Hansapank                     FINANCIAL RESULTS           02/14/2003 09:00



CONSOLIDATED RESULTS, 2002



Annual highlights:

-    Net profit EUR 119.8 million in 2002, annual growth 11%;

-    Operating profit before provisions +12% yoy;

-    Revenues +15% (excl. Hansa-LTB 8%);

-     Expenses +16% (excl. Hansa-LTB 6%) (the amortisation of goodwill

from the Estonian Savings Bank acquisition was completed in July 2002,

decreasing expenses by EUR 1.1 million per month);

-    EVA result EUR 60.5 million, +8% yoy;

-    Net interest margin (NIM) 4.14%, -33bp yoy;

-     Return  on  equity  (ROE) 22.6%, return on  assets  (ROA)  2.5%,

earnings per share (EPS) EUR 1.5;

-    Cost-income ratio 56.3%, excl. Hansa-LTB 48.9%;

-    Sustained strong lending growth;

-     Successful launch of the II Pillar pension reform in Estonia and

Latvia;

-    Restructuring in Hansa-LTB completed;

-    Leasing activities in Russia

-    Rating upgrades to A1/P1 by Moody’s and A- by Fitch.



Falling interest rates set the tone for the year 2002. On the one hand

this favoured lending growth, but on the other hand decreased savings.

Hansabank Group’s loan portfolio increased by 29% to EUR 3.33  billion

during  the  year. The real-estate sector was the main growth  driver.

38%  of  total  growth  was  formed by retail  lending,  which  mostly

consists  of  mortgages.  Second was the real-estate  development  and

other  business service sector, which formed 20% of total  growth.  In

geographic terms, almost half of the growth came from Estonia (EUR 336

million),  with Lithuania contributing EUR 221 million and Latvia  EUR

154 million.

Deposit  growth, however, remained at a modest 9% in 2002. The  growth

was  mainly  held  back  by  low interest rates,  but  in  Latvia  and

Lithuania the volume of deposits was also negatively influenced by the

decrease  in the USD/EUR exchange rate. The Group’s loans to  deposits

ratio increased from 79% to 93% during the year.

Interest rates will continue to decrease also in 2003. Hansabank plans

to offset this through lending growth in Latvia and Lithuania.



One  of  the  Group’s  top  priorities  in  2002  was  finalising  the

integration of Hansa-LTB in Lithuania. The project that was  completed

already   in   September  focused  on  building  a  new  organisation,

restructuring  the  distribution network, transferring  customer  data

into a common database and connecting the branch network into one  on-

line  system.  A key goal in Lithuania was to improve access  to  bank

services.  By the end of 2002 Hansa-LTB increased the number  of  ATMs

2.4  times  to  275, the number of cards 5 times to  601,000  and  the

number  of  hanza.net customers 34 times to 173,000. At the same  time

the number of branches was decreased by 60% to 150.



The  other Group priority for 2002 was to successfully participate  in

the  pension  reforms  in  Estonia and Latvia.  In  Estonia  Hansabank

achieved  a 50% market share with 104,700 customers. A similar  reform

started  in  Latvia  in October, 2002. During the first  three  months

42,600  customers,  63%  of  the market, joined  Hansabanka’s  pension

funds.



Q4 2002 results

The  Group  earned  a  net profit of EUR 31.5 million  in  the  fourth

quarter  of  the  year. Quarterly profit increased by  40%  from  last

year’s  same  period, but decreased by 14% compared  to  the  previous

quarter. The Group’s return on equity was 22.3%, the cost-income ratio

was 56.4%. Cost-income ratio excluding Hansa-LTB was 51.8%.



The Group earnings per share (annualised) decreased from 1.85 euros in

Q3  2002  to  1.59 euros in Q4. The Group EVA result  for  the  fourth

quarter  of the year was EUR 13.6 million, which is 33% less  than  in

the  previous quarter. The Group’s EUR 31.5 million net profit can  be

divided between the three countries as follows: EUR 27.0 million  from

Estonia  (EUR  30.5 million in Q3 2002), EUR 5.9 million  from  Latvia

(EUR 6.5 million in Q3 2002), EUR 4.3 million from Lithuania (EUR  4.5

million in Q3 2002) and EUR -5.7 million (EUR -4.9 million in Q3 2002)

from support functions (group overhead).



