guide to listed funds and b0nds - nasdaq baltic€¦ · at least we did not know far back in 1997,...

E F F I C I E N T S E C U R I T I E S T R A N S A C T I O N S

Guide to ListedFunds and B0ndsRiga Stock Exchange 2004

Guide to Listed Funds and B

0nds Riga Stock Exchange 2004

A S R Ī G A S FO N D U B I R Ž A R I G A S TO C K E XC H A N G E . Va ļ ņ u i e l a 1 . R ī g a LV- 1 0 5 0 . L AT V I J A . Te l . + 3 7 1 7 2 1 2 4 3 1 . Fa x + 3 7 1 7 2 2 9 4 1 1

w w w. o m x g ro u p . co m / r i g a

OMX Exchanges C O P E N H A G E N S T O C K H O L M H E L S I N K I R I G A T A L L I N N V I L N I U S

Investment Funds 4

Baltic Index fonds 6

Internacionālo akciju fondu fonds 8

Parex Krievijas Akciju fonds 10

Valsts obligāciju fonds 12

Parex Austrumeiropas Obligāciju fonds 14

Parex Latu Obligāciju fonds 16

AIF Naudas Tirgus Fonds 18

Latu rezerves fonds 20

Nekustamā īpašuma fonds 22

Parex Baltijas Nekustamā Īpašuma fonds 24

Parex Baltijas Juras Sabalansētais fonds 26

Parex Austrumeiropas Sabalansētais fonds 28

Bonds 30

Government Treasury bills and bonds 32

Latvijas Hipotēku un zemes banka 34

Baltic Trust Bank 38

Akciju komercbanka “Baltikums” 42

Nordic Investment Bank 46

Parex banka 50

Contents

Guide to Listed Funds and B0nds

2 GUIDE TO LISTED FUNDS AND BONDS

Daiga Auziņa-Melalksne, Chairman of

Management Board, Riga Stock Exchange

Dear reader,

How do people know they are starting a tradition?

They don’t. At least we did not know far back in

1997, when we published our first Guide to Listed

Companies. Yet, the publication has survived

through years, and in 2004 we published, together

with our colleagues from Tallinn and Vilnius

stock exchanges, Guide to Baltic Market,

introducing the reader to the equities listed on

the three Baltic Markets - Estonian, Latvian and

Lithuanian.

Traditions sometimes are tricky. You sort of feel

an obligation to carry on, though you understand

it has already become redundant and obsolete.

On the other hand, if you happen to have a

tradition that is in a continuous development

and evolution, it is a genuine pleasure to proceed.

I am happy to share this pleasure with you,

offering our new and at the same time traditional

publication Guide to Latvian Funds and Bonds,

this time guiding you through the Riga Stock

Exchange listed fixed instruments and fund units.

Year 2004 has marked positive and long-lasting

changes in the history of the Baltic states and

the Baltic Stock Exchanges. Admission to the

EU, creation of joint Baltic market, joining the

SAXESS trading platform were just the key

events.

Past year was a productive one for the Riga Stock

Exchange in terms of diversity of listed products.

Apart from one new equity listing on our Main

list, 9 new funds were listed on the Fund list.

Starting with March, 2004, it became possible

for asset management companies to list funds

in currencies other than the national currency

LAT. Also, trading of funds unites on the RSE

trading system became possible. We are also

proud that in 2004 ice was broken for debt

securities issuers – at the very end of the year

Baltic Trust Bank issued mortgage bonds (2

issues) and listed on the RSE; one more

commercial bank – Akciju komercbanka

“Baltikums” - issued and placed corporate notes

at the end of 2004, and listed at the beginning

of 2005. The year was busy also for the “old”

issuers, like Hipotēku un zemes banka, who

listed two new series of mortgage bonds. We

hope for new debt securities issuers in 2005:

Parex banka corporate notes listing early in the

year is a good start.

GUIDE TO LISTED FUNDS AND BONDS 3

Riga Stock Exchange 2004


GENERAL OVERVIEW

Investment funds in Latvia showed another year

of rapid asset growth, earning a high degree of

confidence among investors. The assets of Latvia

registered open-end funds surged by 76.5% to 29

million Ls. As of the end of 2004, 9 asset

management companies and 16 investment funds

have been established and registered in Latvia

since the beginning of the registration process

which began five years prior. The first fund of

funds was launched this year – “Internacionālo

akciju fondu fonds” managed by Baltikums Asset

Management, investing through investment

funds into a diversified portfolio of international

equities. Local insurance companies also got

involved in investment fund distribution when

Sampo Dzīvība become the first life insurance

company in Latvia to offer unit-linked life

insurance policies with performance linked to

Sampo funds and domestic Parex funds.

All investment funds in Latvia are subject to EU

laws regulating investment companies and are

fully compliant with EU UCITS directive Nr

85/611. Latvian investment fund activities are

supervised by the Financial and Capital Market

Commission of Latvia.

In addition to Latvia-domiciled funds, several

foreign investment fund families such as Aviva

Funds, Franklin Templeton Investment Funds

and World Investment Opportunities Funds are

registered for public distribution in Latvia as

well as several foreign investment companies –

SEB Lux Equity Fund Management Company,

SEB Lux (F) Management Company of

Luxembourg and Hansa Investeerimisfondid of

Estonia. The wide range of foreign and local

funds provides an attractive selection of savings

instruments for local investors. The funds are

distributed by largest banks in Latvia – Parex

banka with its subsidiary Parex Asset

Management, Hansabanka and Unibanka.

INVESTMENT FUND LISTING ANDTRADING ON THE RSE

Currently there are 11 open-end funds managed

in Latvia. All are owned by local commercial banks

and distributed through retail branch networks.

Of the 11 funds, 10 are listed (4 traded) on the

Riga Stock Exchange. 2 closed-end investment

funds are listed on the RSE (1 traded) as well.

Investment funds' net assets

* - as of 30.09.04.

-

5

10

15

20

25

30

35

2001 2002 2003 2004*

EUR million

Investment Funds

Asset management company

1 Baltikums Asset Management



4 Hansa Fondi

5 SEB Unifondi

6 Parex ieguldījumu pārvaldes sabiedrība





Investment funds listed on the Riga Stock Exchange

Open-end funds

Fund name

BALTIC INDEX fonds

Internacionālo akciju fondu fonds

Valsts obligāciju fonds

Naudas tirgus fonds

Latu rezerves fonds

Parex Latu Obligāciju fonds

Parex Baltijas Juras Sabalansētais fonds

Parex Austrumeiropas Sabalansētais fonds

Parex Austrumeiropas Obligāciju fonds

Parex Krievijas Akciju fonds

RSE code

BINFR

IAFFR

GOBFR

NATFR

LARFR

PLOFR

PBSFR

PASFR

PAOFR

PKAFR

Type

equity fund

fund of funds

fixed income fund

money market fund

money market fund

fixed income fund

balanced fund

balanced fund

fixed income fund

equity fund

Asset management company

1 SEB Unifondi


Fund name

Nekustamā īpašuma fonds

Parex Baltijas Nekustamā Īpašuma fonds

RSE code

NIPFR

BNIFR

Type

real estate fund

real estate fund

Closed-end funds


Trading or listing on the Riga Stock Exchange

provides numerous benefits to participants:

• RSE membership in the Nordic-based OMX

Exchange Group significantly increases a

fund’s visibility and reach to potential

investors both locally and internationally.

• Professionally managed publicity and

marketing of the funds;

• An increase in the fund’s prestige and profile;

• An increase in liquidity potential;

• A secondary market for closed-end funds.

Investment fund listing and trading requirements

are compliant with OMX Exchange requirements

and provide a high level of transparency for

investors while remaining straightforward for

local fund managers.

MARKET SHARE OF OPEN-ENDINVESTMENT FUNDS

The largest change in market share in 2004 was

a significant increase in assets of Parex open-end

funds (256%) which increased overall market

share from 19% to 39%. Despite of market share

decrease last year Hansa Fondi with 52% market

share still is the largest asset manager of open-

end funds in Latvia. The market share of Optimus

Fondi and Baltikums Asset Management are

respectively 6% and 3%.

INVESTMENT FUNDS’ POR TFOLIOBREAKDOWN BY ASSET CLASSES

The most material change during the year was

the increase in equity investment and investment

fund units, which increased from 4.7% to 13.2%

(as of 30.09.04). The geographical allocation of

these assets is clearly focused on Emerging Europe

as more than half of the industry assets are

invested in the Baltic States and more than a third

in Russia and CIS countries. At the same time,

Latvian exposure has decreased since the

beginning of 2004 from 68.7% to 47.2% illustrating

higher diversification of investments and an

ongoing search for investment opportunities

outside of a fairly small local market.

