BIG's comment on the article „Halbadest laenudest pungitav portfell” published on October 10th 2008 in Äripäev

The article („Halbadest laenudest pungitav portfell”) published in today's
Äripäev is based on tendentious and inaccurate comparative data. The loan
portfolio of Balti Investeeringute Grupi Pank AS (BIG) can not be compared to
the ones of universal banks due to BIG being specialised in consumer loans and
therefore has a significantly different business model. BIG is today
continously profitable enterprise that does not have any difficulties in
fulfilling its financial liabilities. 
BIG forms allowances for credit losses and calculates risks related to loans
according to IFRS and Basel II regulations. The adecuacy of forming allowances
for credit losses is being monitored by Estonian Financial Supervision
Authority and BIG's auditor KPMG and both control the principles of
provisioning and risk assesments consecutively also in the future. Financial
Supervision Authority has also published its comment http://www.fi.ee/?id=3370. 
BIG has formed allowances for credit losses in the amount of 189.1 million
kroons. The ratio of the allowances to loan portfolio is higher than the one of
universal banks, which shows fairly and conservatively the specifics of BIG's
loan portfolio. In the article published on October 10th in Äripäev, the
comparison with provisioning policy used by BIG in the year 2000 is misleading
and inappropriate. In case BIG provisioned all its over 60 days overdue loans
for 100%, it would mean affirmation by the company, that these loans are
unrecoverable. Deliberately assessing the value of assets lower would be a
deceit of investors and depositors. 
The share of BIG's overdue loans is larger than the one of universal banks,
which is distinctive for companies operating in consumer loan sector. Overdue
loans are not money lost, BIG also earned from overdue loans, for example ca
20% in H1 p.a. 
BIG's equity was 560.6 million kroons as of September 30th, capital adequacy
exceeded the required level of 10% and was 18.25% as of June 30th 2008. 

Additional information:
Targo Raus
Chairman of the Management Board