Quarterly Report, Q1-Q3 2007, for Spar Nord Bank

Transcription

1 To OMX The Nordic Exchange Copenhagen and the press Stock Exchange Announcement No. 10, 24 October For further information, contact: Lasse Nyby Chief Executive Officer Tel Ole Madsen, Communications Manager Tel Quarterly Report, Q1-Q3, for Spar Nord Bank DKK 654m profits before tax and upward revision Annualized 25.1% pre-tax return on equity Net interest income up 13% to DKK 850 million Net income from fees, charges and commissions up 9% to DKK 370 million Costs increased by 11% to DKK 944 million Core earnings before impairment up 8% to DKK 526 million DKK 108 million net income recognized due to reversed impairment of loans and advances and related items Core earnings up 23% to DKK 634 million Earnings from investment portfolios up 16% to DKK 20 million Bank lending up 29% and deposits up 16% DKK 75 million upward revision of the forecast core earnings for the year to DKK million Moody s rating: C, A1, P-1 (unchanged) Spar Nord Bank A/S Q3 - a period characterized by broad business expansion Decision to establish new local banks in the cities of Randers and Esbjerg 25 consecutive months with net growth in customers 41 new employees (net), with 37 in front-line functions Major increase in net interest income Growth in customers interest and Forex transactions Growth in lending to customer segments with prime credit quality Continued significant net income recognition deriving from reversed impairment of loans and advances and related items Strategic liquidity targets met Shareholders equity exceeded DKK 4 billion Skelagervej 15 P.O. Box 162 DK-9100 Aalborg Reg. no Tel Tel Swift spno dk 22 sparnord@sparnord.dk CVR no Page 1 of 22

2 Stock Exchange Announcement No October Quarterly Report, Q1-Q3, for Spar Nord Bank Spar Nord Bank A/S Skelagervej 15 Postboks Aalborg Reg. nr Telefon Telefax Swift spno dk 22 CVR-nr Page 2 of 22

3 TABLE OF CONTENTS Management s review 4 Quarterly performance indicators 7 Quarterly performance indicators Q1-Q3 8 Endorsement of the Supervisory and Executive Boards 9 Spar Nord Bank shares held by members of The Supervisory Board and The Executive Board 10 Accounting policies 10 Overview of group compagnies 10 Income statement 11 Balance sheet 12 Statement of changes in equity 13 Solvency information 14 Cash flow statement 15 Notes 16 Notes to the Financial Statements without reference numbers 22 Page 3 of 22

4 MANAGEMENT S REVIEW In the first nine months of, the Spar Nord Bank Group recorded pre-tax profits of DKK 654 million. If last year s extraordinary income from the sale of shares in Totalkredit is excluded, the profits grew by DKK 119 million, equal to an advance of 22%. The return on equity before tax, excluding dividend, represents 25.1% p.a. Yet another quarter with strong business growth forms the backdrop to this profit performance, with the continuing favourable business trends generating significant net proceeds relating to reversed impairment of loans and advances and related items. In view of the highly satisfactory profits during Q1-Q3, Management decided to lift the estimate of total core earnings for the year from DKK million to DKK million. Core earnings Core earnings, the Group s earnings deriving from customerrelated transactions, continued to grow at a strong pace, ending at DKK 634 million for the elapsed nine months an increase of 23% on the same period last year. In, net interest income, which advanced 13% to DKK 850 million, has played an important role in pushing up core earnings. The satisfactory growth is ascribable to the sustained increase in volume the bulk stemming from the customer segments reporting the best credit quality and an interest margin that remained stable in the third quarter. Net income from fees, charges and commissions grew 9% - up from DKK 340 million in Q1-Q3 to DKK 370 million in the same period this year. However, net income from fees, charges and commissions stagnated somewhat in Q3. Income deriving from asset management fees grew handsomely during the first nine months of the year, whereas fee income from securities trading declined. Market-value adjustments ended at DKK 98 million (Q1-Q3 : DKK 119 million). The decrease in market-value adjustments is primarily due to a reduction in market-value adjustments of investment securities, including a negative marketvalue adjustment of the shareholding in LetPension, while earnings from Forex trading activities contributed positively. Profit on equity investments in associates and group enterprises ended at DKK 34 million in Q3 (Q2 : DKK 20 million) and DKK 87 million for the year-to-date (Q1-Q3 : DKK 67 million). This growth is attributable primarily to the positive adjustments of Spar Nord s holdings in Nørresundby Bank and Linde Partners Asset Management. Operating costs, depreciation and amortization ended at DKK 944 million in Q1-Q3 11% up on the same period last year. This growth in costs is an anticipated consequence of the intensified geographical and business expansion. Spar Nord continues to establish new local banks outside North Jutland, thus increasing the number of employees. During Q3, the staff grew by 41 individuals (net), 37 of whom are engaged in front-line functions. Since the same time last year, new local banks have been established in Risskov, Middelfart, Slagelse, Køge and Ikast, plus a leasing company, SN Finans Nord AB, in Malmo. The associated establishment costs alone accounted for DKK 27 million of the costs - in total, a DKK 48 million investment was made in geographical expansion, which is equal to more than half of the total growth in costs of DKK 90 million. As concerns the nature of costs, IT-related expenses and salaries are the main drivers behind the growth in costs. One factor is the heavy investments in major statutory and sector-driven development projects, and the generally heightened activity level means heavier costs for ordinary IT operations. Conversely, the expenses for building maintenance have decreased. This is partly because all local banks have now completed the scheduled refurbishment programme. Costs are expected to grow about 11% for all of. Impairment of loans, advances and related items continued the favourable trend experienced during the most recent quarters, with a net income of DKK 108 million being recognized for the first nine months of (Q1-Q3 : DKK 31 million). The reasons for carrying this sizeable net amount to income are the lower rate of new provisions, a sustained reversal of impairment due to amounts recovered on claims previously written off and a reduction in losses without prior provisions. As concerns the credit quality of the credit portfolio, Management finds it highly satisfactory that the growth in lending stems primarily from the best credit score and rating classes. Earnings from investment portfolios Earnings from portfolio investments during Q1-Q3 ended at DKK 20 million, up 16% on the tri-quarterly period last year. In a third quarter characterized by turbulent financial markets, earnings on portfolio investments ended at a minus of DKK 14 million after funding costs. This result breaks down into a loss of DKK 12 million on interest-related products and a DKK 2 million loss on shares held. Page 4 of 22