INVESTMENT FUNDS MARKET OUTLOOK

Despite the recent high growth rates, the

investment fund market is still in the very

beginning of its expansion. The increasing

confidence in the industry together with a rapid

growth in wealth of local retail and mass affluent

investors, provides the basis for heightened

demand of investment products, other than bank

deposits. A maturing industry should also attract

the attention of foreign private and institutional

customers in the years to come, which will prove

to be an additional growth driver for the industry

as a whole. Finally, pension reform and further

development of the unit-linked products market

will also contribute to the overall growth.

Corporatedebt securities42.5% Other debt

securities0.2%

Governmentdebt securities44.1%

Equities andinvestment

fund units13.2%

BALTIC INDEX fonds

Parex Baltijas Jūras Sabalansētais fonds

Parex Austrumeiropas Sabalansētais fonds

Parex Austrumeiropas Obligāciju fonds

Hansa Austrumeiropas obligāciju fonds

Valsts obligāciju fonds

Parex Latu Obligāciju fonds

Naudas tirgus fonds

Latu rezerves fonds

25.69%

9.61%

8.07%

6.17%

5.30%

4.72%

3.66%

3.06%

2.98%

Performance of open-end investment funds in 2004

Sector overview


INVESTMENT STRATEGY

Fund invests assets in the best and solid Baltic

companies shares, which are included in

BALTIX index list and are traded in the official

list of the Baltic States’ stock exchanges (Riga

Stock Exchange, Tallinn Stock Exchange, Vilnius

Stock Exchange). Investment fund with high

degree of risk.

Investment objective is to achieve capital growth

according to the fund’s policy and diversification

of investment risks.

Baltic Index fonds(Baltic Index Fund)

Asset management company: IJSC “Baltikums Asset Management”

Fund type open-end

Base currency: LVL

Net asset value 31.12.04: 2.170

Inception date: 30.06.2000

Listing: Riga Stock Exchange

Ticker: BINFR

ISIN: LV0000400034

Management fee: 2 %

Subscription fee: 3 %

Redemption fee: 0 %

00.0

9.04

01.0

2.04

01.0

7.04

01.12

.04

02.0

5.04

02.10

.04

03.0

3.04

03.0

8.04

04.0

1.04

04.0

6.04

04.11

.04

Performance of Baltic Index Fund (NAV per unit, since inception)

0.80

1.00

1.20

1.40

1.60

1.80

2.00

2.20

2.40

LVL

Portfolio breakdown by country as of 31.12.2004

Republic of Estonia 29%

Republic of Lithuania 41%

Republic of Latvia 30%

Equity fund


Top 10 holdings as of 31.12.2004

Fund’s performance in base currency

2004 2003 2002 2001 2000

Performance 25.69 % 29.03 % 15.99 % 9.06 % -

Fund’s assets 634 619 LVL 525 555 LVL 173 208 LVL 107 492 LVL 102 839 LVL

Net asset value 2.170 LVL 1.726 LVL 1.337 LVL 1.153 LVL 1.058 LVL

Fund’s annualized performance in base currency

1-year 2-year 3-year Since inception

25.69 % 31.11 % 29.39 % 27.00 %

Fund manager: Ralfs DrēskaAddress: Mazā Pils iela 13, Rīga, LV-1050, LatvijaPhone: + 371 7814762Fax: + 371 7814763E-mail: [email protected]: http://asset.baltikums.lv

Distributor: Akciju komercbanka “Baltikums”Address: Mazā Pils iela 13, Rīga, LV-1050, LatvijaPhone: + 371 7031311Fax: + 371 7031300E-mail: [email protected]

Distributor: AS SEB Latvijas UnibankaAddress: “Unicentrs”, Ķekavas pag., Rīgas raj., LV-1076, LatvijaPhone: + 371 8008009Fax: + 371 7215335E-mail: [email protected]

CONTACT INFORMATION

Name % of Fund

1 Hansabank 9.68

2 Snaige 8.47

3 Lietuvos Telekomas 8.40

4 SAF Tehnika 8.32

5 Rokiškio Suris 4.88

6 Merko ehitus 4.81

7 Norma 4.71

8 Vilniaus Vingis 4.71

9 Pieno Žvaigždes 4.56

10 Latvijas kuģniecība 4.44


INVESTMENT STRATEGY

An open-end investment fund “Internacionālo

akciju fondu fonds” invests in the

world’s leading equity funds, which invest in

the worlds leading companies’ shares,

listed on the stocks exchanges of member

countries of Europe Union and

Organization for Economic Co-operation and

Development.

The investment fund with high degree of risk,

the fund’s assets are widely geographically

diversified to minimize investment risk and

optimize capital growth.

Internacionālo akciju fondu fonds(International Equity Fund of Funds)


Fund type open-end

Base currency: EUR



Listing Riga Stock Exchange

Ticker: IAFFR

ISIN: LV0000400182

Management fee: 1.50 %


Redemption fee: 0 %

88

90

92

94

96

98

100

102

104

106

05.0

3.20

04

07.0

4.20

04

10.0

5.20

04

12.0

6.20

04

15.0

7.200

4

17.0

8.20

04

19.0

9.20

04

22.10

.200

4

24.11

.200

4

27.12

.200

4

Performance of International Equity Fund of Funds (NAV per unit, since inception)

EUR

Portfolio breakdown by currency as of 31.12.2004

USD 30%

EUR 46% GBP 7%

CHF 5%

JPY 12%



Name % of Fund

1 Aviva Equity Fund 8.51

2 UBS (Lux)Equity Fund 8.04

3 SEB Lux Equity Fund 7.76

4 Franklin Templeton Investment Funds 7.39

4 Julius Baer Multistock 7.14

6 UBS (CH)Equity Fund - Japan 6.30

7 UBS (CH)Equity Fund - USA 6.18

8 UBS (CH)Equity Fund - France 5.37

9 UBS (CH)Equity Fund - Germany 5.08

10 UBS (CH)Equity Fund - Great Britain 4.31


2004

Performance 10.27 %

Fund’s assets 224 745 EUR

Net asset value 104.19 EUR


6 - month 1-year 2-year Since inception

10.27 % - - 4.18 %

CONTACT INFORMATION

Equity fund




1 0 GUIDE TO LISTED FUNDS AND BONDS

INVESTMENT STRATEGY

The fund seeks a high level of capital growth by

investing in a selected list of Russian companies

equities exhibiting the highest growth potential,

but currently undervalued. Fund is a diversified

array of the most liquid equity holdings

representing primarily oil, gas, energy and

telecommunications sectors. Fund return is a

combination of stock value growth and dividend

payoffs. In line with overall Russian equity market

growth, Fund it is allowed to invest in regional

companies, as well as construction, metallurgy,

and transportation sectors of Russian economy.

Parex Krievijas Akciju fonds(Parex Russian Equity fund)

Asset management company: AS “Parex ieguldījumu pārvaldes sabiedrība”

Fund type open-end

Base currency: USD




Ticker: PKAFR

ISIN: LV0000400190

Management fee: 2.00%

Subscription fee: up to 3.00%

Redemption fee: 0%

Performance of Parex Russian Equity fund (NAV per unit, since inception)

7.20

7.60

8.00

8.40

8.80

9.20

9.60

10.00

10.40

16.03.04 31.05.04 15.08.04 30.10.04 14.01.05

USD

Portfolio breakdown by country as of 31.12.2004

Energy 12.61%

Oil & gas 29.93%Others 18.90%

Telecoms 19.18%Metallurgy 19.38%

GUIDE TO LISTED FUNDS AND BONDS 1 1


Name % of Fund

1 Transneft (preffered) 9.10

2 LUKoil 8.82

3 Norilsk Nickel 5.03

4 Sberbank 4.89

5 Surgutneftegaz 4.26

6 MTS ADR 3.98

7 Surgutneftegaz (preffered) 3.73

8 Gazprom ADR 3.65

9 RAO EES 3.47

10 Vimpelcom ADR 2.55


2004

Performance -13.90%

Fund’s assets 3,426,125

Net asset value 8.61



- - - -17.34%

Fund manager: Sergejs MedvedevsAddress: Basteja bulvāris 14, Rīga LV-1050, LatvijaPhone: +371 7010810Fax: +371 7010192E-mail: [email protected]: http://www.parex.lv

Distributor: Parex Asset ManagementAddress: Basteja bulvāris 14, Rīga LV-1050, LatvijaPhone: +371 7010914Fax: +371 7778622E-mail: [email protected]

Distributor: AS “Parex banka”Address: Smilšu iela 3, Rīga LV-1522, LatvijaPhone: +371 7010000Fax: +371 7778622E-mail: [email protected]

CONTACT INFORMATION

Equity fund


INVESTMENT STRATEGY

The fund mainly invests assets in government

debt securities of the Baltic States and member

countries of Organisation for Economic Co-

operation and Development and banks’ deposits.

Investment fund with stabile capital growth and

low degree of risk, attained by investing in

government debt securities with high credit

rating.

