eQ's INTERIM REPORT 1-9/2007 (Translation of Finnish language original) January - September 2007: - Net revenues EUR 36.7 million (EUR 31.2 million) - Operating profit EUR 10.6 million (EUR 10.7 million) - Earnings per share EUR 0.23 (EUR 0.32) - Return on equity 14.8 per cent, annualised July - September, Q3/07: - Net revenues EUR 10.4 million (EUR 7.8 million) - Operating profit EUR 2.8 million (EUR 1.9 million) - Earnings per share EUR 0.06 (0.05) eQ Group's revenue growth continued during the reporting period January - September 2007. Group net revenue increased by 18 % to EUR 36.7 million. The growth was strongest in Asset Management (+30 %) and in Securities Brokerage (+26 %). The operating profit was EUR 10.6 million compared to EUR 10.7 million during the same period last year. Net revenue for the third quarter was EUR 10.4 million, an increase of 34 % over last year's Q3 figure. The operating profit was EUR 2.8 million (Q3 2006: EUR 1.9 million). eQ GROUP, KEY FIGURES -------------------------------------------------------------------------------- | | | | | | | | -------------------------------------------------------------------------------- | (EUR 1 000) | | | Change | | | Change | -------------------------------------------------------------------------------- | | Q3/07 | Q3/06 | y-on-y | 1-9/07 | 1-9/06 | y-on-y | -------------------------------------------------------------------------------- | Net revenues from | | | | | | | -------------------------------------------------------------------------------- | financial operations | 1 811 | 1 405 | 42 % | 5 408 | 3 688 | 47 % | -------------------------------------------------------------------------------- | Net commission | 7 690 | 5 099 | 51 % | 26 237 | 23 845 | 10 % | | income | | | | | | | -------------------------------------------------------------------------------- | Other income | 933 | 1 282 | -27 % | 5 098 | 3 674 | 39 % | -------------------------------------------------------------------------------- | Net revenues in | 10 43 | 7 785 | 34 % | 36 743 | 31 207 | 18 % | | total | 4 | | | | | | -------------------------------------------------------------------------------- | Operating profit | 2 844 | 1 883 | 51 % | 10 648 | 10 741 | -1 % | -------------------------------------------------------------------------------- | Earnings/share EUR | 0.06 | 0.05 | 20 % | 0.23 | 0.32 | -28 % | -------------------------------------------------------------------------------- Operating profit for business areas -------------------------------------------------------------------------------- | (EUR 1 000) | | | Change | | | Change | -------------------------------------------------------------------------------- | | Q3/07 | Q3/06 | y-on-y | 1-9/07 | 1-9/06 | y-on-y | -------------------------------------------------------------------------------- | Securities Brokerage | 1 407 | 370 | 280 % | 3 271 | 2 594 | 26 % | -------------------------------------------------------------------------------- | Asset management | 494 | 662 | -25 % | 4 474 | 3 444 | 30 % | -------------------------------------------------------------------------------- | Corporate Finance | 881 | 834 | 6 % | 2 772 | 4 765 | -42 % | -------------------------------------------------------------------------------- | Hosting | 62 | 17 | 265 % | 131 | -62 | 311 % | -------------------------------------------------------------------------------- OPERATING ENVIRONMENT The operating environment during the third quarter was marked by the sub-prime credit crises which caused wide spread turbulence in the financial markets. While eQ is not dependent on short term funding in the interbank market, the sharp increase in short term interest rates decreased the value of our money market positions reducing the net interest margin recorded for the quarter. The equity markets were surprisingly unaffected by the credit squeeze with the Helsinki Stock Exchanges general index actually increasing during the quarter. The volatility in equity markets experienced during the quarter resulted in increased activity among eQ's customers. INCOME AND PROFIT eQ Group's net revenues for the first nine months increased by 18 % compared to the corresponding period of 2006. The growth was especially strong in Asset management services, with a 30 % increase in revenue. The increase in asset management revenues is due to the increased number of customers and the increase in assets under management. The net revenues of Securities brokerage services increased by 26 % as a result increased customer activity, a larger number of customers and gains in proprietary trading. The revenues of Corporate finance were, as expected, lower than on the previous year. eQ Group's costs January - September 2007 increased by 27 per cent compared to the previous year. The increase is due to investments in growth in all eQ's business areas. In addition the acquisition of the majority of eQ shares and the subsequent public tender offer during Q2 by Straumur resulted in extraordinary costs. The combined effect of these increases in costs resulted in an operating profit totalling EUR 10.6 million, being at the same level as last year. At the end of September 2007 eQ had approximately 52 500 customers, which is 16 per cent more compared to the previous year. The group balance sheet is strong: the shareholders' equity at the end of September was EUR 68.1 million and the consolidated capital adequacy ratio