Hansapank                     FINANCIAL RESULTS                 08/22/2003



GROUP FINANCIAL RESULTS Q2 2003 1/2



- Net profit € 29.0 million in Q2 2003, -16.2% qoq and +8.2% yoy

- Net profit affected by € 9.9 million tax on dividends (€3.3 million

in Q2 2002)

- Operating profit before provisions +18.2% qoq and +65.6% yoy

- Total income +11.0% qoq and +17.5% yoy

- Total income positively affected by income from the sale of

property, totalling € 2.4 million

- Total operating expenses +4.1% qoq and -10.5% yoy

- Gradual decrease in interest margins - net interest margin 3.75% in

Q2 2003, -11bp qoq and -35bp yoy

- Return on equity (ROE) 19.5%, return on assets (ROA) 2.1%, earnings

per share (EPS) € 1.47

- Annual loan growth stable at 30%, 6% qoq

- Annual deposit growth has recovered to 11%, 2% qoq

- Hansabank paid dividends of 0.383 euros (EEK 6) per share



AS Hansapank and its subsidiaries (hereinafter Hansabank Group or the

Group) earned € 29.0 million net profit in the second quarter of 2003.

The Group’s operating profit before provisions increased by 65.6% yoy

(2002 second quarter). However, several one-off items affected the

annual growth rate. The Q2 2002 results include a € 3.3 million

goodwill amortisation from the Estonian Savings Bank merger (completed

in July 2002) as well as € 0.9 million redundancy charge from the

restructuring of LTB. This year’s results include several one-off

gains from the sale of property. Without these cost and revenue items,

annual growth of the operating profit would come to 39% and operating

profit after provisions to 9%.

Geographic division of the Hansapank Group € 29.0 million net profit

is the following: € 17.3 million from Estonia (€ 24.2 million in Q1

2003), € 4.4 million from Latvia (€ 4.3 million), € 4.8 million from

Lithuania (€ 4.7 million) and € 2.4 million (€ 1.4 million) from other

markets.



REVENUES AND EXPENSES

The Group’s total income amounted to € 94.1 million in Q2 2003,

increasing 11.0% qoq and 17.5% yoy. Excluding the € 2.4 million one-

off gains from the sale of property, revenue growth would have been

8.1% and 14.5% respectively. Total income distribution during the

second quarter was the following: 57% net interest income, 29% net fee

income, 12% financial income, and 2% other income.

Operating expenses increased by 4.1% qoq and decreased by 10.5% yoy,

totalling € 45.4 million in Q2 2003. Again, extraordinary items

affected the growth. Second quarter last year includes a € 3.3 million

amortisation charge from the Estonian Savings Bank merger as well as a

€ 0.9 million redundancy charge from LTB restructuring. Excluding

those items, annual decrease of the costs would have been 2.8%. 46% of

total expenses was formed by personnel expense, 15% by other expenses

(incl. goodwill amortisation) 18% by administrative expenses, 13% by

depreciation, and 8% by IT expenses.

The Group’s cost-income ratio (before provisions) improved to 46.5%

from 49.7% in Q1 2003 and 57.3% in Q2 2002. The ratio of operating

expenses to total assets improved to 3.16% from 3.18% in Q1 2003 and

3.81% in Q2 2002.

The Group’s average yield of interest-earning assets was 5.89% in Q2

2003, compared to 6.26% in the first quarter, while the cost of

interest-bearing liabilities was 1.95% in Q2 2003 versus 2.23% in the

previous quarter. The Group’s spread decreased by 10bp to 3.94% during

one quarter and by 49bp during the past year.