Valsts obligāciju fonds(Government Bond Fund)


Fund type open-end

Base currency: LVL




Ticker: GOBFR

ISIN: LV0000400059

Management fee: 1.5 %


Redemption fee: 0 %

Performance of Government Bond Fund (NAV per unit, since inception)

10.0

9.20

01

10.0

1.200

2

10.0

5.20

02

10.0

9.20

02

10.0

1.200

3

10.0

5.20

03

10.0

9.20

03

10.0

1.200

4

10.0

5.20

04

10.0

9.20

040.95

1.00

1.05

1.10

1.15

1.20

1.25

LVL

Portfolio breakdown by maturity as of 31.12.2004

5-year 56%

3-year 4%

6-year 1%10-year 39%



Name % of Fund

1 LR Government 10-year T-bond, 14/02/13 29.47

LR Government 5-year T-bond, 08/05/07 24.26





7 Latvijas Unibanka Bonds 3 -year, 28/01/05 4.23

8 LHZB AH Mortgage Bonds 10-year, 15/08/11 3.86

9 LHZB AI Mortgage Bonds 6-year, 15/08/08 0.78




4.72 % 4.09 % 7.09 % 5.79 %




CONTACT INFORMATION

2004 2003 2002 2001

Performance 4.72 % 3.27 % 9.59 % -

Fund’s assets 220 490 LVL 400 234 LVL 1 762 497 LVL 489 934 LVL

Net asset value 1.213 LVL 1.158 LVL 1.121 LVL 1.153 LVL

Fixed income fund


INVESTMENT STRATEGY

The fund seeks maximum total return by

investing in fixed income securities of emerging

markets issuers, locating primarily in the Baltic

states, Central and Eastern Europe. Fund

manager utilizes its extensive competence in

the area. Fund is diversified by currencies; related

options and futures contracts may also be used

for currency hedging purposes. Fund is allowed

to invest in fixed income securities having

investment grade or higher credit ratings.

Parex Austrumeiropas Obligāciju fonds(Parex Eastern European Bond fund)


Fund type open-end

Base currency: USD




Ticker: PAOFR

ISIN: LV0000400125


Performance fee: 10% over 6 months

USD LIBOR + 3%


Redemption fee: 0%

Performance of Parex Eastern European Bond fund (NAV per unit, since inception)

12-M

ar-0

3

12-M

ay-0

3

12-J

ul-0

3

12-S

ep-0

3

12-N

ov-0

3

12-J

an-0

4

12-M

ar-0

4

12-M

ay-0

4

12-J

ul-0

4

12-S

ep-0

4

12-N

ov-0

4

9.90

10.10

10.30

10.50

10.70

10.90

11.10

11.30

11.50

11.70

11.90

Portfolio geographical breakdown as of 31.12.2004

Romania 4.80%

Others 5.57%

EU ex. Latvia 5.90%

Latvia 14.32% Kazakhstan 14.44%

Russia 39.48%

Ukraine 15.49%



Name % of Fund

1 Turanalem 29/05/07 10.00% 4.49

2 Kazkommerts 08/05/07 10.125% 4.03

3 Gazprom 25/04/07 9.125% 3.18

4 Sberbank 24/10/06 3.86% 3.14

5 UralSib bank 06/07/06 8.875% 3.00

6 CFR Marfa 10/12/07 10.50% 2.91

7 VTB Capital 11/12/08 6.875% 2.66

8 MTS 30/01/08 9.75% 2.64

9 Kyivstar 17/08/09 10.375% 2.61

10 City of Moscow 12/10/11 6.45% 2.54




6.17% - - 9.03%




CONTACT INFORMATION

2004 2003

Performance 6.17% 9.90%

Fund’s assets 8,688,621 3,206,492

Net asset value 11.68 10.99

Fixed income fund


INVESTMENT STRATEGY

The fund seeks maximum total return, consistent

with a strong capital preservation. Fund primary

holdings include Latvian government debt,

corporate debt of larger Baltic based companies,

and bank deposits. Fund holdings are

denominated primarily in Latvian lats.

Parex Latu Obligāciju fonds(Parex Lats Bond fund)


Fund type open-end

Base currency: LVL




Ticker: PLOFR

ISIN: LV0000400091



Redemption fee: 0%

Performance of Parex Lats Bond fund (NAV per unit, since inception)

17-O

ct-0

2

27-F

eb-0

3

10-J

ul-0

3

13-N

ov-0

3

25-M

ar-0

4

05-A

ug-0

4

10-D

ec-0

4

9.90

10.10

10.30

10.50

10.70

10.90

11.10

LVL


EU ex. Latvia 9.33%

Others 13.14% Latvia 77.53%



Name % of Fund

1 Latvia 26/01/06 8.125% 9.81

2 Latvia 22/04/05 0% 9.01

3 Latvia 24/03/05 9.125% 6.28

4 Latvia 04/02/05 0% 6.05

5 Latvia 08/05/07 5.625% 5.39

6 City of Moscow 28/04/06 10.95% 4.97

7 LHZB Mortgage bonds 15/08/08 4.75% 4.63

8 Parex banka deposit 10/03/05 4.20% 4.56

9 Latvia 26/08/05 0% 4.45

10 NORD/LB deposit 22/03/05 4.50% 4.08




3.66% 5.04% - 4.67%




CONTACT INFORMATION

2004 2003 2002

Performance 3.66% 6.55% 0.00%

Fund’s assets 329,633 206,261 201,540

Net asset value 11.05 10.65 10.00

Fixed income fund


INVESTMENT STRATEGY

The objective of the open-end investment fund

"Naudas Tirgus Fonds" is to achieve continuous

growth of value of the capital over a short period

of time in compliance with the investment policy

and restrictions set by the Fund Prospectus.

Investment into the Fund might be considered as

an alternative to short-term deposits with banks.

The property of the Fund is invested only in debt

securities (promissory notes and bonds issued

or guaranteed by the state, municipalities and

central banks, as well as promissory notes and

bonds issued by financial institutions and other

companies) and in term deposits with banks.

The property of the Fund is invested only in

securities of issuers from the Baltic States and

OECD countries

AIF Naudas Tirgus Fonds(Money Market Fund)

Asset management company: AS IPS “Hansa Fondi”

Fund type open-end

Base currency: LVL

Net asset value 31.12.04: 1214.49



Ticker: NATFR

ISIN: LV0000400018

Management fee: 0.80% (0.6%)

Subscription fee: -

Redemption fee: -

Performance of Money Market Fund (NAV per unit, since inception)

1 220

19-11-04

1 2001 1801 1601 1401 1201 1001 0801 0601 0401 0201 000

19-11-99 19-11-00 19-11-01 19-11-02 19-11-03

LVL

Portfolio breakdown by maturity as of 31.12.2004

> 1 year 7.82%

6-12 months 25.92%

3-6 months 15.77%

< 3 months 50.49%



Name % of Fund

1 Term deposit in Hansabanka 17.80

2 LR 5-year bonds 24/03/05 15.70

3 LR 1-year bills 22/04/05 10.15

4 Unibanka bond 28/01/05 8.98

5 LR 12-months bills 07/10/05 7.15

6 Nord/LB Latvia bond 04/12/06 4.08

7 LR 6-months bills 17/12/04 4.01

8 LR 12-months bills 08/07/05 4.01

9 LR 6-months bills 04/02/05 2.44

10 LR 12-months bills 26/08/05 2.39




3.06% 2.97 % 3.26 % 3.82 %

Fund manager: Raimonds VesersAddress: Balasta dambis 1a, Riga LV-1048, LatvijaPhone: +371 7444150Fax: +371 7444400E-mail: [email protected]: www.hansafondi.lv

Distributor: AS “Hansabanka”Address: Kaļķu iela 26, Rīga, LV-1050, LatvijaPhone: +371 7444142Fax: +371 7444400E-mail: [email protected]

CONTACT INFORMATION

2004 2003 2002 2001 2000 1999

Performance 3.06% 2.94% 4.17% 5.54% 3.40%

Fund’s assets 12 277 078.25 10 204 849.97 3 619 331.26 2 289 553.86 752 440.81 149 364.54

Net asset value 1 214.49 1 178.38 1 144.74 1 098.93 1 041.20 1 007.00

Money market fund


INVESTMENT STRATEGY

Lat Reserve Fund is an open-end money market

mutual fund, which combines the characteristics

of the Current Account, the Short-term Account

and the Open-ended Deposit Account, but has

higher liquidity than the deposit accounts and

may yield a higher return.

Objective of the fund is to provide investors

with a low risk investment vehicle.

The fund invests in highly liquid and low

risk government and corporate fixed income

securities issued by governments and

corporations, and short-term bank deposits.