was 12.0 %. BUSINESSES Securities Brokerage services Key figures -------------------------------------------------------------------------------- | (EUR 1 000) | | | Change | | | Change | -------------------------------------------------------------------------------- | | Q3/07 | Q3/06 | y-on-y | 1-9/07 | 1-9/06 | y-on-y | -------------------------------------------------------------------------------- | Net revenues | 4 626 | 3 186 | 45 % | 13 807 | 12 607 | 10% | -------------------------------------------------------------------------------- | Operating profit | 1 407 | 370 | 280% | 3 271 | 2 594 | 26 % | -------------------------------------------------------------------------------- | Personnel | 35 | 36 | -3 % | 35 | 36 | -3 % | -------------------------------------------------------------------------------- The net revenues of securities brokerage services were EUR 13.8 million, a 10 per cent increase to the previous year. The third quarter revenue was significantly higher (+ 45%) than during Q3 last year as a factor of higher customer activity and increased revenue for the proprietary trading. As a result of the growth in revenue and efficient cost control, the operating profit increased by 26 per cent compared to the first nine months of 2006. eQ's share of trades executed on the Helsinki Stock Exchange in January - September was 4.3 % and the share of the euro volume 3.3 %. eQ's market share during the third quarter was 3.7 % (trades) and 2.9 % (volume). During the review period eQ introduced the improved Redeye analysis, which help the customers with comparing and monitoring the Nordic listed companies. Additionally, five new listed companies were added to eQ's Research Library. Asset management services Key figures -------------------------------------------------------------------------------- | (EUR 1 000) | | | Change | | | Change | -------------------------------------------------------------------------------- | | Q3/07 | Q3/06 | y-on-y | 1-9/07 | 1-9/06 | y-on-y | -------------------------------------------------------------------------------- | Net revenues | 3 453 | 2 626 | 31 % | 15 194 | 9 997 | 52 % | -------------------------------------------------------------------------------- | Operating profit | 494 | 662 | -25 % | 4 474 | 3 444 | 30 % | -------------------------------------------------------------------------------- | Personnel | 46 | 29 | 59 % | 46 | 29 | 59 % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets under | 1 886 | 857 | 120 % | 1 886 | 857 | 120 % | | management, MEUR | | | | | | | -------------------------------------------------------------------------------- | Deposits, MEUR | 540 | 401 | 35 % | 540 | 401 | 35 % | -------------------------------------------------------------------------------- | Loans, MEUR | 63 | 48 | 31 % | 63 | 48 | 31 % | -------------------------------------------------------------------------------- eQ Bank's assets under management include deposits, discretionary asset management and mutual funds. Discretionary asset management and mutual funds include partly the same funds. The net revenues of asset management services had a strong increase to EUR 15.2 million (EUR 10.0 million), an increase of approximately 52 per cent compared to the previous year. The operating profit was EUR 4.5 million, an increase of 30%. In January-September 2007 eQ's assets under management (including deposits) increased by 120 per cent compared to the previous year totaling EUR 1.9 billion. The sub-prime credit crises in the U.S. caused a wide spread turbulence in the interest market in August-September 2007, which had a negative effect on the development of fixed income funds. In June a new business unit of asset management, eQ Private Bank, was launched and Antti Pietiäinen was appointed to Director of eQ Private Bank. eQ Bank and American Express started cooperation in September 2007. After the reporting period eQ announced that it will open a new branch office in Turku. The Turku office specialises in asset management services to both private persons and institutions. In October 2007 eQ Bank has arranged a capital-guaranteed index-linked bond Next 11. The bond invests in new growth markets and the subscription period ends on 29 October 2007. In October the first corporate bond fund investing in emerging markets, eQ Emerging Markets Corporate debt fund, has been launched in Finland. Corporate Finance services Key figures -------------------------------------------------------------------------------- | (EUR 1 000) | | | Change | | | Change | -------------------------------------------------------------------------------- | | Q3/07 | Q3/06 | y-on-y | 1-9/07 | 1-9/06 | y-on-y | -------------------------------------------------------------------------------- | Net revenues | 1 516 | 1 308 | 16 % | 4 778 | 6 555 | -27 % | -------------------------------------------------------------------------------- | Operating profit | 881 | 834 | 6 % | 2 772 | 4 765 | -42 % | -------------------------------------------------------------------------------- | Personnel | 16 | 12 | 33 % | 16 | 12 | 33 % | -------------------------------------------------------------------------------- eQ Bank's Advium Corporate Finance unit has acted as a financial advisor in twelve transactions during January - September 2007. During the review period Advium acted as financial advisor for example to Finnish investors led by private equity investor