vestjyskbank Quarterly Report

Transcription

1 Q vestjyskbank Quarterly Report Solid commitment

2 Management s Report Report 3 Financial Highlights 5 Key Figures 6 Income Statement 7 Management s Statement 10 Income Statement 11 Balance Sheet 12 Statement of Changes in Shareholders Equity 14 Notes to Income Statement 16 Notes to Balance Sheet 19

3 Management s Report Report Report Development in activities and financial conditions The pre-tax profit for the first quarter of 2008 amounts to DKK 83m and is on a par with the profit for the first quarter of 2007, which is satisfactory. During the first quarter of 2008, market value adjustments have been positive at DKK 19m. The item has been positively impacted by DKK 39m as a consequence of the amended partnership agreement with Totalkredit/Nykredit. When adjusted for this extraordinary entry, market value adjustments have been negative at DKK 20m compared to a positive adjustment of DKK 24m during the same period in The decrease can be ascribed to the generally lower value of the market throughout the first quarter. The amended partnership agreement has also meant that vestjyskbank has gone over to the so-called netting model for guarantees given to Totalkredit. This has pushed the Bank s business volume downwards by DKK 0.8bn. However, compared with the same quarter in 2007, there is still an increase in business volumes for loans and advances as well as deposits, broken down as follows: loans and advances +26% and deposits +14%. The total business volume amounts to DKK 28.7bn compared with DKK 25.1bn in The increase of more than 14% is extremely satisfactory when the negative effect of the transition to the netting model for Totalkredit guarantees is taken into consideration. vestjyskbank has an extremely conservative lending policy. During the period there has been a reversal of impairment on loans and advances of DKK 21.4m, and in the period DKK 25m have been written down, with the effect that net impairment has been limited to DKK 3.6m.

4 Management s Report Report The solvency ratio is calculated at 10.9% (excluding profit for the period), a change of 1.8 percentage points compared with the end of This means that vestjyskbank s solvency target of 10-12% has once again been met. The cost percentage is calculated at 45.3%. This is significantly less than the Bank s longterm objective of a cost percentage of approximately 55%. However, the primary reason for this is the income from the amended Totalkredit/Nykredit partnership agreement mentioned above. Disregarding this, the cost percentage amounts to 56.6%, which corresponds to the level at the end of Earnings/costs fell slightly from 1.98 in 2007 to 1.87 in In February vestjyskbank received subordinated loan capital of a total of DKK 250m in the form of contributions from institutional investors. Average shareholders equity after tax has yielded an interest of 14.8% p.a. Against the background of developments in the first quarter and the continued anxiety in the financial markets, vestjyskbank maintains its previously stated expectations of an annual pre-tax profit of approximately DKK 275m.

5 Management s Report Financial Highlights Financial Highlights Q1 Q1 Full year (DKK m) Income statement Net interest income and fee earnings Market value adjustments Staff costs and administrative expenses Impairment of loans and advances and accounts receivable, etc Pre-tax profit Profit Core income Costs, incl. depreciation and impairment of tangible assets Balance sheet Loans and advances 15,623 12,445 14,563 Deposits 9,371 8,199 9,174 Shareholders equity 1,766 1,602 1,714 Total assets 19,688 15,223 18,513 Guarantees 2 3,699 4,473 5,439 Business volume 2 28,693 25,117 29,176 1 Net interest income and fee earnings + market value adjustment of foreign exchange and fixed assets + other operating income 2 As of 2008 the statement does not include loss guarantees given to Totalkredit due to the transition to the netting model.

6 Management s Report Key Figures Key Figures Q1 Q1 Full year Solvency ratio % 10.2% 9.1% Core capital ratio 1 8.0% 8.5% 7.3% Return on equity before tax % 21.2% 17.3% Return on equity after tax % 15.3% 13.2% Earnings/costs Cost percentage % 54.9% 56.0% Employees calculated as full-time staff (average) Interest rate risk 5 0.7% 0.7% 2.1% Foreign exchange position % 6.0% 99.6% Foreign exchange risk 0.1% 0.0% 0.1% Excess coverage in compliance with statutory liquidity requirements % 18.5% 47.5% Loans and advances plus impairment of these relative to deposits 168.5% 154.3% 160.6% Loans and advances relative to shareholders equity Growth in loans and advances for the period 7.3% 7.9% 26.3% Sum of large commitments % 73.8% 125.4% Accumulated impairment percentage 0.9% 1.3% 0.9% Impairment percentage for the period 0.0% 0.0% -0.1% Per share of DKK 10: Profit per share for the period Equity value per share Price of vestjyskbank shares at the end of the period Market price/equity value per share has been assessed according to the new Executive Order on Capital Adequacy has been assessed according to transitional provisions herein. 2 On the basis of average shareholders equity 3 Ordinary income relative to ordinary costs Ordinary income = net interest income and fee earnings + market value adjustments + other operating income + profit of equity investments in associated and affiliated companies Ordinary costs = staff costs and administrative expenses + depreciation and impairment of intangible and tangible assets + other operating expenses + impairment of loans and advances and accounts receivable, etc. 4 Costs incl. depreciation and impairment of assets / core income 5 Interest rate risk relative to core capital after deductions 6 Foreign Exchange Indicator 1 relative to core capital after deductions 7 Excess coverage in compliance with the 10% requirement of Section 152 of the Danish Financial Business Act 8 Commitments larger than 10% of the capital base relative to the capital base

