions of euros, 31.12.04 30.09.04 30.06.04 31.03.04 31.12.03
unaudited)
Assets
Cash 41.5 43.4 44.4 38.2 45.5
Due from Central Bank 64.1 44.0 59.3 42.1 37.0
Due from other financial 62.8 102.9 59.3 71.3 113.6
institutions
Treasury securities 247.3 269.6 202.7 191.7 195.3
Trading securities 9.1 10.7 9.3 10.3 8.4
Investment securities 0.2 0.3 0.3 3.8 5.7
Loans 1,366.0 1,273.1 1,185.1 1,073.0 965.4
- Allowances for credit -17.7 -15.8 -16.3 -15.2 -12.2
losses
Net loans 1,348.3 1,257.3 1,168.8 1,057.8 953.2
Tangible assets 44.7 43.5 42.1 36.5 34.5
Intangible assets 1.3 1.6 1.9 2.2 2.5
Prepayments and accrued 20.4 26.5 21.1 31.5 30.8
interest
Other assets 9.6 16.5 16.2 19.1 18.8
Total assets 1,849.3 1,816.3 1,625.4 1,504.6 1,445.3
Liabilities
Due to Central Bank and 0.4 77.6 - 14.2 31.0
government
Due to other financial 443.6 385.8 331.2 267.4 252.8
institutions
Deposits 1,125.3 1,064.7 1,023.8 949.2 881.4
Demand deposits 789.8 740.4 717.5 653.4 591.4
Time deposits 335.5 324.3 306.3 295.9 290.0
Debt securities 21.2 22.4 22.5 22.6 22.1
Accrued liabilities 30.9 29.7 24.6 21.6 23.8
Appropriations 2.7 2.5 3.0 2.9 3.2
Other liabilities 46.7 58.7 57.5 63.5 72.5
Minority ownership - - - - 0.1
Subordinated liabilities 12.1 10.4 10.4 10.4 10.2
Internal funding 44.3 47.9 43.6 46.6 40.3
adjustments
Shareholders' equity 122.1 116.6 108.8 106.0 107.9
Total liabilities and 1,849.3 1,816.3 1,625.4 1,504.6 1,445.3
shareholders' equity
COUNTRY-BASED INCOME STATEMENTS - LATVIA
(in millions of euros, Q4 2004 Q3 2004 Q2 2004 Q1 2004 Q4 2003
unaudited)
Interest income 24.6 23.2 21.2 18.7 17.8
Interest expense -7.9 -7.8 -6.4 -6.1 -5.9
Interest income, net 16.7 15.4 14.8 12.6 11.9
Fee and commission income 10.1 9.7 9.7 8.2 8.4
Fee and commission expense -2.5 -2.0 -2.0 -1.6 -2.0
Fees and commissions, net 7.6 7.7 7.7 6.6 6.4
Net result from financial 3.8 4.3 3.7 3.5 3.3
operations
Net income from insurance - - - - -
activities
Other income 0.2 3.0 0.6 0.7 0.2
Total income 28.3 30.4 26.8 23.4 21.8
Operating expenses
Personnel expenses 6.2 5.2 4.9 4.0 4.4
Data network expenses 3.0 2.4 2.6 2.5 2.1
Administrative expenses 3.4 2.7 2.3 2.4 2.7
Other expenses 2.6 0.9 1.7 1.4 1.9
incl. goodwill 0.2 0.3 0.3 0.5 0.3
amortisation
Depreciation 0.6 0.4 0.5 0.5 0.5
Group overhead adjustment 0.8 0.6 0.6 0.4 0.7
Total operating expenses 16.6 12.2 12.6 11.2 12.3
Operating profit before 11.7 18.2 14.2 12.2 9.5
provisions
Losses on loans and -2.2 -3.2 -2.6 -3.1 -3.4
guarantees
Recovered loans 1.0 0.8 0.4 0.6 0.7
Income from associated - - - - -
companies
Profit before income tax 10.5 15.8 12.0 9.7 6.8
Income tax -1.6 -2.3 -1.6 -1.3 -0.7
Profit after income tax 8.9 13.5 10.4 8.4 6.1
Minority interest - - - - -
Net profit 8.9 13.5 10.4 8.4 6.1
COUNTRY-BASED BALANCE SHEETS - LITHUANIA
