AS Balti Investeeringute Grupp       FINANCIAL RESULTS           02.03.2005



Performance results of AS Balti Investeeringute Grupp, 12 months 2004

(unaudited interim report)



The performance results of AS Balti Investeeringud for the year

2004 were as anticipated. Changes in the company’s key economic

indicators were comparable with the developments of other

companies operating in the financial sector. Both the portfolio

of loans issued and the earnings and profit from ordinary

activities grew remarkably. The increase in interest expenses

and wages and salaries has been relatively lower than the

increase in income, and the overall efficiency of the company

has improved. The focus on the core activities and active

marketing activities have significantly contributed to the

accomplishment of the company’s objectives.



The interest income of the consolidation group of AS Balti

Investeeringute Grupp was up 54% from the previous year and

amounted to 64.5 million kroons. At the same time, interest

expenses grew by just 14%, amounting to 11.4 million kroons.

Both the decline in the general interest level and the increase

in the owners' equity contributed to the relatively small

growth in interest expenses. When compared to the second half-

year 2003, interest income grew by 64% and interest expenses

grew by 30% in the second half-year 2004.



The Group earned a total of 4.2 million kroons on net fees and

commissions, which is up 54% from the previous year. When

compared to the second half-year 2003, growth amounted to 32%

in the second half-year 2004.



Administrative expenses grew in the Group by 44% in 2004 when

compared to the year 2003, amounting to 29.7 million kroons. An

increase in expenses incurred in marketing activities accounted

for a significant part in the growth. In the second half-year

2004, the growth in administrative expenses amounted to 53%

when compared to the same period of the previous year.



The aggregate net profit of the Group grew in 2004 by 52% when

compared to the previous year, and amounted to 31.6 million

kroons. In the second half-year 2004, the growth in the net

profit amounted to 31% when compared to the same period of the

previous year.



The consolidated balance sheet total grew during the year 2004

from 185 million kroons at the beginning of the year to 267

million kroons at the end of the year (an increase of 44%).

Trade receivables increased in 2004 from 167 million kroons to

236 million kroons, i.e. by 41%, while the earnings ratio of

the loan portfolio did not decline. The sum of doubtful claims

(for which provisions have been formed) rose to 8.2 million

kroons, i.e. by 17% and doubtful claims accounted for 3.5% of

the portfolio as of 31 December 2004. The actual loss ratio of

loans continued to be lower than the provision ratio and no

material increase of the loss ratio is expected to occur.



The liabilities of the Group grew in the year 2004 to 192

million kroons, i.e. by 41% when compared to the beginning of

the financial year. Among other liabilities, the amount of

issued bonds has increased notably, amounting to 123 million

kroons as of the end of the year 2004 (a growth of 77%).

The owners' equity of the Group increased to 78 million kroons

during the year 2004, i.e. up 61% when compared to the

beginning of the year.



BALANCE SHEET



                                                  EEK                   EUR

                                       GROUP                   GROUP

ASSETS                         31.12.2004  31.12.2003  31.12.2004 31.12.2003

Cash at bank and in hand       13,989,872     999,496     894,114     63,879

Receivables                   228,322,989 160,423,100  14,592,461 10,252,879

Trade receivables             236,448,283 167,161,013  15,111,761 10,683,509

Non-trade receivables             114,055     259,801       7,289     16,604

Less: Allowance for           - 8,239,349 - 6,997,714   - 526,589  - 447,234

uncollectible accounts

Investment properties          13,851,502  14,205,399     885,270    907,888

Intangible assets             - 1,471,613 - 1,608,822    - 94,053  - 102,822

Tangible assets                 6,386,072   6,055,032     408,143    386,986

Other assets                    2,406,536   1,718,558     153,805    109,836

Accrued income and prepaid      6,461,970   3,166,947     412,994    202,404

expenses

TOTAL ASSETS                  269,947,329 184,959,711  17,252,735 11,821,050

                                                                            

LIABILITIES AND OWNERS’        31.12.2004  31.12.2003  31.12.2004 31.12.2003

EQUITY

Payables                       61,939,583  62,174,677   3,958,651  3,973,676

Payable to credit              61,910,579  62,146,487   3,956,797  3,971,874

institutions

Other payables                     29,004      28,190       1,854      1,802

Bonds issued                  122,659,518  69,327,337   7,839,352  4,430,813

Other liabilities                 143,753     237,893       9,187     15,204

Accrued expenses and            7,049,085   4,750,829     450,518    303,633

deferred income

Total liabilities             191,791,940 136,490,736  12,257,708  8,723,326

                                                                            