The  Group’s total revenues amounted to EUR 88.0 million in  Q4  2002,

increasing  by  4%  qoq  and  9%  yoy. Revenue  distribution  was  the

following:  60% net interest income, 28% net fee income, 9%  financial

income,  and  3%  other income. Operating expenses totalled  EUR  51.1

million  during the quarter. The expenses increased by  11%  qoq,  but

decreased  by  4%  yoy.  The  quarterly  growth  was  caused   by   an

exceptionally  low  cost  level in the third  quarter  as  well  as  a

seasonal increase in expenses during the fourth quarter. Both,  salary

and  marketing  expenses  rose by EUR 1.7 million  from  the  previous

quarter.  The  Group  also made a EUR 1.9 million provision  to  cover

future tax liabilities, which is recorded under other expenses. 44% of

total  expenses was formed by personnel expense, 19% by administrative

expenses,  11% by depreciation, 19% by other expenses (incl.  goodwill

amortisation) and 7% by IT expenses.



The  Group’s  net  provisions totalled EUR 4.3  million  in  Q4  2002,

compared to EUR 0.3 million in Q3 2002 and EUR 4.7 million in Q4 2001.

Recoveries  totalled EUR 3.6 million in Q4, including EUR 1.2  million

from  Hansa-LTB. Of all recoveries received during 2002, 51% came from

Hansa-LTB. The Group’s net risk cost was at 0.2% in Q4 2002.



The  Group’s total assets amounted to EUR 5.24 billion at the  end  of

2002,  increasing  by  8% qoq and by 14% yoy. Interest-earning  assets

totalled EUR 4.76 billion, 90.8% of total assets (90.0% at the end  of

September  2002). Interest-bearing liabilities amounted  to  EUR  4.35

billion,  forming 83.0% of total liabilities and shareholders’  equity

(82.7% at the end of September 2002).



The  Group’s loan portfolio increased by EUR 286 million in the fourth

quarter of the year, exceeding the third quarter result by 33%. 35% of

the  quarterly growth originated from Estonia, 35% from Lithuania  and

24%  from  Latvia. Lending to private individuals formed  39%  of  the

growth,  with  real-estate  management  and  other  business  services

contributing  another 19%. Strong growth lifted the  loans  to  assets

ratio from 55% at the beginning of the year to 63%.



Customer  deposits increased by EUR 213 million during the quarter  to

EUR 3.57 billion, which is 2.3 times more than the combined growth  of

the  first 9 months of the year. The Group’s deposit market shares  at

the  end  of  the year were 56% in Estonia, 16% in Latvia and  31%  in

Lithuania.



1 EUR = 15.64664 EEK





Consolidated Balance Sheets            EEK                 EUR

(in millions, unaudited)      31.12.02  31.12.01  31.12.02  31.12.01

                                                                    

Assets                                                              

Cash                           2,436.5   2,404.3     155.7     153.7

Due from Central Bank          3,185.4   4,393.6     203.6     280.8

Due from other financial       6,067.0   7,466.9     387.8     477.2

institutions

Treasury securities            5,059.1   4,247.5     323.3     271.5

Trading securities             1,439.3     437.9      92.0      28.0

Investment securities          3,731.5   5,128.2     238.5     327.8

Securities purchased under     3,010.5   2,508.4     192.4     160.3

resale agreements

Loans                         52,086.4  40,243.9   3,328.9   2,572.0

  - Allowances for credit       -754.7    -859.7     -48.2     -54.9

losses

Net loans                     51,331.7  39,384.2   3,280.7   2,517.1

Tangible assets                1,897.8   2,178.3     121.3     139.2

Intangible assets                406.5     621.8      26.0      39.7

Prepayments and accrued        2,556.4   2,562.8     163.4     163.8

interest

Other assets                     862.4     684.5      55.0      43.7

Total assets                  81,984.1  72,018.4   5,239.7   4,602.8

                                                                    

Liabilities                                                         

Due to Central Bank and          139.5     109.3       8.9       7.0

government

Due to other financial         5,670.8   4,198.0     362.4     268.3

institutions

Deposits                      55,821.4  51,063.4   3,567.6   3,263.6

   Demand deposits            37,499.8  32,480.2   2,396.6   2,075.9

   Time deposits              18,321.6  18,583.2   1,171.0   1,187.7

Securities sold under             86.1       0.1       5.5         -

repurchase agreements

Debt securities issued to the  5,656.4   3,815.3     361.5     243.8

public

Accrued liabilities            2,020.9   1,865.1     129.2     119.2

Appropriations                   593.7     474.3      37.9      30.3

Deferred tax liability            26.6      14.2       1.7       0.9

Other liabilities              2,213.1   2,221.9     141.5     142.0

Total liabilities             72,228.5  63,761.6   4,616.2   4,075.1

Minority ownership                16.5      15.2       1.1       1.0

                                                                    

