Semiannual Report 2001
Hansabank’s share data Nominal price
EEK
10.00
EUR**
0.64
Market price 31.12.96
EEK
80.83
EUR
5.17
Market price 31.12.97
EEK
138.88
EUR
8.88
Market price 31.12.98
EEK
49.92
EUR
3.19
Market price 31.12.99
EEK
98.77
EUR
6.31
Market price 30.06.00
EEK
123.77
EUR
7.91
Market price 31.12.00
EEK
138.94
EUR
8.88
Market price 30.06.01
EEK
150.24
EUR
9.60
Market capitalisation
EEK mil 11,833.6
Net profit EUR mil
EUR mil 756.30
Shares outstanding
Weighted average of shares
EPS EUR
PE
CEPS EUR
Book value PS
P/B
Dividend per share
ROE
ROA
5.5%
1996*
18.2
38,243,560
37,196,620
0.49
10.54
0.82
1.27
4.07
0.07
49.8%
1997
28.5
38,243,560
38,243,560
0.75
11.91
1.09
1.92
4.61
0.04
43.6%
4.1%
1998
-3.9
78,764,434
48,094,904
-0.08
-
0.25
3.41
0.94
0.00
-2.8%
-0.3%
1999
52.1
78,764,434
77,942,369
0.67
9.45
0.77
4.02
1.57
0.32
17.8%
2.7%
6m 2000
33.6
78,764,434
77,866,445
0.86
9.17
0.31
4.18
1.89
na
20.3%
2.9%
2000
76.7
78,764,434
77,811,427
0.99
9.01
1.23
4.67
1.90
0.06
22.4%
3.0%
6m 2001
58.4
78,857,109
78,290,432
1.49
6.44
1.63
5.54
1.73
na
29.0%
3.6%
* Data for years prior 1997 has been adjusted for all stock dividends and split (30.04.1995). ** Exchange rate EEK/EUR quoted by the Bank of Estonia is 15.6466.
Financial highlights 6m 2001 For the period
2000
6m 2000
6m ’00 / 6m ’01 Increase/decrease
(EUR in millions)
Net interest income
77.7
126.2
56.4
37.6%
Non-interest income
53.8
100.5
45.0
19.6%
Income before income tax
60.6
83.7
40.3
50.4%
Net income
58.4
76.7
33.6
73.8%
Earnings per share
1.49
0.99
0.86
72.2%
Market price, end of period
9.60
8.88
7.91
21.4%
Book value, end of period
5.54
4.67
4.18
32.5%
Shareholders' equity to total assets
9.88%
12.63%
12.57%
-21.4%
Asset yield
7.99%
8.81%
8.70%
-8.2%
29.04%
22.40%
20.34%
42.8%
3.55%
2.98%
2.88%
23.3%
44.44%
33.84%
33.16%
34.0%
4.72%
4.91%
4.84%
-2.5%
Net non-interest margin
-0.62%
-0.31%
-0.27%
129.6%
Tier 1 capital ratio
13.18%
15.98%
15.81%
-16.6%
Total capital ratio
14.76%
17.00%
17.33%
-14.8%
Loans
2,221.9
1,761.5
1,435.8
54.7%
Other interest-earning assets*
1,745.9
825.6
867.1
101.3%
Total assets
4,421.3
2,914.1
2,621.3
68.7%
Deposits
3,093.3
1,867.9
1,628.3
90.0%
50.4
50.3
50.3
0.2%
Total shareholders' equity
436.7
368.0
329.6
32.5%
Number of employees
7,391
3,431
3,293
124.4%
565
165
165
242.4%
298,000
211,800
136,000
119.1%
Per common share
Ratios
(EUR)
(%)
Return on shareholders' equity Return on assets Profit margin Net interest margin
At period end
(EUR in millions)
Share capital
Number of bank branches Internet banking customers
* Dues from other banks, treasury securities, bond trading and investment portfolios, reverse repos, dues from Central Bank.
Hansabank’s share performance
SEMIANNUAL REPORT
2001
HANSABANK
share price in kroons
250
trading volume, in millions of kroons
250
share price trading volume
200
200
150
150
100
100
50
50
0
Source: Estonian Securities Depository
2
0 01.95
06.95
12.95
06.96
12.96
06.97
12.97
06.98
12.98
06.99
12.99
06.00
12.00
06.01 07.01
Dear shareholders! We are proud to present you with yet another set of excellent results.
Hansabank Group has increasingly become an international compa-
AS Hansapank and its subsidiaries (hereinafter Hansapank Group or
ny, the last shift being the acquisition of LTB. To facilitate these devel-
the Group) achieved the highest-ever semi-annual profit of € 58.4
opments, our management has undergone several changes. Over the
million, 73.8% increase from previous year’s same period. The
past year several managers with excellent international experience
Group’s balance sheet grew by 68.7% to € 4.4 billion during one
have joined our team and many top managers have taken on new
year. In addition to strong organic growth, the Group also complet-
responsibilities. Hansabank believes that through stronger manage-
ed the acquisition of the largest retail bank in Lithuania, Lietuvos
ment capacity and rotation we will be able to keep one of our main
Taupomasis Bankas (LTB).
competitive advantages – the ability to create and implement new ideas and uphold our current dynamism.
Undoubtedly the most important event has been the successful completion of the nine-month long LTB privatisation process. This acqui-
The employee rotation programme as well as the growing interna-
sition significantly strengthened Hansabank’s position in Lithuania as
tionalisation of the company has taken the cross-border information
well as in the whole Baltic market. In Lithuania our market share rose
exchange on a new level. This year the most important project in this
to 30% and in the Baltics we already control over one third of the
field is the integration of LTB into Hansabank Group. In order to com-
market. With this transaction Hansabank doubled its customer base
plete this ambitious task within 24 months we have assembled an
and workforce – at the end of June the Group had over 2.7 million
integration team from the Group’s employees who are advising our
customers.
Lithuanian colleagues based on the experience gained from similar mergers in Estonia and Latvia. The most important tasks of the inte-
Another significant development during the first half of the year was
gration team are the replacement of the IT system, unification of
the strong growth in the usage of our Internet banking product –
LTB’s and Hansabankas’ organisations and the creation of an organ-
hanza.net. The Group has 300 thousand online-customers in the
isation based on Hansabank’s core values and culture, outsourcing of
Baltics and is the leading Internet banking service provider both, in
non-core activities as well as the reorganisation of the risk manage-
Estonia as well as Latvia. In Latvia we have improved the functional-
ment function.
ity of the product on several occasions and in Estonia our e-banking team is preparing to launch new versions of the corporate and retail
Looking forward, we are optimistic about the Baltic region’s devel-
hanza.net in the autumn.
opment potential despite the global economic slow-down. The positive outlook is also supported by lower interest rates, which should
Among the business units one should highlight the success of our
promote entrepreneurship and overall economic growth. Our long-
leasing and factoring unit, Hansa Capital Group, who is a strong
term strategy will at least to some extent be influenced by
market leader in each of the three countries. Hansa Capital’s semi-
Swedbank’s and SEB’s merger decision. Considering the market con-
annual net profit increased 101.4% from last year’s corresponding
centration in the Baltics, the new bank could not merge its current
period to € 21.7 million. The result also includes a € 4.0 million one-
activities in Estonia and in Lithuania. The merging SEB-Swedbank is
off gain from a change in provisioning principles (switch from gener-
planning on receiving the approval for the merger from the EU com-
al to specific provisioning). The group’s assets grew by 56.0% during
petition authorities by the end of November, after which it will make
the last twelve months.
the relevant decisions regarding its Baltic holdings. Until such decisions are made, Hansabank foresees no change in its operations and
We are also happy with the progress made in recovering problem-
will follow its current strategies.
loans. The recovery of loan write-offs and realisation of collateral has and will take longer than we originally anticipated, but through reor-
Indrek Neivelt
ganisation of the credit monitoring department and creation of a
Managing Director, CEO
designated unit, the situation has improved significantly.
Review of the first half overview of the transaction, please see note "Acquisition of subsidiaries" on pp 9. Hansabank Group’s and LTB’s pro-forma income
euros. Hansapank Group’s return on equity was 29.0% and return on
statements and balance sheets are on pp. 12-13. In the text all
assets was 3.6%.
growth ratios are on pro-forma basis, unless stated otherwise.
Lietuvos Taupomasis Bankas (LTB) belongs to Hansabank’s consolida-
The financial results of the first half 2001 have been reviewed by the
tion group starting from May 31, 2001. Therefore the semi-annual
bank’s Auditors and the net profit of the period is included in the cap-
consolidated income statement also includes LTB’s June net profit and
ital adequacy calculation.
Income statement analysis Hansapank Group’s € 58.4 million net profit can be divided between the
tive legal entities (AS Hansapank € 27.0 million, a/s Hansabanka € 4.8
five business units as follows: Hansabank Estonia € 22.4 million,
million, AB bankas Hansabankas € -0.2 million, LTB € 1.1 million (only
Hansabanka € 3.7 million, Hansabankas and LTB € 0.2 million, Hansa
June result) and AS Hansa Capital € 23.6 million.) Of the total result €
Capital € 21.7 million, and Hansabank Markets € 12.3 million and
26.2 million was earned in the first quarter and € 32.2 million in the sec-
other (operations, which are not directly linked to any business unit) €
ond quarter.