5 The loss on interest-related products is primarily due to the changed market circumstances for credit bonds, including structured credit products. Of the Bank s DKK 8.5 billion bond portfolio at 30 September, structured credit products accounted for DKK 180 million. Of this amount, DKK 75 million is secured by a principal guarantee issued by major international banks, and none of the products have a rating lower than A. None of the investments have an exposure to the US property market. Consolidated profits Accordingly, the pre-tax profits amounted to DKK 654 million versus DKK 687 million in the same period last year. This profit performance yields a 25.1% full-year return on the beginning equity. After estimated tax in the amount of DKK 127 million, profits aggregate DKK 527 million. Accordingly, the current net asset value per share is DKK 72. Business volume Total business volume (deposits, loans, advances and guarantees) has grown from DKK 65 billion to DKK 70 billion since the end of Q3. However, in Q3 the business volume decreased a consequence of a Spar Nord Bank decision to implement the so-called offset model as of 1 July in connection with the Totalkredit cooperation, which means that Totalkredit guarantees in the amount of DKK 3.3 billion have lapsed. Since the same time last year, bank lending has increased by 29% to DKK 38 billion, and deposits are up 16% to DKK 28 billion. Solvency ratio The solvency ratio, with Spar Nord s internal target being min. 10.0%, stood at 11.2% at the end of Q3 (Q2 : 11.0%). Of this figure, 9.6 percentage points are attributable to the Group s core capital (Q2 : 9.3). The core capital ratio, excl. hybrid core capital, amounts to 8.8% (Q2 : 8.6%). The improved solvency ratio is attributable primarily to the Bank s choice of the offset model as concerns items relating to the Totalkredit cooperation, which viewed in isolation results in a decrease in weighted assets. Liquidity Spar Nord s internal strategic liquidity target is for cash deposits, strategic loans and total capital resources to exceed the Bank s volume of lending. Thus, the target is for loans and advances to be financed by long and stable funding at all times. In Q3, a new senior loan of EUR 215 million was floated, and deposits grew handsomely. The latter is a direct result of the rating accorded by Moody s to Spar Nord in August. At end-q3, the Bank s liquidity target is in balance. Compared with the statutory liquidity requirements, Spar Nord strengthened its coverage relative to the statutory cash ratio requirement from 53.3% (end-q2 ) to 80.1% in Q3. None of the Bank s strategic loans or loans having the status of supplementary capital are due to mature in the rest of. Expansion continues After the opening of local banks in Middelfart, Slagelse, Køge and Ikast during the first six months, the decision was made in Q3 to establish new local banks in Randers and Esbjerg in the second half of the year. Both Spar Nord Randers and Spar Nord Esbjerg are expected to open for business in the last quarter of the year. The two new local banks are expected to have a total of about 20 employees when opening. Following the most recent opening of the new local banks, 19 of Spar Nord s 82 local banks are situated outside North Jutland. Also measured in terms of total number of customers, customer growth and business volume, an increasing share of Spar Nord s business comes from the new areas. The newly established local banks outside North Jutland have thus contributed substantially to the 25 consecutive months of continuous growth that Spar Nord has experienced in net customer intake. The potential of geographical expansion Spar Nord has chosen to over-shoot its own strategic target of establishing one or two local banks a year also in because the Bank has been able to attract the right employees to the newly established local banks, and pursuing the expansion strategy offers a major profit potential. Thus, previous experience shows that the newly established local banks will break even already after one year, and after two and a half years will begin contributing positively to the Bank s profit. At the same time, experience shows that in connection with the geographical expansion it has been possible to implement major economies of scale in the Bank s central support functions. Page 5 of 22