Share capital                   7,184,000   7,184,000     459,140    459,140

Other reserves                    718,400     718,400      45,914     45,914

Unrealised exchange-rate      - 1,110,183   - 664,540    - 70,953   - 42,472

differences

Retained earnings              39,731,115  20,362,171   2,539,275  1,301,377

Profit for the financial       31,632,057  20,868,944   2,021,652  1,333,765

year

Total owners’ equity           78,155,389  48,468,975   4,995,027  3,097,724

TOTAL LIABILITIES AND         269,947,329 184,959,711  17,252,735 11,821,050

OWNERS’ EQUITY





INCOME STATEMENT (EEK)

                                                                           EEK

                               GROUP                  GROUP

                           2nd half-year 2nd half-year        2004          2003

                                    2004         2003

Interest income               36,120,472   21,970,739   64,506,954    41,997,871

Interest expense             - 6,365,574  - 4,902,330 - 11,407,194   - 9,988,526

NET INTEREST INCOME           29,754,898   17,068,409   53,099,760    32,009,345

                                                                                

Net profit/loss on                     -    4,216,738            -     4,216,738

financial investments

Net fees and commissions       2,200,764    1,669,813    4,195,886     2,725,171

Net profit/loss on              -279,325    - 199,646    - 261,625     - 623,138

financial transactions

                                                                                

Administrative expenses     - 16,883,388 - 11,024,014 - 29,738,585  - 20,632,411

Wages and salaries            -4,127,289  - 3,004,008  - 7,613,170   - 5,657,753

Social security costs         -1,319,191    - 946,769  - 2,417,222   - 1,799,214

Other administrative        - 11,436,908  - 7,073,236 - 19,708,193  - 13,175,444

expenses

                                                                                

Change in the value of         - 615,017    - 548,133  - 1,225,050   - 1,236,241

tangible and intangible

assets

Change in the value of            75,438      420,137    - 720,408        38,974

receivables and off-

Balance Sheet liabilities

                                                                                

Other operating income         5,205,592    3,394,348    7,383,476     5,254,208

and expenses

Other operating income         5,841,661    4,231,255    8,194,857     7,803,147

Other operating expenses       - 636,069    - 836,906    - 811,381   - 2,548,939

PROFIT BEFORE TAXES           19,458,961   14,997,652   32,733,454    21,752,646

                                                                                

INCOME TAX                     - 739,149    - 736,753  - 1,101,397     - 883,702

NET PROFIT FOR THE            18,719,812   14,260,900   31,632,057    20,868,944

FINANCIAL YEAR





INCOME STATEMENT (EUR)

                                                                        EUR

                             GROUP                 GROUP

                            2nd half-    2nd half-        2004         2003

                            year 2004    year 2003

Interest income             2,308,513    1,404,183   4,122,735    2,684,146

Interest expense            - 406,833    - 313,315   - 729,051    - 638,382

NET INTEREST INCOME         1,901,680    1,090,867   3,393,685    2,045,765

                                                                           

Net profit/loss on                  -      269,498           -      269,498

financial investments

Net fees and commissions      140,654      106,720     268,165      174,170

Net profit/loss on           - 17,852     - 12,760    - 16,721     - 39,826

financial transactions

                                                                           

Administrative expenses   - 1,079,042    - 704,561 - 1,900,637  - 1,318,648

Wages and salaries          - 263,781    - 191,991   - 486,569    - 361,595

Social security costs        - 84,311     - 60,509   - 154,488    - 114,990

Other administrative        - 730,950    - 452,061 - 1,259,580    - 842,062

expenses

                                                                           

Change in the value of       - 39,307     - 35,032    - 78,295     - 79,010

tangible and intangible

assets

Change in the value of          4,821       26,852    - 46,042        2,491

receivables and off-

Balance Sheet liabilities

                                                                           

Other operating income        332,697      216,938     471,889      335,804

and expenses

Other operating income        373,349      270,426     523,745      498,711

Other operating expenses     - 40,652     - 53,488    - 51,857    - 162,906

PROFIT BEFORE TAXES         1,243,651      958,522   2,092,044    1,390,244

                                                                           

INCOME TAX                   - 47,240     - 47,087    - 70,392     - 56,479

NET PROFIT FOR THE          1,196,411      911,435   2,021,652    1,333,765

FINANCIAL YEAR





Eero Varkki

Finance Manager

737 7599