-1.9 million. These results are not comparable to the results of the respec-
Revenues by geographic regions
Assets by geographic regions
in millions of euros, for the period
in millions of euros
6m 2001
2000
6m 2000
30.06.01 31.12.00 30.06.00
Estonia
78.5
163.3
75.8
Estonia
2,983.3
2,652.1
2,300.4
Latvia
37.6
54.7
23.7
Latvia
1,084.6
781.3
684.7
Lithuania
16.7
12.0
4.7
Lithuania
1,243.9
227.9
134.6
1.0
0.9
0.4
Other
10.4
12.2
14.4
Eliminations
-900.9
-759.5
-512.8
Total assets
4,421.3
2,914.0
2,621.3
Other Eliminations Total revenues
-2.4
-4.2
-3.2
131.4
226.7
101.4
Business segment analysis in millions of euros
Banking
Leasing
Insurance
Other*
Eliminations
Consolidated
6m 2001 6m 2000 6m 2001 6m 2000 6m 2001 6m 2000 6m 2001 6m 2000 6m 2001 6m 2000 6m 2001 6m 2000
Total revenue from external customers
76.8
66.9
52.3
32.7
1.9
1.2
0.5
0.6
-
-
131.5
Total revenue from internal customers
22.6
13.5
-21.6
-12.2
-0.4
-0.2
1.8
2.1
-2.4
-3.2
-
-
Total revenue
99.4
80.4
30.7
20.5
1.5
1.0
2.3
2.7
-2.4
-3.2
131.5
101.4
Operating profit
35.6
27.0
24.2
11.7
0.8
0.2
0.0
-0.0
-0.1
-0.1
60.5
38.8
Income/expense from associated companies
101.4
0.1
0.1
-
-
-
-
-
-
-
-
0.1
0.1
Income tax income/(-expense)
-1.5
-6.0
-0.6
-0.5
-
-
-
-
-
-
-2.1
-6.5
Minority interest
-0.1
-0.1
-
-0.0
-
-
-
-
-
-
-0.1
-0.1
-
-
-
1.4
-
-
-
-
-
-
-
1.4
34.1
21.0
23.6
12.6
0.8
0.2
0.0
-0.0
-0.1
-0.1
58.4
33.7
Segment assets
4,302.8
2,474.6
984.2
630.9
25.6
17.4
9.6
11.2
-900.9
-512.8 4,421.3
2,621.3
Segment liabilities
3,788.7
2,085.1
906.4
593.2
22.3
14.6
6.0
11.0
-790.4
-444.5 3,933.0
2,259.4
0.4
0.6
0.4
0.0
-
-
-
-
-
3,789.1
2,085.7
906.8
593.2
22.3
14.6
6.0
11.0
-790.4
Extraordinary income/(-expense) Net income
Unallocated liabilities Total liabilities Capital expenditure
0.8
0.6
-444.5 3,933.8
2,260.0 24.6
-
10.2
15.0
4.9
9.6
0.0
0.0
0.1
-
-
-
15.2
Depreciation
8.6
6.8
0.4
0.3
0.0
0.1
0.1
0.1
-
-
9.1
7.3
Amortisation
8.2
11.0
-0.0
-0.1
-
-
-
-
-
-
8.2
10.9
(incl. intangible, excl. goodwill)
Impairment charge
-
-
0.6
-
-
-
-
-
-
-
0.6
-
Provisions
8.8
7.6
-1.0
3.9
-
-
-
-
-
-
7.8
11.5
Unrealised (profit)/loss
2.7
-
-
-
-
-
-
-
-
-
2.7
-
Vacation reserve
0.1
0.1
0.1
0.1
0.0
0.0
0.0
0.0
-
-
0.2
0.2
6,855
2,854
467
363
57
59
12
17
7,391
3,293
No of employees, end of period
* Others consist of the following subsidiaries: AS Hansa Maja, OÜ Rävala Ärikeskus and AS Crebit.
2001
€ 58.4 million, representing a 73.8% increase on the 2000 first half result. The Group’s earnings per share (annualised) increased to 1.49
SEMIANNUAL REPORT
the balance sheet LTB’s assets and liabilities. For a more detailed HANSABANK
3
Hansabank Group completed the first half of 2001 with a net profit of
HANSABANK
4
The Group’s EVA result for the first half of the year was € 30.1 million,
34.7 million expense in the first half of 2001. Of this € 4.0 million were
which is 43.3% more than in the respective period last year. Business
payments to the Deposit Guarantee Fund. Deposit expense has increased
units’ EVA results are shown in the enclosed table.
by 32.4% compared to last year’s first half, which compares well with the 31.4% increase in customer deposits. The slightly higher growth comes
EVA by business units
from a shift towards time deposits. The cost of foreign funding (loans and
in millions of euros
SEMIANNUAL REPORT
2001
NOPAT*
Hansabank Estonia
Cost of equity
Risk EVA capital**
deposits from other banks as well as issued debt securities) increased by 22.3%. Their volume grew by 17.2% as a result of a € 70 million
26.7
14.16%
85.5
20.7
Eurobond issue this spring. The volume of LTB’s foreign funding has
Hansabanka
4.4
15.04%
62.5
-0.3
decreased by 46.5% during the last year.
Hansabankas
0.7
15.94%
26.4
-1.4
Hansa Capital
18.2
13.93%
127.9
9.3
The Group’s average yield of interest-earning assets was 8.77% and the
Hansabank Markets
14.0
15.99%
72.5
8.2
cost of interest-bearing liabilities was 3.80% in the first half of 2001. LTB’s
Group Treasury
-4.6
14.70%
25.0
-6.4
respective ratios were 7.7% and 4.0%. LTB’s low yield on interest earning
Total Group
59.4
14.70%
399.8
30.1
assets is mainly caused by the small share of loans in total assets (24% in LTB vs. 49% in the whole Group). The Group’s net interest margin was
* Net operating profit after taxes. ** Average of the period.
Net interest income
4.72% in the first half of 2001. LTB’s respective ratio separately was 3.0%. Interest income totalled € 136.5 million in the first half of the year; of this € 5.3
Net fee income amounted to
million was LTB’s June result. On a pro-forma basis interest income record-
Net fees and commissions
ed a 32.0% annual growth. Interest expense amounted to € 58.8 million
of 2001 (€ 1.4 million from LTB), annual growth was 15.9%. Fee income grew
during the first six months of the year (€ 2.3 million from LTB), repre-
by 15.2% and fee expense by 12.8%, compared to previous year’s first half.
€ 30.7 million in the first half
senting a 35.0% increase from last year’s same period,. As a result, net Fees and commissions received from clients totalled € 38.8 million in the
interest income increased by 29.6%.
first half of 2001 (€ 1.7 million from LTB). The growth originated from € 102.2 million of total interest income was formed by loan, leasing and
two sources. The largest single revenue item was fees associated with
factoring interest revenue. Their volume increased by 27.3% compared to
bank cards, which amounted to € 9.6 million in the first half of the year,
last year’s same period, which is slightly below respective portfolio’s
annual pro-forma growth was 41.7%. A significant part of the growth
growth rate (29.7%). During the last 12 months LTB’s loan portfolio has
came from Hansabanka whose respective fees increased by 69% in one
decreased by 12.3% and interest income from loans by 20.9%. At the
year (the number of bank cards grew by 81%). Additionally, Hansabank
same time Hansabank Group’s loan portfolio grew by 37.8% and interest
Estonia organised several campaigns in order to promote the usage of
income from loans by 35.6%.
