EESTI ÜHISPANK    

ANNOUNCEMENT

26.05.1999        

 

IFC LEFT THE OPTION TO ACQUIRE STAKE IN EESTI UHISPANK UNUSED

 

Today, May 26, 1999, International Finance Corporation (IFC)  notified

Eesti  Uhispank  that  it  has  left  unused  the option to acquire an

equity stake  of up  to DM  32.375 million  (US$19.196 million),  i.e.

near 9.6  per cent  of the  share capital  of Eesti  Uhispank. IFC and

Eesti  Uhispank   will  continue   co-operation  on   Baltic  projects

requiring long-term financing.

 

The President  of Eesti  Uhispank, Mr.  Ain Hanschmidt,  said that the

present  decision  has  clarified   the  shareholder  base  of   Eesti

Uhispank. However, it does not  exclude IFC becoming a shareholder  of

the bank  in the  future. "The  co-operation projects  between IFC and

the  bank  as  well  as  our  subsidiaries and clients will definitely

continue, for example in leasing and life insurance," he noted.

 

On January  28, 1999,  IFC agreed  to a  financing package under which

Eesti Uhispank received an eight- year  loan in the amount of EEK  259

million. At present, EEK  80 million has been  used to respond to  the

growing demand for individual housing finance in Estonia. The rest  of

the loan will be disbursed during the present year.

 

Eesti Uhispank  is well  capitalised, as  of end  of April its capital

adequacy  was  13.14  per  cent,  well  above  the 10 per cent minimum

required by  the central  bank. "At  the same  time we  are witnessing

improvement in the economic situation  which in turn is again  pushing

investors  to  start  looking  more  carefully  at  the key efficiency

ratios," said Mr. Ain Hanschmidt.  "An equity base remaining the  same

gives the bank  a possibility to  concentrate on increasing  return on

equity which is a positive signal to investors," he added.

 

For further information, please contact:

 

Mr. Margus Schults

Vice President

Eesti Uhispank

Tel: +372 66 56 600

 

Notes to Editors

 

Eesti  Uhispank  was  founded  in  1992  from  the  partnership  of 10

independent  local   banks.    The  bank   subsequently  merged   with

North-Estonian Bank (AS Pohja-Eesti  Pank) in 1997, and  Tallinna Pank

in 1998. As of April 1999, the  bank holds a 35 per cent market  share

in terms of assets, 36 per cent  in terms of deposits and 32 per  cent

in terms of loans in Estonia.

 

The  bank  offers  a  wide  range  of financial services such as lease

financing, electronic banking and corporate finance complementing  its

core retail  banking activities.  As of  end April  1999, the bank had

total  assets  of  EEK  15.4  billion  (US$  1,040  million) and share

capital  of  EEK   661.5  million  (US$   44.7  million).  The   major

shareholders of  the bank  include Skandinaviska  Enskilda Banken  (36

per cent), Merita Bank clients (22 per cent), Bankers Trust (GDRs,  14

per  cent),  and  Swedfund  Financial  Markets  AB  (5 per cent).  The

bank's capital adequacy for the respective period was 13.14 per cent.

 

International  Finance  Corporation  (IFC),  part  of  the  World Bank

Group, fosters economic  growth in the  developing world by  financing

private sector  investments, mobilizing  capital in  the international

financial markets  and providing  technical assistance  and advice  to

governments and businesses.