HANSABANK August 2002

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HANSABANKAugust 2002
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I Overview of the RegionII Strategies
III Financial ReviewIV Growth opportunities
TABLE OF CONTENTS
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OVERVIEW OF THE REGION
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OVERVIEW OF THE REGION Ratings
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Moodys Fitch SP Estonia Baa1 A- A- Latvia
Baa2 BBB BBB Lithuania Ba1
BBB- BBB- Hansabank senior debt A2 A-
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OVERVIEW OF THE REGION Macro highlights
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GDP Infl. CA/GDP 01 02F 03F
01 02F 03F 01 02F 03F Estonia 5.4 4.0 5.0
5.8 4.5 6.5 -6.5 -7.0 -6.0 Latvia 7.6 4.5
6.0 1.5 2.0 3.0 -10.1 -9.0 -8.0 Lithuania
5.9 4.0 5.0 1.0 2.0 2.5 -4.8 -5.5 -5.0 as
GDP deflator
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OVERVIEW OF THE REGION Market size
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(EUR bln) Deposits Loans GDP Estonia 2.8 2.8
6.1 Latvia 4.6 3.1 8.4 Lithuania 3.1 2.2 1
3.9 Baltics 10.5 8.1 28.4 Total population
(mil) 7.4 Including leasing
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OVERVIEW OF THE REGION Who are the investors
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Portfolio investors in Estonia
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OVERVIEW OF THE REGION Hansabank in the Baltics
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Hansa in the Baltics
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OVERVIEW OF THE REGION Market shares (lending),
Mar 2002
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Estonia
Latvia
Lithuania
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OVERVIEW OF THE REGION Baltic market share, Mar
2002
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Total Baltic market, 31.03.02, EUR in
millions Deposits 10,500 Loans 8,100
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STRATEGIES AND FINANCIAL TARGETS
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STRATEGIES AND FINANCIAL TARGETS Business
philosophy
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• Who is our customer?
• A universal bank in the Baltic countries
• Primary focus on medium-sized companies and
  affluent private customers
• What are our value propositions to the customers?
• Key sustainable competitive advantage is the
  combination of easy access, knowledge of our
  customer and the best quality of service
• One-stop-shop strategy
• How can we do this efficiently?
• Best electronic channels, branches as advisory
  units
• CRM tools enable to offer our customers the most
  suitable solutions
• Common IT system
• Knowledge management within the Group and with
  Swedbank

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STRATEGIES AND FINANCIAL TARGETS Mission
statement and strategies
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• Our mission is to continuously increase the value
  of our company. By learning our customers needs,
  we can offer them the most suitable financial
  solutions, thus saving their time and making
  their everyday lives better. We believe that high
  motivation of our employees is the guarantee of
  the best performance.
• Groups strategies for 2002
• LTB integration
• Pension reform in Estonia
• To increase business volumes in Latvia by being
  the first choice for existing corporate customers
  and aggressively acquiring new retail customers
• To improve the Internet offering to companies
• To clarify the functions between product units
  and customer relationship units
• To streamline internal processes

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STRATEGIES AND FINANCIAL TARGETS Medium-term
financial targets
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• Double the operating profit in 4 years
• ROE at least 25
• Cost-income ratio below 50
• Net risk cost below 0.8
• net risk cost (loan write-offs recoveries) /
  average loan portfolio

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FINANCIAL REVIEW
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FINANCIAL REVIEWOperating profit and net profit
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FINANCIAL REVIEW Regional distribution
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FINANCIAL REVIEW Regional growth
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FINANCIAL REVIEW EVA
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Capital 11 of risk weighted assets Cost of
equity 2002 12.9 2001 14.7 EVA economic
value added
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FINANCIAL REVIEW Efficiency
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Excluding goodwill amortisation, before
provisions Source financial reports
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FINANCIAL REVIEW Revenues and expenses
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5
4
excl. Hansa-LTB
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FINANCIAL REVIEW Loans and deposits
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Deposits
Loans
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Annual growth
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FINANCIAL REVIEWFunding structure, 30.06.02
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FINANCIAL REVIEW Loan and deposit growth by
regions
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Q2 growth was significantly influenced by USD
depreciation against the euro. Negative effect
was app. 70 million on loans and 140 million
on deposits
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FINANCIAL REVIEWDistribution of loans by
industries, 30.06.02
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FINANCIAL REVIEW Asset quality, 30.06.02
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H-LTB
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GROWTH OPPORTUNITIES
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GROWTH OPPORTUNITIES Acquisition history
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• June 1996 Deutsche Lettische bank (current
  Hansabanka)
• July 1998 Estonian Savings Bank (merged with
  Hansabank)
• April 2000 Ventspils UBB (merged with
  Hansabanka)
• May 2001 Lithuanian Savings Bank (merged with
  Hansabankas)
• Second largest bank in Lithuania, largest retail
  bank
• Deposits 966 mio EUR (06.2002)
• Loans 357 mio EUR (06.2002)

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GROWTH OPPORTUNITIES Hansa-LTB acquisition
analysis, 31.12.01
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Additional provisions EUR 46.8 million
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GROWTH OPPORTUNITIES Hansa-LTB restructuring
(June 01 June 02)
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• Number of branches decreased from 400 to 164
• Introduction of new IT-system successful 84
  branches on-line
• 1,200 branch employees retrained to use the new
  IT-system
• Number of employees decreased by 25 to 2,611
• Over 30 days overdues have decreased from 10 to
  1.0
• Start of sales of leasing and factoring products
  of Hansa Capital
• Loan growth in 6m 2002 44 million LTL (8
  annual growth rate)
• incl . mortgages 60 million LTL (86 annual
  growth rate)

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GROWTH OPPORTUNITIES Pension reform in Estonia
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• I and III pillars already existing
• II pillar started in July 2002
• Compulsory to new entrants to the job market
  fully compulsory by 2025
• Material effect on the Groups results in 3-4
  years
• Targets for 2002
• 60 market share in II pillar assets
• 50,000 Hansa Pension Fund clients
• Actual result (June 02)
• 53 market share in assets
• Over 18,000 clients

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GROWTH OPPORTUNITIES Increase in household
consumption
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III Savings products Asset management Pension
II Credit products Mortgages Consumer credit
I Basic products Transfers Cards Internet bank
Issued by Hansabank Group
gt 320 EUR per member
gt 160 EUR per member
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GROWTH OPPORTUNITIES Regional growth
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Non-resident deposits
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Mart Tõevere Financial Division Head of Investor
Relations phone [phone] fax [phone]
569 mart.toevere_at_hansa.ee Liivalaia 10, Tallinn
15040 Estonia www.hansagroup.com/ir