POS terminals. As a result (June 2000 vs June 2001) card payment
On the interest expense side, deposits were the largest cost item with €
Fees and commissions, net in millions of euros, for the period
Interest income, net in millions of euros, for the period
6m 2001
2000
6m 2000
Interest income Loans
6m 2001
2000
6m 2000
Fee and commission income Transfers
9.0
12.7
6.2
Cash services
3.4
6.7
3.1
Loan management and guarantees
4.6
10.9
4.8
57.5
97.2
44.5
Bank deposits and loans
1.1
5.7
2.7
Leasing
3.6
6.4
2.9
Correspondent accounts
8.4
13.9
5.1
Factoring
1.8
2.5
0.8
13.4
20.5
9.1
Electronic services
10.7
18.6
8.4
3.3
2.2
1.0
- Bank cards
9.6
14.8
6.6
38.9
60.2
26.9
- Telebanking
1.1
3.8
1.8
Factoring
5.8
6.2
2.2
Custody
0.9
1.9
1.0
Derivatives, hedging
7.8
10.0
3.6
Brokerage and investment services
1.0
1.5
1.1
Other
0.3
0.7
0.3
Other
3.8
8.3
3.6
136.5
216.6
95.4
38.8
69.5
31.9
2.7
3.3
1.6
Securities portfolio Repos Leasing
Total interest income
Total fee and commission income
Interest expenses Deposits
Fee and commission expense
34.7
52.5
Demand deposits
10.2
15.6
6.7
Time deposits
20.5
30.8
12.5
4.0
6.1
2.7
and guarantees
0.5
0.9
0.3
8.9
17.2
8.6
Card services
2.4
4.4
2.0
Deposit Guarantee Fund Bank deposits and loans
21.9
Settlements Loan management
Securities
7.6
10.9
4.7
Securities transaction fees
0.7
1.6
1.3
Derivatives, hedging
7.5
9.4
3.4
Encashment and cash services
1.1
2.1
1.0
Other
0.1
0.4
0.3
Other
0.7
1.0
0.5
58.8
90.4
38.9
Total fee and commission expense
8.1
13.3
6.8
30.7
56.2
25.1
Total interest expense Interest income, net Net interest margin
(%)
77.7
126.2
56.5
4.72%
4.91%
4.84%
Fees and commissions, net
fees from transfers, which increased by 17.8% to € 9.0 million during one
Hansabank foresees a 20% reduction in LTB’s workforce. At the end of
year. Taken separately, then Hansabank Group’s growth was 29%, while
June, the geographic distribution of the personnel was the following: 3,863
LTB’s fees from transfers decreased by 0.6%. Again, Hansabanka was a
in Lithuania, 2,447 in Estonia, 1,078 in Latvia and 3 in other countries. The
strong contributor with respective fees almost doubling in one year. In
full-time equivalent of the number of employees in the Group was 6,770 at
Estonia, this revenue source is influenced by two opposite trends. While
the end of June 2001 (3,887 as the first half average). The average month-
the number of transfers is constantly increasing, a significant part of the
ly personnel expense per employee was € 1,291 in the first half.
growth comes from electronic channels where the fees are lower. Administrative
Compared to the first half of 2000 the number of transfers increased by
expenses
26% to 15.3 million, including a 69% increase in transfers through our
Administrative expenses
internet bank to 4.2 million. At the end of June Hansabank Group had
million from LTB) in the first half of the year, decreasing by 1.2% from last
298,000 Internet banking customers, of which 255 thousand were in
year’s corresponding period. Taken separately, Hansabank Group’s admin-
Estonia, 38 thousand in Latvia and 5 thousand in Lithuania.
istrative expenses increased by 3% while LTB’s expenses decreased by
totalled € 12.6 million (€ 0.5
16%. Compared to a 1.2% decrease, the Group’s total assets grew by Fees and commission paid amounted to € 8.1 million (€ 0.3 million from
26.9% and total deposits by 26.4% (all pro-forma). The decrease was
LTB). The growth resulted from a 58% increase in fees paid for settlements
achieved through a 15.4% reduction in maintenance costs and a 35.1%
and 10% increase in fees paid for card services.
decrease in the cost of professional services. At the same time the cost of rent increased by 45.4% because of expanding activities in Latvia as well Net income
Net result from financial operations
as introduction of VAT in Estonia (18%), which previously was refunded.
from finan-
cial operations totalled € 16.1 million during the first six months of the
The Group’s total revenues amounted to € 131.4 million (€ 4.4 million
year (€ 3.1 million from LTB). Financial income increased by 4.8% on a
from LTB) in the first half of 2001, exceeding previous year’s same period
pro-forma basis. However, taken separately LTB recorded a 73% increase.
result by 23.7%. Group’s revenues were € 61.2 million in the first quar-
At the same time Hansabank Group’s respective revenues decreased by
ter and € 70.2 million in the second. The revenue distribution was the fol-
3%. This was mainly caused by negative developments on the securities
lowing: 59.1% net interest income, 23.4% net fee income, 12.3% finan-
markets, which resulted in lower revenues from trading and investment
cial income, and 5.3% other income. Operating expenses totalled € 71.3
portfolios as well as derivatives.
million € 3.3 million from LTB) for the period, increasing from previous year's same period by 15.8%. Expenses amounted to € 32.0 million in the first quarter and € 39.3 million in the second quarter. Of total expens-
Net result from financial operations in millions of euros, for the period
es 42.2% was formed by personnel expenses, 17.7% by administrative
6m 2001
2000
6m 2000
15.1
22.3
10.8
0.6
1.1
0.7
Trading equities
-0.2
4.4
1.2
Investment equities
-0.0
0.4
0.9
In the first half of 2001 the Group’s cost-income ratio (before provisions)
Derivatives
-0.1
2.8
2.7
was 48.7% and the ratio of operating expenses to total assets was 3.9%.
Foreign exchange Bonds
Swaps, forwards
0.2
2.9
2.3
Options, futures
-0.3
-0.1
0.4
Other Provisions Total trading income
0.7 16.1
5.6 -0.6 36.0
0.0 -0.3 16.1
Personnel expenses in millions of euros, for the period
Salaries and compensations Bonuses Social insurance charges Total personnel expenses
6m 2001
19.2 5.0 5.9 30.1
2000
30.2 5.7 9.7 45.6
6m 2000
13.8 2.1 4.4 20.3
Number of employees, end of period* 6,770
3,180
2,969
Number of employees, average of the period* 3,887
3,215
2,981
expenses, 19.9% by other expenses (incl. goodwill amortisation), 14.2% by depreciation, and 6.0% by IT expenses.
Administrative expenses in millions of euros, for the period
6m 2001
2000
Maintenance
1.1
3.2
1.2
Rent for premises
4.0
5.6
2.5
Transportation, car lease
0.5
0.9
0.5
Supplies
1.3
2.6
1.2
Communications
2.3
5.0
2.2
Professional services
1.6
5.0
2.4
Insurance
0.3
0.5
0.2
Security
1.3
2.3
1.1
Other
0.2
0.9
0.4
12.6
26.0
11.7
Total administrative expenses
6m 2000
In the first half of 2001 the Group’s loan and guar-
* Full-time equivalent.
Loan losses
antee losses totalled € 7.7 million (€ 0.4 million
from LTB). The Group’s provisioning charge was € 7.8 million in the first
Personnel expenses
Personnel expenses amounted to €
quarter. Due to changes in Hansa Capital’s provisioning policy, Group’s
30.1 million (€ 2.0 from LTB), an
provisions were negative in the second quarter. Hansa Capital replaced
increase of 23.0% from the previous year’s corresponding period.
its general provisions with specific provisions, which resulted in a € 4.0
Hansabank Group’s personnel expense increased by 38% while LTB’s cost
million one-off gain in the second quarter. During the first half of the year
decreased by 4%. The growth originated mostly from a 1.4-fold increase
the Group wrote off loans worth € 9.5 million while recoveries totalled
in the bonus reserve fund. Starting from this year Hansabank is calculating
€ 8.0 million. As a result, the Group’s net risk cost in the first half of
the bonus reserve based on the actual monthly EVA results of the Group.
2001 was 0.15%.
5 HANSABANK
of which 3,638 work in LTB. During the 24-month long integration period
2001
The number of employees in the Group rose to 7,391 by the end of June,
remained virtually unchanged. Second important growth contributor was
SEMIANNUAL REPORT
turnover has increased by 56% in one year, while the number of cards has
SEMIANNUAL REPORT
2001
HANSABANK
6
Balance sheet analysis The Group’s total assets amounted to € 4.42 billion at the end of June,
securities. Occasionally Hansabank also uses repo-agreements. At the
of which € 0.97 billion was formed by LTB’s assets. In the first half of
end of June the volume of liquid assets amounted to € 1.31 billion.
the year the Group’s assets increased by 15.8% (pro-forma), growth was 6.4% in the first quarter and 12.1% in the second quarter. The
Trading and investment securities
good result achieved in the second quarter resulted from robust growth in customer deposits. Annual growth was 30.1%. Excluding the effects
The Group’s trading portfolio amounted to € 79.1 million at the end
of LTB’s acquisition, Hansabank Group’s assets grew by 32.7% during
of June. Over half of this, € 44.0 million is formed by LTB’s relevant
one year. At the end of June interest-earning assets totalled € 3.97 bil-
portfolio. The investment portfolio’s volume stood at € 329.5 million,
lion, increasing the share to 89.7% of total assets (87.9% one year
with LTB’s contributing € 268.8 million. Both portfolios consist mostly
ago). At the same time interest-bearing liabilities amounted to € 3.75
of debt securities, which form 90.1% and 96.9% of the respective
billion, forming 84.8% of total liabilities and shareholders’ equity
portfolios.
