Hansapank                     FINANCIAL RESULTS                 02/12/2004



CONSOLIDATED FINANCIAL RESULTS, 2003 1/2



Annual highlights:

-    Net profit EUR 130.9 million in 2003, annual growth 9%;

-    Operating profit before provisions EUR 176.2 million, +35% yoy;

-     The main factors influencing the annual results were: decreasing

margins,  strong  lending  growth, increase  in  foreign  funding  and

normalisation of provisioning cost (after a very low level in 2002).

-    Revenues +9%;

-    Expenses -8%;

-    EVA result EUR 57.8 million, -4%;

-    Net interest margin 3.65%, -49bp;

-    Return on equity 21.2%, return on assets 2.3%, earnings per share

EUR 1.65;

-    Cost-income ratio 49.3%;

-     Successful launch of the II Pillar pension reform in  all  three

countries  -  0.5 million clients have chosen Hansabank Group  as  the

manager of their pension savings;

-     Acquisition of the largest life insurance company in Lithuania -

Lietuvos Draudimo Gyvybes Draudimas;

-    Successful start of Hansa Leasing Russia;

-    New management structure.



YEAR 2003

Indrek Neivelt, Chairman of the Board, "2003 was a successful year for

Hansabank Group. We reached several important milestones: our Group

has two million cards, one million Internet bank customers and half a

million pension customers. We managed to improve on last year’s

results despite a rapid decrease in interest margins. Our pre-tax

profit increased by 15% to EUR 147.1 million and our market

capitalisation grew by 35% to EUR 1.7 billion. We also took a big step

forward in efficiency, reducing our cost to asset ratio from 3.8% to

3.1% over the year."



Despite intensifying competition, the Group managed to fulfil all

financial targets and the consolidated net profit increased by 9%

during the year to EUR 130.9 million. The development of the Latvian

and Lithuanian operations was particularly positive during 2003. The

return on equity of our Latvian operations reached the targeted 20%

level, while the operating profit of the Lithuanian operations

increased by 5.4 times during the year to EUR 17.2 million.



Falling interest rates, particularly in the retail segment, set the

tone for the year 2003. This created a favourable environment for

lending activities - the Group’s loan portfolio increased by 31%

during the year to EUR 4.40 billion. The biggest change compared to

the previous year came from Lithuania where the total portfolio growth

jumped to 47% and the volume of retail loans more than doubled

(+107%). In terms of sectors 37% of total growth came from retail

lending, which at the end of the year formed already 1/3 of the

Group’s loan portfolio.

Despite rapid loan growth, asset quality remained solid throughout the

year. The net risk cost ratio, which shows the level of write-offs,

was 0.42% in 2003. Overdue loans increased by 8% only and their share

in total loans decreased to 5.4%.



Client  deposits increased by 14% during the year. Deposit growth  was

negatively affected by lower interest rates, launch of the pension  II

pillar  and continuing private consumption. Due to slow deposit growth

the  Group  considerably increased the volume of foreign funding.  The

volume  of  issued  debt securities and loans taken from  other  banks

increased by EUR 0.5 billion and their share in total liabilities rose

to 22%.



A  more  detailed  overview  of the Group’s operations  and  financial

results  during  2003  is given in the annual report,  which  will  be

published during week 14, the latest.





Q4 2003 results

The  Group  earned  a  net profit of EUR 31.6 million  in  the  fourth

quarter  of  the year. The Group earnings per share (annualised)  were

1.54  euros  in  Q4 2003, compared to 1.80 euros in  Q3.  The  Group’s

profit decreased by 12% from the third quarter, which is explained  by

the  exceptionally  low level of expenses in Q3  and  certain  one-off

expenses in Q4.

The  Group’s return on equity was 19.1% in Q4 2003 and the  return  on

assets  as 2.1% The EVA result for the fourth quarter of the year  was

EUR  11.9 million. The Group’s EUR 31.6 million net profit is  divided

between  the countries as follows: EUR 26.0 million from Estonia,  EUR

6.1  million from Latvia, EUR -0.2 million from Lithuania and EUR -0.3

million  from other markets (Russia and the Ukraine) and non strategic

areas.  The  result  from other markets includes EUR  1.9  million  of

provisions and write-offs in the Ukrainian leasing portfolio. The loss

in  Lithuania  was  caused by redundancy charges from  branch  network

restructuring  and pension II pillar campaign expenses  totalling  EUR

2.9 million during the quarter.



REVENUES AND EXPENSES

The  Group’s total revenues amounted to EUR 91.6 million in  Q4  2003,

increasing by 2.1% qoq and 4.1% yoy. The quarterly increase was mainly

driven  by  seasonally  higher net fee income (+7.9%  qoq).  Operating

expenses  increased  by 16.4% during the quarter, totalling  EUR  51.1

million. The growth was mainly caused by the previously mentioned one-

off expenses in Lithuania.