Latu rezerves fonds(The Lat Reserve Fund)

Asset management company: Joint stock investmentmanagement company “SEB Unifondi”

Fund type open-end

Base currency: LVL

Net asset value 31.12.2004: 1.09284



Ticker: LARFR

ISIN: LV0000400067


Subscription fee: 0.00%

Redemption fee: 0.00%

Performance of Lat Reserve Fund (NAV per unit, since inception)

31.12.01 30.06.02 31.12.02 30.06.03 31.12.03 30.06.04 31.12.04

1.00

1.02

1.04

1.06

1.08

1.10

LVL

Portfolio breakdown by investmentinstruments as of 31.12.2004

1-2 year 6.27%

6-12 months 12.79%

3-6 months 24.06%

< 3 months 53.85%

Portfolio breakdown by maturity asof 31.12.2004

>2 year 3.03%

Government bondsand bills 42.91%

Bank deposits 43.74%

Corporate bonds 3.76%

Motgage bonds 9.59%



Name % of Fund

1 Republic of Latvia T-bill 22/04/2005 14.89

2 Deposit 03/01/2005 (Unibanka of Latvia) 12.86

3 Mortgage and Land Bank of Latvia Bond 15/02/2005 7.78


5 Republic of Latvia Bond 26/01/2006 6.03

6 Deposit 07/01/2005 (Unibanka of Latvia) 6.02


8 Deposit 22/02/2005 (Sampo Bank) 4.83

9 Deposit 16/03/2005 (Mortgage and Land Bank of Latvia) 4.23


Fund’s performance in base currency (LVL)

Fund’s annualized performance in base currency (LVL)


2.98% 2.92% - 3.17%

Fund manager: Normunds IgolnieksAddress: “Unicentrs”, Ķekavas pag., Rīgas raj., LV-1076, LatvijaPhone: +371 7779925, +371 7770218Fax: +371 7215386E-mail: [email protected]: http://www.sebfondi.lv

Distributor: AS SEB Latvijas UnibankaAddress: “Unicentrs”, Ķekavas pag., Rīgas raj., LV-1076, LatvijaPhone: +371 7215631Fax: +371 7215531E-mail: [email protected]

CONTACT INFORMATION

2004 2003 2002

Performance 2.98% 2.86% -

Fund’s assets 1 662 820 1 304 558 1 160 578

Net asset value 1.09284 1.06072 1.03085

Money market fund


INVESTMENT STRATEGY

The objective of the closed-end investment fund

is to ensure long-term capital gains by investing

in real estate in Latvia and other Baltic countries,

taking advantage of real estate market

development potential. Fund assets will be

invested mainly in the real estate, but

temporarily available cash will be invested in

fixed income securities in order to gain additional

income.

The Real Estate Fund will invest in properties

with positive cash flow, in new developments,

as well as in properties with a predictable

increase of value.

Nekustamā īpašuma fonds(The Real Estate Fund)

Asset management company: Joint stock investmentmanagement company “SEB Unifondi”

Fund type closed-end

Base currency: USD

Net asset value 31.12.2004: 1.06841

Inception date*: 02.08.2002


Ticker: NIPFR

ISIN: LV0000400083



Redemption fee: 0.00%

* Restructuring: on 15.07.2004. distribution of a second issue of fund shares began. The fund prospectus was amended at the

same time. Until 15.07.2004. the size of the fund was relatively small and no investments were made.

30.06.2002 31.12.2002 30.06.2003 31.12.2003 30.06.2004 31.12.20040.98

1.00

1.02

1.04

1.06

1.08

Performance of the Real Estate Fund (NAV per unit, since inception)

USD

Portfolio breakdown by investment instruments as of 31.12.2004

Government bonds 24.69%

Mortgage bonds 23.96%

Cash 27.95%

Real estate 23.40%


Top holdings as of 31.12.2004

Name % of Fund

1 Cash 27.95

2 Republic of Latvia Bond 24/03/2005 24.69

3 Mortgage and Land Bank of Latvia Bond 15/08/2008 23.96

4 Real Estate, Land Strēļi 23.40

Fund’s performance in base currency (USD)

Fund’s annualized performance in base currency (USD)

1-year 2-year 3-year Since Restructuring

- - - 11.84%

Fund manager: Normunds IgolnieksAddress: “Unicentrs”, Ķekavas pag., Rīgas raj., LV-1076, LatvijaPhone: +371 7779925, +371 7770218Fax: +371 7215386E-mail: [email protected]: http://www.sebfondi.lv

Distributor: AS SEB Latvijas UnibankaAddress: “Unicentrs”, Ķekavas pag., Rīgas raj., LV-1076, LatvijaPhone: +371 7215631Fax: +371 7215531E-mail: [email protected]

CONTACT INFORMATION

2004 2003 2002

Performance - - -

Fund’s assets 2 360 433 202 291 200 450

Net asset value 1.06841 1.00876 1.00004

Real estate fund


INVESTMENT STRATEGY

The investment objective of the Fund is to

maximise total return, through of a combination

of rental income and capital appreciation by

investing in residential, commercial, retail

property and other real estate objects in the Baltic

countries. Changes in real estate values or

economic conditions can have a positive or

negative effect on return.

Parex Baltijas Nekustamā Īpašuma fonds(Parex Baltic Real Estate fund)


Fund type closed-end

Base currency: USD




Ticker: BNIFR

ISIN: LV0000400117



USD LIBOR + 3%


Redemption fee: 0%

Performance of Parex Baltic Real Estate fund (NAV per unit, since inception)

9.00

9.50

10.00

10.50

11.00

11.50

12.00

01-Jun-03 01-Sep-03 01-Dec-03 01-Mar-04 01-Jun-04 01-Sep-04 01-Dec-04

USD

Real estate breakdown as of 31.12.2004

Land plot 63.86%

Commercial property 5.69%

Residential property 30.45%


Fund’s holdings as aof 31.12.2004

Real Estate location % of Fund

1 Land plot, Riga, Raņķa dambis 11.91

2 Ground area, district Riga, Garkalne (near Lake Baltezers) 7.77

3 Residential property and Land plot, Riga, Mežaparks, Lībekas street 6.76

4 Land plot, district Riga, Mārupe 6.48

5 Residential property and Land plot, Riga, Mežaparks, Līgatnes street 6.17

6 Land plot, Riga, Krustpils street 3.52

7 Commercial property, Riga, Tallinas street 2.64

8 Residential property, Riga, Kalnciema street 1.23




12.51% - - 9.48%




CONTACT INFORMATION

2004 2003

Performance 12.09% -

Fund’s assets 9,822,179 8,467,585


Real estate fund


INVESTMENT STRATEGY

The fund maintains a moderate to conservative

risk approach. Up to 30% of the fund’s holdings

may be invested in equities, and the rest in fixed

income instruments. Geographical focus of the

fund is around Baltic Sea region countries, such

as Sweden, Finland, Latvia, Estonia, Russia, etc.

fund manager utilizes its extensive competence

in the area.

Parex Baltijas Jūras Sabalansētais fonds(Parex Baltic Sea Balanced fund)


Fund type open-end

Base currency: LVL




Ticker: PBSFR

ISIN: LV0000400109



Redemption fee: 0%

17-O

ct

17-D

ec

17-F

eb

17-A

pr

17-J

un

17-A

ug

17-O

ct

17-D

ec

17-F

eb

17-A

pr

17-J

un

17-A

ug

17-O

ct

17-D

ec

9.50

10.00

10.50

11.00

11.50

12.00

12.50

Performance of Parex Baltic Sea Balanced fund (NAV per unit, since inception)

LVL


Latvia 42.79%Russia 28.44%

EU ex. Latvia 24.99% Others 3.78%






9.61% 9.80% - 9.28%




CONTACT INFORMATION

2004 2003 2002

Performance 9.61% 10.18% 0.40%

Fund’s assets 1,782,881 749,200 270,760

Net asset value 12.14 11.06 10.04

Balanced fund

Name % of Fund

1 Latvia 14/02/13 5.125% 4.78

2 Gazprom 27/09/10 7.80% 4.51

3 City of Moscow 12/10/11 6.45% 4.26

4 LHZB Mortgage bonds 15/08/08 4.75% 3.42

5 PGNIG Finance 30/10/06 6.75% 2.96

6 WEST LB 09/06/08 4.18% 2.81

7 Parex banka deposit 25/11/05 4.30% 2.80

8 Latvia 08/05/07 5.625% 2.64

9 Latvia 26/01/06 8.125% 2.36

10 Parex Baltijas Juras Akciju fonds 2.30


INVESTMENT STRATEGY

The investment objective of the fund is to

achieve long-term capital growth by investing

mainly in debt and equity securities

issued or guaranteed by the governments,

municipalities, central banks and credit

institutions, as well as in debt and equity

securities issued by corporates in the Eastern

European countries.

