HANSAPANK

COMMENTARY TO FINANCIAL RESULTS



HANSA CAPITAL'S FINANCIAL RESULTS, 6 M 2000



Financial Highlights                                                   

                                          6 m 2000      1999   6 m 1999

At period end (in EEK, millions)                                       

Total assets                               9 873,6   8 067,3    7 374,3

Financial Investments                      8 400,0   6 973,6    6 172,2

  Leasing                                  7 082,6   5 917,5    5 559,0

  Factoring                                  882,4     598,1      324,3

  Loans                                      290,3     371,5      183,3

  Assignment                                  83,6      64,4       65,7

  Consumer Factoring                          61,1      22,1       21,5

Provisions                                  -311,8    -267,5     -271,7

Debt capital                               8 489,4   7 037,1    6 504,4

Equity                                       588,0     398,6      282,6

At period end (in EEK, millions)                                       

Net interest income                          209,3     417,7      202,2

Net commission income                         69,9      73,4       33,2

Other operating income (net)                  27,1      64,8       46,8

Total operating income                       306,2     555,9      282,2

Net profit                                   196,6     217,8       95,4

NIM                                           4,8%      5,8%       5,8%

ROA                                           4,5%      3,0%       2,8%

ROE                                          27,6%     23,5%      23,5%

Interest yield on average assets             10,9%     11,7%      11,7%

Average cost of interest-bearing              7,1%      6,7%       6,6%

liabilities

Number or employees                            363       321        297



Hansa Capital Group’ s net profit in the first half of 2000 was 196.6

million kroons. As of June 30, the Group’s total assets amounted to

9,873.6 million kroons. The Group’s financial results were influenced

by revival in the economy and growth in loan demand, which resulted in

the growth of total assets by 1,806.4 million kroons or 22.4% during

the first half of 2000.

The main source of growth were leasing and factoring receivables,

which increased in all three Baltic states. The growth of leasing

portfolio remained relatively modest in the first quarter, reaching

only 6,0%. The second quarter however witnessed a notable leap,

whereby  leasing portfolio increased by 19,7% during the first half of

the year and amounted to 7,082.6 million kroons at the end of June. As

a result of improvement in economic environment and declined interest

rates, new business volume in the first half of the year was all-time

record for the Group.

Total leasing new business volume in the first half of 2000 was

2,534.0 million kroons (IIQ new business volume being 1,530.8

million), whereas 67.4% of new business came from Estonia, 17.7% from

Latvia and 14.9% from Lithuania.

New business was concentrated on passenger cars (27.4%), real estate

(27.3%), and industrial equipment (19.5%). As at the end of June, the

                                                                  2(4)

largest credited sectors were transport (23.0%), industry (15.9%), and

wholesale and retailing (14,9%%). Compared to the beginning of the

year, the share of the transport sector has declined on the account of

other sectors.

Group’s Estonian leasing market share in total portfolio has increased

to 68% by the end of June (compared to 62% at the beginning of the

year), at the same time the market share of the new business volume in

the first half of 2000 was 70%. The Group’s Latvian and Lithuanian

estimated market shares have not changed considerably compared to the

beginning of the year (being 36% and 35% respectively).

The Group’s factoring portfolio increased by 284.3 million kroons,

i.e. by 47.5%  to 882.4 in the first half of 2000. At the same time

factoring turnover totalled 2,504.1 million kroons, an increase of

142.0% compared to the first half of the previous year.

The Group’s consumer factoring portfolio increased by 39.0 million

kroons in the first half of the year, assignment portfolio increased

by 19.3 million, and loan portfolio decreased by 81.2 million.

Portfolio of the Group’s Estonian financial investments increased by

864.1 million, having reached 5,478.7 million kroons (65.2% from the

total financial investments) during the first half of the year;

Latvian and Lithuanian volumes increased by 385.8 million kroons

(1,565.2 million kroons, 18.6% from the total) and 196.9 million

(1,119.0 million, 13.3% from the total) respectively. The fastest

growth was witnessed in Latvian portfolio – 32.7%, whereas Lithuanian

portfolio increased by 21.4% and Estonian portfolio by 18.7%.

The Group’s interest-bearing liabilities increased by 1,452.3 million

to 8,489.4 million kroons as at the end of June. The largest share of

liabilities (90.9%) was formed by loans from financial institutions.

The Group’s total revenue increased by 8.5% compared to the first half

of the previous year, amounting to 306.2 million kroons. The total

revenue of the first half of the previous year was affected by 25.1

million kroons income tax refund. Excluding the nonrecurring income,

the total revenue increase would have been 19.1%. The  revenue

distribution for the first half of the year  was  the following: 68.3%

net interest income, 22.8%  net fee income, and 8.9% other income.

Provisions charged to income amounted to 41.2 million kroons in the

first half of 2000. At the same time actual write-offs amounted to

19.7 million kroons and recoveries were 11.0 million kroons.

The Group’s operating expenses increased by 57.4% compared to the

first half of the previous year, amounting to 83.6  million kroons.

The largest share of operating expenses (46.5 million kroons) was

formed by personnel expenses.

The Group’s cost-income ratio for the first half of 2000 was 32.6%,

the ratio has decreased by 3.8% compared to the previous year.

In addition to above-mentioned factors,  the Group’s result was

affected by  regained pre-paid dividend income tax in total amount of

22.3 million kroons, which is shown as an extraordinary income in the

income statement.

The Group’s net interest margin was 4.8%, return on assets 4.5% and

return on operating equity 27.6% in the first half of 2000.

                                 

Additional information

Lauri Reinberg

Financial Analyst

Tel. +372 6131 767

E-mail    Lauri.Reinberg@hansa.ee





Mart Tõevere

Head of Investor Relations

+372 6131 569