6 Until the goal of a presence in all major Danish cities has been attained, Spar Nord will thus continue to establish new local banks when and where an opportunity arises. Business areas Spar Nord s Local Banks The pre-tax profits reported by Spar Nord s Local Banks grew in Q1-Q3 by 31% to DKK 515 million. This growth is attributable partly to mounting income from interest, fees, charges and commissions, and to yet another three-month period with net income recognition on impairment of loans, advances and related items. Before impairment, growth in profits amounted to 13%. The satisfactory growth is spurred by the sharp rise in the intake of new customers and growing business volume particularly driven by the new local banks outside North Jutland. Since the same time last year, Spar Nord s Local Banks has welcomed 13,000 new customers (net). The growth in lending amounted to 26% and 12% in deposits. The decision was made in Q3 to establish new local banks in Randers and Esbjerg during the last quarter of the year. Thus, the Spar Nord chain will comprise 19 local banks outside North Jutland and 82 local banks in total. Trading, Financial Markets & the International Division Trading, Financial Markets & the International Division reported pre-tax profits of DKK 96 million in Q1-Q3 (Q1-Q3 : DKK 100 million). Compared with last year, Trading, Financial Markets & the International Division recorded strong growth in the net interest income due to the increased volume of loans and advances. Correspondingly, activities grew strongly, and so did earnings from the interest and Forex areas, while, conversely, earnings from the business area s own position-taking activities were somewhat lower. Finans Nord A/S Finans Nord A/S reported an advance in pre-tax profits of as much as 54% - up from DKK 55 million in Q1-Q3 to DKK 85 million in Q1-Q3. The driver behind this advance is the 36% growth in net interest income to DKK 114 million, and increased profits from the sale of assets held under operating leases. Finans Nord A/S Swedish subsidiary, SN Finans Nord AB, is also growing at a very satisfactory pace, with monthly new sales hovering around SEK 40 million. For Finans Nord as a whole, new agreements worth DKK 2.65 billion were concluded during the first nine months of the year up 33% on the same period last year. Follow-up on full-year forecast for At its meeting today, Spar Nord s Supervisory Board decided to lift its full-year core earnings forecast for the second time this year. In connection with the announcement of the interim profits for the first six months, Spar Nord lifted its core earnings forecast from DKK million to DKK million. Based on the sustained highly satisfactory growth, the forecast is now lifted to DKK million. Spar Nord expects to publish its Annual Report on 7 February Financial Calendar for February: Annual Report 30 April: Q1 Report 20 August: Interim Report for the first six months 29 October: Q1 - Q3 Reports Page 6 of 22

7 QUARTERLY PERFORMANCE INDICATORS DKK million 1-3 Q 1-3 Q Change in pct. 3Q 4Q 1Q 2Q 3Q Full year INCOME STATEMENT Net interest income Net income from fees, charges and commissions Dividends on shares, etc. Market-value adjustments Other operating income Profi t/loss on equity investments in associates and group enterprises Core income Operating costs, depreciation and amortization Core earnings before impairment Impairment of loans and advances, etc. Core earnings Earnings from investment portfolios Totalkredit (sale of shares) Profit before tax Tax Profit after tax BALANCE SHEET Balance sheet total Loans and advances - bank loans and advances - reverse transactions Deposits - bank deposits - repo transactions Shareholders equity Guarantees, etc. Risk-weighted assets Core capital ratio (incl. hybrid core capital) after deductions Business volume FINANCIAL RATIOS Return on equity before tax, % Cost share of core income Cost share of core income - incl. impairment of loans and advances, etc. Income/cost ratio (DKK) Loans and advances rel. to deposits, % Loans and advances rel. to shareholders equity Increase in loans and advances for the period, % Impairment for the period, % Accumulated impairment, % Solvency ratio, % Core capital ratio, incl. hybrid capital, % Coverage relative to statutory cash ratio requirement, % Total of major commitments, % Interest-rate exposure, % Foreign-exchange position, % Foreign-exchange exposure, % Number of employees (full-time, year-end) Number of branches Spar Nord Bank shares DKK per share of DKK 10 Share price, end of period Net asset value (NAV) Earnings after tax Dividend Price/earnings , , , , , ,020 54, ,021 58,565 56,494 57,590 62,020 58,565 38,229 32, ,020 34,318 35,558 36,206 38,229 34,318 38,229 29, ,566 32,409 35,558 36,206 38,229 32, , ,454 1, ,909 28,328 26, ,782 26,259 25,698 27,047 28,328 26,259 28,328 24, ,433 25,722 25,698 27,047 28,328 25, ,349 2, ,008 3, ,389 3,649 3,846 3,849 4,008 3,649 3,921 6, ,361 7,017 6,863 7,475 3,921 7,017 42,147 35, ,495 38,289 40,694 41,845 42,147 38,289 4,040 3, ,085 3,727 3,813 3,911 4,040 3,727 70,478 65, ,163 67,594 68,119 70,728 70,478 67, ,377 1,278 1,278 1,313 1,314 1,336 1,377 1, Page 7 0f 22