(82.4% one year ago). Liquid assets consist of cash, funds in the
Liquid assets
Central Bank and other banks and treasury
Geographic distribution of assets in millions of euros
Estonia
Assets
Liabilities and shareholders’ equity Off-balance sheet items
30.06.01
31.12.00
30.06.01
31.12.00
30.06.01
31.12.00
Operating profit
6m 2001
2000
1,637.9
1,640.7
2,016.3
1,704.4
452.0
413.2
41.3
63.8
Latvia
699.1
538.9
592.7
436.3
189.5
129.4
9.2
14.9
Lithuania
983.2
214.2
969.2
94.8
231.6
138.8
10.1
2.5
19.5
23.1
30.9
200.5
-
0.7
-0.1
1.1
1,077.5
488.5
676.4
393.2
570.3
652.5
-
-
CIS OECD Other
4.1
8.6
135.8
84.8
1.4
0.0
-
-
Total
4,421.3
2,914.0
4,421.3
2,914.0
1,444.8
1,334.6
60.5
82.3
Maturity structure June 30, 2001, in millions of euros
Under 1 month
1…3 months
Cash and due from Central Bank
377.5
-
-
-
-
-
-
-
377.5
Due from other financial institutions
512.1
-
2.2
1.9
13.2
2.3
-
-
531.7
Securities
48.9
87.8
85.0
123.2
194.0
257.3
8.5
-
804.7
Securities purchased under resale agreements
43.2
111.8
1.4
-
-
-
-
-
156.4
138.4
129.7
513.8
317.2
601.8
521.0
-
-
2,221.9
- Allowance for credit losses
-14.0
-3.9
-13.1
-11.3
-11.5
-8.3
-
-
-62.1
Tangible and intangible assets
-
-
-
-
-
-
-
186.9
186.9
Assets
Loans
3…12 months
1…2 years
2…5 years
Over 5 years
Other, Non-financial without maturity assets
Total
Other assets
36.5
28.1
62.9
29.9
14.6
4.6
-
27.7
204.3
Total assets
1,142.6
353.5
652.2
460.9
812.1
776.9
8.5
214.6
4,421.3
Liabilities Due to Central Bank and government Due to other financial institutions Deposits Securities sold under repurchase agreements Debt securities issued to the public Other liabilities
0.1
0.1
0.9
0.5
2.7
3.9
-
-
8.2
47.2
8.7
117.4
20.6
104.1
25.9
-
-
323.9
2,319.1
263.6
477.4
19.4
11.3
2.5
-
-
3,093.3
29.6
-
-
-
-
-
-
-
29.6
3.1
1.6
13.1
222.8
6.5
-
-
-
247.1 231.7
132.4
20.1
25.8
14.1
21.3
11.2
-
6.8
Minority interest
-
-
-
-
-
-
-
3.1
3.1
Subordinated debt
-
-
-
2.1
0.6
45.0
-
-
47.7
Shareholders' equity
-
-
-
-
-
-
-
436.7
436.7
Total liabilities
2,531.5
294.1
634.6
279.5
146.5
88.5
-
446.6
4,421.3
Balance sheet maturity gap
-1,388.9
59.4
17.6
181.4
665.6
688.4
8.5
-232.0
-
Guarantees, letters of credit and undisbursed loans
44.2
84.0
233.8
99.3
81.9
35.4
-
-
578.6
Derivatives, assets
79.6
30.9
84.9
211.0
125.0
-
-
-
531.4
-159.3
-83.2
-91.3
-1.0
-
-
-
-
-334.8
-35.5
31.7
227.4
309.3
206.9
35.4
-
-
775.2
-1,424.4
91.1
245.0
490.7
872.5
723.8
8.5
-232.0
775.2
Off-balance sheet items
Derivatives, liabilities Off-balance sheet maturity gap Net maturity gap
7
Open currency positions LVL
LTL
EUR
USD
Other
Total
164.6
72.8
84.9
8.1
43.9
3.2
377.5
Due from other financial institutions
13.5
4.3
3.9
128.5
347.1
34.4
531.7
Securities
38.0
19.1
301.6
97.7
347.8
0.5
804.7
Securities purchased under resale agreements Loans
1.8
10.9
3.2
130.1
10.4
-
156.4
410.7
167.8
162.2
1,045.2
433.5
2.5
2,221.9
- Allowance for credit losses
-21.6
-5.6
-19.6
-11.6
-3.7
-0.0
-62.1
Tangible and intangible assets
86.8
32.6
63.6
3.9
-
-
186.9
Other assets
73.8
10.5
17.8
68.8
32.3
1.1
204.3
Total assets
767.6
312.4
617.6
1,470.7
1,211.3
41.7
4,421.3
Liabilities Due to Central Bank and government Due to other financial institutions Deposits Securities sold under repurchase agreements Debt securities issued to the public
8.2
-
-
-
-
-
8.2
25.5
19.3
5.6
245.6
27.0
0.9
323.9
1,016.4
233.5
623.4
170.8
1,011.4
37.8
3,093.3
-
18.6
-
11.0
-
-
29.6
7.2
-
0.0
229.8
10.1
-
247.1
43.2
19.7
21.1
74.0
68.5
5.2
231.7
Minority interest
3.1
-
-
-
-
-
3.1
Subordinated debt
1.3
-
-
41.1
5.3
-
47.7
1,104.9
291.1
650.1
772.3
1,122.3
43.9
3,984.6
Other liabilities
Total liabilities Shareholders' equity
436.7
-
-
Net balance sheet position
-774.0
21.3
-32.5
698.4
89.0
-2.2
-
-6.1
38.8
109.9
-47.2
-99.2
9.8
6.0
Off-balance sheet net notional position
Loan portfolio
436.7
The loan portfolio rose by 9.3% during the
past year have been the following: 10.6% in Q3 2000, 10.9% in Q4,
first half of the year, amounting to € 2.22
5.3% in Q1 2001 and 6.7% in Q2 (excluding LTB).
billion as of June 30, 2001, LTB’s portfolio € 0.26 billion. Annual loan growth was 27.1% pro-forma. Without LTB, Hansabank
Geographically, almost half of the growth originated from Estonia –
Group’s loan portfolio has grown by 12.3% during the last 6 months
increase of € 99.9 million in the first half of the year. The Latvian
and by 37.8% during the last year. Quarterly growth rates during the
and Lithuanian (excluding LTB) portfolios grew by € 62.4 million and
Distribution of loans by product
Geographic distribution of loans
in millions of euros
in millions of euros
30.06.01 31.12.00 30.06.00
Loans
30.06.01 31.12.00 30.06.00
1,218.2
923.0
797.8
Estonia
1,256.3
1,156.4
969.8
Finance leases
685.3
566.6
452.7
Latvia
480.2
417.8
317.4
Overdraft
181.7
165.0
119.7
Lithuania
464.2
167.8
123.6
Factoring
130.4
100.3
60.3
OECD
2.9
6.7
9.0
6.3
6.6
5.3
Other
18.3
12.9
16.0
2,221.9
1,761.5
1,435.8
2,221.9
1,761.5
1,435.8
-43.7
-31.4
-34.2
-43.7
-31.4
-34.2
Gross lending after specified loan-loss allowance 2,178.2
1,730.1
1,401.6
Assignment Gross lending to customers Specified loan-loss allowance
Gross lending after specified loan-loss allowance 2,178.2 Unspecified loan-loss allowance Net lending to customers
1,730.1
1,401.6
-18.4
-11.7
-9.3
2,159.8
1,718.4
1,392.3
Gross lending to customers Specified loan-loss allowance Unspecified loan-loss allowance Net lending to customers
Loan portfolio by industries
Write-offs and recoveries
June 30, per cent
in millions of euros
write-offs
Other 13.4%
-18.4
-11.7
-9.3
2,159.8
1,718.4
1,392.3
11.0
recoveries Energy 2.8%
Individuals 24.5%
Construction 3.4%
8.7
Transport and communications 12.3%
5.7
5.7 3.8
Industry 15.9% Real estate management and other business services 12.5%
3.0
2.3 1.9
Wholesale and retailing 15.2%
3 rdq 00
4 thq 00
1 stq 01
2 ndq 01
2001
Cash and due from Central Bank
EEK
SEMIANNUAL REPORT
Assets
HANSABANK
June 30, 2001, in millions of euros
SEMIANNUAL REPORT
2001
HANSABANK
8
by € 53.2 million, respectively. The Group’s portfolio in "Other"
to € 0.69 billion at the end of June (LTB’s leasing portfolio amounted
countries increased because of deposit guaranteed loans issued to
to € 13.4 million). The loan portfolio increased by € 70.0 million to €
CIS companies. Leasing portfolio formed almost half of the growth
1.22 billion (LTB’s portfolio amounted to € 225.2 million).
(excluding LTB) among product groups, increasing by € 105.3 million
Allowance for credit losses in millions of euros
Group
Hansabank
Hansabanka
Hansa Capital
Hansabankas
LTB
Balance, as of 31.12.00
43.1
12.7
7.9
21.9
0.6
-
Opening balance of LTB
20.0
-
-
-
-
20.0
Write-offs
-9.5
-3.4
-4.2
-1.9
-
-
Loan losses*
7.5
4.5
3.4
-1.0
0.3
0.3
Effect of exchange rate changes
1.2
-
0.8
0.3
0.1
-
Change in provisions rules
-0.2
-
-
-0.2
-
-
Balance, as of 30.06.01
62.1
13.8
7.9
19.1
1.0
20.3
* Does not include appropriations on guarantee and stand-by guarantee losses in the amount of EUR 0.2 million.
