Financial results of Baltikums Banka concern for the first half of 2009

The international auditor company KPMG Baltic has performed audit of concern AS
“Akciju komercbanka “Baltikums”” (Baltikums Banka). 

In the first half of 2009 sustainable development of Baltikums Banka concern
continued, which resulted in growth of the key performance indicators and in
consolidation of its position in the chosen niches. 

Conservative approach to risk management, persistency in the strategic
objectives, and establishment of long-term relations with customers - these are
the three pillars of success of the dynamically growing and modern Baltikums
Banka. 

The bank has been successfully developing its regional network for nine years.
At present, the bank successfully functions in Riga, Limassol, Kiev, and
Almaty, as well as has representation in Russia and Azerbaijan via its parent
company Baltikums Bankas Grupa. Baltikums Banka and its foreign branches employ
150 international professionals. 

The most important event of the first half of the year was opening and
successful operations of the bank's branch in Cyprus. Baltikums Banka that is a
counterpart of the concern has successfully redeemed the second issue bonds and
keeps gradually redeeming public bonds earlier issued by the bank from the
financial market on its own initiative. 

Financial results

The profit of Baltikums Banka concern for the first half of the year amounted
to LVL 1.67 million. As of 30 June this year, the concern's assets made up LVL
103.8 million. At the end of June, Baltikums Banka concern issued LVL 27.2
million in loans and attracted deposits worth LVL 74.76 million. 

Such results became possible in 2009, when the world and Latvia have been
shaken by an unprecedented crisis and instability, thanks to the Bank's
well-thought-out and precise strategy and its professional team. Despite a
decrease in the assets resulting from a drop in the bank customers' turnover
Baltikums Banka is one of the Latvian 10 banks that continue operating with
profit, the number of opened customer accounts keeps growing, efficiency of
operations increases, funds are invested in information technologies and
expansion of the bank's international branch. The concern sees prospects in
conquering new markets as competition drops during the crisis. 

Baltikums Banka still maintains very high liquidity and balance structure
indicators and the high capital adequacy more than twice exceeds that required
by supervisory authorities. The capital adequacy index amounted to 16.44%
(requirements of the Financial and Capital Market Commission - at least 8%). 

Major achievements

Currently, the Baltikums Banka focuses on three basic trends of its operations:
Private Banking, Corporate Banking and Wealth Management. 

During the first 6 months of 2009, Baltikums Banka has introduced an entity of
private bankers who facilitate further development of Private Banking services
successfully launched and set as a priority earlier. Now Baltikums Banka
employs a new team of sales and customer service professionals and the
estimated sale of the bank's investment products and services has brought its
first fruit. 

This year, Baltikums Banka has successfully redeemed the second issue bonds and
keeps gradually redeeming public bonds earlier issued by the bank from the
financial market on its own initiative. 

The bank's interest in redemption of its own bonds results from the following
factors. First, Baltikums Banka has a considerable amount of free funds.
Second, these bonds are traded on the market with a significant discount to the
nominal; therefore, Baltikums Banka redeems the bonds prematurely and thus
minimises its interest expenses. The bank also believes that by ensuring market
liquidity of its bonds it contributes to maintaining good business relations
with investors both now and in the future. The bank's opinion is that it is
particularly important these days when there is certain instability and
nervousness on the markets. 

Baltikums Banka has obtained a permit of the Cyprus Central Bank for offering
its services in Cyprus according to the principles of free competition. Now
customers of the Cyprus branch that successfully launched its operations in the
beginning of the year will be able to enjoy a full range of products, services,
and solutions in regular banking service, in Corporate Banking, Private Banking
and Investment Banking, in payment card programmes, as well as in comprehensive
operations in financial markets with no restrictions. 

The concern constantly improves its business models introducing latest
technologies and methodology. However, our philosophy and business approach
remain unchanged. Baltikums Banka is an independent private bank and a family
business. The concern has Latvian origin and its objective is to join leading
independent private banks in the European Union by providing modern and sought
after banking products, services and solutions aimed at facilitating business
and at keeping and growing wealth of our customers. 

Baltikums Banka is famous for its consequent approach to establishing and
maintaining mutually beneficial relations with its customers. Paying close
attention to research and new developments, we create products, services, and
solutions that are sought after, first of all, because they are created in our
customers' interests and represent our response to the customers' needs and
desires. Baltikums Banka was established as a commercial bank and its
entrepreneur's spirit is close and familiar to customers: private
entrepreneurs, high net worth individuals, and professional investors. 

Besides, the bank's objective is not only provide its customers with
professional and quality service but also to join forces in order to create
environment for business, capital, assets, and risks management, to give our
customers, in addition to financial benefits, more stability and confidence
regarding their, their families', and their partners' future. Here we see our
responsibility as private bankers. 

Our values remain unchanged as before: independence and objective approach,
security, responsibility, and comprehensive protection of our customer's
interests. We are grateful to all our customers for cooperation and trust in
these complicated times and look forward to continuing our successful
cooperation in the future. 

Subsidiaries

Baltikums Banka concern includes “ASIPS Baltikums Asset Management”, SIA
„Baltikums Līzings”, SIA „Baltikums Direct”, SIA „Konsulting Invest”, ООО
«Балтикумс Траст» (Kiev), ООО «Балтикумс Траст» (St.Petersburg), OOO „Baltikums
Trast” (Moscow) un AAS „Baltikums”. The aggregate profit of the companies
comprising the concern made up LVL 770 thousand, the profit of the bank alone -
LVL 901 thousand, the total profit of the concern - LVL 1.67 million. 

About Baltikums Banka concern

Baltikums Banka is a counterpart of the Latvian banking group Baltikums Bankas
Grupa and is by 100% owned by family holdings of the group's shareholders. The
objective of Baltikums Banka is to join the European leading independent
private banks by providing modern and sought-after products, services, and
solutions for business development, for keeping and enhancing wealth of our
customers. 

Uldis Zandars
AS „Akciju komercbanka „Baltikums””
Deputy of Head of the Product Development and Marketing Department
Tel.: +371 67 031 408, +371 29 206 536
E-mail: uldis.zandars@baltikums.eu