The Group’s cost-income ratio (before provisions) was 54.1% in the

fourth quarter compared to 47.1% in Q3 2003 and 56.4% in Q4 2002. The

ratio of operating expenses to total assets rose to 3.22%, which is

32bp higher than in Q3 2003.

The Group’s average yield of interest-earning assets was 5.39% in the

fourth quarter, while the cost of interest-bearing liabilities was

1.79%. The Group’s spread decreased by 15bp to 3.60% during one

quarter and by 80bp during the past year.



PROVISIONS AND ASSET QUALITY

The Group’s loan and guarantee losses totalled EUR 11.0 million in Q4

2003, which is 9.8% less than in the previous quarter, but 39.2% more

than in the same period last year. Recoveries totalled EUR 3.4 million

and the net risk cost ratio was 0.56% in the fourth quarter versus

0.40% in Q3 2003. The Group’s target is to keep the ratio below 0.6%

over a business cycle.

The Group’s loan loss reserve amounted to EUR 60.8 million at the end

of the year, forming 1.38% of the loan portfolio. Loans overdue

totalled EUR 235.6 million, down 23.5% qoq, while non-performing loans

(overdue more than 60 days) amounted to EUR 16.9 million. Total

overdue loans formed 5.4% and non-performing loans 0.4% of the loan

portfolio at the end of December 2003.



LENDING AND DEPOSITS

The loan portfolio increased by EUR 0.37 billion, or 9% during the

fourth quarter to EUR 4.40 billion. 41% of the third quarter growth

originated from Estonia, 39% from Lithuania, 19% from Latvia and 1%

from other countries. Lending to private individuals formed 41% of the

growth, with wholesale and retailing and real-estate management

contributing another 21% and 15% respectively.



Customer deposits increased by 5%, or EUR 176.1 million during the

fourth quarter to EUR 4.08 billion. Lithuanian deposits increased by

EUR 141 million, Estonian by EUR 24 million, and Latvian by EUR 11

million. The loan to deposit ratio increased to 108% during the

quarter (103% at the end of Q3 2003).





1 EUR = 15.64664 EEK





Mart Tõevere

Head of Corporate Communications and IR

Tel. +372 6131 569







CONSOLIDATED BALANCE SHEET

(in millions, unaudited)            EEK                EUR

                           31.12.03 31.12.02 31.12.03 31.12.02

Assets                                                       

Cash                        2,502.6  2,436.5    159.9   155.7

Due from Central Bank       5,661.3  3,185.4    361.8   203.6

Due from other financial    8,840.8  8,649.5    564.9   552.8

institutions

Treasury securities         5,663.4  5,059.1    361.9   323.3

Trading securities          1,455.0  1,439.3     93.0    92.0

Investment securities       2,365.1  3,731.5    151.2   238.5

Loans                      68,774.8 52,513.8  4,395.5 3,356.3

  - Allowances for credit    -951.9   -754.7    -60.8   -48.2

losses

Net loans                  67,822.9 51,759.1  4,334.7 3,308.1

Tangible assets             1,834.2  1,897.8    117.3   121.3

Intangible assets             282.6    406.5     18.1    26.0



Prepayments and accrued     2,588.2  2,556.4    165.4   163.4

interest

Other assets                1,257.6    862.4     80.4    55.0

Total assets              100,273.7 81,983.5  6,408.6 5,239.7

                                                             

Liabilities                                                  

Due to Central Bank and       782.2    139.5     50.0     8.9

government

Due to other financial      7,213.8  5,670.8    461.0   362.4

institutions

Deposits                   63,785.7 55,907.5  4,076.7 3,573.1

   Demand deposits         45,229.5 37,499.8  2,890.7 2,396.6

   Time deposits           18,556.2 18,407.7  1,186.0 1,176.5

Debt securities issued to  12,130.9  5,656.4    775.3   361.5

the public

Accrued liabilities         2,111.0  2,020.9    134.9   129.2

Appropriations                743.6    593.7     47.5    37.9

Deferred tax liability         22.0     26.6      1.4     1.7

Other liabilities           2,171.8  2,213.1    138.8   141.5

Total liabilities          88,961.0 72,228.5  5,685.6 4,616.2

Minority ownership            129.6     16.5      8.3     1.1

                                                             