Subordinated liabilities         709.7     721.9      45.3      46.1

Shareholders' equity                                                

Common stock                     793.4     788.6      50.7      50.4

Share premium                  2,824.7   2,762.1     180.5     176.5

Treasury stock                   -26.9     -37.5      -1.7      -2.4

Reserves                         453.8     450.9      29.0      28.8

Other restricted equity          100.5     100.5       6.4       6.4

Currency translation reserve     -38.7      88.2      -2.4       5.7

Retained earnings              4,922.6   3,366.9     314.6     215.2

Total shareholders' equity     9,029.4   7,519.7     577.1     480.6

Total liabilities and         81,984.1  72,018.4   5,239.7   4,602.8

shareholders' equity





Consolidated Income Statement          EEK                 EUR

(in millions, unaudited)          2002      2001      2002      2001

                                                                    

Interest income                4,906.1   4,604.9     313.6     294.3

Interest expense              -1,758.3  -1,943.3    -112.4    -124.2

Interest income, net           3,147.8   2,661.6     201.2     170.1

                                                                    

Fee and commission income      1,766.7   1,395.1     112.9      89.2

Fee and commission expense      -420.4    -306.5     -26.9     -19.6

Fees and commissions, net      1,346.3   1,088.6      86.0      69.6

                                                                    

Net result from financial        463.7     571.7      29.7      36.5

operations

Net income from insurance         29.8      45.6       1.9       2.9

activities

Other income                     186.5     150.9      11.9       9.6

Total income                   5,174.1   4,518.4     330.7     288.7

                                                                    

Operating expenses                                                  

Personnel expenses             1,427.7   1,163.7      91.2      74.4

Data network expenses            217.5     150.0      13.9       9.6

Administrative expenses          530.6     478.5      33.9      30.6

Other expenses                   562.7     557.8      36.0      35.6

 incl. goodwill amortisation     217.6     265.9      13.9      17.0

Depreciation                     392.8     348.1      25.1      22.2

Total operating expenses       3,131.3   2,698.1     200.1     172.4

Operating profit before        2,042.8   1,820.3     130.6     116.3

provisions

Losses on loans and             -313.6    -340.9     -20.0     -21.8

guarantees

Recovered loans                  265.3     262.5      16.9      16.8

Profit from associates under       5.9       8.8       0.3       0.6

the equity method

Operating profit               2,000.4   1,750.7     127.8     111.9

Extraordinary                        -         -         -         -

income/(expense)

Profit before income tax       2,000.4   1,750.7     127.8     111.9

Income tax                      -124.6     -57.5      -7.9      -3.7

Profit after income tax        1,875.8   1,693.2     119.9     108.2

Minority interest                 -1.9         -      -0.1         -

Net profit                     1,873.9   1,693.2     119.8     108.2





Consolidated Income Statement                                       

(in millions of euros,        Q4 2002 Q3 2002 Q2 2002 Q1 2002 Q4 2001

unaudited)

                                                                    

Interest income                 80.8    78.5    78.0    76.3    77.5

Interest expense               -28.1   -27.0   -28.4   -28.9   -30.5

Interest income, net            52.7    51.5    49.6    47.4    47.0

                                                                    

Fee and commission income       31.3    28.6    28.0    25.0    26.2

Fee and commission expense      -7.0    -6.6    -7.3    -6.0    -6.4

Fees and commissions, net       24.3    22.0    20.7    19.0    19.8

                                                                    

Net result from financial        8.2     7.4     6.2     7.9    11.7

operations

Net income from insurance        0.4     0.6     0.5     0.4       -

activities

Other income                     2.4     3.0     3.1     3.4     2.4

Total income                    88.0    84.5    80.1    78.1    80.9

                                                                    

Operating expenses                                                  

Personnel expenses              22.7    21.8    22.6    24.1    23.2

Data network expenses            3.8     3.6     3.4     3.1     3.2

Administrative expenses          9.5     8.0     8.0     8.4     9.6

Other expenses                   9.6     6.3    10.1    10.0    11.4

 incl. goodwill amortisation     1.6     2.6     4.8     4.9     5.0

Depreciation                     5.5     6.6     6.6     6.4     5.9

Total operating expenses        51.1    46.3    50.7    52.0    53.3

Operating profit before         36.9    38.2    29.4    26.1    27.6

provisions

Losses on loans and             -7.9    -3.6    -3.5    -5.0    -9.0

guarantees

Recovered loans                  3.6     3.3     5.3     4.7     4.3

Profit from associates under     0.2     0.1       -       -     0.4

the equity method

Operating profit                32.8    38.0    31.2    25.8    23.3

Extraordinary                      -       -       -       -       -

income/(expense)

Profit before income tax        32.8    38.0    31.2    25.8    23.3

Income tax                      -1.3    -1.4    -4.3    -0.9    -0.9

Profit after income tax         31.5    36.6    26.9    24.9    22.4

Minority interest                  -       -    -0.1       -       -

Net profit                      31.5    36.6    26.8    24.9    22.4





Mart Tõevere

Head of investor relations

+372 6131 569