Balti Investeeringute Grupp  FINANCIAL RESULTS    14.04.2005



Audited  financial statements of Balti Investeeringute Grupp



The  year  2004  has been very successful  for  AS  Balti

Investeeringute Grupp as a consolidation group.



The company's goal to be closer to its clients and expand

the  sales  network  has  proven  a  success.  Since  the

beginning  of  2004 three new branches have been  opened:

one  in  Lasnamäe  Centrum in Tallinn (January),  one  in

Ülemiste  Keskus  in Tallinn (April)  and  one  in  Narva

Centrum  (July).  Thus, as of the end of  2004  AS  Balti

Investeeringute  Grupp  has  seven  branches   throughout

Estonia.  The launch of new branches has been  a  success

and  by  the  beginning  of autumn  a  considerable  loan

portfolio has been formed.



The  financial results of AS Balti Investeeringute  Grupp

for  the  year 2004 were as anticipated. Changes  in  the

company’s  key  economic indicators were comparable  with

the  developments  of other companies  operating  in  the

financial sector. Both the portfolio of loans issued  and

the  earnings  and profit from ordinary  activities  grew

remarkably. The increase in interest expenses  and  wages

and  salaries has been relatively lower than the increase

in  income, and the overall efficiency of the company has

improved.  The  focus on the core activities  and  active

marketing   have   significantly   contributed   to   the

accomplishment of the company’s objectives.



The  interest  income of the consolidation  group  of  AS

Balti  Investeeringute Grupp was up 54% compared to  2003

and  amounted  to  EEK 64.5 million. At  the  same  time,

interest expenses grew by just 14%, amounting to EEK 11.4

million.  Both the decline in the general interest  level

and the increase in the owners' equity contributed to the

relatively small growth in interest expenses.



The  Group earned a total of EEK 4.2 million on net  fees

and commissions, which is up 54% from the previous year.



Administrative expenses grew in the Group by 44% in  2004

when  compared to the year 2003, amounting  to  EEK  29.7

million.  An  increase in expenses incurred in  marketing

activities  accounted  for  a  significant  part  in  the

growth.



The aggregate net profit of the Group grew in 2004 by 52%

when  compared to the previous year, and amounted to  EEK

31.6 million.



In  2004  the Group issued a total of EEK 236 million  in

loans,  which is 52% more than in 2003. As of 31 December

2004 the Group's net loan portfolio amounted to EEK 228.2

million  and  the assets to EEK 269.9 million,  exceeding

the  figures shown at the end of 2003 by 42.5% and 45.9%,

respectively.





The total uncollectible accounts (provisioned) have risen

to  EEK 8.2 million, i.e. by 17% and account for 3.5%  of

the  portfolio  as of 31 December 2004. The  actual  loss

ratio  of  loans continued to be lower than the provision

ratio  and  no  material increase of the  loss  ratio  is

expected to occur.



The liabilities of the Group grew in the year 2004 to 192

million  kroons,  i.e.  by  41%  when  compared  to   the

beginning of the financial year. Among other liabilities,

the   amount  of  issued  bonds  has  increased  notably,

amounting  to EEK 123 million as of the end  of  2004  (a

growth of 77%).



The  owners'  equity  of the Group increased  to  EEK  78

million  during the year 2004, i.e. up 61% when  compared

to the beginning of the year.



The  company's objectives for 2005: to continue expanding

the  sales  network  and making the service  more  easily

available  to clients and to set up a long-term financial

base for the company, which would ensure stable financing

during  the  company's continuing growth phase.  For  the

purpose   of  providing  the  company  with  a  long-term

financing   base  the  company  applied  for   a   credit

institution activity license at the end of 2004.





