HANSAPANK

ANNOUNCEMENT



HANSABANK'S EMPLOYEE COMMITTED A FRAUD



An employee of Hansabank has committed a fraud involving a client of

trade finance. The job contract with the employee has been terminated

and the concurring financial loss to the bank is being specified.

Hansabank will shortly file an application to the police regarding the

violation.

In the immediate future, Hansabank’s department of internal

investigations will complete the investigation of the case. So far, it

has been established that Mait Koldits, head of the department of

trade finance, together with a client, withheld knowledge about an

unguaranteed loan issued by Hansabank to the client in the summer of

1998. Koldits also submitted false information to the bank’s credit

committee.



The expected loss could amount to EEK 66 million. In August Hansabank

will form EEK 66 million of provisions to cover the expected loss.

Regardless of the extraordinary provisions, Hansabank remains within

the range of analysts' profit forecast and the bank does not need to

issue a profit warning.



To avoid future violations of the kind, Hansabank will scrutinize and

perfect the regulations governing the organization of work procedures

and the internal rules in the department of trade finance.

As soon as the details are clarified, Hansabank will file an

application to the police for a criminal case to be opened against the

employee who committed the fraud.



Additional information:



Aivar Rehe

Chief Credit Officer

Tel: +372 613 1960





Mart Tõevere

Head of Investor Relations

+372 6131 569