Hansapank                     FINANCIAL RESULTS           10/24/2003 09:00



GROUP'S FINANCIAL RESULTS, Q3 2003 1/2



- Net profit EUR 35.7 million in Q3 2003, -2.5% yoy

- 9-month net profit EUR 99.3 million, +12.5% yoy

- Operating profit before tax -9.0% qoq and -2.1% yoy, profit before

provisions -6.0% qoq and +19.9% yoy

- Annual net profit comparison considerably influenced by

extraordinarily low level of provisions in Q3 last year. Net

provisions in Q3 2003 EUR 8.6 million, Q3 2002 EUR 0.3 million.

- Total income -4.7% qoq and +6.2% yoy

- Total operating expenses -3.3% qoq and -5.2% yoy

- Further decrease in interest margins due to discontinuation of

government subsidies on student lending in Estonia. Net interest

margin 3.56% in Q3 2003, -19bp qoq and -69bp yoy

- Return on equity (ROE) 22.6%, return on assets (ROA) 2.5%, earnings

per share (EPS) EUR 1.80

- Annual loan growth stable at 32%, 9% qoq

- Annual deposit growth has recovered to 16%, 3% qoq





AS Hansapank and its subsidiaries (hereinafter Hansabank Group or the

Group) earned EUR 35.7 million net profit in the third quarter of

2003. The Group’s operating profit before provisions increased by

19.9% yoy (2002 third quarter).



The Groups earnings per share (annualised) were 1.80 euros in Q3 2003

vs 1.47 euros in Q2. The increase is mainly attributable to the

dividend income tax paid in Q2 2003. Hansapank Group’s return on

equity increased to 22.6% and return on assets was 2.5%. The Group’s

EVA result for the third quarter of the year was EUR 17.2 million.

Geographic division of the Hansapank Group EUR 35.7 million net profit

is the following: EUR 23.7 million from Estonia, EUR 5.8 million from

Latvia, EUR 4.4 million from Lithuania and EUR 1.8 million from other

markets.



REVENUES AND EXPENSES

The Group’s total income amounted to EUR 89.7 million in Q3 2003,

decreasing by 4.7% qoq and increasing by 6.2% yoy. One of the reasons

for the quarterly decrease was one-off income from the sale of

property and other assets worth EUR 2.4 million as well as higher than

usual (by approximately EUR 3 million) trading income. Total income

distribution during the third quarter was the following: 58% net

interest income, 28% net fee income, 10% financial income, and 4%

other income.

Operating expenses decreased by 3.3% qoq and 5.2% yoy, totalling EUR

43.9 million in Q3 2003. 45% of total expenses was formed by personnel

expense, 16% by other expenses (incl. goodwill amortisation) 19% by

administrative expenses, 12% by depreciation, and 8% by IT expenses.

The Group’s cost-income ratio (before provisions) was 47.10% compared

to 46.50% in Q2 2003 and 51.48% in Q3 2002. The ratio of operating

expenses to total assets improved to 2.90% from 3.16% in Q2 2003 and

3.59% in Q3 2002.

The Group’s average yield of interest-earning assets was 5.61% in Q3

2003, compared to 5.89% in the second quarter, while the cost of

interest-bearing liabilities was 1.86% in Q3 2003 versus 1.95% in the

previous quarter. The Group’s spread decreased by 19bp to 3.75% during

one quarter and by 83bp during the past year.



PROVISIONS AND ASSET QUALITY

The Group’s loan and guarantee losses totalled EUR 12.2 million in Q3

2003, which is 24.5% more than in the previous quarter, and 3.4 times

more than in the same period last year. Quarterly increase was caused

by 65% higher loan growth in the third quarter, EUR 347 million in Q3

vs EUR 210 million in Q2. The level of loan write-offs and

provisioning coverage changed only marginally during the quarter. The

annual increase resulted from extraordinarily low provisions in Q3

2002 due to write-backs in Estonia and Lithuania.

Recoveries totalled EUR 3.6 million in Q3 2003. The Group’s net risk

cost was 0.4% versus 0.7% in Q2 2003. The Group’s target is to keep

the ratio below 0.6% over a business cycle.

The Group’s loan loss reserve amounted to EUR 60.0 million at the end

of September, forming 1.49% of the loan portfolio. Loans overdue

totalled EUR 307.8 million, up 3.8% qoq, while non-performing loans

(overdue more than 60 days) amounted to EUR 27.3 million. Total

overdues formed 7.7% and non-performing loans 0.7% of total loans at

the end of September 2003.



LENDING AND DEPOSITS

The loan portfolio increased by EUR 0.35 billion, or 9% during the

third quarter to EUR 4.02 billion. Annual growth was EUR 0.98 billion

or 32%. 40% of the third quarter growth originated from Estonia, 29%

from Lithuania, 17% from Latvia and 14% from other countries, which

mainly represents the growth in the Russian leasing portfolio. Lending

to private individuals formed 37% of the growth, with wholesale and

retailing and industry contributing another 14% and 13% respectively.