8 QUARTERLY PERFORMANCE INDICATORS (Q1 Q3) DKK million Change in pct Full year INCOME STATEMENT Interest income Interest expenses Net interest income Dividends on shares, etc. Fees, charges and commissions received Fees, charges and commissions paid Net income from interest, fees, charges and commissions Market-value adjustments Other operating income Staff costs and administrative expenses Depreciation, amortization and impairment of intangible assets and property, plant and equipment Other operating expenses Impairment of loans, advances and receivables, etc. Profi t/loss on equity investments in associates and group enterprises Profit before tax Tax Profit after tax BALANCE SHEET Balance sheet total Loans and advances - bank loans and advances - reverse transactions Deposits - bank deposits - repo transactions Shareholders equity Guarantees, etc. Risk-weighted assets Core capital ratio (incl. hybrid core capital) after deductions Business volume FINANCIAL RATIOS Return on equity before tax, % Return on equity after tax, % Income/cost ratio (DKK) Loans and advances rel. to deposits, % Loans and advances rel. to shareholders equity Increase in loans and advances for the period, % Impairment for the period, % Accumulated impairment, % Solvency ratio, % Core capital ratio, incl. hybrid capital, % Coverage relative to statutory cash ratio requirement, % Total of major commitments, % Interest-rate exposure, % Foreign-exchange position, % Foreign-exchange exposure, % Spar Nord Bank shares DKK per share of DKK 10 Earnings per share for the period Listed price, end of period Net asset value (NAV), incl. earnings per share for the period Dividend per share Share price/nav per share for the period Share price/nav per share Average no. of shares (mill.) 2, , , , , , , , , , , , , , , , , , ,020 54, ,006 33,209 43,904 54,021 62,020 58,565 38,229 32, ,273 17,976 25,501 32,020 38,229 34,318 38,229 29, ,273 17,690 25,228 29,566 38,229 32, , , ,909 28,328 26, ,407 18,508 21,401 26,782 28,328 26,259 28,328 24, ,407 18,508 21,128 24,433 28,328 25, , , ,008 3, ,063 2,281 2,603 3,389 4,008 3,649 3,921 6, ,661 4,278 6,346 6,361 3,921 7,017 42,147 35, ,932 23,069 30,147 35,495 42,147 38,289 4,040 3, ,766 2,010 2,123 3,085 4,040 3,727 70,478 65, ,341 40,762 53,250 65,163 70,478 67, Page 8 of 22

9 STATEMENT OF THE SUPERVISORY BOARD AND EXECUTIVE BOARD ON THE INTERIM REPORT The Supervisory and Executive Boards have today reviewed and adopted the Interim Report for Q3 of Spar Nord Bank A/S. The Interim Report for Q3 is presented in accordance with IAS 34, Interim Financial Reporting, and in accordance with additional Danish disclosure requirements for interim reports prepared by listed financial companies. We consider the accounting policies applied to be appropriate, and in our opinion the Interim Report gives a true and fair view of the Group s assets, liabilities and financial position at 30 September and of the results of the Group s operations and cash flows for the period from 1 January to 30 September. Aalborg, 24 October EXECUTIVE BOARD Lasse Nyby Chief Executive Officer John Lundsgaard Managing Director Lars Møller Managing Director SUPERVISORY BOARD Torben Fristrup Chairman of the Supervisory Board Erling Kjær Deputy Chairman of the Supervisory Board Per Nikolaj Bukh Niels Kristian Kirketerp Carsten Normann Per Søndergaard Pedersen Trine Bruun Haals Elected by the employees Jan Høholt Jensen Elected by the employees Ole Skov Elected by the employees Page 9 of 22

10 SPAR NORD BANK SHARES HELD BY MEMBERS OF THE SUPERVISORY BOARD AND THE EXECUTIVE BOARD 16 April 15 August 10 Oktober Per Nikolaj Bukh - new Supervisory Board member Torben Fristrup 3,200 3,200 3,200 Trine Bruun Haals 2,110 2,110 2,110 Jan Høholt Jensen 3,130 3,130 3,130 Niels Kristian Kirketerp 7,090 7,090 7,090 Erling Kjær 13,700 13,700 14,475 Carsten Normann 0 0 2, April 15 August 10 Oktober Per Søndergaard Pedersen 10,380 10,380 10,380 Ole Skov John Lundsgaard 23,770 23,770 23,770 Lars Møller 25,000 25,000 25,000 Lasse Nyby 22,380 22,380 22,380 Note: The holdings include all shares held by all members of the household. ACCOUNTING POLICIES The Interim Report has been prepared in accordance with IAS 34, Interim Financial Reporting, and in accordance with additional Danish disclosure requirements for interim reports prepared by listed financial companies. The accounting policies have been consistently applied with those adopted in the Annual Report. The Annual Report contains the complete wording of the accounting policies applied. The Interim Report has not been subject to a review or audit. The measurement of certain assets and liabilities requires Management to estimate how future events will impact on the value of such assets and liabilities. Estimates of significance to the financial reporting are made in connection with determining the impairment of loans and advances, the fair value of unlisted financial instruments, provisions, etc. Estimates are based on assumptions that Management consider appropriate but which are uncertain by their nature. OVERVIEW OF GROUP COMPANIES Share capital End of period *) DKK million Shareholders equity End of period *) DKK million Results *) DKK million Ownership interest Pct. Ownership interest Pct. Consolidated subsidiaries Erhvervsinvest Nord A/S, Aalborg Finans Nord A/S, Aalborg SN Finans Nord AB, Sweden Finans Nord Cross Border A/S, Aalborg Sparekassen Nordjyllands Investeringsselskab af A/S (a subsidiary of Erhvervsinvest Nord A/S, Aalborg) Non-consolidated companies Beluni Inc., USA (1) (1) The company is in liquidation *) According to the most recent Annual Report Page 10 of 22