PROVISIONS AND ASSET QUALITY

The Group’s loan and guarantee losses totalled € 9.8 million in Q2

2003, which is 12.6% more than in the previous quarter, but 2.8 times

more than in the same period last year. Almost half of the provisions,

EUR 4.6 million, were made by Hansa Capital. Larger than usual

provisions were due to a revision of ratings and recovery rates in the

Latvian and Lithuanian leasing subsidiaries. The Group had also above

average loan losses in the second quarter. This was mostly due to one-

off event where Hansa Capital wrote-off repossessed collaterals that

had been for sale over 1 year, worth € 2.6 million. Hansa Capital’s

write-offs totalled € 3.7 million, or 46% of the Group’s total during

the quarter. Recoveries totalled € 1.9 million in Q2 2003. The Group’s

net risk cost was 0.7% versus -0.1% in Q1 2003.



LENDING AND DEPOSITS

The loan portfolio increased by 6% during the second quarter to € 3.67

billion. Annual growth was 30%. 41% of the annual growth originated

from Estonia, 29% from Lithuania, 19% from Latvia and 11% from other

countries, which mainly represents the growth in the Russian leasing

portfolio. Lending to private individuals formed 39% of the growth,

with real-estate management and wholesale and retailing contributing

another 17% and 15% respectively. 10% of total growth was formed by

the transport and communications sector, which again is related to the

Russian leasing portfolio as all of the transactions under this

portfolio are leases of wagons for transportation companies.

Customer deposits increased by 2% during the second quarter to € 3.80

billion. Lithuanian deposits increased by € 53 million, Estonian by €

20 million, while Latvian deposits decreased by € 10 million. Annual

growth of deposits keeps increasing steadily rising to 11% at the end

of June from 8% at the end of March. At the end of June loan to

deposit ratio stood at 97% (93% at the end of Q1 2003). The Group’s

deposit market shares as at June 30 were 57.3% in Estonia, 15.8% in

Latvia and 31.2% in Lithuania.



HANSABANK - THE MOST SUCCESSFUL II-PILLAR ASSET MANAGER IN THE BALTICS

A year has passed since the Estonian government launched the so-called

II pillar (compulsory individual pension scheme) of the pension

system. In Latvia, the reform started in September 2002 and in

Lithuania it will be launched in the third quarter of 2003.

The pension reform could be considered as the last of the major

reforms on the local banking market. Having gone through the adoption

of electronic banking, rapid credit growth both on the corporate and

consumer side, the Baltic banking is now seeing the first developments

of a long-term savings market.

The start of the reform has been very successful for the Group. In

Estonia, 127,100 clients had selected Hansabank as their asset manager

by the end of June 2003, giving us a 50% market. In Latvia we have

been equally successful with 82,300 clients, or 51% of the market,

choosing Hansabanka’s funds. In Lithuania the necessary legislation

has been passed and the market participants can start signing

contracts with clients this autumn.

In the longer perspective our branch network, the largest in all three

countries, provides us with a strong advantage over our competitors,

both, in the context of wider coverage as well as cost-effectiveness.





1 EUR = 15.64664 EEK





Mart Tõevere

Head of Corporate Communications and IR

Tel. +372 6131 569





CONSOLIDATED BALANCE SHEETS

(in millions,                     EEK                      EUR        

unaudited)

