Hansapank                     FINANCIAL RESULTS                 10/25/2002



GROUP'S FINANCIAL RESULTS, Q3 2002



- Net profit EUR 36.6 million in Q3 2002, +36.6% qoq and +33.6% yoy;

- Operating profit before provisions +29.9% qoq and +33.6% yoy.

Amortisation of goodwill (EUR 1.1 million per month) from the Estonian

Savings Bank merger was completed in July. Excluding this change,

operating profit growth was 22.4% and 25.9%, respectively;

- Revenues +5.5% qoq and +10.6% yoy;

- Expenses -8.7% qoq and -3.1% yoy;

- Net interest margin (NIM) 4.28% in Q3 2002, +19bp qoq;

- Return on equity (ROE) 27.5%, return on assets (ROA) 3.1%, earnings

per share (EPS) EUR 1.8;

- Sustained strong lending growth;

- Successful launch of the II Pillar pension reform in Estonia. 55,178

members or 55.1% of all participants selected Hansabank’s pension

funds by the end of September;

- Restructuring in Hansa-LTB completed:

     - All branches on-line;

     - Number of employees reduced by 9% to 2,372 in Q3;

     - Number of branches reduced by 5% to 155;

- Moody’s upgraded Hansabank’s financial strength rating to C, giving

the rating also a positive outlook. Moody’s considers Hansabank the

strongest financial institution in the Baltic countries.



The third quarter of 2002 was very successful for Hansabank Group. The

Group (AS Hansapank and its subsidiaries) earned a record-high net

profit of EUR 36.6 million, up 33.6% from last year’s same period. The

Group’s return on equity was 27.5%, well above the 25% target, while

the cost-income ratio decreased to 51.7%, approaching the targeted 50%

level. Cost-income ratio excluding Hansa-LTB was 44.9%.



The Group earnings per share (annualised) were 1.85 euros in Q3 2002

vs 1.36 euros in Q2. The Group EVA result for the third quarter of the

year was EUR 21.6 million, which is 43% more than in Q2, and 38% more

than in the respective period last year. The Group’s EUR 36.6 million

net profit can be divided between the three countries as follows: EUR

30.0 million from Estonia (EUR 25.7 million in Q2 2002), EUR 6.6

million from Latvia (EUR 4.8 million in Q2 2002), EUR 4.5 million from

Lithuania (EUR 5.3 million in Q2 2002) and EUR -4.5 million (EUR -9.0

million in Q2 2002) from support functions (group management and IT

servers). In the second quarter the cost of the support functions also

includes the dividend income tax (EUR 3.25 million).



The Group’s total revenues amounted to EUR 84.5 million in Q3 2002,

increasing by 5.5% qoq and 10.6% yoy. Revenue distribution was the

following: 61% net interest income, 26% net fee income, 9% financial

income, and 4% other income. Operating expenses totalled EUR 46.3

million during the quarter. 47% of total expenses was formed by

personnel expense, 17% by administrative expenses, 14% by

depreciation, 14% by other expenses (incl. goodwill amortisation) and

8% by IT expenses.

The Group’s cost-income ratio (before provisions) improved to 51.7%

(44.9%. excl. Hansa-LTB) from 57.3% (48.4%) in Q2 2002. The ratio of

operating expenses to total assets improved to 3.6% (3.5% excl. Hansa-

LTB) from 3.8% (3.4%) in Q2 2002. The Group will not achieve one of

its financial targets - to keep the cost-income ratio below 50% in

2002 because of the restructuring process in Hansa-LTB.



The Group’s net provisions totalled EUR 0.3 million in Q3 2002,

compared to EUR -1.8 million in Q2 2002 and EUR 0.6 million in Q3

2001. Recoveries totalled EUR 3.3 million in Q3, including EUR 1.9

million from Hansa-LTB. Of all recoveries received during the past 12

months, 53% have come from Hansa-LTB. The extraordinarily high level

of recoveries continues to keep the Group’s net risk cost at a low

level: 0.01% in Q3 2002. The Group’s target is to keep the ratio below

0.8% over a business cycle.



The Group’s total assets amounted to EUR 4.86 billion at the end of

September 2002. Interest-earning assets totalled EUR 4.38 billion,

90.0% of total assets (89.1% at the end of June 2002). Interest-

bearing liabilities amounted to EUR 4.02 billion, forming 82.7% of

total liabilities and shareholders’ equity (83.3% at the end of June

2002).



One of the bases for good quarterly results has been expanding lending

activities. Quarterly loan growth almost equalled that of the first

half of the year: EUR 215 million vs EUR 256 million, respectively.

Annual growth of the portfolio was EUR 0.73 billion or 32%. 48% of the

annual growth originated from Estonia, 28% from Latvia and 21% from

Lithuania. Lending to private individuals formed 31% of the growth,

with real-estate management and other business services contributing

another 19%. Strong growth lifted the loans to assets ratio from 52% a

year ago to 62%.