Loans overdue in millions of euros
Group
Hansabank
Hansabanka
Hansa Capital
Hansabankas
LTB
Up to 30 days
118.5
37.2
1.6
63.3
-
31 to 60 days
20.8
2.1
0.0
14.0
-
4.7
Over 60 days*
25.4
3.1
1.0
5.7
0.1
15.5
164.7
42.4
2.6
83.0
0.1
36.6
Loan portfolio as at the end of period*
2,221.9
756.2
328.7
842.4
51.3
243.3
Average loan portfolio*
Total loans overdue, 30.06.01
16.4
* Non-performing loans.
1,919.3
747.2
311.1
767.9
45.9
259.2
Net risk cost**
0.15%
-0.92%
2.57%
0.36%
0.00%
-2.31%
Allowance for credit losses / loan portfolio*
2.79%
1.82%
2.40%
2.27%
1.95%
8.34%
Loans overdue / loan portfolio*
7.4%
5.6%
0.8%
9.9%
0.2%
15.0%
Over 60 days / loan portfolio*
1.1%
0.4%
0.3%
0.7%
0.2%
6.4%
8.0
6.8
0.2
0.5
-
0.5
Recoveries during the period (EUR in millions)
* Excluded loans to consolidation companies. For the Group's average LTB is only accounted for June. ** (Write offs - recoveries) / average loan portfolio.
Distribution of loan portfolio by risk group in millions of euros, except ratios
STANDARD: Claims and loans not subject to special watch and without substantial servicing problems belong to that loan class i.e. maximum overdue debt up to 30 calendar days and nothing indicating the deterioration of the loan servicing capacity or the decline of the market value of the loan in the future. Loans and claims of risk class 1-3. WATCH: Such claims and loans are specially watched, that during their monitoring have demonstrated shortcomings, which non-liquidation may deteriorate the loan client’s credit solvency in future.Claims and loans are taken under special watch, if: 1) A loan cannot be duly analysed due to imperfect loan contract, lack of financial reports or any other similar reason, or; 2) Claim or loan is overdue up to 60 calendar days, or; 3) The condition of collateral or its verifiability is questionable, or; 4) The acceptance value of collateral has declined lower than the loan residue, or; 5) Economic or market conditions may have a negative impact on client’s credit solvency in the future, or; 6) Economic or market conditions may affect the market value of loan, or; 7) A probability of the deterioration of loan client’s credit solvency has arisen during the monitoring. All loans of risk classes 4-5. SUBSTANDARD: Claims and loans are considered substandard, if: 1) A claim or debt is overdue up to 90 calendar days, or; 2) A loan has been restructured due to client’s payment problems and credit institution has agreed with the amendment of contractual conditions it generally does not agree with, or; 3) Real decline of credit solvency of loan client or the market value of a loan. All loans of the risk class 6. DOUBTFUL: Claims and loans are considered doubtful, if: 1) The credit institution will obviously endure partial loss from the claim or loan under suspicion or has to reduce loan nominal in order to bring the loan value into conformity with market conditions, or; 2) A claim or loan is overdue up to 180 calendar days, or; 3) The debtor has been initiated a bankruptcy or liquidation proceeding, or; 4) The credit institution has sued the debtor. Claims and loans belonging to risk class 7. LOSS: A claim or loan is hopeless or loss, if: 1) The deviation from the payment schedule of contractual interests and principal loan amount exceeds 180 calendar days, or; 2) The market value of loan has declined to a level, which recovery with the taking of measures cannot be realised by, or is not economically feasible to a credit institution or; 3) The credit institution is unable to defend its reclamation right in the bankruptcy or liquidation process of the debtor, or; 4) The debtor is not found, or; 5) The loans are issued to clients having been declared bankrupt and the estimated average payment of claim within 360 calendar days is doubtful.
Total
30.06.01
31.12.00
1,979.1
89.1%
1,714.7
97.3%
179.6
8.1%
12.2
0.7%
26.5
1.2%
30.2
1.7%
33.4
1.5%
1.3
0.1%
3.3
0.1%
3.1
0.2%
2,221.9
100.0%
1,761.5
100.0%
Growth among the five business units was the following: Hansa
increased by € 48.1 million during the first half of the year - € 25
Capital € +144.5 million, Hansabanka € +48.9 million, Hansabank
million was formed by one 3-year loan taken by Hansa Capital.
Land
Cost
Loan quality
The Group’s loan loss reserve amounted to €
Balance at the beginning of
62.1 million at the end of June, forming 2.79%
the year
Buildings Equipment Constand other* ruction
0.9
55.5
74.1
0,1
130.6
-
1.3
11.9
-
13.2
combinations
-
56.4
32.4
2,3
91.1
Reclassification
-
0.5
-0.4
-0,1
-
-5.7
-
-5.8
-0.2
-
-0.2
1.3
2.6
0,0
3.9
114.9
114.7
2,3
232.8
of the loan portfolio. Of the said amount LTB’s reserve formed € 20.4
Additions
million. The actual write-offs and recoveries for the past four quarters
Additions through business
are shown in the graph on page 7. The principal amount of total overdue loans in the Group totalled € 164.7 million and the principal amount of loans overdue more than 60 days (non-performing loans)
Disposals
amounted to € 25.4 million. LTB’s corresponding figures were € 36.6
-
-0.1
Write-offs
million and € 15.5 million, forming 15.0% and 6.4% of the bank’s
-
-
Effect of movements in foreign
portfolio, respectively. Following the due diligence performed in LTB
exchange
during the privatisation process, the Group formed € 18.4 million of
0.0
Balance at the end of the period 0.9
additional provisions and wrote-off loans worth € 1.6 million. After
Total
2001
Tangible assets June 30, 2001, in millions of euros
Depreciation
these provisions LTB’s loan loss ratio rose to 8.38%, which is adequate
Balance at the beginning of the year
-
12.7
36.4
-
49.1
coverage for the bank’s lending risk. These additional provisions are
Depreciation charge for the period
-
1.6
7.6
-
9.2
reflected in the goodwill created from the acquisition of LTB.
Depreciation through business com-
Funding
binations
-
9.2
21.0
-
30.2
Clients’ deposits form 78.6% of total liabilities (74.1% at
Impairment charge
-
-
0.5
-
0.5
the end of 2000). The significant increase in their share
Disposals during the period
-
-0.7
-2.8
-
-3.5
Effect of movements in foreign exchange -
0.3
1.3
-
1.6
-
23.1
64.0
-
87.1
was caused by the acquisition of LTB, whose respective ratio was 94.7% at the end of June. Customer deposits amounted to € 3.09 billion at the
Balance at the end of the period
end of June; LTB’s deposits amounted to € 0.89 billion. While deposit
Net book value
growth amounted to a modest 4.2% in the first quarter, Hansabank
Balance at the beginning of
experienced a strong improvement in the second quarter with the growth
the year
0.9
42.8
37.7
0,1
81.5
rate rising to 13.2% (excluding LTB). Annual growth of customer deposits
Balance at the end of the period 0.9
91.8
50.7
2,3
145.7
was 26.4% pro-forma at the end of June. In addition to increasing the share of deposits in total funding, the consolidation of LTB had also a sig-
* Equipment and other tangible assets also include fixed assets under operating lease.
nificant influence on the internal structure of deposits. At the end of 2000 retail deposits formed 44% and corporate deposits 52% of total deposits.
Acquisition of subsidiaries
After the consolidation of LTB, the share of retail deposits rose to 55%
in millions of euros
and the share of corporate deposits decreased to 40%.
2001 LTB Hansabanka Total
Net assets acquired: The outstanding balance of loans received from other banks
Cash and cash equivalents
86.2
1.1
87.3
amounted to € 323.9 million at the end of June, including € 15.2
Dues from other banks
127.2
2.9
130.1
million of loans in LTB’s balance sheet. The volume of these loans
Securities
417.6
4.5
422.1
Loans to customers
188.8
6.2
195.0
Deposits divided by client type
Other assets
100.9
0.8
101.7
in millions of euros
Due to other banks
-10.3
-0.6
-10.9
-832.7
-12.4
-845.1
Other liabilities
-51.2
-1.1
-52.3
26.5
1.4
27.9 20.7
30.06.01 31.12.00 30.06.00
Deposits
Demand deposits Public sector Corporate customers Private individuals Total demand deposits
90.7
23.6
24.5
659.1
489.6
470.7
Fair value of net assets
823.5
454.6
421.7
Goodwill
17.8
2.9
1,573.3
968.7
916.0
Total purchase consideration
44.3
4.3
48.6
Satisfied by cash
-44.3
-4.3
-48.6
213.4
4.0
217.4
169.1
-0.3
168.8
Overnight deposits* Public sector Corporate customers Private individuals Total overnight deposits
16.0
14.3
17.1
252.2
200.8
173.0
7.3
3.3
6.6
275.5
218.4
196.7
Corporate customers Private individuals
Cash and cash equivalents in subsidiary acquired Cash outflow on acquisition of subsidiary
Time deposits Public sector
Less:
45.7
38.4
10.5
335.9
273.1
203.8 301.3
862.9
369.3
Total time deposits
1,244.5
680.8
515.6
Total deposits
3,093.3
1,867.9
1,628.3
* In the balance sheet overnight deposits are recorded as part of demand deposits.