Parex Austrumeiropas Sabalansētais fonds(Parex Eastern European Balanced fund)


Fund type open-end

Base currency: EUR




Ticker: PASFR

ISIN: LV0000400174



EUR LIBOR + 3%


Redemption fee: 0%

Performance of Parex Eastern European Balanced fund (NAV per unit, since inception)

Oct

-03

Nov

-03

Dec

-03

Jan-

04

Feb-

04

Mar

-04

Apr

-04

May

-04

Jun-

04

Jul-

04

Aug

-04

Sep-

04

Oct

-04

Nov

-04

Dec

-04

9.809.90

10.0010.1010.2010.3010.4010.5010.6010.7010.8010.9011.00EUR


Russia 28.82%

Latvia 21.38%

EU ex. Latvia 18.87%Romania 10.64%

Others 8.94%

Ukraine 5.92%

Kazakhstan 5.43%



Name % of Fund

1 CFR Marfa 10/12/07 10.50% 4.26

2 City of Moscow 12/10/11 6.45% 3.96

3 City of Moscow 28/04/06 10.95% 3.75

4 PGNIG Finance 30/10/06 6.75% 3.15

5 SNP Petrom 02/10/06 11.625% 2.84

6 Gazprom 27/09/10 7.80% 2.79

7 Croatian Bank Rec.&Dev. 11/02/11 4.875% 2.68

8 Romania 02/07/10 5.75% 2.60

9 MTS 19/11/09 5.00% 2.57

10 Ukraine 15/03/07 10.00% 2.44




8.07% - - 6.50%




CONTACT INFORMATION

2004 2003

Performance 8.07% -0.10%

Fund’s assets 4,070,211 693,871


Balanced fund


Corporate debt securities and mortgage bonds

050

100150

200250300350400450

31-12-0231-12-0131-12-00 31-12-03 31-12-04

225.91257.86 293.20

375.83425.71

0

20

40

60

80

100

120

140

31-12-0231-12-0131-12-00 31-12-03 31-12-04

47.11 48.24

71.89

132.95117.35

Government debt securities

Bonds

Alongside with equities trading, fixed income

instrument market has a significant role in the

Latvian capital market. The total value of listed

fixed income instruments at the end of 2004 was

EUR 660 million, and the total trading volume

in secondary market was EUR 157 million.

Latvian Government continued to build the most

active issuer in the Latvian Bond market: the

value of the Government Treasury bills and bonds

listed on the Riga Stock Exchange was EUR 580

million. Latvijas Hipotēku un zemes banka is the

leading issuer of mortgage bonds. At the end of

the year mortgage bonds of 11 series, offering a

variety of maturities, the longest being 10 years,

with aggregate face value over EUR 70 million

were available in the market. Latvijas Hipotēku

un zemes banka is using the Riga Stock Exchange

infrastructure for primary placement for the new

mortgage bond issues.

Latvijas Unibanka and Nordic Investment Bank

(NIB) are two other corporate bond issuers. As

to the latter, this is already the second issue of

Nordic Investment Bank lat-denominated bonds

in Latvia (the previous matured in September of

2002).

Year 2004 was remarkable for bringing in two

new actors in the Latvian mortgage bond market.

Baltic Trust Bank issued two series of mortgage

bonds – in LVL and in USD; both were listed on

the Baltic bond list at the end of the year. At the

very end of the year one more bond issuer joined

the market – Akciju komercbanka “Baltikums”

issued corporate notes, listed early in 2005. The

past year also brought a novelty in the Latvian

capital market: since March, the listing an

trading in other currencies, namely, USD and

EUR, has been made possible.

8.00 16.00 21.6029.00

45.63

Corporate debt securities Mortgage bonds

Value of debt securities registered at the LCD (LVL million)


Sector overview

Specifications of the debt instruments traded on the Riga Stock Exchange as of 31-12-2004

Type of security ISIN code Trading Currency Maturity Coupon close best close best Nominal valuecode (%) bid bid

(dirty) (yield, %)

Latvian Government bills and bonds

LV0000532067 LVGT000005E LVL 4-02-05 99.73 3.2488 4,420,000.00

5-year T-bond LV0000570018 LVGB091205 LVL 24-03-05 9.12 103.81 3.3189 61,060,000.00

12M T-bill LV0000540763 LVGT000005A LVL 22-04-05 99.05 3.2269 6,300,000.00

6M T-bills LV0000532075 LVGT000005G LVL 22-04-05 99.05 3.2269 5,000,000.00

12M T-bill LV0000540771 LVGT000005B LVL 3-06-05 98.69 3.2071 10,000,000.00

6M T-bills LV0000532083 LVGT000005H LVL 17-06-05 98.56 3.2268 4,120,000.00

12M T-bill LV0000540789 LVGT000005C LVL 8-07-05 98.38 3.2218 10,000,000.00

12M T-bill LV0000540797 LVGT000005D LVL 26-08-05 97.95 3.2337 10,000,000.00

12M T-bill LV0000540805 LVGT000005F LVL 7-10-05 97.48 3.3842 8,650,000.00






Latvijas Hipotēku un zemes banka mortgage bonds

AF LV0000800076 LMBB085005 LVL 15-02-05 8.50 103.8749 3.2711 1,000,000.00

AD LV0000800126 LMBB065006 LVL 15-08-06 6.50 106.3856 4.0001 3,000,000.00

AG LV0000800092 LMBB075007 LVL 15-08-07 7.50 106.6773 5.9205 3,000,000.00

AI LV0000800118 LMBB070008 LVL 15-08-08 7.00 107.57 5.499 2,000,000.00

AJ LV0000800167 LMBBFLOT08 LVL 15-08-08 4.75 101.8472 4.7485 3,000,000.00

AK LV0000800183 LMBBFLOT09 LVL 15-08-09 4.75 101.8472 4.7488 3,000,000.00

AH LV0000800100 LMBB075011 LVL 15-08-11 7.50 104.2 7.25 1,150,000.00

BA LV0000800217 LMBBFLOT11 USD 15-08-11 2.65 101.0354 2.6247 10,000,000.00

AL LV0000800142 LMBB060012 LVL 15-08-12 6.00 106.0307 5.4001 5,000,000.00

AM LV0000800159 LMBB052513 LVL 15-08-13 5.25 102.0358 5.2501 3,862,400.00

BB LV0000800241 LMBBFLOT14 USD 15-08-14 3.00 101.1833 2.9997 15,000,000.00

Baltic Trust Bank mortgage bonds

3-year LVL LV0000800233 BTBBFLOT07 LVL 1-12-07 5.75 100.54 5.6971 1,745,000.00

5-year USD LV0000800225 BTBBFLOT09 USD 1-12-09 3.75 100.225 3.7321 700,000.00

Corporate bonds

Latvijas Unibanka LV0000800134 UNOB065005 LVL 28-01-05 6.50 103.02 3.5211 9,946,000.00

Nordic Investment Bank LV0000800175 NIBB042507 LVL 25-07-07 4.25 102.4884 4.0001 5,000,000.00


Government Treasury bills and bonds serve as

domestic borrowing instrument. Public debt

market in Latvia started back in 1993 when the

first government debt securities were issued.

The issuing volumes depend on the current

Government borrowing policies, the status of

the budget, the refinancing needs of public

debt, and the liquidity of public finances. The

issuer, on behalf of the Government, is State

Treasury. Latvian Government debt securities

are classified according to their maturity: T-

bills (maturing in 12 months or sooner; sold at

a discount); medium-term T-bonds (maturing

in 3-5 years); long-term T-bonds (maturing after

5 years). The latter are coupon bonds, the

coupon payment scheduled, typically, on semi-

annual basis for medium-term bonds and on

annual basis for long-term bonds.

In primary market the bidders for government

debt paper may participate in two types of

auctions:

• Competitive multi-price auctions (run jointly

by Bank of Latvia and State Treasury): the

bidders specify the amount they are bidding

for as well as the discount/yield rate. Only

banks are admitted to bidding. The bids are

filled in starting with the lowest rates bid.

• Non-competitive fixed rate auctions (run

jointly by the Latvian Central Depository

and State Treasury): this is a novelty since

2002. Banks as well as brokerage companies

that are the LCD participants may bid either

on own or clients’ behalf - owing to

facilitated accessibility, this expands the

investor base for government fixed rate

instruments. The bids should specify only

the number of securities. As a result of the

auction, the securities are allocated in

proportion to the number bid.

A typical breakdown between the number of

securities allotted for the competitive multiple-

price auction and non-competitive fixed price

auction is 80% : 20%.

A project has been started to replace the

primary auctions for Latvian Government

domestic securities from the Bank of Latvia

and Latvian Central Depository to Riga Stock

Exchange(trading via SAXESS system

In 2004 Treasury continued to run new long-

term domestic instrument programs by offering

new 10 year T-bond. Also 6 and 12 month T-bills

were offered to the domestic market. In order

to cover government's funding requirement in

2005 Treasury is planning to run a new 5 year

T-bond program as well as aiming on short

term securities auctions. As lat is re-pegged to

the euro currency Treasury is considering to

change the funding strategy by concentrating

on borrowings in euro market and shortening

domestic issues. The Treasury is in process of

changing the regulations on issuing Latvian

Government domestic securities. Tap issues,

buy-backs, switches (T-bond exchange

programs) are under consideration.