                    30.06.03 31.12.02 30.06.02 30.06.0 31.12.0 30.06.0

                                                     3       2       2

Assets                                                                

Cash                 2,261.0  2,436.5  2,039.4   144.5   155.7   130.4

Due from Central     4,218.0  3,185.4  2,338.1   269.6   203.6   149.4

Bank

Due from other       6,460.9  6,067.0  6,070.1   412.9   387.8   388.0

financial

institutions

Treasury securities  4,908.8  5,059.1  6,287.3   313.7   323.3   401.8

Trading securities   1,349.2  1,439.3    866.8    86.2    92.0    55.4

Investment           2,490.2  3,731.5  4,886.1   159.2   238.5   312.3

securities

Securities           3,801.5  3,010.5  2,704.2   243.0   192.4   172.8

purchased under

resale agreements

Loans               57,481.4 52,086.4 44,248.8 3,673.7 3,328.9 2,828.0

  - Allowances for    -864.1   -754.7   -722.2   -55.2   -48.2   -46.2

credit losses

Net loans           56,617.3 51,331.7 43,526.6 3,618.5 3,280.7 2,781.8

Tangible assets      1,828.1  1,897.8  2,037.0   116.8   121.3   130.2

Intangible assets      357.8    406.5    468.5    22.9    26.0    30.0

Prepayments and      3,195.1  2,556.4  2,616.3   204.2   163.4   167.2

accrued interest

Other assets         1,192.2    862.4  1,654.2    76.2    55.0   105.7

Total assets        88,680.1 81,984.1 75,494.6 5,667.7 5,239.7 4,825.0

                                                                      

Liabilities                                                           

Due to Central Bank    196.8    139.5    103.3    12.6     8.9     6.6

and government

Due to other         6,193.8  5,670.8  3,674.4   395.9   362.4   234.9

financial

institutions

Deposits            59,463.4 55,821.4 53,581.3 3,800.4 3,567.6 3,424.5

   Demand deposits  40,260.5 37,499.8 34,549.6 2,573.1 2,396.6 2,208.1

   Time deposits    19,202.9 18,321.6 19,031.7 1,227.3 1,171.0 1,216.4

Securities sold          6.4     86.1        -     0.4     5.5       -

under repurchase

agreements

Debt securities      7,513.9  5,656.4  4,819.6   480.2   361.5   308.0

issued to the

public

Accrued liabilities  2,148.6  2,020.9  1,751.6   137.3   129.2   111.9

Appropriations         661.9    593.7    520.1    42.3    37.9    33.2

Deferred tax            23.6     26.6     23.0     1.5     1.7     1.5

liability

Other liabilities    2,211.3  2,213.1  2,256.2   141.3   141.5   144.2

Total liabilities   78,419.7 72,228.5 66,729.5 5,011.9 4,616.2 4,264.8

Minority ownership      73.5     16.5     16.2     4.7     1.1     1.0

                                                                      

Subordinated           693.3    709.7    713.7    44.3    45.3    45.6

liabilities

Shareholders'                                                         

equity

Common stock           793.4    793.4    793.4    50.7    50.7    50.7

Share premium        2,822.4  2,824.7  2,826.5   180.4   180.5   180.7

Treasury stock         -16.3    -26.9    -14.8    -1.0    -1.7    -0.9

Reserves               460.8    453.8    453.8    29.4    29.0    29.0

Other restricted       100.5    100.5    100.5     6.4     6.4     6.4

equity

Currency              -102.4    -38.7     18.3    -6.5    -2.4     1.2

translation reserve

Retained earnings    5,435.2  4,922.6  3,857.5   347.4   314.6   246.5

Total shareholders'  9,493.6  9,029.4  8,035.2   606.8   577.1   513.6

equity

Total liabilities   88,680.1 81,984.1 75,494.6 5,667.7 5,239.7 4,825.0

and shareholders' equity





CONSOLIDATED INCOME STATEMENT

                                    EEK                    EUR        

(in millions,          6m 2003     2002  6m 2002 6m 2003   2002 6m 2002

unaudited)

                                                                      

Interest income        2,473.0  4,906.1  2,414.7  158.1  313.6   154.3

Interest expense        -861.7 -1,758.3   -895.9  -55.1 -112.4   -57.3

Interest income, net   1,611.3  3,147.8  1,518.8  103.0  201.2    97.0

                                                                      

Fee and commission       974.0  1,766.7    828.5   62.2  112.9    53.0

income

Fee and commission      -199.9   -420.4   -207.5  -12.8  -26.9   -13.3

expense

Fees and commissions,    774.1  1,346.3    621.0   49.4   86.0    39.7

net

                                                                      

Net result from          296.4    463.7    219.6   18.9   29.7    14.1

financial operations

Net income from           16.2     29.8     14.4    1.0    1.9     0.9

insurance activities

Other income             101.7    186.5    101.7    6.6   11.9     6.5

Total income           2,799.7  5,174.1  2,475.5  178.9  330.7   158.2

                                                                      

