HANSAPANK

COMMENTARY TO FINANCIAL RESULTS



HANSA CAPITAL'S FINANCIAL RESULTS, Q1 2001



Financial Highlights                                               

                                     3 m 2001       2000   3 m 2000

At period end (in EEK, millions)                                   

Total assets                         13 813.0   12 794.4    8 623.8

Financial Investments                12 044.4   10 961.9    7 380.6

  Leasing                             9 734.5    8 864.9    6 273.5

  Factoring                           1 480.4    1 394.1      645.4

  Loans                                 464.9      421.1      369.2

  Assignment                             91.6      106.2       54.7

  Consumer Factoring                    273.0      175.6       37.8

Provisions                             -358.8     -342.3     -284.7

Debt capital                         12 071.2   11 288.0    7 515.1

Equity                                  949.9      770.0      487.9

At period end (in EEK, millions)                                   

Net interest income                     161.4      485.7      105.2

Net commission income                    43.4      160.7       26.6

Other operating income (net)             21.9       55.5       13.4

Total operating income                  226.7      702.0      145.2

Net profit                              137.5      395.8       90.1

NIM                                      4.9%       4.9%       5.1%

ROA                                      4.2%       4.0%       4.4%

ROE                                     28.4%      24.6%      27.3%

Interest yield on average assets        10.8%      10.9%      11.3%

Cost income ratio                       24.9%      31.7%      31.7%

Net risk cost                            0.5%       0.5%       0.5%

Number or employees                       443        412        340



Hansa Capital Group’ s net profit in the first quarter of 2001 was

137.5 million kroons. As of March 31, the Group’s total assets

amounted to 13,812.5 million kroons. Hansa Capital with it´s 55%

market share is the leading leasing and factoring company in the

Baltics.



During the first quarter Hansa Capital Group’s total assets grew by 1

018.3 million kroons or by 8.0%. The main source of growth were

leasing and factoring receivables, which increased in all three Baltic

states.



The Group’s financial investments increased by 1,082.5 million kroons

(9.9%) during first quarter, totalling 12,044.4 million kroons at the

end of March. Of the total growth 36.5% originated from Lithuania,

36.5% from Estonia and 26.1% from Latvia.



The largest share of the Group’s financial investments as at the end

of the year was formed by Estonian portfolio (61.7%), followed by

Latvia (19.7%) and Lithuania (17.1%). Compared to the beginning of the

year, the geographical structure of assets shifted in favour of Latvia

and Lithuania. As at the end of March, the largest credited sector was

transport (21.7%), followed by real estate management and other

business services (18.9%), and private individuals (15.0%). Compared

to the beginning of the year, the share of the transport sector has

risen mainly on the account of wholesale, retailing and industry

sectors.



Total new sales during first quarter was 623.3 million kroons. From

total leasing new business 60.9% came from Estonia, 22.9% from Latvia

and 16.2% from Lithuania. The Group’s leasing portfolio increased by

9.8% compared to the beginning of the year and amounted to 9,734.5

million kroons at the end of March. The leasing portfolio distribution

by assets was as follows: real estate – 27.5%, passenger cars – 25.1%,

commercial vehicles – 20.0%, equipment – 18.6%, and other assets –

3.2%. Compared to the beginning of the year, the share of real estate

has increased mainly on the account of commercial vehicles.



Group’s Estonian leasing market share by total portfolio decreased by

0.8% to 67.2% by the end of March (compared to the 68% at the

beginning of the year). The Group’s Latvian estimated market share

stayed at the same level - 42% and Lithuanian estimated market share

was 43%. Hence the Group is the market leader in all three Baltic

States.



The Group’s factoring portfolio increased by 6.2% to 1,480.4 million

kroons during first quarter, factoring turnover totalled 2,250.6

million kroons.



The Group’s ego consumer finance (consumer factoring) portfolio

reached 273.0 million kroons as at the end of March, having grown from

the beginning of the year 97.3 million kroons.

The Group’s assignment portfolio decreased by 14.6 million, and loan

portfolio increased by 43.9 million kroons during the first quarter.



The Group’s interest-bearing liabilities increased by 6.9% to 12,071.2

million kroons as at the end of the quarter. The largest share of

liabilities (88.4%) was formed by loans from parent company.

The Group’s total revenue increased during first quarter by 53.6%

compared to the same period previous year, amounting to 223.0 million

kroons. The  revenue distribution was the following: 72.4% net

interest income, 19.5% net fee income, and 8.1% other income.



Provisions charged to income amounted to 14.5 million kroons, at the

same time actual write-offs amounted to 15.3 million kroons and

recoveries were 5.5 million kroons. The Group’s net risk cost has

stayed at the same level, forming 0.5%. At the end of the March the

volume of leasing receivables overdue more than 60 days amounted to

112.9 million kroons, forming 1.2% of the Group’s leasing portfolio.



The Group’s operating expenses increased by 43.0% compared to the

previous year, amounting to 56.0 million kroons. The largest share of

operating expenses – 32.8 million kroons – was formed by personnel

expenses (growth compared to the last year first quarter was 52.2%).

The number of employees of the Group increased by 7.5% to 443 as at

the end of the March. The Group’s office expenses totalled 7.3 million

kroons (growth of 44.1%), IT expenses totalled 1.5 million kroons

(growth of 28.0%) and marketing expenses totalled 2.7 million kroons

(growth of 20.2%). The Group’s cost-income ratio before provisions was

24.9% (the Group’s target was to lower the cost-income ratio to 30%).



The Group’s net interest margin was 4.9%, return on assets 4.2% and

return on operating equity 28.4% in first quarter, 2001.



Additional information:

Jaak Raid

Financial Analyst

Tel  +372 6131 230

E-mail    Jaak.Raid@hansa.ee



Agnes Makk

Head of marketing

Tel  +372 6131 730

E-mail    Agnes.Makk@hansa.ee





Mart Tõevere

Head of investor relations

+372 6131 569