Latvian Central Depository is primary

depository for all Government debt securities;

secondary market is run on the infrastructure

provided by the Riga Stock Exchange.

Government debt securities may be used for

monetary operations in Bank of Latvia.

Government Treasury bills and bonds


Central Government domestic/external debt, total, % of GDP, 2000 - 2004

Type of Nominalsecurity value, LVL

6 month T-bill 20,225,000

12 month T-bill 55,114,000

3 year T-bonds 15, 993,900

5 year T-bonds 208, 296, 600

10 year T-bonds 126, 075,900

Total outstanding 425, 705,400

Latvian Government domestic securities outstanding as of 31.12.2004

2000 2001 2002 2003 2004

Domestic Debt 222.9 256 291.6 426.7 423

External Debt 348 456.9 464.5 419.6 552.3

Total debt 570.9 712.9 756.1 846.3 975.3

Total Debt in % of GDP 12.2% 13.8% 13.3% 13.4% 13.4%

6 month T-bils 5%

12 month T-bils 13%

3 year T-bonds 4%

5 year T-bonds 48%

10 year T-bonds 30%

11.0%

11.5%

12.0%

12.5%

13.0%

13.5%

14.0%

0

100

200

300

400

500

600

200220012000 2003 2004

in annual terms, % of GDPLVL millions

Domestic debt External debt Total debt in % of GDP Note: 2004 - preliminary

Latvian Government treasury bills and bonds yield (average, by time to maturity)

Yield, %

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

6

5

4

3

2

less then 3 years to maturity 3

over 3 year maturity

0-12 months to maturity

1-2 years maturity


Latvijas Hipotēku un zemes banka

COMPANY IN BRIEF

The Mortgage and Land Bank of Latvia (Mortgage

Bank) was established in 1993 and is fully state-

owned. In line with the development concept of

Mortgage Bank till the year 2005 approved by

the government the Bank plans to continue with

the activities promoting development of

the national economy - lending to the small

and medium-sized enterprises, granting of

mortgage loans and issuing of mortgage bonds.

Parallel to the function of a development bank,

Mortgage Bank offers financial services all over

Latvia, such as loans, settlement services, cash

deposits, transactions with currency and

securities and also services related to the

privatisation process.

Government of the Republic of Latvia (100%)

The Mortgage Bank was the first bank in Latvia

to start mortgage lending in the traditional sense

of the word i.e. granting of long-term loans

against the collateral of real estate. As at the end

of the year 2004 the Mortgage Bank had issued

mortgage bonds for 37,912 thousand lats. There

are 11 series of mortgage bonds denominated in

Latvian lats and US dollars in circulation. The

mortgage bonds issued by Mortgage Bank have

acquired their place in the financial market. The

investors trust the Mortgage Bank as the issuer

and the issued mortgage bonds as a safe and

profitable financial instrument. The mortgage

bonds issued by Mortgage Bank are listed on the

Riga Stock Exchange Bond list.

MOR TGAGE BONDS

name LMBB052513 LMBB060012 LMBB065006 LMBB085005

ISIN LV0000800159 LV0000800142 LV0000800126 LV0000800076

listing date 1-12-03 28-10-02 18-02-02 24-05-00

number of bonds outstanding 38,624 50,000 30,000 10,000

currency LVL LVL LVL LVL

nominal value 100 100 100 100

issue value 3,862,400 5,000,000 3,000,000 1,000,000

maturity date 15-08-13 15-08-12 15-08-06 15-02-05

coupon rate % 5.25 6 6.5 8.5

SUBSTANTIAL SHAREHOLDERS


Investor relations contact: Gints Henkels Jānis Strubergs

Address: Doma laukums 4, Rīga, Doma laukums 4, Rīga,

LV-1977, Latvija LV-1978, Latvija

Telephone: +371 7774050 +371 7774247

Fax: +371 7820143 +371 7820144

E-mail: [email protected] [email protected]

Internet home page: www.hipo.lv

CONTACT INFORMATION

name LMBB075007 LMBB070008 LMBBFLOT08 LMBBFLOT09

ISIN LV0000800092 LV0000800118 LV0000800167 LV0000800183

listing date 2-01-01 18-02-02 16-06-03 30-12-03

number of bonds outstanding 30000 20,000 30,000 30,000

currency LVL LVL LVL LVL

nominal value 100 100 100 100

issue value 3,000,000 2,000,000 3,000,000 3,000,000

maturity date 15-08-07 15-08-08 15-08-08 15-08-09

coupon rate % 7.5 7 4.75 4.75(6-month (6-month

RIGIBOR+0.5%) RIGIBOR+0.5%)

name LMBB075011 LMBBFLOT11 LMBBFLOT14

ISIN LV0000800100 LV0000800217 LV0000800241

listing date 5-11-01 30-08-04 10-12-04

number of bonds outstanding 11,500 100,000 150,000

currency LVL USD USD

nominal value 100 100 100

issue value 1,150,000 10,000,000 10,000,000

maturity date 15-08-11 15-08-11 15-08-14

coupon rate % 7.5 2.65 3(6-month (6-month

LIBOR+0.8%) LIBOR+0.7%)

Core business: banking

Latvijas Hipotēku un zemes banka

31.12.2003 30.09.2004


FINANCIAL INFORMATION (bank only)

Balance sheet (LVL thousand)

Assets

Cash and balances with Central Bank 7,293 12,579

Fixed income securities 10,543 11,166

Due from credit institutions 15,274 5,325

Loans to customers 188,774 253,807

Equity securities available for sale 18 23

Investments in subsidiaries and associated entities 344 430

Intangible assets 909 1,283

Fixed assets 6,827 7,386

Other assets 638 725

Prepayments and accrued income 1,562 1,910

Total assets 232,182 294,634

Liabilities

Due to Central Bank - 3,293

Due to credit institutions 40,218 65,074

Customer deposits 128,363 149,778

Transit funds 4,158 3,489

Mortgage bonds 22,846 29,895

Other liabilities 1,259 531

Provisions and accrued expense 2,479 3,756

Deferred tax liabilities 500 563

Subordinated liabilities 8,300 13,300

Total liabilities 208,123 269,679

Shareholder’s equity

Share capital 20,058 22,820

Reserve capital 3,576 814

Retained earnings 425 1,321

Total shareholder’s equity 24,059 24,955

Total liabilities and shareholder’s equity 232,182 294,634

Off balance sheet itemsContingent liabilities 1,180 2,022Financial commitments 10,903 13,925



Auditors: PricewaterhouseCoopers SIA

31.12.2003 30.09.2004

Profit/loss statement (LVL thousand)

Interest income 15,434 13,175

Interest expense (6,993) (6,256)

Net interest income 8,441 6,919

Fee and commission income 2,705 2,548

Fee and commission expense (312) (281)

Net commission and fee income 2,393 2,267

Result from dealing with securities and foreign exchange 696 566

Other operating income 1,759 1,515

Operating income 13,289 11,267

Staff costs (4,641) (3,862)

Administrative expenses (4,097) (3,567)

Depreciation and amortisation (1,258) (1,192)

Profit/(loss) from revaluation of long-term investments -58 88

Operating expenses (10,054) (8,533)

Provision for impairment losses (1,424) (1,121)

Profit before income tax 1,811 1,613

Income tax expense (237) (292)

Net profit for the period 1,574 1,321

ROE 7.02% 7.49%

ROA 0.78% 0.67%


Baltic Trust Bank

COMPANY IN BRIEF

JSC "BALTIC TRUST BANK" ("BTB") is a universal

bank operating in Latvia and offering a wide

range of retail and corporate products through

a wide on-line network of branches, retail

agencies, ATMs and Internet-banking system.

BTB is an active trading member of the Riga

Stock Exchange. BTB is the first private-owned

bank in Latvia that has issued mortgage-covered

bonds. BTB is a principal member of VISA,

Europay and SWIFT.

SIA "Finstar Baltic Investments" 49.76%

JSC "Corowo Invest AG" 22.60%

Andrejs Nilovs 7.52%

Davids Taurinsh 7.41%

Edgars Dubra 7.40%

In 2005 the Bank is planning to proceed with

more issues of medium term LVL/EUR

denominated bonds. The bonds cover consists

of private mortgages and obligations,

guaranteed by Latvian municipalities.


