HANSAPANK

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO HANSA CAPITAL'S FINANCIAL RESULTS, I Q 2000



Financial Highlights                                                   

                                          31.03.00      1999       1998

At period end (in EEK, millions)                                       

Total assets                               8,623.8   8,067.3    6,754.4

Financial Investments                      7,281.5   6,973.6    6,034.6

  Leasing                                  6,273.5   5,917.5    5,350.2

  Factoring                                  645.4     598.1      279.8

  Loans                                      369.2     371.5      341.4

  Assignment                                  54.7      64.4       32.3

  Consumer Factoring                          37.8      22.1       30.8

Provisions                                  -284.7    -267.5     -185.6

Debt capital                               7,515.1   7,037.1    6,165.1

Equity                                       487.9     398.6      177.1

At period end (in EEK, millions)                                       

Net interest income                          105.2     417.7      353.8

Net commission income                         26.6      73.4       43.0

Other operating income (net)                  13.4      64.8       16.6

Total operating income                       145.2     555.9      413.4

Net profit                                    90.1     217.8      152.1

NIM                                           5.1%      5.8%       5.8%

ROA                                           4.4%      3.0%       2.7%

ROE                                          26.9%     23.5%      22.9%

Interest yield on average assets             11.3%     11.7%      12.1%

Average cost of interest-bearing              7.1%      6.7%       7.1%

liabilities

Number or employees                            340       321        245



Hansa Capital Group’ s net profit in the first quarter of 2000 was

90.1 million kroons. As of March 31, the Group’s total assets amounted

to 8,623.8 million kroons.

During the first quarter Hansa Capital Group’s total assets grew by

556.5 million kroons or by 6.9%. The main source of growth were

leasing and factoring receivables, which increased in all three Baltic

countries.

Compared to the beginning of the year, the leasing portfolio has

increased by 356.1 million kroons (6.0%) to 6,273.5 million kroons as

at the end of the first quarter. As a result of stabilised economic

environment and declined interest rates, first quarter’s new business

volume was all-time record for the Group. Total leasing new business

volume stood at 1,003.3 million kroons, whereas 72.1% of new business

volume came from Estonia, 15.5% from Latvia and 12.3% from Lithuania.

New business was concentrated on real estate (31.0%), passenger cars

(28.7%) and industrial equipment (19.8%). As at the end of March, the

largest credited sectors were transport (25.1%), industry (17.1%),

wholesale and retailing (16.1%) and business services (14.8%).

Compared to the beginning of the year, the share of the transport

sector has declined on the account of other sectors, which is in line

with the Group’s strategy – to reduce risk concentration in the

highway transport sector. Group’s Estonian leasing market share in

total portfolio has increased to 65% by the end of the first quarter

(compared to 62% at the beginning of the year), at the same time the

market share of the new business volume in the first quarter was 72%.

The Group’s factoring portfolio increased by 47.3 million kroons, i.e.

by 7.9% to 645.4 in the first quarter. At the same time factoring

turnover totalled 1,033.8 million kroons, an increase of 125.9%

compared to the first quarter of the previous year.

The group’s consumer factoring portfolio increased by 15.7 million

kroons in the first quarter, loan portfolio decreased by 2.3 million

and assignment portfolio decreased by 9.7 million.

Portfolio of the Group’s Estonian financial investments increased by

252,8 million, having reached 4,868.4 million kroons (66,0% from total

financial investments) during the first quarter; Latvian and

Lithuanian volumes increased by 129.1 million kroons (1,309.6 million

kroons, 17.7% from total) and 26.8 million (949.7 million, 12.9% from

total) respectively.

The Group’s interest-bearing liabilities increased by 478.0 million to

7,515.1 million kroons as at the end of the first quarter. The largest

share of liabilities (87.2%) was formed by loans from financial

institutions.

In  the  first quarter of 2000 the Group’s total revenue amounted to

145.2 million kroons. The  revenue distribution for the first quarter

was  the following: 72.4%  net interest income, 18.3%  net fee income,

and 9.3% other income.

Provisions charged to income amounted to 15.9 million kroons in the

first quarter. At the same time actual write-offs amounted to 8.2

million kroons and recoveries were 2.3 million kroons.

The Group’s operating expenses amounted to 39.1 million kroons in the

first quarter. The largest share of operating expenses (21.5 million

kroons) was formed by personnel expenses.

The Group’s net interest margin was 5.1%, return on assets 4.4% and

return on operating equity 26.9% in the first quarter of 2000.



Additional information

Lauri Reinberg

Financial Analyst

Tel. +372 6131 767

E-mail    Lauri.Reinberg@hansa.ee





Mart Tõevere

Investor relations

+372 6131 569