Meritaabp year-end report 1999

Merita Plc including associated companies Year-end report 1999 Merita Plc and Nordbanken Holding AB (publ), which changed its name in January 2000 to Nordic Baltic Holding (NBH)(publ), were the owner holding companies of MeritaNordbanken Plc, parent company of the MeritaNordbanken Plc Group. MeritaNordbanken Plc Group and the two owner companies together formed MeritaNordbanken Group. On November 14, 1999, Nordbanken Holding made an exchange offer to the shareholders and holders of convertible bonds in Merita Plc. As of January 20, 2000, shareholders representing 95.9% of the total number of shares and votes had accepted the offer. Accordingly, the redemption procedure for the remaining shares was initiated, whereby Merita will become a wholly-owned subsidiary of Nordic Baltic Holding. Holders of convertible bonds corresponding to 91.2% of the total outstanding loan amount accepted the exchange offer. Nordic Baltic Holding is listed on the stock exchanges in Stockholm and Helsinki. The share is traded on the Helsinki Exchanges in the form of Finnish Depositary Receipts (FDR). In order to implement the exchange offer, Nordic Baltic Holding submitted a redemption bid on January 31, 2000 in accordance with the Finnish Securities Market Act and concurrently requested a redemption ruling in accordance with the Finnish Companies Act pertaining to the shares which had not been exchanged. The redemption price is EUR 5.77 per share. If a shareholder does not accept the redemption ruling the redemption price will be determined by arbitration in accordance with the Finnish Companies Act. At the same time, Nordic Baltic Holding presented a redemption offer for the convertible bonds that had not been exchanged. The redemption price is 104.2% of the nominal value of the bond, which is FIM 10 000 (EUR 1 681.88). As a result of the planned merger of Merita Plc, it is not possible to exchange the convertible bonds for shares in Merita Plc. In order to illustrate Merita's financial development and position strictly from the company's viewpoint, the following income statements and balance sheets are presented for Merita Plc, including and excluding the associated company MeritaNordbanken. Earnings and financial position Net profit for the year for MeritaNordbanken Group amounted to EUR 1 098 M, compared with EUR 704 M in 1998. This result includes withdrawals from pension foundation and funds of EUR 65 M (152), and write-downs of real estate of EUR 145 M (617). Return on equity amounted to 20.9% and earnings per share to EUR 0.53. Merita Plc's share (40%) of the MeritaNordbanken Group's result is shown under profit from companies accounted for under the equity method, including a deduction of EUR 13 M (80) in accordance with the original cooperation agreement. The result also includes payment of 40% of the withdrawal from the pension foundation and funds of EUR 26 M (61) and a charge of 40% of the real estate write-downs of EUR 58 M (247). Thereafter, the result corresponds to 40% of the total result of the MeritaNordbanken Group and amounts to EUR 439 M (281). Profit for the year for Merita Plc excluding associated companies amounted to EUR 134 M (137). Merita Plc´s shareholders´equity (excluding associated companies) was EUR 1 828 M at the year end. Subsequent to the increase in shareholders' equity of associated companies and adjusted according to the original cooperation agreement, the shareholders'equity of Merita Plc at the year- end corresponded to 40% of the shareholders´equity of the MeritaNordbanken Group, EUR 2 210 M, or EUR 2.68 per share. Dividend The Board of Directors of Merita Plc proposes that no ordinary dividend be paid. The Board of Nordic Baltic Holding (NBH) AB (publ) proposes a dividend of SEK 1.75 per share. Further information: Jarmo Laiho, Executive Vice President, tel. +358 9 165 42118, +358 50 1656 Income statement Merita Plc Merita Plc incl. the associated company EUR million 1999 1998 1999 1998 Interest income 14 25 14 25 Interest expenses -7 -18 -7 -18 Net interest income 7 7 7 7 Income from equity investments Participating interests - - 154 1 Other companies 0 0 0 0 Commission expenses -0 -0 -0 -0 Net result from financial operations - 133 - 133 Other operating income 0 7 8 7 7 147 169 148 Administrative expenses Personnel expenses Salaries and fees -1 -1 -1 -1 Staff-related costs Pension costs -1 -3 -1 -3 Other staff-related costs -0 -0 -0 -0 Other administrative expenses -2 -11 -2 -11 Depreciation and and write-downs on tangible and intangible assets - -0 - -0 Other operating expenses -1 -1 -1 -1 -5 -16 -5 -16 Profit from the company accounted for under the equity method 470 404 - - Adjustment in accordance with the Cooperation Agreement -13 -80 - - Operating profit 459 455 164 132 Refund from the Pension Foundation/Fund 26 61 - 4 1) 1) Writedowns on real estate holdings -58 -247 - -11 Profit before taxes 427 269 164 125 2) Income taxes 12 12 -30 12 Profit for the financial year 439 281 134 137 1) 40 per cent of the refund from the Pension Foundation/Fund of the MeritaNordbanken Group and 40 per cent of the Group's write-downs on real- estate holdings have been included in the income statement. 2) Income taxes include only Merita Plc's taxes. Merita Plc's share of the MeritaNordbanken Group other taxes is reported under "Profit from companies accounted for under the equity method" and amounts to EUR 94 million (in 1998 EUR 91 million) Keys ratios including associated companies 1999 1998 Shares outstanding at end of period, millions 833.7 832.0 - after full conversion 856.9 859.1 Earnings per share after full conversion EUR EUR 0.53 0.33 - excl. items affecting comparability EUR EUR 0.51 0.42 Shareholders' equity per share at the end of period after full conversion EUR EUR 2.68 2.29 Market price at the end of period EUR EUR 5.85 5.42 Market capitalization / Shareholders equity 2.2 2.4 Direct yield, % - 3.3 Return on equity, % 20.9 14.3 Average number of employees during the year 5 6 Balance sheet Merita Plc Merita Plc incl. the associated company EUR million 1999 1998 1999 1998 Assets Debt securities eligible for 172 158 172 158 refinancing with central banks Loans to credit institutions 6 36 6 36 repayable on demand Other debt securities 152 152 152 152 Shares and participations 0 0 0 0 Participating interests 2 032 1 727 1 650 1 650 Other assets 0 1 0 1 Prepaid expenses and accrued 10 13 10 13 income Total assets 2 372 2 087 1 990 2 010 Liabilities and shareholders' equity Liabilities Other liabilities 12 12 12 12 Accrued expenses and prepaid 6 14 6 14 income Provisions Pension provisions 2 1 2 1 Other provisions - - - - Subordinated liabilities 142 152 142 152 Liabilities 162 179 162 179 Shareholders's equity Share capital 1 402 1 399 1 402 1 399 Share premium reserve 11 5 11 5 Ordinary reserve 36 36 36 36 Retained earnings 322 187 245 254 Profit for the year 439 281 134 137 Shareholders' equity 2 210 1 908 1 828 1 831 Total liabilities and 2 372 2 087 1 990 2 010 shareholders' equity Off-balance-sheet commitments Commitments on behalf of customers in favour of third parties Guarantees and pledges 2 1 2 1 Shareholders' equity 1999 1998 Equity capital excluding the associated company 1 828 1 831 Share of equity capital in the associated company 449 111 Adjustment in accordance with the Cooperation Agreement -67 -34 Equity capital including the associated company 2 210 1 908 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/02/16/20000216BIT00650/bit0001.doc http://www.bit.se/bitonline/2000/02/16/20000216BIT00650/bit0002.pdf