Sentica Partners in the divestment of Elematic Group Oy to a private equity fund managed by Pamplona Capital Management LLP. Furher, Advium acted as the financial advisor to Veritas Pensions Insurance Company, Veritas Life Insurance and Veritas Mutual Non-Life Insurance in the divestment of five properties to funds managed by DEGI Deutsche Gesellschaft für Immobilienfonds mbH. The personnel of Advium has grown and amounted to 16 at the end of September. Due to the fact that success fees play an important role in the corporate finance business, the unit's performance can fluctuate significantly between quarters. Hosting services Key figures -------------------------------------------------------------------------------- | (EUR 1 000) | | | Change | | | Change | -------------------------------------------------------------------------------- | | Q3/07 | Q3/06 | y-on-y | 1-9/07 | 1-9/06 | y-on-y | -------------------------------------------------------------------------------- | Net revenues | 1 148 | 1 057 | 9 % | 3 892 | 2 976 | 31 % | -------------------------------------------------------------------------------- | External revenues | 839 | 665 | 26 % | 2 964 | 2 048 | 45 % | -------------------------------------------------------------------------------- | Internal revenues | 309 | 392 | -21 % | 928 | 928 | 0 % | -------------------------------------------------------------------------------- | Operating profit | 62 | 17 | 265 % | 131 | -62 | 311 % | -------------------------------------------------------------------------------- | Personnel | 18 | 15 | 20 % | 18 | 15 | 20 % | -------------------------------------------------------------------------------- During the second and third quarter of 2007 the operating environment of Xenetic has been under changes by consolidations in the sector. Many competitors, on the same size as Xenetic, have been acquired by larger companies. Management perceives the said consolidation positive as it clears up the company's operating environment; there remain very few ITC-managed service providers in Finnish market with focus on flexibility and business critical systems. The net revenues have increased during the third quarter as planned totalling EUR 3.9 million. The positive increase in profitability was mainly due to successful new customer business and the operating profit during the period was EUR 0.1 million. The major investments carried out in 2006 weaken the profitability of Xenetic compared to the sector average. The amount of personnel in Xenetic has grown and the number of professionals at the end of September was 18. INVESTMENTS eQ Group's investments in January - September totalled EUR 2.1 million, of which EUR 1.3 million were directed to tangible assets (EUR 2.6 million of which EUR 2.3 million were directed to tangible assets in 1-9/2006). CAPITAL ADEQUACY At the end of September 2007 the group capital adequacy ratio was 12.0%. The profit for the reporting period has not been included in Tier 1 own funds. PERSONNEL At the end of September eQ Group had 171 employees (150). The head count consists of staff working permanently or for a fixed term of at least six months. THE FINAL RESULT OF STRAUMUR'S PUBLIC TENDER OFFER The public tender offer by Straumur-Burdaras Investment Bank hf for all issued and outstanding shares and option rights in eQ Corporation terminated on July 3, 2007. Straumur-Burdaras' holding in eQ after termination of the tender offer is a total of 32 410 347 shares representing about 96.13 per cent of shares issued by eQ and of votes attached to them. Straumur has on 6 August 2007 given a notification according to which Straumur's holding of the shares and votes in eQ has exceeded nine tenths (9/10) and that Straumur has a right according to Chapter 18, Section 1 of the Finnish Companies Act to redeem all shares from the minority shareholders in eQ at a price of EUR 7.60 per share. REDEMPTION OF SHARES Straumur has initiated minority redemption proceedings in accordance with Chapter 18 of the Companies Act to acquire the minority shares in eQ. The Arbitral Tribunal appointed by the Redemption Committee of the Central Chamber of Commerce has, thus far, not confirmed the schedule in the matter. Provided that the Arbitral Tribunal confirms that Straumur's redemption right is clear, Straumur is entitled to gain title to all the shares in eQ by placing a security approved by the Arbitral Tribunal for the payment of the redemption price. EXTRAORDINARY GENERAL MEETING An Extraordinary General Meeting of eQ Corporation was held on June 25, 2007. The meeting elected a new Board of Directors for the company for a term, which lasts until the end of the next Annual General Meeting. The Extraordinary General meeting re-elected Mr Antti Pankakoski and Mr Petteri Walldén as members of the Board of Directors and elected Mr William Fall and Mr Antti Mäkinen as new members of the Board. The Board of Directors elected William Fall as Chairman of the Board. SHARES AND SHARE CAPITAL At the end of September 2007 the consolidated shareholders' equity was EUR 68.1 million and the share capital was EUR 5 731 286.33 divided over 33 713 449 shares. The weighted average number of shares during the review period was 33 713 449. Equity per share was EUR 2.01. eQ Corporation had 1 765 shareholders on September 30, 2007. During January - September 2007 the highest share price (quoted) on the Helsinki Stock Exchange was EUR 7.61 and