AS EESTI FOREKSPANK

ANNOUNCEMENT

16.11.98

 

COMMENTARY TO THE FOREKSPANK'S FINANCIAL RESULTS IN OCTOBER

 

In October, the balance sheet volume of Eesti Forekspank decreased by 270 million EEK,

or 13.8%. The demand and time deposits of the clients amounted at the end of

October respectively 422 million EEK and 284 million EEK, decreasing in a month

respectively by 197 million EEK (31.8%) and 55.4 million EEK (16.3%).

The bank was holding demand and time deposits of the clients in total of 705.5 

million EEK, decreasing by 252 million EEK (26.3%) compared with the end of September.

The loans received from the other banks increased in a month by 24.11%, or 

93.9 million EEK. At the end of October, the time resources were 68.5% (59% at the end

of September) and demand resources 31.5% (40.1%) of the interest-bearing liabilities.

Amounts in collection and other liabilities decreased in a month respectively by

55.5 (22.1)% and 20.0 (26.9%) million EEK.

 

Due to the closed stock issuance to the Bank of Estonia, the share capital of 

Eesti Forekspank increased in October by 120 million EEK. Also the 

conversion of the convertible bonds (issued in 1994) to the shares took place in 

October, due to which the share capital increased by 2.5 million EEK.

Capital surplus decreased in October by the amount of expenses of the 

closed stock issuance in August (i.e. 4.9 million EEK).

 

In the assets section, current investments in securities decreased by 3.3 

million EEK (57.8%) and the investments in debt securities 58.1 million EEK 

(25.7%). Gross loan portfolio grew in October by 1.1 million EEK (0.1%), and the 

net loan portfolio decreased mainly due to the additional 113 million EEK 

provision for the allowances for credit losses. In October, the allowances for 

credit losses amounted 12.5% of the gross loan portfolio.

 

Forekspank's 1998 10 months loss was 247 million EEK. The loss for October was

146.1 million EEK, of which the loss on the securities investments accounted for

31.9 million EEK (incl. 30 million EEK loss on the sale of AS Eesti 

Investeerimispank shares), and an additional 113 million EEK provision for the 

allowances for credit losses.

 

Before the provisions in October 1998, the revenue structure of Eesti Forekspank 

was the following:

gross interest revenue 44.7%, commissions and service fees 24.9%, profit from the

currency exchange operations 29.6%, and other revenues 0.8%.

 

The structure of Eesti Forekspank's non-interest expenses was the following:

personnel expenses 34.9%, administrative expenses 48.9%, commissions and other

service fees paid 3.7%, and other expenses 12.5%.

 

Eesti Forekspank's capital adequacy was at the end of September 10,24% and the

risk concentration 120,83%.

 

 

Danel Tuusis

Financial Manager

Eesti Forekspank

Tel. +372 6302 106