11 INCOME STATEMENT Note DKK 000 3Q 3Q Full year Interest income Interest expenses Net interest income Dividends on shares, etc. Fees, charges and commissions received Fees, charges and commissions paid Net income from interest, fees, charges and commissions Market-value adjustments Other operating income Staff costs and administrative expenses Depreciation, amortization and impairment of intangible assets and property, plant and equipment Other operating expenses Impairment of loans, advances and receivables, etc. Profit/loss on equity investments in associates and group enterprises Profit before tax Tax Profit 2,045,864 1,435, , ,157 2,025,172 1,196, , , ,115 1,001, , , , ,042 1,023,518 16,029 20, , , , , , ,929 53,392 49,256 17,158 15,218 66,608 1,235,070 1,126, , ,520 1,514, , ,879 9, , ,177 52,917 57,598 17,391 13,271 81, , , , ,771 1,101,502 54,737 57,011 18,372 20,400 68,731 1,064 1, ,160-30,029-30,064-18, ,080 97,775 77,198 33,119 43, , , , , ,205 1,033, , ,897 27,983 45, , , , , , ,553 EARNINGS PER SHARE Earnings per share Diluted earnings per share Page 11 of 22

12 BALANCE SHEET Note DKK Full year 9 ASSETS Cash balances and demand deposits with central banks Receivables from credit institutions and central banks Loans, advances and other receivables at amortized cost Bonds at fair value Shares, etc. Equity investments in associates, etc. Assets linked to pooled schemes Intangible assets Investment properties Corporate properties Land and buildings, total Other property, plant and equipment Temporary assets Other assets Prepayments Total assets 429, , ,585 6,536,671 4,935,096 8,127,351 38,229,174 32,020,431 34,318,191 8,539,639 9,240,172 8,420, , , , , , ,587 3,912,163 3,263,673 3,556,032 50,448 44,449 52,152 15,352 13,532 14, , , , , , , , , ,294 14,613 13,958 12,446 2,062,708 1,865,701 1,616,297 55,598 51,655 52,216 62,019,564 54,021,439 58,565, SHAREHOLDERS EQUITY AND LIABILITIES LIABILITIES OTHER THAN PROVISIONS Payables to credit institutions and central banks Deposits and other payables Deposits in pooled schemes Issued bonds at amortized cost Other non-derivative financial liabilities at fair value Current tax liabilities Temporary liabilities Other liabilities Deferred income Total payables PROVISIONS FOR LIABILITIES Provisions for pensions and related liabilities Provisions for deferred tax Provisions for losses on guarantees Other provisions Total provisions SUBORDINATED DEBT Subordinated debt SHAREHOLDERS EQUITY Share capital Revaluation reserves Accumulated exchange adjustments of foreign entities Accumulated changes in value, total Statutory reserves Other reserves, total Retained earnings or loss Total shareholders equity Shareholders equity and total liabilities 22,231,829 18,683,089 21,962,456 24,415,625 23,518,678 22,702,789 3,912,163 3,263,673 3,556,032 2,210, ,800 1,576, , ,000 1,089, , ,315 53,078 5,134 5,244 5,217 2,647,575 2,230,765 2,187, , , ,121 56,141,231 49,111,766 53,241,506 3,516 3,674 3, ,788 99, ,530 6,450 15,101 26,811 35,212 22,335 21, , , ,018 1,676,012 1,380,770 1,458, , , ,688 37,393 44,945 37, ,327 44,945 37, , , , , , ,275 2,982,839 2,483,161 2,755,259 4,008,355 3,388,729 3,648,615 62,019,564 54,021,439 58,565,286 OFF-BALANCE-SHEET ITEMS 12 Guarantees, etc. Other commitments Total off-balance-sheet items 3,921,435 6,360,826 7,016, ,921,435 6,360,826 7,016,713 Page 12 of 22

13 STATEMENT OF CHANGES IN EQUITY DKK 000 Share capital Revalutation reserve Foreign currency Translation reserves Statutory reserves Proposed dividend Retained earnings Total SHAREHOLDERS EQUITY Shareholders equity Reclassification Translation of foreign entity Other capital movements in associates and group enterprises Share-based remuneration Net gains/losses recognized directly in shareholders equity Profit for the period Total income for the period Dividend to shareholders Dividend received Dividend received, treasury shares Purchase and sale of treasury shares Tax, treasury shares Other movements, total Shareholders equity, the Group, end of period 570,688 37, , ,206 2,584,053 3,648,615 36,422-36, , , ,038 24, , ,038 37, , , , , , , , , , , ,998 3, ,303-46, ,134 9, , ,206-17, , ,688 37, , ,982,839 4,008,355 SHAREHOLDERS EQUITY Shareholders equity Revaluation of properties Other capital movements in associates and group enterprises Share-based remuneration Net gains/losses recognized directly in shareholders equity Profit for the period Total income for the period Dividend to shareholders Dividend received Dividend received, treasury shares Purchase and sale of treasury shares Tax, treasury shares Capital increase, issue expenses Other movements, total Shareholders equity, the Group, end of period 570,688 44, , ,206 2,029,787 3,038, , ,100 3, ,912 12, , ,812 16, , , , , , , , , , , ,320 2, ,487-74, ,272 18, , ,206-41, , ,688 44, , ,483,161 3,388,729 The share capital consists of 57,068,810 shares in the denomination of DKK 10. Page 13 of 22

