Eesti Pank has sold its stake in Optiva Pank to Sampo Finance Ltd.

Sampo Finance Ltd, jointly owned by Sampo Insurance plc and Kaleva Mutual Insurance Company, and Eesti Pank have signed an agreement for the sale of Eesti Pank's 57,9% stake in Optiva Pank. The purchase price of the shares agreed upon as a result of the negotiations is 214 360 000 kroons. Eesti Pank will also provide an indemnity against certain potential future losses, the ultimate cost of which should be determined by mid-2002. The shares shall be transferred to the purchaser after the requisite licences and approvals have been obtained from the Finnish and Estonian supervisory authorities. Both parties believe that the licences will be obtained by 30 September 2000 at the latest.

Under the terms of the agreement, Eesti Pank will provide an indemnity against possible losses rising from the realisation of certain of Optiva Pank's assets which are presently difficult to value given the lack of a liquid market ("Risk Assets"). The total book value of Risk Assets to be covered by the indemnity is currently estimated at 332 million kroons. The final list of assets to be covered by the idemnity will be formalized by the end of this year, after Sampo Finance Ltd. has had an opportunity to review Optiva's assets in greater detail. Payments under the idemnity will be triggered only where the proceeds from the realisation of these assets are less than their carrying values in Optiva Pank's balance sheet. Possible losses realised on the sale of the risk assets shall be divided between the parties with Eesti Pank bearing 75% of the total amount of the resulting loss. Total payments by Eesti Pank arising from the agreement cannot exceed the sum of the purchase price paid by Sampo to Eesti Pank and the amount of the guarantee issued by Eesti Pank in April 2000.

Eesti Pank=s acquisition of its controlling stake in Optiva Pank two years ago was clearly motivated by monetary and banking policy considerations. The decision was made proceeding from the necessity to stabilise the banking sector and prevent a possible systemic crisis.

By selling its stake in Optiva Pank Eesti Pank will meet one of its strategic goals - fully give up its shares in commercial banks operating in Estonia. The central bank giving up its final stake in the commercial banking sector can be seen as the sucessful conclusion of a phase in the Estonian banking reform. As a result of the reforms Estonian banking has become much stronger, better capitalized, more transparent and more safe to all customers.

Eesti Pank is convinced that the entrance of a new strategic investor, Sampo into the Estonian banking market is a positive development. The central bank believes that the new owners of Optiva Pank, using their international know-how, will strengthen the competition in the banking sector and offer new services and products to the customers. Attracting strategic foreign investors to the Estonian banking sector has been a long-term priority for the central bank.