MOR TGAGE BONDS

Baltic Trust Bank Baltic Trust Bank3YR LVL mortgage bonds 5 USD mortgage bonds

name/trading code BTBBFLOT07 BTBBFLOT09

ISIN LV0000800233 LV0000800225

listing date 7-12-04 7-12-04

number of bonds outstanding 17450 7000

currency LVL USD

nominal value 100 100

issue value 1745000 700000

maturity date 1-12-07 1-12-09

coupon rate RIGIBOR 6M + 1.25% USD LIBOR 6M + 1.25%


Investor relations contact: Uldis Zandars

Address: 13. janvāra iela 3, Rīga LV-1050, Latvija

Telephone: +371 7024784

Fax: +371 7211 985

E-mail: [email protected]

Internet home page: www.btb.lv

CONTACT INFORMATION



Baltic Trust Bank

FINANCIAL INFORMATION

Balance sheet (LVL)

2003 2004 non-audited

Assets

Cash and placements with Bank of Latvia 9,665,897 21,934,000

Placements with banks 69,124,118 76,018,180

Loans 64,132,740 71,174,951

Fixed income securities 9,167,096 12,889,313

Non-fixed income securities 1,019,678 573,328

Investment in associated companies 0 0

Investment in related companies 147,534 21,150,795

Derivatives 72,605 20,556

Intangible assets 934,207 971,630

Fixed assets 5,562,974 6,207,756

Other assets 398,361 1,071,056

Accrued income and future expenses 560,017 -

Total assets 160,785,227 193,011,565

Liabilities and equity capacity

Liabilities to other banks 37,010,015 15,373,806

Deposits 106,834,211 151,769,108

Debt securities issued 0 1,951,400

Derivatives 116,356 26,589

Other liabilities 4,790,301 5,154,960

Accrued expenses and future income 772,366

Provisions 319,264

Subordinated debt 0 5,000,000

Capital and reserves 10,942,714 13,735,702

Total capital and liabilities 160,785,227 193,011,565

Trust assets 0 1,406,000

Commitments 653,104 3,529,583

Future liabilities to clients 4,439,175 3,257,103


Auditors: Deloitte & Touche


2003 2004 non-audited

Interest income 5,839,554 6,714,206

Interest expenses -2,293,034 -2,823,878

Net interest income 3,546,520 3,890,328

Fee income 3,512,459 4,168,899

Fee expenses -596,891 -813,258

Financial instruments trade income 1,849,345 3,071,427

Financial instruments revaluation income 1,152 37,986

Total financial activities income 8,312,585 10,355,383Other Income 731,813 606,779

Administrative expenses -5,820,863 -6,360,390

Intangible and fixed assets depreciation -1,014,722 -1,148,226

Other expenses -165,542 -54,943

Expenses on provisions -273,758 -238,307

Provisions reversal income 243,197 117,917

Profit 2,012,710 3,278,213Extraordinary income 16,610 4,194

Extraordinary expenses - -40,626

Pre-tax net profit 2,029,320 3,241,781

Taxes -199,262 -401,830

Net profit 1,830,058 2,839,951

ROE 20% 26%

ROA 1.40% 1.70%

Profit/loss statement (LVL)


Akciju komercbanka “Baltikums”

COMPANY IN BRIEF

Akciju komercbanka “Baltikums” is one of the

youngest private commercial banks in Latvia.

Akciju komercbanka “Baltikums”, operating

since June 2001, is 100% owned by JSC

“Baltikums bankas grupa”.

Akciju komercbanka “Baltikums” offers a wide

range of banking services. The Bank has

specialized in servicing export and import

operations, trade finance and provide

investment management services.

Geographically the main Akciju komercbanka

“Baltikums” markets are the Baltic states as

well as Central and Eastern European countries.

The priority in client financing for Akciju

komercbanka “Baltikums” is trade finance as

well as lending to transit and shipping

companies. In the future, the Bank will continue

to fortify its positions in these market segments

using the broad experience of the Bank’s

management in executing trade finance

projects and collaboration with JSC “Kompass

Grupa”, which has its main activities in cargo

forwarding, cargo expedition and ship agency.

In the area of trade finance the Bank mostly

finances trade transactions with cotton, grain,

metal and sugar. In partnership with other

specialized companies, Akciju komercbanka

“Baltikums” offers export and pre-export

financing services.

Akciju komercbanka “Baltikums” has two

subsidiaries: IPAS “Baltikums Asset

Management’’ (main activity is management

of investment funds, pension funds, state

funded pension plans and portfolios of

individual investors) and SIA “Baltikums

Līzings’’ (leasing operations), as well as an

equity investment in AS “Atklātais Pensiju

Fonds Baltikums’’ (services for pension capital

savings and establishment of pension plans for

private pension funds).

JSC "Baltikums bankas Grupa " 100.00%

Akciju komercbanka “Baltikums” is seriously

planning to develop its long-term financing

program necessary for extending the

successfully started trade finance and shipping

finance. The public offering of notes is the first

step in this direction. As a result,

Akciju komercbanka “Baltikums” will improve

the term structure of its balance sheet and will

decrease its dependence on non-resident

deposits. In the coming 3 years,

Akciju komercbanka “Baltikums” expects to

use equity, publicly issued debt securities and

inter-bank loans as the major sources of

financing.



Investor relations contact: Tatjana Gaivoronska

Address: Mazā Pils iela 13, Rīga, LV-1050, Latvija

Telephone: +371 7031311

Fax: +371 7031300


Internet home page: www.baltikums.lv

CONTACT INFORMATION

CORPORATE NOTES

name BABBFLOT06

ISIN LV0000800258

listing date 4-01-05

number of notes outstanding 38,555

currency EUR

nominal value 100

issue value 3,855,500.00

maturity date 29-12-06

coupon rate 6-month EURIBOR + 3.5%



Akciju komercbanka “Baltikums”

2003 2004 9 months non-audited

Assets

Cash and balances with the Bank of Latvia 742 1 350

Due from credit institutions 6 147 12 375

Loans 14 911 13 227

Fixed income securities 6 519 7 125

Shares and other non-fixed income securities available for sale 13 13

Investments in associated entities 9 9

Investments in subsidiaries 499 499

Derivatives - 3

Intangible assets 92 83

Fixed assets 1 130 1 102

Other assets 256 165

Prepayments and accrued income 258 248

Total assets 30 576 36 199

Assets under management 6 572 4 500

Liabilities and equity

Due to credit institutions and the Bank of Latvia 12 386 18 527

Customers’ deposits 12 291 11 910

Other liabilities 378 263

Deferred income and accrued expenses 30 27

Provisions 26 20

Total liabilities 25 111 30 747

Shareholders’ equity and reserves

Share capital 5 100 5 100

Reserve capital and other reserves 17 17

Retained earnings 41 48

Profit for the year 307 287

Total shareholders’ equity and reserves 5 465 5 452Total liabilities and equity 30 576 36 199Liabilities under management 6 572 4 500

Off-balance itemsContingent liabilities 136 88

Other off-balance commitments 5 070 4 681

Total off-balance items 5 206 4 769





Auditors: KPMG Latvia SIA

2003 2004 9 months non-audited

Interest income 1 292 1 027

Interest expense -459 -293Net interest income 833 734Fees and commission income 472 382

Fees and commission expense -115 -88Net fee and commission income 357 294Result from operations with securities and foreign exchange 104 118

Other operating income 78 22Operating income 1 372 1 168Administrative expenses -956 -806

Depreciation and amortization -74 -62

Provisions for doubtful debts and off-balance sheet items -10 -

Other operating expenses -16 -13Total operating expenses -1 056 -881Profit before tax 316 287Corporate income tax -9 -Profit after tax 307 287

ROAA, return on average assets 1.26% 1.15%

ROAE, return on average equity 6.10% 7.10%



Nordic Investment Bank

COMPANY IN BRIEF

The Nordic Investment Bank (NIB) was

established in 1975. Signatories of the

establishing agreement were the governments

of Denmark, Finland, Iceland, Norway, and

Sweden. Estonia, Latvia and Lithuania joined

NIB in the beginning of 2005. NIB is a multilateral

financial institution providing medium and long-

term loans and guarantees. NIB finances public

and private projects, both in and outside the

member countries. High priority is given to

investments furthering economic cooperation

between the member countries. NIB's provision

of credits is highly suited to investments that

secure energy supplies, improve infrastructure

or support research and development. Loans and

guarantees are granted on market terms. NIB

acquires the funds to finance its lending by

borrowing on the international capital market.

Sweden 37%

Denmark 21%

Finland 19%

Norway 20%

Iceland 1%

Latvia 1%

Estonia 1%

Lithuania 2%

NIB's supra national status and AAA/Aaa rating

makes the Bank a strong credit in any currency.

This has resulted in NIB having outstanding

debt in 34 different currencies. NIB has been

active in all the established currencies including

Nordic currencies, EEK, LAT, USD, EUR, GBP,

JPY and HKD. To broaden its funding base, NIB

also actively studies possibilities and issues in

emerging and developing markets, for example

in Eastern Europe and Asia. To maintain a

dialogue with investors and to find out the

investors requirements and preferences, NIB

actively carries out investor presentations and

one-to-one meetings.