the lowest EUR 4.68. At the end of the period eQ's share price was EUR 7.60 and the market capitalisation EUR 256.2 million. A total amount of 44 053 765 shares, representing 130 % of the company's shares and corresponding to a turnover of EUR 321 261 552 were traded during the period. RISKS eQ Corporation's main risks are classified as credit risks, market risks, operational risks and business risks. eQ Bank's credit risk management aims to prevent and mitigate the situations, where customer or other counterparty fails to fulfil their agreed obligations. Credit risk is limited through measures such as counterparty limits, which are defined according to the bank's own funds. Well-defined credit granting process helps mitigating the credit risk. Also, the bank primarily grants credit only against collateral. During the reporting period there were no credit losses. Market risk refers to the risk of loss resulting from changes in interest rates, equity prices or exchange rates. The Board of eQ has accepted the market risk principles and the risk limits. Market risks are managed by trading limits, which are supervised by independent risk management unit on daily basis. Interest rate risk within eQ Bank's customer business is minor because most deposits and lending have equal interest rate bindings. Interest rate risk is monitored through sensitivity of net interest income to changes in the interest rate level. Treasury unit is responsible for corporation's liquidity and bank's funding and also for the management of the credit risk, currency risk and counterparty risk. The requirements for liquidity are monitored on a daily basis. Operational risks refer to the risk of loss resulting from factors such as inadequate or failed internal processes, personnel, systems or external factors. Operational risks are managed by measures such as developing internal processes, ensuring sufficient guidance and using collateral and insurance policies. Contingency plans have been put in place to cope with major disturbances to operations. The earnings impact of operational risks during the period has been minor. OUTLOOK The revenues of the eQ Group as well as the profitability are very sensitive to the development of the equity and fixed income markets. In corporate finance business the revenues are highly dependent on receiving success fees as well as the timing of those. Due to these reasons the financial performance of eQ Group may fluctuate significantly between quarters. Provided that the capital markets remain reasonably stable during the remainder of the year, it is likely that the operating profit for the fourth quarter will be at the level of or higher than that recorded during the third quarter. POST BALANCE SHEET DATE EVENTS ARBITRAL TRIBUNAL APPOINTED IN THE REDEMPTION PROCEEDINGS REGARDING THE SHARES IN eQ The Redemption Committee of the Finnish Central Chamber of Commerce has, according to its letter dated 2 October 2007, on 24 September 2007 appointed an Arbitral Tribunal to decide upon the price and the redemption right to the shares in eQ Corporation that are not owned by Straumur-Burdaras Investment Bank hf. The Arbitral Tribunal consists of Markus Troberg, Attorney-at-law. DE-LISTING OF eQ CORPORATION As Straumur-Burdaras Investment Bank hf. holds over 97 percent of all the shares in eQ Corporation the Board of Directors of eQ has resolved to apply for the termination of trading with the eQ shares and for the delisting of the shares from the official list of OMX Nordic Exchange Helsinki Oy. An application for delisting has been filed with OMX Helsinki on 12 October 2007. The OMX Helsinki has announced on October 22 2007 that the shares of eQ Corporation will be delisted from the OMX Nordic Exchange Helsinki when the ownership of all shares of eQ Corporation has been transferred to the redeemer in the redemption process. eQ Corporation The Board For further information: Antti Mäkinen tel. +358 9 6817 8686 CEO mobile +358 50 561 1501 eQ Corporation e-mail antti.makinen@eQ.fi Distribution: Helsinki Stock Exchange Main media www.eQ.fi This third Interim Financial Report of the year 2007 does not include the information of related parties according to IAS 34 standard because there have not been any essential changes compared to the financial statements of 2006. Otherwise the report has been prepared according to the IAS standard 34 (interim reports). The interim report has been prepared under the same principles as the Financial Statements of 2006. The report is unaudited. -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE SHEET (IFRS) | 30.9.2007 | 30.9.2006 | 31.12.2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1000 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liquid assets | 61 | 40 | 40 | -------------------------------------------------------------------------------- | Claims on credit institutions | 145 052 | 145 691 | 91 508 | -------------------------------------------------------------------------------- | Financial assets held for trading | 266 798 | 117 235 | 189 188 | -------------------------------------------------------------------------------- | Available-for-sale financial assets | 169 122 | 171 770 | 168 216 | -------------------------------------------------------------------------------- | Claims on the public and public | 61 931 | 44 102 | 54 866 | | sector entities | | | | -------------------------------------------------------------------------------- | Investment