Subordinated liabilities      688.7    709.7     44.0    45.3

Shareholders' equity                                         

Common stock                  793.4    793.4     50.7    50.7

Share premium               2,832.8  2,824.7    181.0   180.5

Treasury stock                 -7.7    -26.9     -0.5    -1.7

Reserves                      460.7    453.8     29.5    29.0

Other restricted equity       100.5    100.5      6.4     6.4

Currency translation         -176.1    -38.7    -11.2    -2.4

reserve

Retained earnings           6,490.8  4,922.6    414.8   314.6

Total shareholders' equity 10,494.4  9,029.4    670.7   577.1

Total liabilities and     100,273.7 81,984.1  6,408.6 5,239.7

shareholders' equity





CONSOLIDATED INCOME STATEMENT

 (in millions, unaudited)            EEK                EUR

                               2003     2002     2003    2002

                                                             

Interest income             4,957.1  4,906.1    316.9   313.6

Interest expense           -1,704.8 -1,758.3   -109.0  -112.4

Interest income, net        3,252.3  3,147.8    207.9   201.2

                                                             

Fee and commission income   2,038.1  1,766.7    130.3   112.9

Fee and commission expense   -438.9   -420.4    -28.1   -26.9

Fees and commissions, net   1,599.2  1,346.3    102.2    86.0

                                                             

Net result from financial     575.1    463.7     36.7    29.7

operations

Net income from insurance      27.1     29.8      1.7     1.9

activities

Other income                  182.8    186.5     11.7    11.9

Total income                5,636.5  5,174.1    360.2   330.7

                                                             

Operating expenses                                           

Personnel expenses          1,337.8  1,427.7     85.5    91.2

Data network expenses         231.6    217.5     14.8    13.9

Administrative expenses       528.3    530.6     33.8    33.9

Other expenses                429.2    562.7     27.4    36.0

 incl. goodwill                99.2    217.6      6.3    13.9

amortisation

Depreciation                  352.6    392.8     22.5    25.1

Total operating expenses    2,879.5  3,131.3    184.0   200.1

Operating profit before     2,757.0  2,042.8    176.2   130.6

provisions

Losses on loans and          -652.5   -313.6    -41.7   -20.0

guarantees

Recovered loans               192.2    265.3     12.3    16.9

Profit from associates          4.7      5.9      0.3     0.3

under the equity method

Profit before income tax    2,301.4  2,000.4    147.1   127.8

Income tax                   -239.3   -124.6    -15.3    -7.9

Profit after income tax     2,062.1  1,875.8    131.8   119.9

Minority interest             -13.4     -1.9     -0.9    -0.1

Net profit                  2,048.7  1,873.9    130.9   119.8



CONSOLIDATED INCOME STATEMENT - QUARTERLY

(in millions of euros,                                        

unaudited)

                         Q4 2003 Q3 2003 Q2 2003 Q1 2003 Q4 2002

                                                              

Interest income             80.3    78.5   78.7    79.4   80.8

Interest expense           -27.1   -26.8  -26.7   -28.4  -28.1

Interest income, net        53.2    51.7   52.0    51.0   52.7

                                                              

Fee and commission income   35.1    33.0   33.1    29.1   31.3

Fee and commission          -7.7    -7.6   -6.6    -6.2   -7.0

expense

Fees and commissions, net   27.4    25.4   26.5    22.9   24.3

                                                              

Net result from financial    9.0     8.8   11.0     7.9    8.2

operations

Net income from insurance    0.2     0.5    0.4     0.6    0.4

activities

Other income                 1.8     3.3    4.2     2.4    2.4

Total income                91.6    89.7   94.1    84.8   88.0

                                                              

Operating expenses                                            

Personnel expenses          24.4    19.7   20.9    20.5   22.7

Data network expenses        4.5     3.4    3.6     3.3    3.8

Administrative expenses      9.0     8.4    8.2     8.2    9.5

Other expenses               8.2     6.9    6.8     5.5    9.6

 incl. goodwill              1.5     1.7    1.6     1.5    1.6

amortisation

Depreciation                 5.0     5.5    5.9     6.1    5.5

Total operating expenses    51.1    43.9   45.4    43.6   51.1

Operating profit before     40.5    45.8   48.7    41.2   36.9

provisions

Losses on loans and        -11.0   -12.2   -9.8    -8.7   -7.9

guarantees

Recovered loans              3.4     3.6    1.9     3.4    3.6

Profit from associates       0.1       -    0.1     0.1    0.2

Profit before income tax    33.0    37.2   40.9    36.0   32.8

Income tax                  -1.1    -1.3  -11.6    -1.3   -1.3

Profit after income tax     31.9    35.9   29.3    34.7   31.5

Minority interest           -0.3    -0.2   -0.3    -0.1      -

Net profit                  31.6    35.7   29.0    34.6   31.5





Mart Tõevere

Head of Communications and IR

+372 6131 569