Prospects

The structural reform of the Bank has been set as one of the main aims for 1997. The structural reform is intended to improve the service quality and cost efficiency of the Bank. Hoiupank is a commercial bank with biggest branch network - as of July 1997 Hoiupank has 173 branches in Estonia. It is the intention of the Bank to optimise the branch network and to decrease the number of branches to 150 by the end of 1997.

As of end of 1996 Hoiupank had a 42.6% share in the retail deposit market. It is the intention of the Bank to increase this to 47% by the end of 1997.

Hoiupank had a market share of 9.2% in corporate deposits at the end of 1996. The aim of the Bank is to increase the market share to 15% by the end of 1997.

Hoiupank intends to establish a representational office in Lithuania in 1998 and Hoiupank Leasing intends to establish a subsidiary in Lithuania.

On 1st January, 1998, based on the decision from 21st August, 1997 of the Supervisory Board of the Bank, Mr. Aare Kilp will become the new Chairman of the Board of the Bank.

The Bank's main strategies are:
(i) to continue to be the bank with the largest retail network in Estonia;
(ii) to expand its activities to Latvia and Lithuania by the year 2000;
(iii) to promote the means for "self-service" banking;
(iv) to improve the Bank's recognition as a major corporate bank, to grow its market share of corporate lending;
(v) to improve the professional level of the employees;
(vi) to offer the best price to quality ratio with its services in Estonia;
(vii) to improve the security;
(viii) to improve profitability through increased cost control.

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