in associates | 0 | 60 | 30 | -------------------------------------------------------------------------------- | Intangible assets | 27 343 | 18 913 | 27 745 | -------------------------------------------------------------------------------- | Tangible assets | 4 943 | 4 548 | 4 699 | -------------------------------------------------------------------------------- | Other assets | 172 289 | 175 566 | 89 198 | -------------------------------------------------------------------------------- | Deferred tax assets | 793 | 3 616 | 1 661 | -------------------------------------------------------------------------------- | TOTAL ASSETS | 848 333 | 681 542 | 627 150 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LIABILITIES | | | | -------------------------------------------------------------------------------- | Liabilities to credit institutions | 89 | 0 | 90 | -------------------------------------------------------------------------------- | Liabilities to the public and public | 537 778 | 400 004 | 435 833 | | sector entities | | | | -------------------------------------------------------------------------------- | Derivative financial instruments | | | | -------------------------------------------------------------------------------- | and other liabilities held for | 21 564 | 34 672 | 15 571 | | trading | | | | -------------------------------------------------------------------------------- | Other liabilities | 217 842 | 178 205 | 101 003 | -------------------------------------------------------------------------------- | Tax liabilities | 1 843 | 0 | 15 | -------------------------------------------------------------------------------- | Deferred tax liabilities | 1 019 | 822 | 993 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL LIABILITIES | 780 135 | 613 704 | 553 505 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY CAPITAL | | | | -------------------------------------------------------------------------------- | Share capital | 5 731 | 5 731 | 5 731 | -------------------------------------------------------------------------------- | Share premium account | 48 675 | 48 675 | 48 675 | -------------------------------------------------------------------------------- | Reserve fund | 2 106 | 2 106 | 2 106 | -------------------------------------------------------------------------------- | Fair value reserve | 149 | 189 | 0 | -------------------------------------------------------------------------------- | Retained earnings | 11 482 | 11 086 | 17 131 | -------------------------------------------------------------------------------- | Total equity attributable to equity | 68 143 | 67 788 | 73 644 | | holders of the parent company | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Minority interest | 55 | 50 | 0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL EQUITY | 68 198 | 67 838 | 73 644 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL EQUITY AND LIABILITIES | 848 333 | 681 542 | 627 150 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OFF-BALANCE SHEET COMMITMENTS | 30.9.2007 | 30.9.2006 | 31.12.2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Credit limits not in use | 77 078 | 56 161 | 59 023 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED PROFIT AND LOSS | 1.1.-30.9.20 | 1.1.-30.9. | 1.1. - | | ACCOUNT (IFRS) | 07 | 2006 | 31.12.2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1000 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Interest income | 16 378 | 9 637 | 14 075 | -------------------------------------------------------------------------------- | Interest expense | -10 970 | -5 949 | -8 762 | -------------------------------------------------------------------------------- | Net interest income | 5 408 | 3 688 | 5 312 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Fee and commission income | 32 571 | 28 378 | 43 293 | -------------------------------------------------------------------------------- | Fee and commission expense | -6 334 | -4 533 | -6 059 | -------------------------------------------------------------------------------- | Net fee and commission income | 26 237 | 23 845 | 37 233 | -------------------------------------------------------------------------------- | Impairment of receivables | -21 | 7 | 10 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net income from financial assets | 1 850 | 1 463 | 2 393 | | held for trading | | | | -------------------------------------------------------------------------------- | Net income from available-for-sale | 112 | 60 | 377 | | financial assets | | | | -------------------------------------------------------------------------------- | Net income from foreign exchange | 64 | 25 | 59 | | dealing | | | | -------------------------------------------------------------------------------- | Other operating income | 3 094 | 2 119 | 2 901 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total income | 36 743 | 31 207 | 48 285 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Administrative expenses | | | | -------------------------------------------------------------------------------- | | Staff costs | -13 298 | -10 622 | -15 893 | -------------------------------------------------------------------------------- | | Other administrative expenses | -8 883 | -6 741 | -9 360 | -------------------------------------------------------------------------------- | Total administrative expenses | -22 182 | -17 363 | -25 