EESTI ÜHISPANK

COMMENTARY TO FINANCIAL RESULTS



CONSOLIDATED PERFORMANCE OF EESTI ÜHISPANK IN Q3 2000



The  consolidated  nine-month net profit of  Eesti  Ühispank  amounted

to EEK51.7m, and the Q3 earnings to EEK6.16m.  The quarterly  increase

of the  total balance  of the  Group was  4.8 per   cent  (EEK726.4m),

and the  total  balance  as  of  30 September was EEK16bn.



The  total  balance   of the Group increased   thanks  to  the  growth

of deposits.  In Q3  the amounts  due to  clients of   the EÜP   Group

increased  by  9.7  per  cent,  i.e.   EEK847.4m,   and  amounted   to

EEK9.6bn  at  the end of  September.  Since   the beginning   of   the

year client deposits have   increased  by EEK1.6bn  or 19.5 per  cent,

which is more  than the respective  figure  for   the  total   balance

(7.0  per   cent)  and   loan portfolio   (10.7  per  cent). Q3 saw  a

balanced  increase  of demand  and term deposits, by 9.8 per cent  and

9.5 per  cent respectively, while demand deposits exceeded EEK5bn  for

the  first  time  ever.  The  Q3m  deposit growth took place first and

foremost  thanks to business clients: the quarterly  deposit  increase

of private undertakings was 16.8 per  cent, which is 35.0 per cent  on

the beginning of the year. Private deposits  grew  by  4.4  per   cent

in Q3 and. 21.3  per  cent  on  the beginning of the year.



At   the   same  time  the  Group  reduced  considerably the volume of

other   funding by  repaying EEK338.4m  (bonds   issued  and long-term

credit lines) in Q3.  In Q3 total external   funding increased by  5.5

per cent, i.e. EEK721.3m.



The  equity of the Group increased in Q3 thanks to earnings.  At   the

end of  September the  capital adequacy  of the   Group was  11.66 per

cent and 12.32 per cent in the Bank.



In  Q3  the   loan portfolio growth rate was   double  on  the  growth

rate  in Q2. In Q3 the loan portfolio  increased  by EEK505.5m   (5.11

per  cent),  which  is  more  than   the   growth  total  in Q1 and Q2

(EEK500.4m). At the end of September   the total  loan  portfolio  was

EEK10.4bn. In  Q3 the   Group   made additional   provisions   in  the

amount   of   EEK45.9m.     The  uncollectible  loans  to  loan  ratio

remained on  the same  level as   in   Q2   (2   per cent),  as  fully

provisioned  loans   were transferred  to   an  off-balance   account.

The   net    loan portfolio to assets ratio  has increased by 0.2  per

cent  and was 63.6 per cent at the end of Q3.



In   Q3   the   underlying   profit   of   the   EÜP   Group    before

provisions  was EEK71.6m, which is 16.8  per cent  growth  on the   Q2

result (Q2 - EEK61.3m; Q1 -  EEK44.8m). The operating income  of   the

Group amounted  to EEK238.4m  in   Q3,   and   to EEK685.1m  since the

beginning of the year.  Most of the   core business  total   income of

the Group, 51.3  per  cent,   comes form   net  interest  income, 25.5

per cent is the net  income form  fees and commissions, 12.1 per  cent

is dealing profit,  and  11  per cent is  other income. The  operating

expenses  of the   Group  are down on  the beginning of the year   and

were EEK166.3m   in  Q3,   that is 5.1  per cent   down  on   Q2.  The

cost/income ratio is down to 68.8 per cent  (73 per  cent  in Q2   and

76.4  per  cent  in  Q1)  due  to  lower  operating cost and increased

earnings.



Net   profit  of  the  EÜP  Group  since  the beginning of the year by

fields of activity  is the following:  banking - EEK45.1m;  leasing  -

EEK2.6m;  life assurance -  EEK2.9m,  and  asset management - EEK1m.





Ülo Suurkask

Vice-President

Head of Accounting and Financial Reporting Division

Tel.+372 6657 200





Urmas Neetar

head of reporting department

6 656 390