Operation results of Mortgage bank for 6 months of 2009

Mortgage bank has grown its assets volume by 5.4% in the first six months of this year,
the assets thus have reached 999 million lats, incl. the volume of issued loans of 691.7 million lats.

To enable financial availability to Latvian entrepreneurs, Mortgage bank has expanded the implementation
of special purpose lending programmes this year, as mandated by the Government. The volume of loans granted
under the Programme for Improvement of Competitiveness of Businesses during the first six months of this year
has increased by 16.6 million lats, the total amount of loans granted under this programme is 64.4 mln. lats.
 
During the first half of the year, Mortgage bank repaid a syndicated loan of 22 million euro and has accrued
funds for repayment of a syndicated loan scheduled for the second half of the year. For this purpose, Mortgage
bank has increased the amount of investments in Latvian Government securities to 103.6 million lats.

Due to the global deterioration of the economic situation, with the risk of granted loans rising, Mortgage bank
has increased the provisions for doubtful assets by 15.4 million lats during the first six months of this year.
As a result of building the provisions, the losses of Mortgage bank for the reporting period are 4.58 mln. lats.

The Bank’s unaudited gross profit for six months before taxes and provisions for doubtful loans reached 10.88 mln.
lats, which is 2.3 times more if compared to the respective period of 2008. The retained earnings of the bank for
previous years is 12.32 mln. lats.

In January of 2009, the paid-up share capital of the bank was increased by 29.5 million lats. The capital adequacy
ratio on June 30, 2009 was 12%, which considerably exceeds the statutory minimum of the Law on Credit Institutions
(8%). In the second half of the year, the Mortgage bank’s capital is to be increased yet by 43 million lats, in
accordance with the amendments to the national budget of 2009, accepted by the Saeima of the Republic of Latvia.

The international credit rating agency Moody’s, after the in-depth analysis conducted in June, has retained the
investment level credit rating for Mortgage bank, which is equal to that of the Latvian Government (Baa3, P-3).