252 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Depreciation and write-downs on | | | | | tangible | | | | -------------------------------------------------------------------------------- | and intangible assets | -2 253 | -1 714 | -2 349 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other operating expenses | -1 630 | -1 372 | -1 917 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Share of associated companies' | -30 | -17 | -47 | | results | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net operating profit | 10 648 | 10 741 | 18 720 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income taxes | -2 783 | -69 | -2 007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the financial year | 7 866 | 10 672 | 16 713 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | -------------------------------------------------------------------------------- | | Equity holders of the parent | 7 836 | 10 724 | 16 765 | | | company | | | | -------------------------------------------------------------------------------- | | Minority interests | 30 | -53 | -52 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share, EUR | 0,23 | 0,32 | 0,50 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share, diluted, EUR | 0,23 | 0,32 | 0,50 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED CASH FLOW STATEMENT | 1.1.-30.9 | 1.1.-30.9. | 1.1. - | | (IFRS) | .2007 | 2006 | 31.12.2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | EUR 1000 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Cash flow from operating | | | | | | activities | | | | -------------------------------------------------------------------------------- | | Net operating profit | 10 648 | 10 741 | 18 720 | -------------------------------------------------------------------------------- | | Adjustments: | 8 053 | 582 | 1 234 | -------------------------------------------------------------------------------- | | Change in working capital | -7 668 | 5 582 | 19 173 | -------------------------------------------------------------------------------- | | Income taxes paid | -178 | -54 | -44 | -------------------------------------------------------------------------------- | | Cash flow from operating | 10 855 | 16 850 | 39 083 | | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Cash flow from investing | | | | | | activities | | | | -------------------------------------------------------------------------------- | | Investments in intangible and | -1 931 | -2 674 | -3 351 | | | tangible assets | | | | -------------------------------------------------------------------------------- | | Other investments | -258 | -164 | -164 | -------------------------------------------------------------------------------- | | Acquisitions of subsidiaries | | | -5 446 | -------------------------------------------------------------------------------- | | Cash flow from investing | -2 189 | -2 838 | -8 960 | | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Cash flow from financing | | | | | | activities | | | | -------------------------------------------------------------------------------- | | Share issue | 25 | 585 | 585 | -------------------------------------------------------------------------------- | | Payment of dividend | -13 482 | -6 678 | -6 678 | -------------------------------------------------------------------------------- | | Cash flow from financing | -13 457 | -6 093 | -6 093 | | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Change in cash and cash | -4 791 | 7 920 | 24 029 | | | equivalents | | | | -------------------------------------------------------------------------------- | | Cash and cash equivalents at Jan | 48 575 | 24 546 | 24 546 | | | 1. | | | | -------------------------------------------------------------------------------- | | Cash and cash equivalents at the | 43 785 | 32 466 | 48 575 | | | end of the period | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF | | | | | | | | | CHANGES IN | | | | | | | | | EQUITY | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1000 | | | | | | | | -------------------------------------------------------------------------------- | | Share | Share | Reser | Fair | Accrue | Minor | Total | | | capital | premi | ve | value | d | ity | | | | | um | fund | reserv | profit | inter | | | | | accou | | e | funds | ests | | | | | nt | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity capital | 5 731 | 48 | 2 106 | 0 | 17 131 | 0 | 73 644 | | 1.1.2007 | | 675 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial | | | | 149 | | | | | instruments | | | | | | | | -------------------------------------------------------------------------------- | Distribution of | | | | | -13 | | | | dividend | | | | | 485 | | | -------------------------------------------------------------------------------- | Profit for the | | | | | 7 836 | 30 | | | period | | | | | | | | -------------------------------------------------------------------------------- | Minority | | | | | | 25 | | | interest | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity capital | 5 731 | 48 | 2 106 | 149 | 11 482 | 55 | 68 198 | | 30.9.2007 | | 675 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity capital | 5 678 | 48 | 2 106 | 9 | 7 023 | 103 | 63 063 | | 1.1.2006 | | 144 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Subscription | 54 | 531 | | | | | | | with the option | | | | | | | | | rights | | | | | | | | -------------------------------------------------------------------------------- | Financial | | | | -9 | | | | | instruments | | | | | | | | -------------------------------------------------------------------------------- | Equity | | | | | 22 | | | | compensation | | | | | | | | | plans | | | | | | | | -------------------------------------------------------------------------------- | Distribution of | | | | | -6 679 | | | | dividend | | | | | | | | -------------------------------------------------------------------------------- | Profit for the | | | | | 16 765 | -52 | | | period | | | | | | | | -------------------------------------------------------------------------------- | Minority | | | | | | -51 | | | interest | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity capital | 5 731 | 48 | 2 106 | 0 | 17 131 | 0 | 73 644 | | 31.12.2006 | | 675 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | QUARTERLY FINANCIAL PERFORMANCE | 7 - | 4 - | 1 - | 10 - | 7 - | | | 9/200 | 6/2007 | 3/200 | 12/2006 | 9/2006 | | | 7 | | 7 | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1000 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Interest income | 6 111 | 5 666 | 4 601 | 4 438 | 3 702 | -------------------------------------------------------------------------------- | Interest expense | -4 | -3 823 | -2 | -2 814 | -2 298 | | | 300 | | 847 | | | -------------------------------------------------------------------------------- | Net interest income | 1 811 | 1 843 | 1 754 | 1 624 | 1 405 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net fee and commission income | 7 690 | 9 602 | 8 945 | 13 388 | 5 099 | -------------------------------------------------------------------------------- | Impairment of receivables | 2 | 2 | -25 | 4 | 3 | -------------------------------------------------------------------------------- | Net income from financial assets | -59 | 540 | 1 368 | 929 | 468 | | held for trading | | | | | | -------------------------------------------------------------------------------- | Net income from | 93 | -6 | 24 | 317 | 100 | | available-for-sale financial | | | | | | | assets | | | | | | -------------------------------------------------------------------------------- | Net income from foreign exchange | 9 | 43 | 13 | 34 | 14 | | dealing | | | | | | -------------------------------------------------------------------------------- | Other operating income | 888 | 1 325 | 881 | 781 | 697 | -------------------------------------------------------------------------------- | Total income | 10 | 13 349 | 12 | 17 078 | 7 785 | | | 434 | | 960 | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Administrative expenses total | -6 | -8 762 | -7 | -7 889 | -4 802 | | | 236 | | 184 | | | -------------------------------------------------------------------------------- | Depreciation and write-downs on | | | | | | | tangible | | | | | | -------------------------------------------------------------------------------- | and intangible assets | -792 | -747 | -714 | -635 | -605 | -------------------------------------------------------------------------------- | Other operating expenses | -562 | -541 | -527 | -545 | -486 | -------------------------------------------------------------------------------- | Share of associated companies' | 0 | -16 | -14 | -30 | -10 | | results | | | | | | -------------------------------------------------------------------------------- | Total expenses | -7 | -10 | -8 | -9 099 | -5 902 | | | 590 | 066 | 439 | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net operating profit | 2 844 | 3 283 | 4 521 | 7 979 | 1 883 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income taxes | -745 | -839 | -1 | -1 938 | -12 | | | | | 199 | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the financial period | 2 099 | 2 444 | 3 322 | 6 041 | 1 871 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | | | -------------------------------------------------------------------------------- | | Equity holders of the parent | 2 071 | 2 442 | 3 322 | 6 040 | 1 893 | | | company | | | | | | -------------------------------------------------------------------------------- | | Minority interests | 28 | 2 | 0 | 1 | -23 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share, quarterly, | 0,06 | 0,07 | 0,10 | 0,18 | 0,05 | | EUR | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LEASE OBLIGATIONS | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Irrevocable minimum lease obligations | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating leases | 30.9.200 | 30.9.200 | 31.12.20 | | | 7 | 6 | 06 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating lease obligations | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Current financial year / In less than | 117 | 82 | 433 | | | one year (31.12.2006) | | | | -------------------------------------------------------------------------------- | | Coming financial years / Between one | 767 | 729 | 566 | | | and five years (31.12.2006) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Total | 884 | 812 | 999 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Premises lease obligations | 30.9.200 | 30.9.200 | 31.12.20 | | | 7 | 6 | 06 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Current financial year / In less than | 345 | 345 | 1 392 | | | one year (31.12.2006) | | | | -------------------------------------------------------------------------------- | | Coming financial years / Between one | 3 936 | 5 315 | 3 936 | | | and five years (31.12.2006) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Total | 4 281 | 5 660 | 5 328 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial leases | 30.9.200 | 30.9.200 | 31.12.20 | | | 7 | 6 | 06 | -------------------------------------------------------------------------------- | | Minimum lease payments | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | In less than one year | 219 | 119 | 135 | -------------------------------------------------------------------------------- | | Between one and five years | 260 | 203 | 203 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Total | 479 | 322 | 338 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | GUARANTEES AND PLEDGES | 30.9.200 | 30.9.200 | 31.12.20 | | | 7 | 6 | 06 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | On own behalf | | | | -------------------------------------------------------------------------------- | | Pledged securities | 98 263 | 81 200 | 106 766 | -------------------------------------------------------------------------------- | | Pledged claims on credit institutions | 10 574 | 8 938 | 9 325 | -------------------------------------------------------------------------------- | | Total | 108 836 | 90 138 | 116 091 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | DERIVATIVES | 30.9.200 | 30.9.200 | 31.12.20 | | | 7 | 6 | 06 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Values of underlying instruments | | | | -------------------------------------------------------------------------------- | | Interest rate derivatives | 4 906 | 8 618 | 5 441 | -------------------------------------------------------------------------------- | | Equity derivatives | 5 007 | 2 567 | 2 817 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CAPITAL ADEQUACY | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1000 | 30.9.2007 | 30.9.2006 | 31.12.2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Own funds | | | | -------------------------------------------------------------------------------- | | Original own funds | 32 485 | 37 523 | 30 813 | -------------------------------------------------------------------------------- | | Additional funds, gross | 149 | 255 | 0 | -------------------------------------------------------------------------------- | | Deductions | -183 | -66 | 0 | -------------------------------------------------------------------------------- | Total own funds | 32 451 | 37 712 | 30 813 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Capital requirement for credit | 11997 | 10 667 | 8 408 | | risks | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Capital requirement for market | 4579 | 6 018 | 4 636 | | risks | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Capital requirement for operational | 4999 | - | - | | risks | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Capital adequacy ratio (%) | 12,0 | 18,1 | 18,9 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | The Capital adequacy ratio at 30.9.2007 is calculated by the BASEL II code. | -------------------------------------------------------------------------------- KEY FINANCIAL INDICATORS -------------------------------------------------------------------------------- | | 30.9.2007 | 30.9.2006 | 31.12.2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on equity, % (Annualised) | 14,8 | 21,7 | 24,5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating costs to earnings | 0,71 | 0,66 | 0,61 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit per share, EUR | 0,31 | 0,42 | 0,50 | | (Annualised) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit per share, quarterly, EUR | 0,06 | 0,05 | 0,18 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit per share, EUR (diluted) | 0,06 | 0,05 | 0,18 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit per share trailing 12m, EUR | 0,41 | 0,43 | 0,50 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity per share, EUR | 2,02 | 2,01 | 2,18 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity ratio, % | 8,0 | 10,0 | 11,7 | -------------------------------------------------------------------------------- The principles of calculating financial indicators Return on equity % (net operating profit/loss - taxes) x 100 ------------------------------------------ total equity (average of the figures for the beginning and the end of the year) Operating costs to earnings administrative expenses + depreciation and write-downs on tangible and intangible assets + other operating expenses --------------------------------------------- net interest income + net commission income + impairment of receivables + net income from financial assets held for trading + net income from available-for-sale financial assets + net income from exchange dealing + other operating income + share of associated companies' results (net) Profit per share, EUR net operating profit - taxes + minority interest --------------------------------------------- average weighted number of shares corrected with share issues Profit per share, diluted, EUR net operating profit - taxes + minority interest -------------------------------------------- weighted average number of shares during the financial period (diluted) Equity per share, EUR total equity -------------------------------------------- adjusted average number of shares on balance sheet date Equity ratio, % total equity x 100 ------------------------------------------- balance sheet total