Operating expenses                                                    

Personnel expenses       647.1  1,427.7    731.3   41.4   91.2    46.7

Data network expenses    108.0    217.5    102.3    6.9   13.9     6.5

Administrative           256.6    530.6    257.3   16.4   33.9    16.4

expenses

Other expenses           194.1    562.7    314.8   12.3   36.0    20.1

 incl. goodwill           49.2    217.6    151.7    3.1   13.9     9.7

amortisation

Depreciation             187.0    392.8    203.2   12.0   25.1    13.0

Total operating        1,392.8  3,131.3  1,608.9   89.0  200.1   102.7

expenses

Operating profit       1,406.9  2,042.8    866.6   89.9  130.6    55.5

before provisions

Losses on loans and     -288.7   -313.6   -133.5  -18.5  -20.0    -8.5

guarantees

Recovered loans           83.0    265.3    156.6    5.3   16.9    10.0

Profit from associates     2.9      5.9      0.5    0.2    0.3       -

under the equity

method

Profit before income   1,204.1  2,000.4    890.2   76.9  127.8    57.0

tax

Income tax              -202.4   -124.6    -80.7  -12.9   -7.9    -5.2

Profit after income    1,001.7  1,875.8    809.5   64.0  119.9    51.8

tax

Minority interest         -6.8     -1.9     -0.9   -0.4   -0.1    -0.1

Net profit               994.9  1,873.9    808.6   63.6  119.8    51.7





CONSOLIDATED INCOME STATEMENT - QUARTERLY

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

unaudited)                     2003   2003   2002  2002   2002   2002

                                                                     

Interest income                78.7   79.4   80.8  78.5   78.0   76.3

Interest expense              -26.7  -28.4  -28.1 -27.0  -28.4  -28.9

Interest income, net           52.0   51.0   52.7  51.5   49.6   47.4

                                                                     

Fee and commission income      33.1   29.1   31.3  28.6   28.0   25.0

Fee and commission expense     -6.6   -6.2   -7.0  -6.6   -7.3   -6.0

Fees and commissions, net      26.5   22.9   24.3  22.0   20.7   19.0

                                                                     

Net result from financial      11.0    7.9    8.2   7.4    6.2    7.9

operations

Net income from insurance       0.4    0.6    0.4   0.6    0.5    0.4

activities

Other income                    4.2    2.4    2.4   3.0    3.1    3.4

Total income                   94.1   84.8   88.0  84.5   80.1   78.1

                                                                     

Operating expenses                                                   

Personnel expenses             20.9   20.5   22.7  21.8   22.6   24.1

Data network expenses           3.6    3.3    3.8   3.6    3.4    3.1

Administrative expenses         8.2    8.2    9.5   8.0    8.0    8.4

Other expenses                  6.8    5.5    9.6   6.3   10.1   10.0

 incl. goodwill amortisation    1.6    1.5    1.6   2.6    4.8    4.9

Depreciation                    5.9    6.1    5.5   6.6    6.6    6.4

Total operating expenses       45.4   43.6   51.1  46.3   50.7   52.0

Operating profit before        48.7   41.2   36.9  38.2   29.4   26.1

provisions

Losses on loans and            -9.8   -8.7   -7.9  -3.6   -3.5   -5.0

guarantees

Recovered loans                 1.9    3.4    3.6   3.3    5.3    4.7

Profit from associates under    0.1    0.1    0.2   0.1      -      -

the equity method

Profit before income tax       40.9   36.0   32.8  38.0   31.2   25.8

Income tax                    -11.6   -1.3   -1.3  -1.4   -4.3   -0.9

Profit after income tax        29.3   34.7   31.5  36.6   26.9   24.9

Minority interest              -0.3   -0.1      -     -   -0.1      -

Net profit                     29.0   34.6   31.5  36.6   26.8   24.9





Mart Tõevere

Head of investor relations

+372 6131 569