Customer deposits decreased EUR 69.5 million during the quarter to EUR

3.36 billion. In the third quarter, the Government and the Central

Bank of Estonia decided to withdraw excess cash in the banking system

by placing government deposits, worth EUR 65-100 million, abroad. In

September Estonian Government deposits decreased EUR 30 million in

Hansabank. As a result, loan to deposit ratio rose to 91% at the end

of September (79% in the beginning of the year). The Group’s deposit

market shares as at August 31 were 53.7% in Estonia, 15.7% in Latvia

and 30.2% in Lithuania.



1 EUR = 15.64664 EEK





Consolidated Balance Sheets     EEK                      EUR        

(in millions,       30.09.02 31.12.00 30.09.01 30.09.0 31.12.0 30.09.0

unaudited)                                           2       0       1

                                                                      

Assets                                                                

Cash                 2,020.9  2,404.3  1,750.1   129.2   153.7   111.9

Due from Central     3,107.5  4,393.6  2,936.8   198.6   280.8   187.7

Bank

Due from other       4,176.3  7,466.9  9,052.1   266.9   477.2   578.5

financial

institutions

Treasury securities  6,585.9  4,247.5  4,854.2   420.9   271.5   310.2

Trading securities   1,154.8    437.9    369.3    73.8    28.0    23.6

Investment           3,654.7  5,128.2  4,985.5   233.6   327.8   318.6

securities

Securities           2,430.7  2,508.4  2,092.4   155.3   160.3   133.7

purchased under

resale agreements

Loans               47,609.4 40,243.9 36,191.0 3,042.8 2,572.0 2,313.0

  - Allowances for    -727.6   -859.7   -849.3   -46.5   -54.9   -54.3

credit losses

Net loans           46,881.8 39,384.2 35,341.7 2,996.3 2,517.1 2,258.7

Tangible assets      1,983.3  2,178.3  2,054.6   126.8   139.2   131.3

Intangible assets      433.7    621.8    640.3    27.7    39.7    40.9

Prepayments and      2,627.3  2,562.8  2,675.3   167.9   163.8   171.0

accrued interest

Other assets         1,031.0    684.5    602.5    65.9    43.7    38.7

Total assets        76,087.9 72,018.4 67,354.8 4,862.9 4,602.8 4,304.8

                                                                      

Liabilities                                                           

Due to Central Bank    115.7    109.3    120.7     7.4     7.0     7.7

and government

Due to other         4,069.5  4,198.0  4,624.3   260.1   268.3   295.5

financial

institutions

Deposits            52,493.8 51,063.4 47,189.4 3,355.0 3,263.6 3,015.9

   Demand deposits  34,201.9 32,480.2 29,345.4 2,185.9 2,075.9 1,875.5

   Time deposits    18,291.9 18,583.2 17,844.0 1,169.1 1,187.7 1,140.4

Securities sold        255.9      0.1     27.6    16.4       -     1.8

under repurchase

agreements

Debt securities      5,305.0  3,815.3  3,826.7   339.1   243.8   244.6

issued to the

public

Accrued liabilities  1,864.3  1,865.1  1,670.8   119.2   119.2   106.8

Appropriations         536.4    474.3    435.4    34.3    30.3    27.8

Deferred tax            24.0     14.2      6.8     1.5     0.9     0.4

liability

Other liabilities    2,089.6  2,221.9  1,603.0   133.4   142.0   102.5

Total liabilities   66,754.2 63,761.6 59,504.7 4,266.4 4,075.1 3,803.0

Minority ownership      16.8     15.2     15.1     1.1     1.0     1.0

                                                                      

Subordinated           714.2    721.9    739.4    45.6    46.1    47.3

liabilities

Shareholders'                                                         

equity

Common stock           793.4    788.6    788.6    50.7    50.4    50.4

Share premium        2,827.4  2,762.1  2,761.4   180.7   176.5   176.5

Treasury stock         -30.9    -37.5    -47.6    -2.0    -2.4    -3.0

Reserves               453.8    450.9    450.9    29.0    28.8    28.8

Other restricted       100.5    100.5    100.5     6.4     6.4     6.4

equity

Currency                27.6     88.2     26.2     1.8     5.7     1.7

translation reserve

Retained earnings    4,430.9  3,366.9  3,015.6   283.2   215.2   192.7

Total shareholders'  8,602.7  7,519.7  7,095.6   549.8   480.6   453.5

equity

Total liabilities   76,087.9 72,018.4 67,354.8 4,862.9 4,602.8 4,304.8

and shareholders'

equity





Consolidated Income Statement      EEK                    EUR        

(in millions,          9m 2002     2001  9m 2001 9m 2002  2001 9m 2001

unaudited)

                                                                      

Interest income        3,642.3  4,604.9  3,392.7  232.8  294.3   216.8

Interest expense      -1,318.9 -1,943.3 -1,466.8  -84.3 -124.2   -93.7

Interest income, net   2,323.4  2,661.6  1,925.9  148.5  170.1   123.1

                                                                      