Customer deposits increased by 3%, or EUR 100.2 million during the

third quarter to EUR 3.90 billion. Latvian deposits increased by EUR

80 million, Lithuanian by EUR 48 million, while Estonian deposits

decreased by EUR 28 million. Annual growth of deposits keeps

increasing steadily, rising to 16% at the end of September from 11% at

the end of June. At the end of September loan to deposit ratio stood

at 103% (97% at the end of Q2 2003).





1 EUR = 15.64664 EEK





Mart Tõevere

Head of Corporate Communications and IR

Tel. +372 6131 569









CONSOLIDATED BALANCE SHEETS

(in millions,                     EEK                      EUR        

unaudited)

                    30.09.03 31.12.02 30.09.02 30.09.0 31.12.0 30.09.0

                                                     3       2       2

Assets                                                                

Cash                 2,133.2  2,436.5  2,020.9   136.3   155.7   129.2

Due from Central     4,154.8  3,185.4  3,107.5   265.5   203.6   198.6

Bank

Due from other       5,328.3  6,067.0  4,176.3   340.5   387.8   266.9

financial

institutions

Treasury securities  4,965.3  5,059.1  6,585.9   317.3   323.3   420.9

Trading securities   1,323.4  1,439.3  1,154.8    84.6    92.0    73.8

Investment           2,447.8  3,731.5  3,654.7   156.5   238.5   233.6

securities

Securities           3,971.5  3,010.5  2,430.7   253.8   192.4   155.3

purchased under resale agreements

Loans               62,910.4 52,086.4 47,609.4 4,020.7 3,328.9 3,042.8

  - Allowances for    -939.5   -754.7   -727.6   -60.0   -48.2   -46.5

credit losses

Net loans           61,970.9 51,331.7 46,881.8 3,960.7 3,280.7 2,996.3

Tangible assets      1,809.9  1,897.8  1,983.3   115.7   121.3   126.8

Intangible assets      321.0    406.5    433.7    20.5    26.0    27.7

Prepayments and      2,953.6  2,556.4  2,627.3   188.8   163.4   167.9

accrued interest

Other assets         1,127.1    862.4  1,031.0    72.0    55.0    65.9

Total assets        92,506.8 81,984.1 76,087.9 5,912.2 5,239.7 4,862.9

                                                                      

Liabilities                                                           

Due to Central Bank    220.7    139.5    115.7    14.1     8.9     7.4

and government

Due to other         7,753.1  5,670.8  4,069.5   495.5   362.4   260.1

financial institutions

Deposits            61,031.0 55,821.4 52,493.8 3,900.6 3,567.6 3,355.0

   Demand deposits  42,284.9 37,499.8 34,201.9 2,702.5 2,396.6 2,185.9

   Time deposits    18,746.1 18,321.6 18,291.9 1,198.1 1,171.0 1,169.1

Securities sold        348.4     86.1    255.9    22.3     5.5    16.4

under repurchase agreements

Debt securities      7,695.4  5,656.4  5,305.0   491.8   361.5   339.1

issued to the public

Accrued liabilities  1,892.7  2,020.9  1,864.3   121.0   129.2   119.2

Appropriations         712.6    593.7    536.4    45.5    37.9    34.3

Deferred tax            26.8     26.6     24.0     1.7     1.7     1.5

liability

Other liabilities    1,944.0  2,213.1  2,089.6   124.3   141.5   133.4

Total liabilities   81,624.7 72,228.5 66,754.2 5,216.8 4,616.2 4,266.4

Minority ownership     127.2     16.5     16.8     8.1     1.1     1.1

                                                                      

Subordinated           693.1    709.7    714.2    44.3    45.3    45.6

liabilities

Shareholders'equity

Common stock           793.4    793.4    793.4    50.7    50.7    50.7

Share premium        2,846.1  2,824.7  2,827.4   181.9   180.5   180.7

Treasury stock          -8.2    -26.9    -30.9    -0.5    -1.7    -2.0

Reserves               451.3    453.8    453.8    28.8    29.0    29.0

Other restricted       100.5    100.5    100.5     6.4     6.4     6.4

equity

Currency              -124.6    -38.7     27.6    -8.0    -2.4     1.8

translation reserve

Retained earnings    6,003.3  4,922.6  4,430.9   383.7   314.6   283.2

Total shareholders' 10,061.8  9,029.4  8,602.7   643.0   577.1   549.8

equity

Total liabilities   92,506.8 81,984.1 76,087.9 5,912.2 5,239.7 4,862.9

and shareholders'

equity





CONSOLIDATED INCOME STATEMENT

                                    EEK                    EUR        

(in millions,          9m 2003     2002  9m 2002 9m 2003   2002 9m 2002

unaudited)

                                                                      

