HANSABANK February 2002

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HANSABANKFebruary 2002
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I Overview of the RegionII What is
HansabankIII Strategies IV Financial
ReviewV Growth opportunities
TABLE OF CONTENTS
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OVERVIEW OF THE REGION
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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 Macro highlights
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GDP Infl. CA/GDP 00 01E 02E 00 01E 02E
00 01E 02E Estonia 6.9 4.5 3.5 4.7 5.5 3.0 -6.4 -
6.0 -4.5 Latvia 6.6 7.0 4.0 4.3 3.5 2.0 -6.8 -8.0
-8.0 Lithuania 3.3 5.0 4.0 2.0 0.5 2.0 -6.3 -6.0
-3.5 as GDP deflator
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OVERVIEW OF THE REGION Market size
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(EUR bln) Deposits Loans GDP Estonia 2.7 2.5
6.0 Latvia 4.2 3.1 8.8 Lithuania 3.0 2.0 1
3.3 Baltics 9.9 7.6 28.1 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
Market capitalisation (bln EUR, 12.01) Total
Baltic market 3.4 12 of GDP Hansabank 0.9
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WHAT IS HANSABANK
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WHAT IS HANSABANK 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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WHAT IS HANSABANK Market shares (lending), Sept
2001
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Estonia
Latvia
Lithuania
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WHAT IS HANSABANK Baltic market share, Sept 2001
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Total Baltic market, 30.09.01, EUR in
millions Deposits 9,000 Loans 6,800
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STRATEGIES AND FINANCIAL TARGETS
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STRATEGIES AND FINANCIAL TARGETS Mission
statement and strategies
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• Our mission is to continuosly 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
• To improve the understanding of our customers
  needs by implementing Customer Relationship
  Management tools
• To improve the Internet offering to companies
• To increase employee satisfaction through further
  developing a motivating environment
• To clarify the functions between product units
  and customer relationship units
• To streamline internal processes

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STRATEGIES AND FINANCIAL TARGETS Access
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1999 2000 2001 Customers (mio) 1.1 1.2 2.9 Cards
(mio) 0.7 0.8 1.3 ATMs 500 625 875 I-banking
customers (mio) 0.1 0.2 0.4
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STRATEGIES AND FINANCIAL TARGETS CRM
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• Take the customer segmentation results and value
  propositions for focus customers to everyday
  customer interactions
• Use and develop customer (segment) profitability
  analysis
• Follow and develop service quality standards in
  all countries
• Continue to develop pre-approved personal offers
  of short term and mortgage credit and other
  products for focus customers in Estonia and
  introduce in Latvia. Introduce also for business
  customers in Estonia
• Provide the account managers of focus customers a
  holistic view of their customers' activities with
  the whole Group
• Use the past contact history in every interaction
  with the focus customers with the introduction of
  new contact center platform

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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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41
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FINANCIAL REVIEW EVA, 2001
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CoE 14.70
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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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27
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42
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FINANCIAL REVIEW Loans and deposits
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Loans
Deposits
75
46
31
31
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FINANCIAL REVIEW Loan and deposit growth by
regions
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Excluding LTB acquisition, growth rates in
Lithuania were 49 for loans and 84 for deposits
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FINANCIAL REVIEW Asset quality, 31.12.01
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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)
• Hansa-LTB, December 2001
• Assets (mio EUR) 1,096
• Loans (mio EUR) 336
• Deposits (mio EUR) 947
• Customers 1,500,000
• Branches 211
• Employees 3,100

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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 Main activities in
Hansa-LTB in 2001
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• Completion of legal merger in December
• Implementation of the new IT-system started
• Hansabank risk management principles implemented,
  strenghtening the lending organisation, training
  programme for lending employees
• Restructuring the branch network
• Number of branches 50 to 211
• Number of employees 17 to 3,100
• In electronic banking ATM networks merged, new
  version of internet banking and Telehansa
  launched, payment products in ATMs, introduction
  of direct debit
• Number of cards 55 to 237,000
• Number of ATMs 88 to 205
• Outsourcing of non-core activities cash
  handling, security services and sales of PC
  insurance

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GROWTH OPPORTUNITIES Main targets for Hansa-LTB
in 2002
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• Customers
• 300 ATMs
• 350,000 cards issued
• 75,000 internet banking customers
• Among top 3 financial institutions by service
  quality
• Active sales of leasing and factoring products in
  the network
• Internal processes
• New IT system introduced
• Non-core activities outsourced
• Branch network optimised
• Learning and Growth
• Re-qualification training for all branch network
  employees
• Qualification system for sales employees,
  development programme for managers

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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
gt 350 EUR per member
gt 190 EUR per member
Credit cards
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GROWTH OPPORTUNITIES Medium-sized companies
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• App. 10,000 customers
• Underbanked compared to large corporate customers
• Mostly using basic products
• Growth from nominal growth in the economy
• New domestic investments FDI
• Higher margins
• Better risk diversification

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GROWTH OPPORTUNITIES Pension reform in Estonia
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• I and III pillars already existing
• II pillar to start from 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

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GROWTH OPPORTUNITIES Regional growth
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Non-resident deposits
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GROWTH OPPORTUNITIES Regional growth
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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
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