EESTI ÜHISPANK

ANNOUNCEMENT

15.03.99

 

Comments on Eesti Ühispank financial results for February

 

Total assets of Ühispank amounted  to EEK 14,306 million in  February,

having increased by  4,2% or EEK  572 mln. The  profit for the  Bank's

accounting  year  increased  to  EEK  10,1  mln.  The corrections made

during the  audit into  the results  of 1998  are not  included in the

financial  results  of  February.   Adjustments  apply  only  to   the

discounting of assets and the loss from previous years and it  doesn't

change the result of the  current year. The corrections were  included

into  the  accounting  reports  at  the  beginning of March, after the

confirmation of the auditors.

 

Growth of balance sheet resulted from the increase of client  deposits

by 15,6 per cent or more than EEK 1 billion. At the same time,  taking

into account the  funds coming from  the Ühispank Eurobond  issue, the

Bank paid back approximately EEK 400 mln of funds borrowed from  other

banks.  One  part  of  the  growth  of  client deposits was due to the

recurrence of state deposits from the privatisation of Telekom.  Also,

all the other  client groups' deposits  grew in February  as well. The

deposits  of  corporate  clients  increased  by  7,4%  or EEK 242 mln,

compared to January. There was  a recovery of companies' turnovers  in

February, the resulting changes will be revealed during the  following

months. Deposits of  private clients have  grown 2% steadily  from the

beginning of the year, amounting to EEK 35 mln.

 

Despite  the  growth  in  deposits,  Ühispank  does  not at this point

consider  it  reasonable  to  increase  the risk of corporate lending.

However,  taking  into  the  consideration  the  growing income of the

population,  Ühispank  will  grant  long-term  housing  loans  on more

favourable terms  than until  now and  after the  restructuring of the

loan portfolio, the Bank will give preference to the export  projects,

which are  lower in  interest yield,  but have  stable revenue  bases.

Bank's  loan  portfolio  decreased  by  EEK  138 mln or 1,8%; loans to

private clients  increased by  1,3%. Net  loan portfolio  was EEK  7,3

billion by the end of February, which made up 50,8% of total assets.

 

Bank's liquid assets in  other banks have increased  substantially due

to the additional  funding.  Cash  and other banking  account balances

increased by  EEK 0,6  billion in  February.   To avoid  the loss from

risk transmission, Ühispank does not reflect in its revenues the  part

with  the  potential  risk.  This  will increase the future additional

profit potential on  account of the  previous periods and  at the same

time it  will decrease  the risk  of extraordinary  losses. Of  Bank's

total income,  76,3% are  net interest  income; 18,3%  net commissions

and fees and 5,4% other income. Eesti Ühispank capital adequacy  ratio

was 13,9% at the end of February.

 

Additional information:

Ülo Suurkask

Vice President

Tel + 372 6 110 350