14 SOLVENCY INFORMATION DKK 000 Full year Capital base and solvency ratio Shareholders equity Proposed dividend /expected dividend Intangible assets in the Bank Group Miscellaneous Core capital after deductions Hybrid core capital Core capital (incl. hybrid core capital) after deductions Subordinated debt (excl. hybrid core capital) Revaluation, properties Other deductions Capital base after deductions Risk-weighted items Core capital ratio, % Core capital ratio (incl. hybrid core capital), % Solvency ratio, % 4,008,355 2,829,253 3,648, , ,206 50,448 44,449 52, ,148 44,945 37,393 3,710,354 2,739,859 3,387, , , ,939 4,039,904 3,084,500 3,726,803 1,346,462 1,036,129 1,119,208 37,327 44,945 37, , , ,520 4,720,622 3,429,722 4,152,884 42,146,750 35,494,718 38,288, As from 1 January, the determination of solvency ratio includes the profit for the period. Page 14 of 22

15 CASH FLOW STATEMENT DKK 000 Full year CASH GENERATED FROM OPERATIONS Profit before tax Depreciation, amortization and impairment of property, plant and equipment and intangible assets Gains and losses on the sale of property, plant and equipment and intangible assets Adjustment of impairment of loans and advances, etc. Provisions for liabilities Profit/loss on equity investments Expensed for share-based remuneration Corporate income tax paid Cash generated from operations, total Movement in credit institutions and central banks, net Movement in loans and advances Movement in bond portfolio Movement in equity portfolio Movement in issued bonds Movement in other assets and other liabilities, net Movement in deposits Total working capital Cash generated from operations, total 654, ,369 1,033,179 54,072 43,175 68, , ,737-90, ,910-23,834-9,997 60,589-97,702-77, ,044 24,038 12,912 17,995-17,263-9, , , , , ,685 1,124,593 4,968,489-3,833,246-4,796,561-7,022, ,812-1,404, ,073-27,179 57,494 48, , ,800 1,576, ,542-65, ,587 1,712,836 4,120,151 3,304,263-2,376, ,863 3,169,996-1,860, ,783 3,955,864 CASH GENERATED FROM INVESTMENTS Net investment in associates and group enterprises Net investment in intangible assets Net investment in property, plant and equipment Net investment in treasury shares Dividend from group enterprises and associates Cash generated from investments, total -31,743-20,520-27, ,279-9,578-95,465-62, ,556-46,753-74,487-80,529 24,613 15,171 15, , , ,602 CASH GENERATED FROM FINANCING Subordinated debt Capital increase/issue expenses Dividend to shareholders, excluding dividend on treasury shares Cash generated from financing, total Movements in cash and cash equivalents for the period Cash and cash equivalents, beginning of period Movements in cash and cash equivalents for the period Cash and cash equivalents, end of period Cash and cash equivalents, end of period Cash and cash equivalents and demand deposits with central banks Receivables from credit institutions and central banks with less than 3 mths to maturity Total 217, , , , , ,886 50, , ,468-1,959, ,212 3,284,794 7,256,219 3,971,425 3,971,425-1,959, ,212 3,284,794 5,296,489 3,789,213 7,256,219 1,894,150 1,135, ,913 3,402,339 2,653,381 6,412,306 5,296,489 3,789,213 7,256,219 Page 15 of 22

16 NOTER Note DKK million Spar Nord s Local Banks Trading, Financial Markets & the International Division Finans Nord A/S Corporate Coordination & Support Staff functions and unallocated Earnings from investment portfolios, etc. * Eliminations Total 1 Business segments - 1st 3rd quarters INCOME STATEMENT Interest income Interest expenses Net interest income Net income from fees, charges and commissions Dividends on shares, etc. Market-value adjustments Other operating income Profit/loss on equity investments in associates and group enterprises Total income Operating costs Profit before impairment of loans and advances, etc. Impairment of loans and advances, etc. Profit before tax 1, , , , , BALANCE SHEET Assets Loans, advances and other receivables at amortized cost Other assets Total assets Shareholders equity and liabilities Deposits and other payables Shareholders equity (allocated capital) Miscellaneous liabilities Total shareholders equity and liabilities 29, , , , , , , , , , , , , , , , , , , , , , ,019.6 FINANCIAL RATIOS Return on equity, full-year, % **) Costs as a percentage of income Risk-weighted items, end of period Number of employees (end of period, full-time) , , , , , , ,377 * Earnings from investment portfolios, etc. consist of earnings from investment portfolios, the sale of Totalkredit, ErhvervsInvest Nord A/S and Erhvervsinvest K/S. ** The rate of return on equity per annum has been calculated on allocated capital (8%) based on average risk-weighted items. As of 1 July, Corporate Banking has merged with Spar Nord s Local Banks. Page 16 of 22

