In the first half of 2007, the Group's core business continued expansion,
bringing along increase in main financial indicators.
Compared to a year ago, the balance sheet total expanded 2.6-fold to 2,269.4
million kroons and the loan portfolio grew 2.1 times to 1,614.5 million kroons.
Interest income surged to 236.9 million kroons, a two-fold improvement on a year
ago. Net income for the period rose to 89.3 million kroons.
BIG's term deposits portfolio increased to 192.2 million kroons by the end of
the half-year, which is a 51% increase compared to the beginning of the year.
BIG's strategy is to continue offering best interest rates for term deposits
among Estonian banks.
The Group's structure and the managements of group entities remained the same
throughout the period.
On 1 August 2007, the membership of the Parent company's management board
changed as Head of Sales and Marketing Kaido Saar ascended to the board. Since 1
August 2007, members of the management board have been Veiko Kandla, Kaido Saar,
and Targo Raus
In 2007, the Group began preparing for penetration of the Lithuanian market. On
25 July, a representation was registered with the Lithuanian Company Register.
The representation will complete the activities required for opening a branch
and launching business operations. A branch should be opened in the second half
of 2007.
The development of the Lithuanian consumer loan market has been following the
pattern of Estonia and Latvia. Although the Lithuanian market is considerably
larger than the Estonian one, the average consumer credit per person and the
ratio of consumer loans to GDP are significantly lower than the corresponding
figures for Estonia and Latvia. These are the factors which underpin our
decision to enter the Lithuanian market.
In the first half of 2007, the number of bank offices operated by Balti
Investeeringute Grupi Pank AS increased to 29, including 17 in Estonia and 12 in
Latvia. In 2nd half-year BIG has opened another two offices in Estonia and one
in Latvia.
At period-end, the Group employed 354 people. Payments made to the Group's
management and supervisory board members in the first half of 2007 totalled
1.280 million kroons and 0.332 million kroons respectively.
During the reporting period, Balti Investeeringute Grupi Pank AS issued bonds of
62.7 million euros (981 million kroons) in an international market. The bonds
are listed on Stockholm Stock Exchange. In the second half-year, we intend to
continue enhancing the efficiency of our internal processes by upgrading our IT
solutions, improving management accounting and developing other operations.
--------------------------------------------------------------------------------
| Consolidated Balance Sheet | | |
--------------------------------------------------------------------------------
| | (In millions of kroons) |
--------------------------------------------------------------------------------
| | 30 June 2007 | 31 Dec. 2006 |
--------------------------------------------------------------------------------
| ASSETS | |
| | |
--------------------------------------------------------------------------------
| Cash | 0.008 | 0.005 |
--------------------------------------------------------------------------------
| Due from Central Bank | 164.524 | 96.186 |
--------------------------------------------------------------------------------
| Due from credit institutions | 400.276 | 44.728 |
--------------------------------------------------------------------------------
| Loans to customers | 1,614.498 | 1,012.513 |
| | | |
--------------------------------------------------------------------------------
| Allowance for credit losses | -51.807 | -20.819 |
| | | |
--------------------------------------------------------------------------------
| Debt and other fixed income securities | 18.759 | 0 |
--------------------------------------------------------------------------------
| Intangible assets | 8.053 | 6.388 |
--------------------------------------------------------------------------------
| Property and equipment | 20.338 | 18.087 |
--------------------------------------------------------------------------------
| Investment property | 5.297 | 5.358 |
--------------------------------------------------------------------------------
| Other assets | 1.719 | 0 |
--------------------------------------------------------------------------------
| Accrued income and prepaid expenses | 87.695 | 48.551 |
| | | |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 2,269.360 | 1,210.997 |
--------------------------------------------------------------------------------
| LIABILITIES | | |
--------------------------------------------------------------------------------
| Due to credit institutions | 150.480 | 159.250 |
--------------------------------------------------------------------------------
| Deposits from customers | 192.180 | 126.970 |
| | | |
--------------------------------------------------------------------------------
| Other liabilities | 0.999 | 1.151 |
--------------------------------------------------------------------------------
| Debt securities issued | 1,345.276 | 481.687 |
--------------------------------------------------------------------------------
| Accrued expenses and deferred income | 28.215 | 22.106 |
| | | |
--------------------------------------------------------------------------------
| Subordinated liabilities | 170.121 | 108.030 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 1,887.271 | 899.194 |
--------------------------------------------------------------------------------
| EQUITY | | |
--------------------------------------------------------------------------------
| Share capital | 80.000 | 80.000 |