Interest income        3,700.5  4,906.1  3,642.3  236.5  313.6   232.8

Interest expense      -1,280.2 -1,758.3 -1,318.9  -81.8 -112.4   -84.3

Interest income, net   2,420.3  3,147.8  2,323.4  154.7  201.2   148.5

                                                                      

Fee and commission     1,489.3  1,766.7  1,276.8   95.2  112.9    81.6

income

Fee and commission      -318.8   -420.4   -312.1  -20.4  -26.9   -19.9

expense

Fees and commissions,  1,170.5  1,346.3    964.7   74.8   86.0    61.7

net

                                                                      

Net result from          433.3    463.7    335.8   27.7   29.7    21.5

financial operations

Net income from           23.0     29.8     23.3    1.5    1.9     1.5

insurance activities

Other income             155.3    186.5    149.0    9.9   11.9     9.5

Total income           4,202.4  5,174.1  3,796.2  268.6  330.7   242.7

                                                                      

Operating expenses                                                    

Personnel expenses       955.9  1,427.7  1,071.7   61.1   91.2    68.5

Data network expenses    161.3    217.5    157.3   10.3   13.9    10.1

Administrative           387.6    530.6    381.1   24.8   33.9    24.4

expenses

Other expenses           300.7    562.7    413.9   19.2   36.0    26.4

 incl. goodwill           75.0    217.6    193.3    4.8   13.9    12.3

amortisation

Depreciation             273.6    392.8    306.9   17.5   25.1    19.6

Total operating        2,079.1  3,131.3  2,330.9  132.9  200.1   149.0

expenses

Operating profit       2,123.3  2,042.8  1,465.3  135.7  130.6    93.7

before provisions

Losses on loans and     -481.0   -313.6   -188.6  -30.7  -20.0   -12.1

guarantees

Recovered loans          139.6    265.3    208.8    8.9   16.9    13.3

Profit from associates     3.9      5.9      1.1    0.2    0.3     0.1

under the equity method

Profit before income   1,785.8  2,000.4  1,486.6  114.1  127.8    95.0

tax

Income tax              -222.9   -124.6   -103.1  -14.2   -7.9    -6.6

Profit after income    1,562.9  1,875.8  1,383.5   99.9  119.9    88.4

tax

Minority interest         -9.4     -1.9     -1.5   -0.6   -0.1    -0.1

Net profit             1,553.5  1,873.9  1,382.0   99.3  119.8    88.3





CONSOLIDATED INCOME STATEMENT - QUARTERLY

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

unaudited)                     2003   2003   2003  2002   2002   2002

                                                                     

Interest income                78.5   78.7   79.4  80.8   78.5   78.0

Interest expense              -26.8  -26.7  -28.4 -28.1  -27.0  -28.4

Interest income, net           51.7   52.0   51.0  52.7   51.5   49.6

                                                                     

Fee and commission income      33.0   33.1   29.1  31.3   28.6   28.0

Fee and commission expense     -7.6   -6.6   -6.2  -7.0   -6.6   -7.3

Fees and commissions, net      25.4   26.5   22.9  24.3   22.0   20.7

                                                                     

Net result from financial       8.8   11.0    7.9   8.2    7.4    6.2

operations

Net income from insurance       0.5    0.4    0.6   0.4    0.6    0.5

activities

Other income                    3.3    4.2    2.4   2.4    3.0    3.1

Total income                   89.7   94.1   84.8  88.0   84.5   80.1

                                                                     

Operating expenses                                                   

Personnel expenses             19.7   20.9   20.5  22.7   21.8   22.6

Data network expenses           3.4    3.6    3.3   3.8    3.6    3.4

Administrative expenses         8.4    8.2    8.2   9.5    8.0    8.0

Other expenses                  6.9    6.8    5.5   9.6    6.3   10.1

 incl. goodwill amortisation    1.7    1.6    1.5   1.6    2.6    4.8

Depreciation                    5.5    5.9    6.1   5.5    6.6    6.6

Total operating expenses       43.9   45.4   43.6  51.1   46.3   50.7

Operating profit before        45.8   48.7   41.2  36.9   38.2   29.4

provisions

Losses on loans and           -12.2   -9.8   -8.7  -7.9   -3.6   -3.5

guarantees

Recovered loans                 3.6    1.9    3.4   3.6    3.3    5.3

Profit from associates under      -    0.1    0.1   0.2    0.1      -

the equity method

Profit before income tax       37.2   40.9   36.0  32.8   38.0   31.2

Income tax                     -1.3  -11.6   -1.3  -1.3   -1.4   -4.3

Profit after income tax        35.9   29.3   34.7  31.5   36.6   26.9

Minority interest              -0.2   -0.3   -0.1     -      -   -0.1

Net profit                     35.7   29.0   34.6  31.5   36.6   26.8





Mart Tõevere

Head of investor relations

+372 6131 569