Hansabank and the Lithuanian State Property Fund signed the share purchase agreement of 90.73% of Lietuvos Taupomasis Bankas shares on April 23, 2001. Closing of the agreement was on June 1, 2001. Hansabank paid LTL 150 million for the above mentioned shares and made an offer to minority shareholders on equal terms after which the bank controls 98.05% of LTB's share capital. Following the due diligence performed in LTB during the privatisation process, the Group formed € 42.7 million of additional provisions, including € 20.0 million on loans and € 20.1 million on real-estate. These additional provisions are reflected in the goodwill that will be amortised on a straight-line basis over 5 years. In May Hansabank acquired a further 1.93% of a/s Hansabanka, increasing its holding to 99.9%. The goodwill from the transaction will be amortised over 5 years.
SEMIANNUAL REPORT
Hansabank Markets € -32.2 million. LTB’s portfolio decreased by € 29.7 million during the first half of the year.
HANSABANK
Estonia € +41.2 million, Hansabankas € +14.6 million and
9
10
Compared to June 2000, the volume of dues to other banks has
launched this spring under the EMTN programme.
SEMIANNUAL REPORT
2001
HANSABANK
remained virtually unchanged, decreasing by 3.7%. To finance the purchase of LTB Hansabank issued subordinated At the same time, the balance of debt securities issued to the pub-
bonds in the value of € 25 million in June, increasing the total vol-
lic increased by 36.3%, amounting to € 247.1 million as of June 30,
ume of subordinated debt to € 47.7 million.
2001. The growth originated from a € 70 million Eurobond issue,
Capital adequacy and ratings As at June 30, 2001 the Group’s shareholders’ equity amounted to
Hansabank’s ratings are the following:
€ 436.7 million. The shareholders’ equity was increased by € 58.4 million net profit of the period and was decreased by € 5.0 million
Moody’s Investors Service
dividend payments.The Group’s risk-weighted assets and off-balance
Long-term deposit rating
Baa1
Long-term deposit rating
BBB
sheet liabilities rose by 42.3% in the first half of the year (19.1%
Short-term deposit rating
Prime 2
Short-term deposit rating
A-2
Financial strength rating
excluding LTB).
Standard & Poors
C-
The consolidated net own funds increased by 22.6%. As a result, the Group’s capital adequacy ratio decreased from 17.0% in the beginning of
Capital structure
the year to 14.8% and the Tier I ratio decreased from 16.0% to 13.2%.
in millions of euros
Primary capital
30.06.01 31.12.00 (Tier 1)
In the first quarter international rating agency Moody’s Investors
Share capital
Service adjusted Estonian commercial banks’ financial strength rating
Share premium
to reflect the widened scale (from 9 to 13 levels) and updated defin-
Reserves
itions. As a result Hansabank’s financial strength rating rose by one
Other reserves
level to C-.
Retained earnings from previous periods Retained earnings from current period Minority ownership
Capital ratios per cent
30.06.01 31.12.00
1 2 3
28.2
6.4
6.4
107.0
36.1
58.4
76.7
3.1
1.5 2.3
Less: Intangible assets
41.2
26.9
Treasury shares
13.18%
15.98%
1.53%
0.95%
14.76%
17.00%
Supplementary capital
Tier 1 leverage ratio
9.02%
11.76%
Own funds, total
Common stock to total assets
1.14%
1.73%
Common shareholders' equity to total assets
9.88%
12.63%
Tier 1 capital divided by total risk-weighted on and off-balance sheet items. Tier 2 capital divided by total risk-weighted on and off-balance sheet items. Tier 1 capital divided by assets.
28.8
11.7
Tier 2 capital ratio2 3
50.3 176.2
Unrealised changes in exchange rate
Tier 1 capital ratio1 Total capital ratio
50.4 176.5
Total Tier 1 (Tier 2)
Deductions from own funds Own funds, net
2.5
8.2
398.6
342.6
46.3
20.4
444.9
363.0
0.4
0.4
444.5
362.6
1.3
1.3
Own funds for covering trading portfolio's market risk
(Tier 3)
Asset structure in millions of euros
30.06.00
31.12.00
Nominal
Riskweighted
Nominal
124.4
-
87.8
Due from Central Bank
253.1
-
253.2
-
Due from other financial institutions
671.5
157.9
183.2
38.5
Cash
Riskweighted
-
Securities
804.6
276.7
381.0
77.7
Net loans
2,280.4
2,003.6
1,814.9
1,582.7
Tangible assets
145.7
145.7
81.5
81.5
Intangible assets
41.2
-
26.9
-
Prepayments and accrued interest
58.5
29.3
54.2
27.1
Other assets
41.9
29.1
31.4
18.5
Total assets
4,421.3
2,642.3
2,914.1
1,826.0
I category
872.8
-
671.8
-
II category
822.0
164.4
371.7
74.3
III category
414.1
207.0
237.9
119.0
IV category
2,270.8
2,270.8
1,632.7
1,632.7
Off balance sheet items
1,444.8
247.6
1,334.6
204.4
397.8
5.6
315.3
4.9
83.7
74.8
68.5
62.2
Distribution of assets by risk categories
Capital requirement for covering the risks of the trading book Open net currency position exceeding the 2% level of own funds
11
Off-balance sheet liabilities 30.06.01
31.12.00 Risk-weighted amount
Nominal
Credit equivalent
Risk-weighted amount
99.3
99.3
92.0
111.0
111.0
102.8
231.6
115.8
111.6
148.7
74.4
68.4
1.7
0.8
0.6
1.9
0.9
0.8
866.2
19.6
11.9
940.7
22.0
10.1
Under 1 year
529.6
10.5
5.2
669.1
15.3
8.5
Over 1 year
336.6
9.1
6.7
271.6
6.7
1.6
Other
246.0
31.9
31.6
132.3
22.5
22.3
Total
1,444.8
267.4
247.7
1,334.6
230.8
204.4
Undisbursed loans Letters of credit Derivatives
Derivative financial instruments in millions of euros
30.06.01 Contractual/ notional amount Total
Forward exchange contracts Forward exchange contracts Currency swaps
31.12.00
Contractual/ Fair values notional amount Assets Liabilities Total
Fair values Assets Liabilities
19.7
0.0
-
17.5
0.2
434.6
3.2
-
504.6
-2.2
-
80.7
0.0
-0.0
106.6
0.0
-0.2
OTC options bought and sold Other
-
-
-
-
1.0
-
-
535.0
3.2
-0.0
629.7
-2.0
-0.2
Swaps
306.6
-1.9
-
295.2
2.9
-
Total OTC derivatives
306.6
-1.9
-
295.2
2.9
-
15.8
-0.3
0.3
4.3
-0.1
0.5
8.8
0.5
-0.7
11.5
0.5
-0.9
24.6
0.2
-0.4
15.8
0.4
-0.4
866.2
1.5
-0.4
940.7
1.3
-0.6
Total OTC derivatives Interest rate derivatives
Equity and other derivatives Futures OTC options bought and sold Total OTC derivatives Total derivatives
Basis of preparation of interim report These interim consolidated financial statements are prepared in accor-
the tax is accounted through income statement. 2000 statements have
dance with IAS 34 Interim Financial Reporting. The accounting policies
been adjusted to ensure comparability.
used in preparation of interim consolidated financial statements are consistent with those used in the annual consolidated financial statements
"The Bank has not adopted IAS 39 "Financial instruments: Recognition
for the year ended 31 December 2000, except for the following change.
and measurement" applicable from January 1, 2001 due to similar accounting principles used by the Bank's parent company Swedbank.
In accordance with IAS 12, the principles of accounting for the income
According to Bank's management estimation adoption of IAS 39
tax calculated on dividends has changed. Until now, income tax on div-
would not had affected significantly the net result of the Group for the
idends was subtracted from the retained profits. Starting from 2001,
six months period ended June 30, 2001."
Larger shareholders as of 30.06.01 Shareholder
Swedbank
Amount of shares Holding
45,463,982
57.7%
EBRD
7,648,784
9.7%
Merita Bank Plc (custody)
4,151,360
5.3%
Norbax Inc.