17 Note NOTER DKK million Spar Nord s Local Banks Trading, Financial Markets & the International Division Finans Nord A/S Corporate Coordination & Support Staff functions and unallocated Earnings from investment portfolios, etc. * Eliminations Total 1 Business segments - 1st 3rd quarters INCOME STATEMENT Interest income Interest expenses Net interest income Net income from fees, charges and commissions Dividends on shares, etc. Market-value adjustments Other operating income Profit/loss on equity investments in associates and group enterprises Total income Operating costs Profit before impairment of loans and advances, etc. Impairment of loans and advances, etc. Profit before tax , , , BALANCE SHEET Assets Loans, advances and other receivables at amortized cost Other assets Total assets Shareholders equity and liabilities Deposits and other payables Shareholders equity (allocated capital) Miscellaneous liabilities Total shareholders equity and liabilities 23, , , , , , , , , , , , , , , , , , , , , , ,021.4 FINANCIAL RATIOS Return on equity, full-year, % **) Costs as a percentage of income Risk-weighted items, end of period Number of employees (end of period, full-time) , , , , , ,278 * Earnings from investment portfolios, etc. consist of earnings from investment portfolios, the sale of Totalkredit, ErhvervsInvest Nord A/S and Erhvervsinvest K/S. ** The rate of return on equity per annum has been calculated on allocated capital (8%) based on average risk-weighted items. As of 1 July, Corporate Banking has merged with Spar Nord s Local Banks. Page 17 of 22

18 NOTER Note DKK 000 Full year 2 Interest income Receivables from credit institutions and central banks Loans, advances and other receivables Bonds Foreign-exchange contracts Interest-rate contracts Share contracts Derivative instruments, total Other interest income Total interest income Of which, income from genuine purchase and resale transactions booked under: Receivables from credit institutions and central banks Loans, advances and other receivables 155,893 94, ,120 1,570,354 1,083,419 1,517, , , ,619 74,899 32,068 50,763 10,935-5,322 1, ,961 26,771 52, ,045,864 1,435,740 2,025,172 17,516 10,866 23,777 3,665 2,715 20,070 3 Interest expenses Credit institutions and central banks Deposits and other payables Subordinated debt Other interest expenses Total interest expenses Of which, interest expenses from genuine sales and repo transactions booked under: Payables to credit institutions and central banks Deposits and other payables 618, , , , , ,904 64,402 60,728 79, ,462 2,119 1,196, ,897 1,001,654 37,612 27,427 40, ,938 17,574 4 Fees, charges and commissions received Securities trading and custody accounts Asset management Payment services Loan transaction fees - of which, mortgage credit institutions Guarantee commissions Other fees, charges and commissions Total fees, charges and commissions received 118, , , , , ,293 35,050 32,741 43,705 65,942 64,634 89,329 41,576 37,900 51,732 23,516 22,345 30,186 31,054 30,946 36, , , ,929 5 Fees, charges and commissions paid Securities trading and custody accounts Asset management Payment services Loan transaction fees Guarantee commissions Other fees, charges and commissions Total fees, charges and commissions paid 29,052 24,073 35,617 18,589 10,998 13, ,014 5,296 5,009 10,171 12,542 53,392 49,256 66,608 6 Net fees, charges and commissions received Securities trading and custody accounts Asset management Payment services Loan transaction fees - of which, mortgage credit institutions Guarantee commissions Other fees, charges and commissions Net fees, charges and commissions received, total 89,259 97, , , , ,140 35,050 32,741 43,705 65,942 64,634 89,329 41,576 37,900 51,732 22,774 18,331 24,890 26,045 20,775 23, , , ,321 Page 18 of 22

19 NOTES Note DKK 000 Full year 7 Market-value adjustments Other loans, advances and receivables at fair value Bonds Shares, etc. Foreign exchange Foreign exchange, interest, share, commodity and other contracts and derivative instruments Assets linked to pooled schemes Deposits in pooled schemes Other assets Miscellaneous commitments Total market-value adjustments -2,950-7,684-10,370-81,949-85,597-96,511 17, , ,744 89,568-32,993 32,034 75, , , , , , , , , ,154 24,680 33, , , ,177 8 Staff costs and administrative expenses Staff costs Administrative expenses Total Staff costs Salaries Pensions Social security costs and payroll tax, etc. Total Of which, salaries and remuneration of the Supervisory and Executive Boards account for Executive Board Supervisory Board Salaries and remuneration of Supervisory Board and Executive Board, total The Executive Board s remuneration is composed of three elements: Base salary Bonus Management incentive scheme Number of employees (average no. of full-time employees) 565, , , , , , , ,450 1,101, , , ,618 51,832 46,931 63,323 31,926 29,854 40, , , ,213 9,379 7,730 9,865 1,488 1,491 2,043 10,867 9,221 11,908 5,353 5,402 7,145 1,650 1,350 1,350 2, ,370 1,335 1,237 1,252 Termination rules: The members of the Executive Board have a term of notice of 12 months and will receive a compensation corresponding to two years pay. Pension obligation: Like the other employees, members of the Executive Board are comprised by defined-contribution pension plans. Incentive scheme: The Executive Board and executive staff members are comprised by the Group s share option scheme. Reference is made to the Group s Annual Report for a more detailed description. Other administrative expenses: IT expenses Marketing costs Cost of premises Telephone and postage Other office expenses Other administrative expenses Total 129, , ,340 54,798 51,988 68,622 39,221 44,028 62,501 21,032 20,261 27,705 9,931 9,417 12,802 73,016 67,495 88, , , ,289 9 Receivables from credit institutions and central banks Receivables from central banks, subject to notice Receivables from credit institutions Total receivables from credit institutions and central banks 1,573,699 1,398,485 1,698,543 4,962,972 3,536,611 6,428,808 6,536,671 4,935,096 8,127,351 Page 19 of 22

