HANSAPANK

COMMENTARY TO FINANCIAL RESULTS



HANSA CAPITAL'S UNAUDITED FINANCIAL RESULTS 1999



Financial Highlights                                        

                                              1999      1998

At period end (in EEK, thousands)                           

Total assets                             8 067 277 6 754 382

Financial Investments                    6 973 595 6 034 569

  Leasing                                5 917 473 5 350 207

  Factoring                                598 107   279 795

  Loans                                    371 528   341 425

  Assignment                                64 382    32 327

  Consumer Factoring                        22 104    30 815

Provisions                                -267 510  -185 569

Debt capital                             7 037 070 6 165 146

Equity                                     398 636   177 070

At period end (in EEK, thousands)                           

Net interest income                        417 655   353 806

Net commission income                       73 400    42 969

Other operating income (net)                64 848    16 616

Net financial income                        -2 404    23 832

Total operating income                     555 902   413 391

Net profit                                 217 821   152 096

NIM                                           5,8%      5,8%

ROA                                           3,0%      2,7%

Interest yield on average assets             11,7%     12,1%

Average cost of interest-bearing              6,7%      7,1%

liabilities

Number or employees                            321       245



During the year Hansa Capital Group's total assets grew by EEK 1,312.9

million, i.e. by 19.4% to EEK 8,067.3 million as at the end of the

year.

The largest single item on the asset side is the leasing portfolio,

which forms EEK 5,917.5 million or 84.9% of financial investments.

From the beginning of the year, the leasing portfolio has increased by

EEK 567.3 million, i.e. by 10.6%. Factoring portfolio increased by EEK

318.3 million, i.e. by 113.8% to EEK 598.1 million. Loan portfolio

increased by EEK 30.1 million (8.8%). Assignment receivables grew by

EEK 32.1 million (99.2%), reaching EEK 64.4 million by the end of

period. Consumer factoring portfolio decreased by 8.7 million (-

28.3%), amounting to EEK 22.1 million.

Portfolio of Estonian financial investments increased by EEK 464.6

million, having reached EEK 4,615.6 million(66.2% from total) at the

end of the year; Latvian and Lithuanian volumes increased by 359.2

million (1 180.2 million, 16.9% from total) and 164.7 million (922.9

million, 13.2% from total) respectively. Leasing new sales formed

3,618.5 million what is 876.5 million (31.9%) higher than last year

respectively. During the period almost half of the new sales was made

in Latvia (627.5 million) and Lithuania (504.5 million). Based on new

sales growth Hansa Capital Group leasing market shares increased in

Latvia by 8.4% reaching 36.9%, in Lithuania respectively 1.8% and

36.2% and in Estonia market share grew 6.0% reaching 62.0%

Group's debt capital increased by EEK 1,101.9 (17.9%) during the year

and amounted to EEK 7,267.1 million by the end of the period. Loans

continue to make up the largest part of loan liabilities (85.7%);

bonds' share was 8.9% and bills of exchange’ share in loan resource

was 5.3%.

Developments and economical changes in Baltic region affected also

Hansa Capital during the year – claims in total amount of 102.2

million were written off (1998 total write-offs amounted 23.9

million). Provisions were increased by 81.9 million, reaching in total

amount of 267.5 million(3,8% from financial investments).

Group's total revenue (interest income, fees and commissions),

according to results of the year, constitutes EEK 555.9 million. When

compared to the total revenue of last year's corresponding period,

Group's revenues increased by EEK 142.5 million, i.e. 34.5%. Net

interest income formed major part in total income(75.1%), net

commission income formed 13.2% and other operating income 11.7%. Net

interest income constituted EEK 417.7 million, exceeding the last

year's corresponding period result by 18.0%.

Net income of Hansa Capital Group for the 1999 constituted EEK 217.8

million, exceeding the income earned in the last year by EEK 65.7

million (43.2%).

Total costs increased by 48.5 million (44.8%) from which personal

expenses were 42.7% (18.6 million) and other administrative expenses

respectively 45.2% (19.7 million). Cost income ratio was 36.6% which

is by 1.8% lower than in previous period (38.4%).

Group's net interest margin (NIM) was 5.8%, return on average assets

(ROA) 3.0% and return on used equity 23.5%.





Mart Tõevere

Analyst

+372 6131 569