7 Management s Report Income Statement Income Statement Net interest income totals DKK 126m compared with DKK 118m in the same quarter in 2007, an increase of 6.5%. This increase has been caused by the continued rise in business volume. Fees and commission income show a limited overall increase of DKK 1.5m to DKK 34m, corresponding to 4.7%. The breakdown is shown in the table below. DKK m Percentage distribution 31/3 31/3 31/3 31/ Guarantee commission Securities trading and custody Other fees and commissions Payment services Loan processing fees Net interest income and fee earnings total DKK 157m compared with DKK 148m in This 6.2% increase is due to increased business volumes in loans and advances, guarantees and payment services. During the period vestjyskbank reduced many fees and commissions, and this is reflected in the fall in fee earnings. Market value adjustments show a drop of 18.4% to DKK 19m. This figure includes income from the amended partnership agreement with Totalkredit/Nykredit to the order of DKK 39m. Thus, without this adjustment there would be a negative market value adjustment of around DKK 20m. This fall can be attributed to the generally lower value of the market throughout the first quarter. Costs, including depreciation and impairment of tangible assets, amount to DKK 92m compared with DKK 91m in 2007, corresponding to an increase of 1.1%. During the period the Bank opened a new branch in Horsens, with the appointment of seven new employees. Taking this into account, the increase in costs is extremely modest. Impairment of loans and advances and accounts receivable, etc. total DKK 3.1m, compared with a net reversal of DKK 3.7m in The Bank s conservative lending policy and the high quality of the Bank s portfolio of loans and guarantees has led to a fall in the accumulated impairment percentage. At the end of the quarter the impairment account totalled DKK 172m, corresponding to 0.9% of total loans and advances, impairment and guarantees against 1.3% in the same quarter in 2007.

8 Management s Report Income Statement Balance sheet The Bank s balance sheet at the end of the first quarter of 2008 totalled DKK 19.7bn, compared with DKK 15.2bn in 2007, corresponding to an increase of 29.3%. Total loans and advances have increased by DKK 3.2bn to DKK 15.6bn, an increase of 25.5%. Growth in loans and advances is evenly distributed across all of vestjyskbank s business areas. Deposits have risen by 14.3% from DKK 8.2bn to DKK 9.4bn. The Bank s portfolio of guarantees has fallen from DKK 4.5bn to DKK 3.7bn, corresponding to 17%. This drop is due to the transition to the netting model in respect of loss guarantees given to Totalkredit. The total business volume total loans and advances, deposits and guarantees amounts to DKK 28.7bn compared with DKK 25.1bn at the end of the first quarter in 2007, corresponding to a growth of 14%. Liquidity vestjyskbank s liquidity objective is a liquidity percentage of at least 40. At the end of the first quarter the liquidity percentage has been calculated at The Bank has thus satisfied its liquidity objective. Solvency/capital status At the end of 2007 vestjyskbank s solvency ratio was calculated at 9.1%, which lay under the Bank s solvency objective of 10-12%. In February vestjyskbank received subordinated loan capital of a total of DKK 250m in the form of contributions from institutional investors. Solvency is calculated at 10.9% (excluding profit for the period). Thus, vestjyskbank s solvency objective of percent has once again been met. Shareholders equity At the end of the first quarter and after addition of profit for the period, shareholders equity totalled DKK 1.7bn. Since the end of the period there have been no significant events that have affected the profit. The new capital adequacy requirments With effect from 1 January 2007, new capital adequacy requirements were introduced for calculating credit, market and operational risks. Until 1 January 2008 vestjyskbank has made use of transitional provisions, but as from the first quarter of 2008 the new rules have been implemented in full.