20 NOTES Note DKK 000 Full year 10 Impairment of loans and advances and provisions for guarantees Individual impairment of loans and advances Individual impairment, beginning of period New provisions for individual impairment Individual impairment reversed Previously written down, now definitively lost Other additions and disposals Individual impairment, end of period 443, , , , , , , , ,675 17,541 35,361 43, , , ,486 Groups of impairment losses, loans and advances Groups of impairment losses, beginning of period New provisions for groups of impairment losses Groups of impairment losses reversed Previously written down, now definitively lost Other additions and disposals Groups of impairment losses, end of period 55,071 60,200 60, , , , ,954 90,390 55,071 Total impairment of loans and advances Impairment, beginning of period New provisions for impairment Impairment reversed Previously written down, now definitively lost Other additions and disposals Impairment, end of period 498, , , , , , , , ,804 17,541 35,361 43, , , ,557 Impairment recognized in the income statement New provisions for impairment during the year Impairment reversed Losses without prior impairment Carried to income, previously written off Recognized in the income statement Impairment, other credit risks Provisions for losses on guarantees Provisions for losses on guarantees, beginning of period New provisions during the year Provisions reversed Other additions and disposals Provisions for losses on guarantees, end of period Provisions recognized in the income statement New provisions during the year Provisions reversed Recognized in the income statement 145, , , , , ,957 14,377 29,737 52,211 62,874 59,850 96,575-89,799-17, , , ,811 28,000 28, ,361 12,899 1, ,450 15,101 26, ,361 12,899 1,816-20,361-12,899-1,816 Page 20 of 22

21 NOTER Note DKK 000 Full year 11 Subordinated debt Nom. DKK 50,000,000, expiry , interest rate % Nom. DKK 150,000,000, expiry , interest rate % Nom. DKK 100,000,000, expiry , interest rate % Nom. EUR 10,000,000, expiry , interest rate % Nom. EUR 2,500,000, expiry , interest rate % Nom. EUR 5,000,000, expiry , interest rate % Nom. DKK 155,000,000, expiry , interest rate % Nom. DKK 200,000,000, expiry , interest rate % Nom. NOK 220,000,000, expiry , interest rate % Nom. EUR 40,000,000, expiry , interest rate % Nom. EUR 33,500,000, expiry , interest rate % Portfolio of own bonds Supplementary capital contributions, total 0 50, , , , , ,000 75,285 76,859 76,360 18,822 19,215 19,090 37,643 38,430 38, , , , , , , , , , , , , ,597-2,597 1,346,462 1,036,129 1,119,208 Hybrid core capital Nom. DKK 350,000,000, interest rate % Subordinated debt, total Interest on subordinated debt Costs of raising subordinated debt Subordinated capital contributions that can be included for the purpose of calculating the capital resources 329, , ,939 1,676,012 1,380,770 1,458,147 63,940 59,944 77, ,291 1,676,012 1,380,770 1,458, Contingent liabilities The Bank and all major wholly-owned subsidiaries are jointly registered for payroll tax and VAT and are jointly and severally liable for the payroll tax and VAT payable Guarantees, etc. Financial guarantees Loss guarantees for mortgage loans Registration and refinancing guarantees Other guarantees Guarantees, etc., total 2,373,701 2,068,326 2,280, ,436 3,222,976 3,378, , , , , , ,611 3,921,435 6,360,826 7,016,713 Other commitments Irrevocable credit commitments Other commitments, total Page 21 of 22

22 NOTES TO THE FINANCIAL STATEMENTS WITHOUT REFERENCE NUMBERS DKK 000 Full year Genuine sales and repo transactions and genuine purchase and resale transactions Genuine purchase and resale transactions constitute the following: Receivables from credit institutions and central banks Loans, advances and other receivables Genuine sales and repo transactions constitute the following: Payables to credit institutions and central banks Deposits and other payables Assets sold as an element in genuine sales and repo transactions Asset item: Bonds at fair value 440, ,357 2,162, ,454,279 1,908,581 1,089,912 1,684,585 1,621, ,348, ,203 1,074,790 1,379,833 2,112,174 Security furnished At the end of the third quarter, securities were deposited with Danmarks Nationalbank (the central bank), The Royal Bank of Scotland and foreign clearing centres worth 6,284,459 6,711,053 8,171,077 Hedge accounting Assets Loans and advances Carrying amount Purchase price Fair value Nominal value Derivatives (swap contracts) Carrying amount Fair value Synthetic principal/nominal value 73,398 78,542 76,927 75,000 75,000 75,000 73,398 78,542 76,927 75,000 75,000 75,000 1,563-3,542-1,927 1,563-3,542-1,927 75,000 75,000 75,000 Liabilities Subordinated debt Carrying amount Purchase price Fair value Nominal value Derivatives (swap contracts) Carrying amount Fair value Synthetic principal/nominal value 463, , , , , , , , , , , ,245-18, ,709-18, , , , ,245 Payables to credit institutions Carrying amount Purchase price Fair value Nominal value Derivatives (swap contracts) Carrying amount Fair value Synthetic principal/nominal value 0 452,202 1,175, ,000 1,196, ,202 1,175, ,800 1,176, ,798-21, ,798-21, ,800 1,176,630 Ownership The Spar Nord Foundation, Aalborg, and Nykredit Realkredit A/S, Copenhagen, have disclosed that they each own more than 5 % of the share capital of Spar Nord Bank A/S. Page 22 of 22