AS HANSAPANK

ANNOUNCEMENT

29.07.99

 

 

HANSA CAPITAL GROUP'S FINANCIAL RESULTS IN THE FIRST HALF OF 1999

 

Financial Highlights 

                   

    					I h-y 1999         1998         I h-y 1998

At period end (in EEK, millions)

Total assets                               7 374,3      6 754,4            4 931,5

Financial investments                      6 172,2      6 034,6            3 743,7

  Leasing                                  5 559,0      5 498,5            3 402,4

  Factoring                                  324,3        279,8              222,0

  Loans                                      183,3        193,2               45,5

  Assignment                                  65,7         32,3               33,9

  Consumer factoring                          21,5         30,8               40,0

  Other                                       18,5          0,0                0,0

Provisions                                  -271,7       -185,6              -21,8

Debt capital                               6 504,4      6 165,1            4 333,7

Equity                                       282,6        177,1              147,2

For the period (in EEK, millions)                       

Net interest income                          202,2        337,1              131,6

Net commission income                         33,2         44,5               21,7

Other operating income (net)                  17,8         15,0               11,1

Net financial income                          -4,1         44,0                5,1

Total operating income                       249,1        440,5              169,5

NIM                                            5,8%         5,8%               5,9%

ROA                                            2,8%         2,7%               4,6%

Interest yield on average assets              11,5%        12,1%              11,6%

Average cost of interest-bearing 

liabilities                                    6,6%         7,1%               7,3%

Number or employees                            297           247               173

 

 

Hansa Capital's consolidated net income for the first half of 1999 totaled 

EEK 95.4 million, compared with a net income of EEK 101.7 for the same period 

last year. The decrease is primarily due to significantly increased provisions 

and write-offs, reflecting a downturn in the transport sector. 

Provisions charged to income amounted to EEK 70.8 million in the first half of 

1999 (compared with EEK 4.8 million for the same period last year). 

Based on information available as of 30 June 1999, the management is of the 

opinion that these provisions are sufficient to cover any losses that could 

occur. 

The actual write-offs constituted EEK 27.3 million or 0.9% (annualised) of 

average financial investments (in 1998 a total of 23.9 million of receivables 

were written off).

The Group's total income in the first half of 1999 was EEK 249.1 million. When 

compared to the total income for the same period last year, the Group's income 

has increased by EEK 79.6 million, i.e. 47.0%.

Interest income increased from EEK 257.9 million to EEK 405.7 million (i.e. 57.3%), 

primarily as a result of an increase in average financial investments by 85.3%. 

Interest expenses rose by 61.0% in the first half of 1999 and totaled EEK 203.5 

million. Net interest income increased by EEK 70.7 million (53.7%) to EEK 202.2 

million in the first half of 1999.

Due to involving relatively low-cost funding, the average cost of interest-bearing 

liabilities decreased from 7.1% in whole 1998 to 6.6%. On the other side, interest 

yield on average assets fell from last year's 12.1% to 11.5%.  As a result the 

Group's net interest margin (NIM) remained unchanged from last year’s level at 5.8%.

The geographical structure of total interest and comission income was the following: 

Estonia –67.4%, Latvia –15.4%, Lithuania –13.0%, Ukraine and Russia –4.2%. 

Group's return on average assets has marginally improved to 2.8% in the first half of 

1999, up from 2.7% for the whole of last year.

During the first half of 1999, Hansa Capital Group's total assets increased by 9.2%, 

i.e. in absolute terms by EEK 619.9 million, to EEK 7,374.3 million as at the end of 

June (the growth for the same period last year was 29.0%). Due to an economic slowdown 

in the Baltic states and a crisis in the road transport sector, Hansa Capital has 

intentionally slowed further expansion by imposing stricter criteria on clients' 

creditworthiness.

 

The increase in assets primarily resulted from an increase in leasing and factoring 

receivables as well as in prepayments to suppliers (which will turn into the leasing 

portfolio in the near future), which was partially offset by a decrease in the consumer 

factoring portfolio.

The largest single item on the assets side is the leasing portfolio, which forms EEK 

5,559.0 million or 90.1% of all financial investments. From the beginning of the year, 

the leasing portfolio has increased by EEK 60.5 million, i.e. by 1.1%. At the same time 

prepayments to suppliers increased by EEK 278.1 million, i.e. by 113.4%. The most credited 

sector as at the end of June was transport (32.6%), followed by trade (15.4%), industry 

(13.4%) and business services (10.0%).

The factoring portfolio increased by EEK 44.5 million, i.e. 15.9%, to EEK 324.3 million. 

The loan portfolio (the major share of which are loans to associated companies) decreased 

by EEK 9.8 million (5.1%). Assignment receivables more than doubled as a result of rapidly 

developing Latvian and Lithuanian operations as well as some big-ticket Estonian deals, 

reaching EEK 65.7 million by the end of the period. The consumer factoring portfolio 

decreased by 9.3 million (30.2%), amounting to EEK 21.5 million.