--------------------------------------------------------------------------------
| Capital reserve | 8.000 | 4.000 |
--------------------------------------------------------------------------------
| Translation reserve | 3.775 | 0.437 |
--------------------------------------------------------------------------------
| Retained earnings | 200.980 | 53.537 |
--------------------------------------------------------------------------------
| Net income for the period | 89.334 | 173.829 |
--------------------------------------------------------------------------------
| TOTAL EQUITY | 382.089 | 311.803 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND EQUITY | 2,269.360 | 1,210.997 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated Balance Sheet | | | |
--------------------------------------------------------------------------------
| | (In millions of euros) | |
--------------------------------------------------------------------------------
| | 30 June 2007 | 31 Dec. 2006 | |
--------------------------------------------------------------------------------
| ASSETS | |
| | |
--------------------------------------------------------------------------------
| Cash | 0.001 | 0 | | |
--------------------------------------------------------------------------------
| Due from Central Bank | 10.515 | 6.148 | | |
--------------------------------------------------------------------------------
| Due from credit institutions | 25.582 | 2.859 | | |
--------------------------------------------------------------------------------
| Loans to customers | 103.185 | 64.711 | | |
| | | | | |
--------------------------------------------------------------------------------
| Allowance for credit losses | -3.311 | -1.331 | | |
| | | | | |
--------------------------------------------------------------------------------
| Debt and other fixed income | 1.199 | 0 | | |
| securities | | | | |
--------------------------------------------------------------------------------
| Intangible assets | 0.515 | 0.408 | | |
--------------------------------------------------------------------------------
| Property and equipment | 1.300 | 1.156 | | |
--------------------------------------------------------------------------------
| Investment property | 0.338 | 0.342 | | |
--------------------------------------------------------------------------------
| Other assets | 0.110 | 0 | | |
--------------------------------------------------------------------------------
| Accrued income and prepaid | 5.605 | 3.103 | | |
| expenses | | | | |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 145.039 | 77.396 | | |
--------------------------------------------------------------------------------
| LIABILITIES | | | | |
--------------------------------------------------------------------------------
| Due to credit institutions | 9.617 | 10.177 | | |
--------------------------------------------------------------------------------
| Deposits from customers | 12.283 | 8.115 | | |
| | | | | |
--------------------------------------------------------------------------------
| Other liabilities | 0.064 | 0.073 | | |
--------------------------------------------------------------------------------
| Debt securities issued | 85.979 | 30.785 | | |
--------------------------------------------------------------------------------
| Accrued expenses and deferred | 1.803 | 1.413 | | |
| income | | | | |
--------------------------------------------------------------------------------
| Subordinated liabilities | 10.873 | 6.904 | | |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 120.619 | 57.467 | | |
--------------------------------------------------------------------------------
| EQUITY | | | | |
--------------------------------------------------------------------------------
| Share capital | 5.113 | 5.113 | | |
--------------------------------------------------------------------------------
| Capital reserve | 0.511 | 0.256 | | |
--------------------------------------------------------------------------------
| Translation reserve | 0.241 | 0.028 | | |
--------------------------------------------------------------------------------
| Retained earnings | 12.845 | 3.422 | | |
--------------------------------------------------------------------------------
| Net income for the period | 5.710 | 11.110 | | |
--------------------------------------------------------------------------------
| TOTAL EQUITY | 24.420 | 19.929 | | |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND EQUITY | 145.039 | 77.396 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated Income Statement | | |
--------------------------------------------------------------------------------
| | (In millions of kroons) |
--------------------------------------------------------------------------------
| | 1st half 2007 | 1st half 2006 |
--------------------------------------------------------------------------------
| Interest income | 236.944 | 114.385 |
| | | |
--------------------------------------------------------------------------------
| Interest expense | 48.021 | 10.838 |
--------------------------------------------------------------------------------
| Net interest income | 188.923 | 103.547 |
--------------------------------------------------------------------------------
| Net fees and commissions | -0.055 | -0.062 |
--------------------------------------------------------------------------------
| Fee and commission income | 0.098 | 0.073 |
--------------------------------------------------------------------------------
| Fee and commission expense | 0.153 | 0.135 |
--------------------------------------------------------------------------------
| Net gain / loss on financial transactions | -1.452 | -0.098 |
--------------------------------------------------------------------------------
