HANSAPANK

COMMENTARY TO FINANCIAL RESULTS



CONSOLIDATED UNAUDITED FINANCIAL RESULTS, 9 MONTHS 2001



-    net profit growth 58.0%, operating profit (before provisions)

     growth 17.0%

-    successful start of the LTB integration process

-    asset growth 53.4%

-    ROE 27.5%

-    EPS 1.45 euros

-    improved recovery of loan write offs, net risk cost 0.15%

-    largest internet bank in Estonia (286,000 customers) and in

Latvia (60,000 customers), in total 352,000 internet banking customers



All figures in this announcement are in euros. The EEK/EUR exchange

rate is 15.64664.



Hansabank Group completed the first 9 months of 2001 with a net profit

of EUR 85.8 million, representing a 58.0% increase on the 2000 first 9-

month result. At the same time the Group operating profit before

provisions increased by 17.0%. The Group earnings per share

(annualised) increased to 1.45 euros. Return on equity was 27.5% and

return on assets was 3.2%. The Group EVA result for the first 9 months

of the year was EUR 45.3 million, which is 50.5% more than in the

respective period last year. The Group’s results were influenced by

improving asset quality on the one hand and growth in business volumes

on the other.



Hansapank  Group’s EUR 85.8 million net profit can be divided  between

the  five  business  units  as  follows: Hansabank  Estonia  EUR  35.8

million,  Hansabanka  EUR 6.7 million, Hansabankas  and  LTB  EUR  0.1

million,  Hansa  Capital EUR 31.3 million, and Hansabank  Markets  EUR

17.9  million and other (operations, which are not directly linked  to

any  business unit) EUR –6.0 million. These results are not comparable

to the results of the respective legal entities (AS Hansapank EUR 41.3

million, a/s Hansabanka EUR 8.3 million, AB bankas Hansabankas EUR 0.2

million,  LTB  EUR 1.5 million (June-September result)  and  AS  Hansa

Capital  EUR  34.1 million.) Of the total result EUR 26.2 million  was

earned  in  the first quarter, EUR 32.2 million in the second  quarter

and EUR 27.3 million in the third quarter.



As a result of good leasing growth, interest income increased by 29.0%

(excluding LTB) from last year’s same period. The Group’s net interest

margin decreased to 4.57% at the end of September. LTB’s respective

ratio (June-September) was 2.88%. Excluding LTB, the Group’s net

interest margin would have been 4.76%. Non-interest income growth was

6.3% (excl. LTB) in the 9 months of 2001. The main reason behind the

slow growth was a 16.4% decrease in trading revenues. The Group’s

total revenues totalled EUR 207.8 million in the first 9 months of

2001. The revenue distribution was the following: 59.2% net interest

income, 24.0% net fee income, 10.4% financial income, and 6.4% other

income.

Operating expenses totalled EUR 119.1 million for the period,

increasing from previous year's same period by 19.3%. Of total

expenses 43.0% was formed by personnel expenses, 17.6% by

administrative expenses, 20.3% by other expenses (incl. goodwill

amortisation), 13.7% by depreciation, and 5.4% by IT expenses.

At the end of September 2001 the Group’s cost-income ratio (before

provisions) was 51.6% (46.4% excl. LTB) and the ratio of operating

expenses to total assets was 4.0%.



In the 9 months of 2001 the Group’s loan and guarantee losses totalled

EUR 12.8 million. During the three quarters of 2001 the Group wrote

off loans worth EUR 14.7 million (EUR 16.7 million during 9 months of

2000) while recoveries totalled EUR 12.5 million (EUR 6.4 million

during 9 months of 2000). The Group’s net risk cost during the 9

months of 2001 was 0.15%.



The Group’s total assets amounted to EUR 4.30 billion at the end of

September. The Group’s assets increased by 6.4% in the first quarter

of the year, by 12.1% in the second quarter and decreased by 2.6% in

the third quarter. The third quarter result (in Latvia and Lithuania)

was significantly influenced by USD depreciation. The Group’s loan

portfolio grew by 31.3% (excl. LTB). The third quarter saw a slow-down

in Hansabank’s growth rates, in particular in Estonia, where loan

growth decreased to 24.7% and deposit growth to 16.0%. We see better

growth potential in Latvia and Lithuania where the respective growth

rates were 24.9% and 48.1% for loans and 24.3% and 80.2% for deposits

(all excl. LTB).





Mart Tõevere

Head of investor relations

+372 6131 569