(in millions of euros, 31.12.04 30.09.04 30.06.04 31.03.04 31.12.03
unaudited)
Assets
Cash 64.7 55.3 53.3 51.9 62.8
Due from Central Bank 102.6 87.4 99.1 101.7 145.2
Due from other financial 259.1 160.7 156.8 175.2 100.4
institutions
Treasury securities 124.9 163.9 181.4 175.5 158.7
Trading securities 31.2 52.7 62.6 71.7 74.3
Investment securities 132.5 128.7 126.4 125.6 101.9
Loans 1,565.8 1,399.6 1,275.9 1,159.2 1,074.8
- Allowances for credit -16.9 -15.2 -14.7 -13.3 -13.2
losses
Net loans 1,548.9 1,384.4 1,261.2 1,145.9 1,061.6
Tangible assets 38.1 40.0 41.4 43.7 44.8
Intangible assets 20.3 21.9 23.6 25.2 12.5
Prepayments and accrued 23.4 24.7 29.3 24.1 31.0
interest
Other assets 6.5 10.2 5.8 6.9 13.3
Total assets 2,352.2 2,129.9 2,040.9 1,947.4 1,806.5
Liabilities
Due to Central Bank and 3.4 3.4 3.0 2.9 2.7
government
Due to other financial 404.7 323.2 329.8 291.0 21.4
institutions
Deposits 1,633.3 1,505.8 1,426.7 1,359.1 1,301.7
Demand deposits 1,117.3 1,012.4 957.6 899.5 877.5
Time deposits 516.0 493.4 469.1 459.6 424.2
Debt securities - - - - -
Accrued liabilities 36.6 30.7 29.9 26.7 30.0
Appropriations 66.6 60.9 54.4 49.8 0.9
Other liabilities 19.3 24.9 21.2 23.9 21.2
Minority ownership 0.8 0.8 0.8 0.9 0.9
Subordinated liabilities - - - - -
Internal funding 31.4 34.6 36.9 58.8 300.0
adjustments
Shareholders' equity 156.1 145.6 138.2 134.3 127.7
Total liabilities and 2,352.2 2,129.9 2,040.9 1,947.4 1,806.5
shareholders' equity
COUNTRY-BASED INCOME STATEMENTS - LITHUANIA
(in millions of euros, Q4 2004 Q3 2004 Q2 2004 Q1 2004 Q4 2003
unaudited)
Interest income 22.2 21.3 19.6 18.7 17.0
Interest expense -7.0 -7.0 -6.7 -6.5 -6.5
Interest income, net 15.2 14.3 12.9 12.2 10.5
Fee and commission income 11.0 9.6 9.5 8.4 8.1
Fee and commission expense -2.7 -2.4 -2.7 -2.1 -1.8
Fees and commissions, net 8.3 7.2 6.8 6.3 6.3
Net result from financial 2.2 1.7 1.4 2.3 1.6
operations
Net income from insurance 1.1 0.9 1.0 0.6 -
activities
Other income 0.6 1.1 1.0 0.9 0.7
Total income 27.4 25.2 23.1 22.3 19.1
Operating expenses
Personnel expenses 6.4 6.3 6.5 6.3 8.0
Data network expenses 3.3 2.8 2.8 3.1 2.8
Administrative expenses 3.0 2.6 2.7 2.7 2.8
Other expenses 3.7 3.0 3.0 2.8 3.0
incl. goodwill 1.5 1.6 1.6 1.5 1.2
amortisation
Depreciation 0.7 0.7 0.7 0.7 1.0
Group overhead adjustment 0.9 0.5 0.7 0.4 0.6
Total operating expenses 18.0 15.9 16.4 16.0 18.2
Operating profit before 9.4 9.3 6.7 6.3 0.9
provisions
Losses on loans and -3.7 -2.9 -1.7 -0.6 -2.0
guarantees
Recovered loans 1.0 0.6 1.6 1.0 1.2
Income from associated - - - - -
companies
Profit before income tax 6.7 7.0 6.6 6.7 0.1
Income tax -0.5 -0.4 -0.4 -0.3 -0.3
Profit after income tax 6.2 6.6 6.2 6.4 -0.2
Minority interest -0.1 - - - -
Net profit 6.1 6.6 6.2 6.4 -0.2
Mart Tõevere
Head of Corporate Communications and IR
Tel. +372 6131 569
Sitemap