Fee and commission     1,276.8  1,395.1    986.1   81.6   89.2    63.0

income

Fee and commission      -312.1   -306.5   -206.6  -19.9  -19.6   -13.2

expense

Fees and commissions,    964.7  1,088.6    779.5   61.7   69.6    49.8

net

                                                                      

Net result from          335.8    571.7    387.5   21.5   36.5    24.8

financial operations

Net income from           23.3     45.6     45.6    1.5    2.9     2.9

insurance activities

Other income             149.0    150.9    112.7    9.5    9.6     7.2

Total income           3,796.2  4,518.4  3,251.2  242.7  288.7   207.8

                                                                      

Operating expenses                                                    

Personnel expenses     1,071.7  1,163.7    801.6   68.5   74.4    51.2

Data network expenses    157.3    150.0    100.4   10.1    9.6     6.4

Administrative           381.1    478.5    328.0   24.4   30.6    21.0

expenses

Other expenses           413.9    557.8    378.3   26.4   35.6    24.2

 incl. goodwill          193.3    265.9    187.1   12.3   17.0    12.0

amortisation

Depreciation             306.9    348.1    254.9   19.6   22.2    16.3

Total operating        2,330.9  2,698.1  1,863.2  149.0  172.4   119.1

expenses

Operating profit       1,465.3  1,820.3  1,388.0   93.7  116.3    88.7

before provisions

Losses on loans and     -188.6   -340.9   -200.8  -12.1  -21.8   -12.8

guarantees

Recovered loans          208.8    262.5    195.6   13.3   16.8    12.5

Profit from associates     1.1      8.8      3.2    0.1    0.6     0.2

under the equity

method

Operating profit       1,486.6  1,750.7  1,386.0   95.0  111.9    88.6

Extraordinary                -        -        -      -      -       -

income/(expense)

Profit before income   1,486.6  1,750.7  1,386.0   95.0  111.9    88.6

tax

Income tax              -103.1    -57.5    -43.6   -6.6   -3.7    -2.8

Profit after income    1,383.5  1,693.2  1,342.4   88.4  108.2    85.8

tax

Minority interest         -1.5        -     -0.5   -0.1      -       -

Net profit             1,382.0  1,693.2  1,341.9   88.3  108.2    85.8





Consolidated Income Statement

(in millions of euros,     Q3     Q2     Q1    Q4     Q3     Q2     Q1

unaudited)               2002   2002   2002  2001   2001   2001   2001

                                                                      

Interest income          78.5   78.0   76.3  77.5   80.3   72.0   64.5

Interest expense        -27.0  -28.4  -28.9 -30.5  -34.9  -31.2  -27.6

Interest income, net     51.5   49.6   47.4  47.0   45.4   40.8   36.9

                                                                      

Fee and commission       28.6   28.0   25.0  26.2   24.2   21.4   17.4

income

Fee and commission       -6.6   -7.3   -6.0  -6.4   -5.1   -4.4   -3.7

expense

Fees and commissions,    22.0   20.7   19.0  19.8   19.1   17.0   13.7

net

                                                                      

Net result from           7.4    6.2    7.9  11.7    8.0    9.2    7.6

financial operations

Net income from           0.6    0.5    0.4     -    1.4    0.8    0.7

insurance activities

Other income              3.0    3.1    3.4   2.4    2.5    2.4    2.3

Total income             84.5   80.1   78.1  80.9   76.4   70.2   61.2

                                                                      

Operating expenses                                                    

Personnel expenses       21.8   22.6   24.1  23.2   21.1   17.0   13.1

Data network expenses     3.6    3.4    3.1   3.2    2.1    2.4    1.9

Administrative expenses   8.0    8.0    8.4   9.6    8.4    6.6    6.0

Other expenses            6.3   10.1   10.0  11.4   10.0    7.9    6.3

 incl. goodwill           2.6    4.8    4.9   5.0    4.8    3.8    3.4

amortisation

Depreciation              6.6    6.6    6.4   5.9    6.2    5.4    4.7

Total operating          46.3   50.7   52.0  53.3   47.8   39.3   32.0

expenses

Operating profit before  38.2   29.4   26.1  27.6   28.6   30.9   29.2

provisions

Losses on loans and      -3.6   -3.5   -5.0  -9.0   -5.1    0.1   -7.8

guarantees

Recovered loans           3.3    5.3    4.7   4.3    4.5    2.3    5.7

Profit from associates    0.1      -      -   0.4    0.1      -    0.1

under the equity method

Operating profit         38.0   31.2   25.8  23.3   28.1   33.3   27.2

Extraordinary               -      -      -     -      -      -      -

income/(expense)

Profit before income     38.0   31.2   25.8  23.3   28.1   33.3   27.2

tax

Income tax               -1.4   -4.3   -0.9  -0.9   -0.8   -1.1   -0.9

Profit after income tax  36.6   26.9   24.9  22.4   27.3   32.2   26.3

Minority interest           -   -0.1      -     -    0.1      -   -0.1

Net profit               36.6   26.8   24.9  22.4   27.4   32.2   26.2





Mart Tõevere

Head of investor relations

+372 6131 569