OREANDA-NEWS. On 01 June 2009 was announced, that in the 1st quarter of 2009 the total assets of BIGBANK AS decreased by 154.7 million kroons and receivables from customers reduced by 145.5 million kroons. The reduction in the loan portfolio is associated with the surrounding economic environment. On one hand considerably reduced consumer confidence reduces the customers' interest in taking loans and at the same time BIGBANK has continued to make the criteria for grating loans more conservative.

BIGBANK AS does not forecast the loan sales volumes to increase to the previous level in 2009 and in connection with that the sales network is currently being optimized in order to respond to today's loan sales volumes, in the course of which the number of sales offices as well as number of employees shall be reduced. During the 1st quarter a total of 4 sales offices were closed in the

Group (including 2 in Estonia and 2 in Latvia) and the company made 39 employees redundant (including 8 in Estonia and 31 in Latvia). It is planned to continue with optimizing the office network also in the 2nd quarter. The aim of restructuring is to keep an optimal and efficient sales structure and to retain the profitability of the activity also in a complicated economic environment.

Loan repayments from customers outbalance the volume of sales of new loans, thus generating positive cash flow. From available resources, in the 1st quarter of 2009 BIGBANK AS has acquired bonds issued by the Group in the total amount of 189.6 million kroons in nominal value. The initial redemption date was in 2011. Transaction prices remained below the nominal value. In addition, in 2009 a bonds restructuring aimed at the domestic market has been performed, in the course of which BIGBANK AS acquired bonds and subordinated liabilities with a total value of 156.5 million kroons (including 98.5 million kroons with a maturity date in 2009 and subordinated liabilities in the amount of 58.0 million kroons with a maturity date in 2014) and at the same time issued bonds with a maturity date in 2010 with a total value of 93.8 million kroons and subordinated liabilities with a maturity date in 2015 with a total value of 62.6 million kroons. The aim of the transaction was to extend and diversify the maturity of liabilities.

As of 31 March 2009 the volume of cash and equivalents totaled 463.9 million kroons (16.8% of total assets), at the end of 2008 the respective figure was 479.4 million kroons (16.5% of total assets).

Bonds (1 237.4 million kroons, reduction by 250.2 million kroons during the quarter) and term deposits (763.7 million kroons, increase by 133.1 million kroons during the quarter) continue to form the largest share of liabilities. As of the end of the 1st quarter the total volume of liabilities amounted to 2 176.2 million kroons, reducing by 157.6 million kroons during the quarter. The liabilities' weighted average duration until maturity extends to 19.6 months and the weighted average interest rate was 8.8% (9.6% as of the year-end). The weighted average interest rate has reduced during the quarter above all in connection with the decrease in Euribor.

In the 1st quarter of 2009 the interest income amounted to 148.0 million kroons and the revenue related to enforcement process amounted to 40.9 million kroons. The respective figures in the 4th quarter of 2008 were 169.3 million kroons and 39.4 million kroons. The reduction of the interest income is connected to the reduction of loan portfolio and also increase in the volume of loan portfolio in payment delay. Profit from the acquisition of bonds below nominal value totaled 46.4 million kroons in the 1st quarter.

In connection with the considerably worsened economic environment the customers' payment behavior has also deteriorated during the recent periods, due to which the volume of loans with payment delays over 90 days has increased both in the 4th quarter of 2008 as well as in the 1st quarter of 2009. The main reasons for the deterioration of the payment behavior could be the increase in unemployment, also the considerable reduction of incomes, which immediately became evident particularly in case of customers with a lower income, who did not have any monetary reserve, with the emergence of solvency problems. In the 1st quarter the growth of loan portfolio with payment delays over 90 days has been stopped in Estonia and slowed down in Latvia and Lithuania with more active credit management activity. In the loan portfolio with payment delays, the short-term payment delays have been reduced through more active credit management activity and resulting thereof it is possible to predict in the future a smaller volume of loan portfolio in long-term payment delays.

In connection with the changes in economic environment the volume of impairment allowance has been increased considerably during the 1st quarter and the impairment allowance costs totaled 82.6 million kroons in the 1st quarter. As of 31 March 2009 the total volume of impairment allowances amounts to 279.9 million kroons, including additional impairment allowances and the reserves of potential assessment error of 29.5 million kroons and impairment allowances for other assets in the amount of 9.5 million kroons.

In the 1st quarter the net profit of the reporting period amounted to 23.6 million kroons (26.8 million kroons in the 4th quarter of 2008). Profit before impairment allowances and profit from premature termination of bonds amounted to 59.8 million kroons in the 1st quarter of 2009 (61.2 million kroons respectively in the previous quarter).

As of the end of the 1st quarter of 2009 equity totaled 582.4 million kroons (579.4 million kroons as of the end of 2008). In the 1st quarter dividends were paid out as the allocation of profit of the financial year in the total amount of 19.0 million kroons. Capital adequacy as of the end of the quarter was 19.2%. The share of the equity amounted to 21.1% of total assets.

As of 31 March 2009 the Group had 46 offices all over the Baltics, of which 20 offices were located in Estonia, 15 in Latvia and 11 in Lithuania. As of 31 March 2009 there were 468 employees working in the Group, including 216 in Estonia, 176 in Latvia and 76 in Lithuania.