2,637,647
3.3%
Pictet & Cie
1,340,692
1.7%
Hoiupanga Töötajate Aktsiaselts
1,177,000
1.5%
967,568
1.2%
Clearstream Banking Luxembourg S.A. Clients Chase Manhattan Bank, Luxembourg
804,750
1.0%
Others
14,665,326
18.6%
Total
78,857,109
100.0%
HANSABANK
Guarantees
Credit equivalent
2001
Nominal
SEMIANNUAL REPORT
in millions of euros
SEMIANNUAL REPORT
2001
HANSABANK
12
Consolidated pro-forma income statements in millions of euros, for the period
6m 2001
2000
6m 2000
Interest income
162.6
277.4
123.2
Interest expense
-73.0
-122.9
-54.1
Interest income, net
89.6
154.5
69.1
Fee and commission income
46.5
87.2
40.4
Fee and commission expense
-9.6
-16.8
-8.6
Fees and commissions, net
36.9
70.4
31.8
Net result from financial operations
18.8
41.0
17.9
Dividends
0.7
0.2
0.2
Net income from insurance activities
1.5
1.5
0.8
Other operating income
5.2
7.8
3.5
152.7
275.4
123.3
31.9
Total income Operating expenses Personnel expenses
39.2
68.4
Data network expenses
4.7
8.5
3.7
Administrative expenses
15.1
33.4
15.3
Other expenses
14.7
30.3
12.8
6.9
15.0
6.4
12.0
21.8
10.4
incl. goodwill amortisation Depreciation Total operating expenses Losses on loans and guarantees Recovered loans Profit from associates under the equity method Operating profit Extraordinary income/(-expense)
85.7
162.4
74.1
-13.9
-52.6
-28.4
10.1
10.3
3.7
0.1
0.7
0.1
63.3
71.4
24.6
0.1
1.6
1.5
Profit before income tax
63.4
73.0
26.1
Income tax
-2.0
-1.3
-6.5
Profit after income tax
61.4
71.7
19.6
Minority interest
-0.0
-0.3
-0.1
Net profit
61.4
71.4
19.5
Consolidated pro-forma balance sheets 30.06 2000
Cash
124.4
116.0
95.1
Due from Central Bank
253.1
309.1
319.3
Due from other financial institutions
531.7
240.6
441.7
Treasury securities
396.1
284.0
165.3
Trading securities
79.1
21.4
23.4
Investment securities
329.5
432.7
368.2
Securities purchased under resale agreements
156.4
74.1
10.4
2,221.9
2,033.4
1,748.2
-62.1
-67.5
-69.6
2,159.8
1,965.9
1,678.6
145.7
138.3
142.1
41.2
43.0
53.1 131.8
Loans - Allowances for credit losses Net loans Tangible assets Intangible assets Prepayments and accrued interest
162.4
149.4
Other assets
41.9
44.6
56.5
Total assets
4,421.3
3,819.1
3,485.5
Liabilities Due to Central Bank and government Due to other financial institutions Deposits
8.2
9.0
10.1
323.9
275.8
336.3
3,093.3
2,722.3
2,447.9
Demand deposits
1,848.8
1,647.3
1,570.4
Time deposits
1,244.5
1,075.0
877.5
29.6
-
7.0
Securities sold under repurchase agreements Debt securities issued to the public
247.1
191.3
181.3
Accrued liabilities
88.3
93.6
79.8
Appropriations
27.2
25.4
19.0
0.5
0.5
0.6
115.7
114.0
52.1
3,933.8
3,431.9
3,134.1
3.1
4.3
4.2
47.7
23.4
30.3
Deferred tax liability Other liabilities Total liabilities Minority ownership Subordinated liabilities Shareholders' equity Share capital Share premium
50.4
50.3
50.3
176.5
176.2
176.2
Treasury shares
-2.5
-8.2
-4.3
Reserves
28.8
29.0
22.8
6.4
6.4
1.3
Other reserves Currency translation reserve Retained earnings Total shareholders' equity Total liabilities and shareholders' equity
11.7
2.3
3.5
165.4
103.5
67.1
436.7
359.5
316.9
4,421.3
3,819.1
3,485.5
HANSABANK
31.12 2000
2001
30.06 2001
Assets
SEMIANNUAL REPORT
in millions of euros, end of period
13
14
Consolidated cash flow statements
SEMIANNUAL REPORT
2001
HANSABANK
in millions, for the period
EEK
EUR
6m 2001
2000
6m 2000
947.5
1,287.2
607.7
60.5
31.4
51.5
55.8
2.0
3.3
3.6
-2,135.8
-3,389.7
-1,492.1
-136.5
-216.6
95.3
Interest expense
920.8
1,414.6
608.9
58.8
90.4
38.9
Depreciation and amortisation
271.4
478.0
227.7
17.3
30.5
14.6
(-Profit) / loss from sales of tangible assets
0.8
-1.5
0.6
0.1
-0.1
0.0
Book value of tangible assets written-off
2.6
0.3
-
0.2
0.0
-
Total adjustments to operating profit
-908.8
-1,446.8
-599.1
-58.1
-92.5
152.4
-341.3
-747.1
-425.1
-21.8
-47.7
-27.2
20.7
309.0
-33.1
1.3
19.7
-2.1
-2,138.4
634.3
-996.8
-136.7
40.5
-63.7
-901.6
-101.4
-131.6
-57.7
-6.5
-8.4
12.4
106.4
-295.8
0.8
6.8
-18.9
Operating profit
6m 2001
2000
6m 2000
82.3
38.8
Adjustments to operating profit Loan losses Interest income
Changes in operating assets and liabilities Net change in prepayments Net change in accrued liabilities Net change in deposits placed with other banks Net change in trading securities Net change in loans to financial institutions Net change in liquidity securities
4,851.3
-1,222.1
433.7
310.1
-78.1
27.7
Net change in securities purchased under resale agreements
-1,289.2
-1,036.8
-41.5
-82.3
-66.3
-2.7
Net change in loans
-3,865.9
-7,660.4
-3,003.2
-247.1
-489.6
-191.9
1,426.0
-114.1
-417.8
91.1
-7.3
-26.7
368.2
-24.3
237.0
23.5
-1.6
15.1
Net change in demand deposits
3,353.6
3,829.4
3,916.6
214.3
244.7
250.3
Net change in time deposits
2,596.3
4,361.7
1,777.9
165.9
278.8
113.6
462.5
-509.2
-399.6
29.6
-32.4
-25.5
Net change in other assets Net change in short-term liabilities due to other banks
Net change in securities sold under repurchase agreements Net change in other liabilities
-395.2
874.8
-0.7
-25.2
55.9
-0.0
Total adjustments to operating assets and liabilities
4,159.4
-1,299.8
620.0
265.7
-83.1
39.6
Interest received
2,144.6
3,220.2
1,410.5
137.2
205.8
90.1
-906.5
-1,230.7
-554.4
-57.9
-78.7
-35.4
-
22.4
22.3
-
1.4
1.4
Interest paid Extraordinary income / (-expense) Income tax paid Net cash provided by operating activities
-26.5
-98.8
-98.8
-1.7
-6.3
-6.3
5,472.5
453.7
1,408.2
349.7
29.0
280.6
2,643.3
579.1
-
168.9
37.0
-
Cash flows of investing activities Acquisition of subsidiaries Dividends received
11.5
3.1
2.4
0.7
0.2
0.2
Net change in securities held for investment
-3,985.2
294.3
236.4
-254.7
18.8
15.1
Acquisition of tangible assets
-1,158.8
-597.8
-386.0
-74.1
-38.2
-24.7
33.1
192.5
119.7
2.1
12.3
7.7
-32.6
-26.4
-5.6
-2.1
-1.7
-0.4
-2,488.7
444.8
-33.1
-159.2
28.4
-2.1
Proceeds from sale of tangible assets Acquisition of intangible assets Net cash flow used in investing activities Cash flows from financing activities Credit lines of Central Bank and government received
7.3
15.0
11.7
0.5
1.0
0.7
Credit lines of Central Bank and government paid
-19.9
-46.7
-25.7
-1.3
-3.0
-1.6
Long-term loans received from other banks
224.5
41.4
25.7
14.3
647.9
402.6
Long-term loans paid back to other banks
-41.7
-1,605.3
-846.7
-2.7
-102.5
-54.1
Issue of securities
872.3
1,725.6
1,568.9
55.7
110.3
100.3 -
Income from treasury shares
-0.2
0.6
-
-0.0
0.0
Issued capital and share premium
4.5
-
-
0.3
-
-
Net change in subordinated loans
379.0
-102.9
4.2
24.3
-6.6
0.3
Dividends paid
-78.8
-388.8
-388.8
-5.0
-24.8
-24.8
89.1
-6.3
54.6
5.7
-0.4
3.5
1,859.5
-6.2
602.7
118.9
-0.3
38.6
Net change in treasury stock Net cash flow used in financing activities
Effect of the change in exchange rate from foreign subsidiaries 147.2 Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the period
-1.6
15.4
9.4
-0.1
1.0
4,927.7
890.7
1,993.2
314.8
57.0
318.1
6,790.0
5,899.3
5,899.3
434.0
377.0
377.0
11,717.7
6,790.0
7,892.5
748.8
434.0
695.1
EEK 31.12 2000
EUR Change
30.06 2001
31.12 2000
15 Change
Cash
1,945.8
1,374.4
571.4
124.4
87.8
Balances with Central Bank
3,959.8
3,961.2
-1.4
253.1
253.2
-0.1
Placements with other banks
5,812.1
1,454.4
4,357.7
371.3
93.0
278.3
11,717.7
6,790.0
4,927.7
748.8
434.0
314.8
SEMIANNUAL REPORT
Total
36.6
Consolidated statements of changes in shareholders' equity EEK in millions, for the period
EUR
6m 2001
2000
6m 2000
787.6
787.6
787.6
6m 2001
2000
6m 2000
50.3
50.3
Share capital Balance at the beginning of the year Issue of common stock
50.3
1.0
-
-
0.1
-
-
788.6
787.6
787.6
50.4
50.3
50.3
Balance at the beginning of the year
2,757.7
2,757.1
2,757.1
176.2
176.2
176.2
Proceeds from sales of treasury stock
3.5
0.6
-
0.3
0.0
-
2,761.2
2,757.7
2,757.1
176.5
176.2
176.2
-39.4
-128.5
-67.6
-2.5
-8.2
-4.3
27.9
Balance at the end of the period Share premium
Balance at the end of the period Treasury shares Reserves Balance at the beginning of the year
440.5
436.5
436.5
28.2
27.9
Appropriations to statutory reserve
10.1
4.0
0.8
0.6
0.3
0.1
Balance at the end of the period
450.6
440.5
437.3
28.8
28.2
28.0
Stock dividends of subsidiaries
100.5
100.5
20.5
6.4
6.4
1.3
Currency translation reserve
183.8
36.7
53.7
11.7
2.3
3.5
1,763.3
1,031.6
1,031.6
112.8
65.9
65.9
Net income
914.1
1,200.4
526.1
58.4
76.7
33.6
Appropriations to reserves
-10.1
-4.0
-0.8
-0.7
-0.3
-0.1
-
4.1
-0.2
-
0.4
-0.0
-78.9
-388.8
-388.7
-5.1
-24.8
-24.8
-
-80.0
-
-
-5.1
-
Balance at the end of the period
2,588.4
1,763.3
1,168.0
165.4
112.8
74.6
Total shareholders' equity
6,833.7
5,757.8
5,156.6
436.7
368.0
329.6
Other reserves
Retained rarnings Balance at the beginning of the year
Reclassification of exchange rate differences Dividends paid Stock dividends of subsidiaries
Reserves comprise the capital reserve required by the Commercial Code. Subject to a decision by the general meeting of shareholders, the capital reserve can be used for covering losses if the latter cannot be covered with unrestricted equity, or increasing share capital.
