OPTIVA PANK

ANNOUNCEMENT

09.09.99

 

UNAUDITED H1 RESULTS OF OPTIVA GROUP

 

As of the end of June, Optiva Group’s balance sheet size totaled 3.2 

billion EEK, providing 11.6 million EEK increase for H1 1999. The 

group’s H1 net profit amounted to 7.6 million EEK, of which 4.6 

million EEK was earned in Q2. 

 

Among the group’s largest subsidiaries, AS Optiva Liising posted 1.6 

million EEK profit.

 

In H1 the group’s foreign capital increased by 4.7 million EEK, 

whereas the volume of interest-bearing assets dropped by 171.3 million 

EEK or 6.3% and non-interest bearing assets increased by 176. million 

EEK or 110.0%). Such tendencies occurred mainly due to decreased 

volume of bonds issued: 817.5 million EEK in the beginning of the year 

down to 499.1 million EEK at the end of June (change –318. million EEK 

or –39.0%). Decline in bonds issued was due to maturation of the bonds 

and pre-term redemption due to favorable market conditions.

 

As of the end of June, the total volume of the group’s deposits 

amounted to 1’039 million EEK, increasing in H1 by 166.5 million EEK 

or 19.1%. Demand deposits increased in H1 by 159.8 million EEK or 

29.4%, and term deposits by 6.7 million EEK or 2.0%. As the volume of 

demand deposits grew during this period significantly faster than the 

term deposits, then the share of demand deposits among total deposits 

increased in H1 by 5.4%, to 67.7% level. The share of clients’ 

deposits on the group balance sheet increased from 27.3% (end of 1998) 

to 32.4% (H1 1999). 

In Q1 the deposits increased by 144.1 million EEK (incl. demand 

deposits by 60.9 million EEK and term deposits 83.2 million EEK), and 

by 22.3 million EEK in Q2 (incl. demand deposits by 98.9 million EEK 

and term deposits –76.5 million EEK). Volume of term deposits 

decreased in Q2 mainly due to ending of the government term deposits. 

Amounts in collection increased in H1 by 95.2 million EEK or 95.3

 

As of end-June, the group’s owners’ equity stood at 342.9 million EEK, 

accounting for 10.7% of the group’s total assets.

 

Changes in the groups’ assets size and structure occurred mainly due 

to changed structure of foreign capital. On the group balance sheet, 

the size of liquid assets grew from 451.3 million EEK (end-December) 

to 646.5 million EEK at the end of June, providing 195.2 million EEK 

or 43.2% increase. As of the end of 1998, these assets accounted for 

14.1% of the group’s total assets; the respective figure at the end of 

H1 1999 stood at 20.7% (6.6% change). Such growth occurred mainly due 

to increased term and demand deposits with other banks by 185.4 

million EEK. In Q1 the size of liquid assets grew due to increased 

foreign capital; the respective H1 result was more affected by 

decreased loan portfolio. 

 

On the group’s assets account, the net loan portfolio decreased by 

202.9 million EEK or 10.3%, amounting to 1’766 million EEK at end-

June, with the most substantial decline in net loan portfolio 

occurring in Q2. The share of net loan portfolio also diminished among 

the group’s assets by 55.0% at the end of June (61.5% at the end of 

1998). 

 

The groups’ investments in debt securities increased in H1 by 46.3 

million EEK or 26.8%, totaling 219.0 million EEK or 6.8% of the 

group’s assets. Long-term investments in shares dropped in H1 by 20.9 

million EEK or 20.8%.

 

Total revenue of Optiva Pank in H1 1999 amounted to 100.6 million EEK. 

The income structure was as follows: net interest income after loan 

provisions accounted for 42.5% of total revenue, commissions and 

service fees received for 22.9%, income from currency exchange for 

15.3%, income from investments in shares for 19.2% and other income or 

1.1%. 

 

The group’s H1 revenues amounted to 108.3 million EEK, of which net 

interest income after loan provisions accounted for 17.0% (18.4 

million EEK commissions and service fees received 21.6% (23.4 million 

EEK), income from financial investments 8.3% (9.0 million EEK), income 

from financial operations 42.9% (46.5 million EEK) and other income 

10.1% (10.9 million EEK).

 

The group’s H1 non-interest expenses totaled 73.4 million EEK, of 

which the personnel expenses accounted for 48.4% (35.6 million EEK), 

the administrative expenses 26.1% (19.2 million EEK), commissions and 

service fees paid 7.3% and other non-interest expenses 18.2%.

 

The following table presents the key indicators of the group and bank 

in H1 1999:

 

 	                                BANK                           GROUP

	                       Q1 99    Q2 99      H1 99       Q1 99   Q2 99   H1 99 

Return on equity                1.8%	 6.8%	    4.4%	3.5%	5.4%	4.5%

Return on assets                0.2%	 0.7%	    0.5%	0.4%	0.5%	0.5%

Average asset utilization       10.6%	11.4%	   11.0%	11.4%	13.8%	12.9%

Average yield                   7.3%	 7.7%	    7.5%	7.4%	7.2%	7.4%

Net non-interest margin 	3.2%	 3.7%	    3.5%	4.1%	6.6%	5.5%

Profit margin  	                1.8%	 6.2%	    4.1%	3.2%	3.9%	3.6%

Net interest margin after 

    loan provisions	        2.3%	 2.8%	    2.6%	2.3%	-0.02%	1.1%

 

 

 

Priit Perens

Financial Director

+372 63 02 101