BALANCE SHEET



                                  GROUP                  PARENT

                                                         COMPANY

ASSETS              Note  31.12.2004  31.12.2003  31.12.2004  31.12.2003

Cash at bank and in   2   13,999,490     999,496  13,874,608     239,494

hand 

Receivables              228,322,990 160,423,100 214,277,798 148,209,105

                                  

Trade receivables     3  236,448,283 167,161,013 219,636,397 153,035,534

                                  

Non-trade             4      114,055     259,801       8,334      19,850

receivables

Less: Allowance for   5   -8,239,348  -6,997,714  -5,366,933  -4,846,279

uncollectible

accounts

Shares and other      7            0           0  18,098,518  15,813,714

securities

Shares in                          0           0  18,098,518  15,813,714

subsidiaries

Investment            8   13,851,502  14,205,399           0           0

properties

Intangible assets     9   -1,307,003  -1,608,822     457,317     225,878

Tangible assets      10    6,386,072   6,055,032   5,986,153   5,863,482

Other assets         12    2,406,536   1,718,558   2,204,648   1,669,887

Accrued income and   13    6,297,359   3,166,947   7,281,103   3,966,347

prepaid expenses

TOTAL ASSETS             269,956,946 184,959,711 262,180,145 175,987,908

                                                                                                      

LIABILITIES AND           31.12.2004  31.12.2003  31.12.2004  31.12.2003

OWNERS’ EQUITY

Payables                  61,945,739  62,174,677  55,171,726  54,153,841

Payables to credit   14,  61,916,735  62,146,487  55,168,776  53,915,049

institutions         25

Other payables                29,004      28,190       2,950     238,792

Bonds issued         15  122,659,518  69,327,337 122,659,518  69,327,337

Other liabilities            143,753     237,893     119,291     216,187

Accrued expenses     16    7,041,029   4,750,829   6,120,518   3,832,009

and deferred income

Total liabilities        191,790,039 136,490,736 184,071,053 127,529,374

Share capital              7,184,000   7,184,000   7,184,000   7,184,000

Other reserves               718,400     718,400     718,400     718,400

Unrealised exchange-      -1,110,182    -664,540  -1,167,997    -674,981

rate differences

Retained profit           39,731,115  20,362,171  39,731,115  20,362,171

Profit for the            31,643,574  20,868,944  31,643,574  20,868,944

financial year

Total owners’             78,166,907  48,468,975  78,109,092  48,458,534

equity

TOTAL LIABILITIES        269,956,946 184,959,711 262,180,145 175,987,908

AND OWNERS’ EQUITY                







INCOME STATEMENT



                                    GROUP                   PARENT

                                                            COMPANY

                   Note         2004        2003         2004        2003

Interest income     17    64,506,954  41,997,871   53,268,043  33,847,814

Interest expense    18   -11,410,093  -9,988,526  -10,880,368  -9,358,230

NET INTEREST              53,096,861  32,009,345   42,387,675  24,489,584

INCOME

                                                                    

Net profit/loss on   7             0   4,216,738    4,568,139   7,840,051

financial

investments

Net fees and        19     4,195,886   2,725,171    3,336,981   2,205,837

commissions

Net profit/loss on  20      -267,781    -623,138      -16,012     -14,004

financial

transactions

                                                                    

Administrative           -29,727,630 -20,632,411  -23,774,617 -15,028,841

expenses

Wages and salaries        -7,604,946  -5,657,753   -6,258,658  -4,489,035

Social security           -2,414,491  -1,799,214   -2,088,638  -1,497,706

costs

Other                    -19,708,193 -13,175,444  -15,427,321  -9,042,100

administrative

expenses

                                                                    

Change in the      8, 9,  -1,225,050  -1,236,241     -876,535    -711,433

value of tangible   10

and intangible

assets

Change in the       21      -720,408      38,974      245,268     194,090

value of

receivables and

off-Balance Sheet

liabilities

                                                                    

Other operating            7,393,093   5,254,208    5,937,117   2,174,742

income and

expenses

Other operating     22     8,564,431   7,803,147    6,583,289   3,090,126

income

Other operating     23    -1,171,338  -2,548,939     -646,172    -915,384

expenses

PROFIT BEFORE             32,744,971  21,752,646   31,808,016  21,150,026

TAXES

INCOME TAX                -1,101,397    -883,702     -164,442    -281,082

NET PROFIT FOR THE       31,643,574   20,868,944   31,643,574  20,868,944

FINANCIAL YEAR





Eero Varkki

Chief Financial Officer

737 7599