| Gains / income on financial transactions | 2.174 | - |
--------------------------------------------------------------------------------
| Losses / expenses on financial transactions | 3.626 | 0.098 |
--------------------------------------------------------------------------------
| Administrative expenses | 66.314 | 32.501 |
| | | |
--------------------------------------------------------------------------------
| Salaries | 21.710 | 9.577 |
--------------------------------------------------------------------------------
| Social security and health insurance charges | 6.649 | 3.044 |
--------------------------------------------------------------------------------
| Other administrative expenses | 37.955 | 19.880 |
--------------------------------------------------------------------------------
| Depreciation, amortisation and impairment | -2.439 | -1.099 |
| losses on property, plant and equipment and | | |
| intangible assets | | |
--------------------------------------------------------------------------------
| Net impairment loss on financial assets | -32.842 | -3.057 |
| | | |
--------------------------------------------------------------------------------
| Recoveries | 0.016 | 0.319 |
--------------------------------------------------------------------------------
| Losses | 32.858 | 3.376 |
--------------------------------------------------------------------------------
| Net other operating income | 8.594 | 6.164 |
--------------------------------------------------------------------------------
| Other operating income | 21.045 | 10.244 |
--------------------------------------------------------------------------------
| Other operating expenses | 12.451 | 4.080 |
--------------------------------------------------------------------------------
| Net income before tax | 94.415 | 72.894 |
--------------------------------------------------------------------------------
| Income tax expense | 5.081 | 1.928 |
| | | |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Net income for the period | 89.334 | 70.966 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated Income Statement | | |
--------------------------------------------------------------------------------
| | (In millions of euros) |
--------------------------------------------------------------------------------
| | 1st half 2007 | 1st half 2006 |
--------------------------------------------------------------------------------
| Interest income | 15.143 | 7.310 |
| | | |
--------------------------------------------------------------------------------
| Interest expense | 3.069 | 0.674 |
--------------------------------------------------------------------------------
| Net interest income | 12.074 | 6.636 |
--------------------------------------------------------------------------------
| Net fees and commissions | -0.004 | -0.004 |
--------------------------------------------------------------------------------
| Fee and commission income | 0.006 | 0.005 |
--------------------------------------------------------------------------------
| Fee and commission expense | 0.010 | 0.009 |
--------------------------------------------------------------------------------
| Net gain / loss on financial transactions | -0.092 | -0.006 |
--------------------------------------------------------------------------------
| Gains / income on financial transactions | 0.139 | 0 |
--------------------------------------------------------------------------------
| Losses / expenses on financial transactions | 0.231 | 0.006 |
--------------------------------------------------------------------------------
| Administrative expenses | 4.237 | 2.096 |
| | | |
--------------------------------------------------------------------------------
| Salaries | 1.387 | 0.612 |
--------------------------------------------------------------------------------
| Social security and health insurance charges | 0.425 | 0.195 |
--------------------------------------------------------------------------------
| Other administrative expenses | 2.425 | 1.289 |
--------------------------------------------------------------------------------
| Depreciation, amortisation and impairment | -0.156 | -0.070 |
| losses on property, plant and equipment and | | |
| intangible assets | | |
--------------------------------------------------------------------------------
| Net impairment loss on financial assets | -2.099 | -0.196 |
| | | |
--------------------------------------------------------------------------------
| Recoveries | 0.001 | 0.02 |
--------------------------------------------------------------------------------
| Losses | 2.100 | 0.216 |
--------------------------------------------------------------------------------
| Net other operating income | 0.549 | 0.394 |
--------------------------------------------------------------------------------
| Other operating income | 1.345 | 0.655 |
--------------------------------------------------------------------------------
| Other operating expenses | 0.796 | 0.261 |
--------------------------------------------------------------------------------
| Net income before tax | 6.035 | 4.658 |
--------------------------------------------------------------------------------
| Income tax expense | 0.325 | 0.123 |
| | | |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Net income for the period | 5,71 | 4,535 |
--------------------------------------------------------------------------------
The audited interim report for H1 2007 is available in full copy at the internet
page of Tallinn Stock Exchange and at the home page of Balti Investeeringute
Grupi Pank AS at http://www.big.ee.
Targo Raus
Balti Investeeringute Grupi Pank AS
Chairman of the Board
Phone: 735 0923