The regional structure of financial investments shifted towards Latvia and Lithuania in 

the first half of 1999. The fastest growth was in the Latvian financial investments 

portfolio (growth 92.9 million or 11.3%), followed by the Lithuanian (75.4 million 

or 9.9%) portfolio.  The Ukrainian and Russian portfolio decreased by 17.1 million 

(5.6%). Group's Estonian portfolio decreased by EEK 13.7 million (0.3%).

The Group's interest-bearing liabilities increased by EEK 339.3 (5.5%) during the 

first half of 1999 and amounted to EEK 6,504.4 million by the end of the period. 

Loans continue to form the largest part of interest-bearing liabilities (82.1%); 

the share of bonds was 10.9%. Compared to the end of 1998, loans increased by EEK 

686.3 million primarily as a result of a 40-million euro syndicated loan agreement 

signed with the EBRD in June 1999.

Shareholders’ equity grew by EEK 105.5 million, or 59.6%, to EEK 282.6 million 

during the first half of 1999.

 

 

 

Income Statement

EEK in millions                         6 m 1999         1998   6 m 1998

                        

Interest income                            405,7        677,5      257,9

Interest expenses                          203,5        340,4      126,4

Net interest income                        202,2        337,1      131,6

Commission income                           40,3         59,8       25,7

Commission expenses                          7,0         15,4        3,9

Other operating income (net)                17,8         15,0       11,1

Net financial income                        -4,1         44,0        5,1

Total operating income                     249,1        440,5      169,5

Staff costs                                 29,0         59,6       21,0

Other administrative expenses               21,4         33,8       11,7

Depreciation                                 2,7          3,5        1,4

General and administrative expenses         53,1         97,0       34,1

Provisions for doubtful receivables         70,8        162,7        4,8

Write-offs                                  27,3         23,9        0,6

Provisions for credit losses                98,1        186,6        5,4

Operating profit                            97,9        156,9      130,0

Net income from equity investments           3,7          2,9        0,0

Non-operating income/expenses               29,0         -1,2       -2,4

Profit before income tax                   130,6        158,7      127,5

Income tax                                  34,9          6,7       25,9

Minority interest                            0,3         -0,1        0,0

Net profit                                  95,4        152,1      101,7

  

 

Balance Sheet

EEK in millions                         30.06.99        31.12.98        30.06.98

ASSETS                  

Bank accounts                              368,5           166,5           71,9

Marketable securities                       13,0             6,4            0,0

Due from customers                         169,4           139,0          127,7

Financial investments                    6 172,2         6 034,6        3 743,7

  Leasing                                5 559,0         5 498,5        3 402,4

  Factoring                                324,3           279,8          222,0

  Loans                                    183,3           193,2           45,5

  Assignment                                65,7            32,3           33,9

  Consumer factoring                        21,5            30,8           40,0

  Other                                     18,5             0,0            0,0

Provisions for doubtful receivables       -271,7          -185,6          -21,8

Net financial investments                5 900,6         5 849,0        3 721,9

Prepayments to suppliers                   523,4           245,3          684,2

Stocks for resale                          103,6            99,1           45,8

Long-term equity investments                57,1            49,8           50,3

Tangible noncurrent assets                  86,4            72,6           84,2

Intangible assets                            6,6             6,3           12,0

Accrued income and prepaid expenses        145,7           120,4          133,5

TOTAL ASSETS                             7 374,3         6 754,4        4 931,5

                        

LIABILITIES AND EQUITY                  

Loans                                    5 340,0         4 653,7        3 020,0

Bonds                                      711,3           972,7          890,2

Bills of exchange                          453,1           538,8          423,5

Liabilities to customers and suppliers     421,1           257,5          351,5

Accrued expenses and prepaid revenue       154,1           136,8           64,5

Other liabilities                            0,9             0,7            1,3

Deferred tax liabilities                     0,4             4,2           33,3

Negative goodwill                            9,6            12,0            0,0

TOTAL LIABILITIES                        7 090,6         6 576,4        4 784,3

Minority interest                            1,1             0,9            0,0

EQUITY                  

Share capital                               40,0            40,0           40,0

Reserves                                     5,8             5,6            5,8

Retained earnings                          245,6           150,4          101,1

Unrealised exchange difference              -8,9           -19,0            0,4

TOTAL EQUITY                               282,6           177,1          147,2

TOTAL LIABILITIES AND EQUITY             7 374,3         6 754,4        4 931,5

 

Further information:

Lauri Reinberg

Hansa Capital, Financial Analyst

Phone: +372 6131 767

 

 

Mart Toevere

Analyst

Tel. +372 6131 569