NIB's asset and liability methods and risk

management tools enable the Bank to issue in

different currencies, structures, maturities and

amounts. Issues are mainly documented under

existing debt programmes but, when required,

this can also be done with stand-alone

documentation.

NIB has a small, efficient and dedicated team

that enables NIB to respond very quickly to

funding proposals from both investors and

arrangers. This also secures timely and smooth

execution of all deals.

NIB strives to maintain the highest possible

credit rating. For this purpose, which is central

to the Bank's operational concept, the Bank aims

to be at the cutting edge in terms of financial

risk management and cost effectiveness.



Investor relations contact: Kari Kukka, Head of Funding, Vice president

Address: PO Box 249, 00171 Helsinki, Finland

Telephone: +358 9 1800 464

Fax: +358 9 1800 309


Internet home page: www.nib.int

CONTACT INFORMATION

CORPORATE BONDS


NIB bonds

name/trading code NIBB042507

ISIN LV0000800175

listing date 25-Jul-03

number of bonds outstanding 5,000

currency LVL

nominal value 1,000

issue value 5,000,000

maturity date 25-Jul-07

coupon rate 4.25%


Nordic Investment Bank

FINANCIAL INFORMATION

Balance sheet (EUR thousand)

Assets

Cash and cash equivalents 2,996,669 3,480,964Financial placementsPlacements with credit institutions 124,364 125,987Debt securities 1,254,377 1,181,193Other 8,152 8,683

1,386,893 1,315,863Loans outstanding, net after provisions 10,522,411 10,472,177Intangible assets 2,570 4,670Tangible assets 34,631 35,663Other assetsDerivatives 1,387,480 1,263,773Other assets 5,083 4,591

1,392,563 1,268,363Accrued interest and fees receivable 330,519 330,041Total assets 16,666,256 16,907,743

LiabilitiesAmounts owed to credit institutionsShort-term amounts owed to credit institutions 252,373 291,642Long-term amounts owed to credit institutions 114,364 125,911

366,738 417,554Debts evidenced by certificatesDebt securities issued 12,822,379 13,176,296Other debt 264,300 238,542

13,086,679 13,414,838Other liabilitiesDerivatives 1,266,571 1,061,421Other liabilities 15,066 6,029

1,281,638 1,067,450Accrued interest and fees payable 281,592 288,773Total liabilities 15,016,646 15,188,614

EquityAuthorised and subscribed capital 4,000,000 4,000,000of which callable capital -3,595,740 -3,595,740Paid-in capital 404,260 404,260Statutory reserve 644,983 644,983Reserve funds 439,500 549,500Other value adjustments 9,532 9,154Profit for the period 151,334 111,232Total equity 1,649,610 1,719,129Total liabilities and equity 16,666,256 16,907,743Guarantee commitments 28,572 28,443

31.08.200431.12.2003

The Nordic Investment Bank's accounts are kept in euro. On 31 August 2004,

EUR 1.00 = DKK 7.44 / ISK 87.60 / NOK 8.40 / SEK 9.13 / USD 1.21.


Auditors: Ernst & Young


Profit/loss statement (EUR thousand)

Interest income 469,341 296,709Interest expense -313,912 -187,793Net interest income 155,429 108,916

Commission income and fees received 4,876 6,454Commission expense and fees paid -1,470 -897Net profit on financial operations 14,569 9,464Foreign exchange losses -23 43Operating income 173,381 123,979

ExpensesGeneral administrative expenses 19,753 14,158Depreciation and write-down in value of tangible and intangible assets 2,600 1,936Provision for possible loan losses, reversals (-) -307 -3,348Total expenses 22,047 12,747

Profit for the period 151,334 111,232

ROE 9.5%

ROA 0.9%

31.08.200431.12.2003


Parex banka

COMPANY IN BRIEF

Parex banka was founded in 1992 as first Latvian

bank with private capital. The Bank's primary

business consists of providing corporate and

retail banking through its network across the

Baltic countries. The Bank's main areas of

operation include accepting deposits from

customers, granting short-term and long-term

loans to local municipalities, corporate

customers, private individuals and other credit

institutions, issuing and servicing payment cards

and credit cards, proprietary trading, dealing

with lease finance and foreign exchange

transactions. The Bank also offers trust

management and investment banking services

and performs local and international payments,

as well as provides a wide range of other financial

services. Parex is well known for its client loyalty

and high customer service level.

Parex considers the Baltic States of Latvia,

Estonia, and Lithuania to be its home market

and works to offer universal banking services in

these markets. Also, Parex uses its geographical

position to be involved in east-west capital and

trade flows.

As at 31 December 2004 Parex banka was the

largest commercial bank in Latvia in terms of

assets and capital and reserves. It was the largest

bank by deposits and the third largest in terms

of lending. Since its foundation, Parex banka has

operated with the profit.

As at 31 December 2003 the Bank had 103

branches and client service centers in Latvia. The

Bank has a subsidiary in Lithuania and a branch

in Estonia. The Bank also has 5 representative

offices in Frankfurt (Germany), Stockholm

(Sweden), Tokyo (Japan), Kiev (Ukraine) and

Baku (Azerbaijan) as well as a subsidiary, Parex

Group Representation Limited, in London (UK),

which operates the Bank’s representative office.

In February 2004 Parex banka completed the

purchase of the Swiss “AP Anlage und Privatbank

AG” thus becoming the first bank among the

new EU member states that has started banking

operation in Switzerland.

Valery Kargin 42.89%

Viktor Krasovitsky 42.89%

The issue of the notes was undertaken by Parex

banka as part of the funding diversification

program. In addition, it has served as a tool to

attract attention of the market participants to

such kind of funding of the companies. In

future the Bank plans to act as an arranger of

similar kind of deals for Baltic-based companies

for listing on Riga Stock Exchange. The Bank

also plans an issue of eurobonds in the nearest

future.




Investor relations contact: Irina Harlampjeva

Address: Address: Smilšu iela 3, Rīga LV-1050, Latvija

Telephone: +371 7778577

Fax: +371 7778569


Internet home page: www.parexgroup.com

CONTACT INFORMATION

CORPORATE NOTES

name PRXB042508

ISIN LV0000800274

listing date 17-03-05

number of notes outstanding 50,000

currency LVL

nominal value 100

issue value 5,000,000

maturity date 4-03-08

coupon rate 4.25%


Parex banka



Assets Cash and balances with the Bank of Latvia 59,017 63,748Balances due from credit institutions 144,772 320,259Loans and advances to customers 445,542 640,349Fixed income securities 325,931 274,122Shares and other non-fixed income securities 9,793 11,429Investments in subsidiaries 7,841 18,369Derivative financial instruments 1,505 1,414Intangible assets 2,505 3,318Fixed assets 19,229 19,452Prepayments and accrued income 5,613 8,006Other assets 1,667 2,190Total assets 1,023,415 1,362,656

Liabilities and equity

Balances due to credit institutions and central banks 104,185 162,663Deposits from customers 800,978 1,058,256Derrivative financial instruments 3,482 3,322Accrued expense and deferred income 2,859 3,510Provision for liabilities and charges 782 957Other liabilities 2,972 7,574Total liabilities 915,258 1,236,282 Minority interest - Shareholders’ equity Piad-in share capital 63,327 65,027Share premium 9,226 12,694Fair value revaluation reserve 4,270 3,867Retained earnings 31,334 44,786Total shareholders’ equity 108,157 126,374Total liabilities and equity 1,023,415 1,362,656

Memorandum items Contingent liabilities 12,490 25,888Financial commitments 99,817 127,825Foreign exchange contracts 714,498 816,745Other financial instruments 23,549 25,592Funds under trust management 2,990 131,829

20042003

Auditors: Ernst & Young Baltics



Interest income 43,617 54,096Interest expense (17,618) (19,153)Net interest income 25,999 34,943

Fees and commission income 20,418 21,612Fees and commission expense (4,240) (5,098)Net fee and commission income 16,178 16,514

Result from operations with securities and foreign exchange 17,943 12,190Other operating income 807 1,287Operating income 60,927 64,934

Administrative expenses (28,870) (33,933)Depreciation and amortization (5,335) (5,841)Other operating expenses (390) (340)Provisions for doubtful debts and off-balance sheet items (11,905) (8,672)Release of previously established provisions 328 715Profit from investments in subsidiaries 1,221 1,609Total operating expenses (62) 375

Profit before tax and minority interest 15,976 18,472

Corporate income tax (2,553) (2,020)Profit before minority interest 13,423 16,452Minority interest - -Net profit for the year 13,423 16,452

ROAA, return on average assets 1.38% 1.38%ROAE, return on average equity 14.93% 14.03%

20042003


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