Additional information on financial results can be obtained from:
HANSABANK
30.06 2001
2001
Analysis of cash and cash equivalents in millions
Mart Tõevere Head of Investor Relations Phone: +372 613 1569 Fax: +372 613 1550 e-mail:
[email protected] www.hansa.ee
16
Consolidated income statements
SEMIANNUAL REPORT
2001
HANSABANK
in millions, for the period
EEK
EUR
6m 2001
2000
6m 2000
6m 2001
2000
6m 2000
2,135.8 -920.8 1,215.0
3,389.7 -1,414.6 1,975.1
1,492.1 -608.9 883.2
136.5 -58.8 77.7
216.6 -90.4 126.2
95.4 -38.9 56.5
607.0 -126.4 480.6
1,087.1 -208.5 878.6
499.0 -105.9 393.1
38.8 -8.1 30.7
69.5 -13.3 56.2
31.9 -6.8 25.1
Net result from financial operations Dividends Net income from insurance activities Other operating income Total income
251.7 11.5 23.8 74.0 2,056.6
563.4 3.1 23.8 103.3 3,547.3
252.0 2.4 11.8 44.2 1,586.7
16.1 0.7 1.5 4.7 131.4
36.0 0.2 1.5 6.6 226.7
16.1 0.2 0.8 2.7 101.4
Operating expenses Personnel expenses Data network expenses Administrative expenses Other expenses incl. goodwill amortisation Depreciation Total operating expenses Losses on loans and guarantees Recovered loans Profit from associates under the equity method Operating profit Extraordinary income/(-expense) Profit before income tax Income tax Profit after income tax Minority interest Net profit
471.2 66.5 197.2 222.0 113.2 158.2 1,115.1 -120.7 125.6 1.1 947.5 947.5 -31.6 915.9 -1.8 914.1
713.8 116.4 406.8 393.9 206.8 271.2 1,902.1 -494.0 129.2 6.8 1,287.2 22.4 1,309.6 -105.0 1,204.6 -4.2 1,200.4
317.4 50.3 183.4 175.2 100.2 127.5 853.8 -180.3 53.0 2.1 607.7 22.3 630.0 -101.8 528.2 -2.1 526.1
30.1 4.3 12.6 14.2 7.2 10.1 71.3 -7.7 8.0 0.1 60.5 60.5 -2.0 58.5 -0.1 58.4
45.6 7.4 26.0 25.2 13.2 17.3 121.5 -31.6 8.3 0.4 82.3 1.4 83.7 -6.7 77.0 -0.3 76.7
20.3 3.2 11.7 11.2 6.4 8.2 54.6 -11.5 3.4 0.1 38.8 1.4 40.2 -6.5 33.7 -0.1 33.6
23.35 23.34
15.43 15.39
13.51 13.49
1.49 1.49
0.99 0.98
0.86 0.86
30.06 2000
30.06 2001
Interest income Interest expense Interest income, net Fee and commission income Fee and commission expense Fees and commissions, net
Basic earnings per share (EEK, EUR) Diluted earnings per share (EEK, EUR)
Consolidated balance sheets in millions, end of period
EEK 30.06 2001
2000
EUR 2000
30.06 2000
Assets Cash Due from Central Bank Due from other financial institutions Treasury securities Trading securities Investment securities Securities purchased under resale agreements Loans - Allowances for credit losses Net loans Tangible assets Intangible assets Prepayments and accrued interest Other assets Total assets
1,945.8 3,959.8 8,320.1 6,197.4 1,237.2 5,155.4 2,447.8 34,765.9 -971.4 33,794.5 2,279.2 645.0 2,541.0 654.6 69,177.8
1,374.4 3,961.2 1,836.4 4,444.2 335.6 1,181.6 1,158.7 27,561.5 -674.6 26,886.9 1,275.6 420.7 2,228.4 491.8 45,595.5
1,096.3 3,484.7 5,727.2 2,586.6 365.8 1,240.2 163.3 22,464.9 -680.2 21,784.7 1,250.5 538.1 1,988.0 789.3 41,014.7
124.4 253.1 531.7 396.1 79.1 329.5 156.4 2,221.9 -62.1 2,159.8 145.7 41.2 162.4 41.9 4,421.3
87.8 253.2 117.4 284.0 21.4 75.5 74.1 1,761.5 -43.1 1,718.4 81.5 26.9 142.4 31.4 2,914.0
70.1 222.7 366.0 165.3 23.4 79.3 10.4 1,435.8 -43.5 1,392.3 79.9 34.4 127.1 50.4 2,621.3
Liabilities Due to Central Bank and government Due to other financial institutions Deposits Demand deposits Time deposits Securities sold under repurchase agreements Debt securities issued to the public Accrued liabilities Appropriations Deferred tax liability Other liabilities Total liabilities Minority ownership Subordinated liabilities
128.2 5,067.6 48,399.7 28,928.1 19,471.6 462.5 3,866.2 1,381.0 425.1 7.2 1,811.6 61,549.1 49.0 746.0
140.8 3,923.0 29,226.6 18,574.8 10,651.8 2,993.8 1,346.0 397.2 7.3 1,411.9 39,446.6 24.2 366.9
158.5 4,758.8 25,477.6 17,409.6 8,068.0 109.6 2,837.1 1,124.6 298.0 9.5 588.1 35,361.8 22.2 474.1
8.2 323.9 3,093.3 1,848.8 1,244.5 29.6 247.1 88.3 27.2 0.5 115.7 3,933.8 3.1 47.7
9.0 250.7 1,867.9 1,187.1 680.8 191.3 86.0 25.4 0.5 90.3 2,521.1 1.5 23.4
10.1 304.1 1,628.3 1,112.7 515.6 7.0 181.3 71.9 19.0 0.6 37.7 2,260.0 1.4 30.3
Shareholders' equity Share capital Share premium Treasury shares Reserves Other reserves Currency translation reserve Retained earnings Total shareholders' equity Total liabilities and shareholders' equity
788.6 2,761.2 -39.4 450.6 100.5 183.8 2,588.4 6,833.7 69,177.8
787.6 2,757.7 -128.5 440.5 100.5 36.7 1,763.3 5,757.8 45,595.5
787.6 2,757.1 -67.6 437.3 20.5 53.7 1,168.0 5,156.6 41,014.7
50.4 176.5 -2.5 28.8 6.4 11.7 165.4 436.7 4,421.3
50.3 176.2 -8.2 28.2 6.4 2.3 112.8 368.0 2,914.0
50.3 176.2 -4.3 28.0 1.3 3.5 74.6 329.6 2,621.3