9 Management s Report Income Statement Recognition and measuring Assets are recognised in the balance sheet when it is probable that, as a consequence of an earlier event, future financial benefits will accrue to the Bank, and the asset s value can be measured reliably. Liabilities are recognised in the balance sheet when the Bank has, as a consequence of an earlier event, a legal or an actual liability, and it is probable the future financial benefits will be deducted from the Bank and the liability s value can be measured reliably. When first recognised, assets and liabilities are measured at current value. However, tangible assets are measured at cost price at the time when first recognised. Measurement after the first recognition takes place as described for each individual accounting item below. When recognising and measuring, consideration is given to foreseeable risks and losses that occur before the annual report is submitted, and that confirm or disprove conditions that existed on the balance sheet date. In the income statement income is recognised as it is earned, while expenses are recognised at the amounts that relate to the financial year. However, value increases in properties are recognised directly to shareholders equity. Financial instruments are recognised on the settlement date. No segment information is provided, as there is no significant variation internally between activities or geographical markets. Outlook for 2008 When the annual report for 2007 was published, vestjyskbank expected the annual profit for 2008 to be approximately DKK 275m. Against the background of the profit for the first three months of the year, income from the amended partnership agreement with Totalkredit/Nykredit and the continued anxiety in the financial markets, the Bank maintains its expectations of the overall profit for the year. Accounting policies The accounting policies remain unchanged from last year. Financial calendar August 2008 Half-yearly report for October 2008 Quarterly Report, Q1-Q3 2008

10 Management s Statement 10 Management s Statement The Board of Directors and the Executive Management have on this date reviewed and approved the Report for the period 1 January 31 March 2008 for Vestjysk Bank A/S. The report has been prepared in accordance with the Danish Financial Business Act and additional Danish disclosure requirements for publicly listed financial institutions. We consider the accounting policies applied to be appropriate in such a way that the Report provides a true and fair view of the Bank s assets, liabilities, financial position and profit. The Report has not been audited or reviewed. Lemvig, 30 April 2008 Executive Management Frank Kristensen Board of Directors Anders Bech Peter Grankær Peter Mortensen Kirsten Lundgaard-Karlshøj Peder Hesselaa Nielsen Peter Bækkelund Rasmussen

11 Income Statement 11 Income Statement Q1 Q1 Full year DKK t DKK t DKK t Interest income 302, ,588 1,034,556 Interest expenses 177, , ,720 Net interest income 125, , ,836 Dividends of shares, etc ,376 Fees and commission income 34,103 32, ,737 Paid fees and commission expenses 3,417 3,275 13,739 Net interest income and fee earnings 156, , ,210 Market value adjustments 19,349 23,709 22,955 Other operating income ,700 Staff costs and administrative expenses 89,734 88, ,978 Depreciation and impairment of intangible and tangible assets 1,837 1,994 12,290 Impairment of loans and advances and accounts receivable, etc. 3,107-3,724-14,727 Pre-tax profit 82,510 85, ,324 Tax 19,389 23,853 69,025 Profit 63,121 61, ,299

12 Balance Sheet 12 Balance Sheet 31/3/ /3/ /12/2007 DKK t DKK t DKK t Assets Cash in hand and demand deposits at central banks 420,354 92, ,714 Accounts receivable at credit institutions and central banks 392, , ,674 Loans and advances and other accounts receivable at amortised cost price 15,623,196 12,444,753 14,563,436 Bonds carried at current value 2,319,218 1,575,147 2,378,866 Shares, etc. 416, , ,001 Total land and buildings Domicile properties 212, , ,189 Other tangible assets 7,964 3,780 7,800 Current tax assets 30,045 16,215 13,784 Deferred tax assets 0 2,000 4,777 Other assets 253, , ,652 Prepayments 12,726 9,226 12,337 Total assets 19,687,852 15,223,029 18,513,230

13 Balance Sheet 13 Balance Sheet 31/3/ /3/ /12/2007 DKK t DKK t DKK t Liabilities Debt Debt to credit institutions and central banks 5,953,857 3,300,211 5,379,692 Deposits and other amounts due 9,371,461 8,199,394 9,174,443 Issued bonds carried at amortised cost price 1,492,750 1,472,999 1,506,990 Current tax liabilities 0 9,421 0 Other liabilities 391, , ,654 Prepayments Total debt 17,209,768 13,266,492 16,343,798 Provisions for liabilities Provisions for pensions and similar liabilities 11,090 10,381 8,040 Provisions for deferred tax 5, Provisions for losses on guarantees 9,429 5,602 9,263 Other provisions for liabilities 0 2,664 0 Total provisions for liabilities 25,553 18,647 17,303 Subordinated debt Subordinated debt 686, , ,088 Shareholders equity Share capital 86,000 88,000 86,000 Revaluation reserves 15,750 15,750 15,750 Earnings retained/loss brought forward 1,663,892 1,498,488 1,569,291 Proposed dividends of this ,000 Total shareholders equity 1,765,642 1,602,238 1,714,041 Total liabilities 19,687,852 15,223,029 18,513,230

14 Statement of Changes in Shareholders Equity 14 Q Share Revalua- Statutory Earnings Proposed Total sharecapital tion reserves retained dividends holders reserves equity DKK t DKK t DKK t DKK t DKK t DKK t Shareholders equity, beginning of ,000 15, ,569,291 43,000 1,714,041 Profit for the period 63,121 63,121 Distributed dividends ,000-42,035 Sale of own shares 97,940 97,940 Acquisition of own shares -76,263-76,263 Calculated tax relating to own shares 8,838 8,838 Shareholders equity, end of Q ,000 15, ,663, ,765,642 Q Share Revalua- Statutory Earnings Proposed Total sharecapital tion reserves retained dividends holders reserves equity DKK t DKK t DKK t DKK t DKK t DKK t Shareholders equity, end of ,000 15,750 2,813 1,505,507 44,000 1,656,070 Correction as a result of merger with subsidiary company -2,813 2,813 0 Shareholders equity, beginning of 2007, after correction 88,000 15, ,508,320 44,000 1,656,070 Profit for the period 61,374 61,374 Distributed dividends 1,528-44,000-42,472 Sale of own shares 47,648 47,648 Acquisition of own shares -120, ,382 Shareholders equity, end of Q ,000 15, ,498, ,602,238 Continued on the following page

15 Statement of Changes in Shareholders Equity 15 Full year 2007 Share Revalua- Statutory Earnings Proposed Total sharecapital tion reserves retained dividends holders reserves equity DKK t DKK t DKK t DKK t DKK t DKK t Shareholders equity, end of ,000 15,750 2,813 1,505,507 44,000 1,656,070 Correction as a result of merger with subsidiary company -2,813 2,813 0 Shareholders equity, begining of 2007, after correction 88,000 15, ,508,320 44,000 1,656,070 Profit for the period 179,299 43, ,299 Distributed dividends 1,528-44,000-42,472 Write-down of capital -2,000 2,000 0 Sale of own shares 199, ,104 Acquisition of own shares -322, ,501 Calculated tax relating to own shares 1,541 1,541 Shareholders equity, end of ,000 15, ,569,291 43,000 1,714,041

16 Notes to Income Statement 16 Q1 Q1 Full year DKK t DKK t DKK t Interest income/forward premium of Accounts receivable at credit institutions and central banks 6,998 4,148 27,096 Loans and advances and other accounts receivable 265, , ,289 Bonds 23,924 16,354 84,675 Total derivative financial 6, ,476 instruments of which: Foreign exchange contracts 2,917 1,115 7,361 Interest rate contracts 3,485-1,260 2,115 Other interest income Total interest income 302, ,588 1,034,556 Interest expenses for Credit institutions and central banks 59,491 29, ,621 Deposits and other amounts due 87,542 58, ,991 Issued bonds 21,900 12,774 71,365 Subordinated debt 8,313 3,998 21,720 Other interest expenses Total interest expenses 177, , ,720 Fees and commission income Securities trading and custody 8,101 9,375 41,132 Payment services 5,908 4,162 25,199 Loan processing fees 4,150 3,309 17,097 Guarantee commission 10,792 9,579 47,506 Other fees and commissions 5,152 6,141 10,803 Total fees and commission income 34,103 32, ,737 Market value adjustment of Bonds ,533-12,577 Shares, etc. 27,657 16,740 17,088 Foreign exchange ,686 15,611 Foreign exchange, interest rate, share, raw material and other contracts, as well as derivative financial instruments -7,466 4,274 10,746 Other assets 2, ,391 Other liabilities -3,205-4,117-6,522 Total market value adjustments 19,349 23,709 22,955

17 Notes to Income Statement 17 Staff costs and administrative expenses Q1 Q1 Full year DKK t DKK t DKK t Salaries and remuneration to the Board of Directors, Executive Management and Board of Representatives Board of Directors Executive Management: Salaries ,440 Pensions ,462 Total Executive Management ,902 The Bank does not uphold agreements with the Executive Management in relation to bonus or incentive schemes or similar renumeration schemes. Board of Representatives Total 1, ,948 Staff costs Salaries 45,043 44, ,120 Pensions 5,447 5,002 20,837 Expenses for social security 5,217 4,401 17,670 Total 55,707 53, ,627 Other administrative expenses 32,997 34, ,403 Total staff costs and administrative expenses 89,734 88, ,978 Number of employees The average number of employees in the financial period, calculated as full-time employees Pension conditions Members of the Executive Management may resign without notice before expiry of the year in which the member turns 62. The Bank is exempt from any pension liability in relation to resignation, be it on account of age, illness, disability or any other reason. Tax Calculated tax of profit for the year 9,578 23,853 72,013 Deferred tax 9, ,777 Deferred adjustment of calculated tax from previous years Total tax 19,389 23,853 69,025

18 Notes to Income Statement 18 Q1 Q1 Full year DKK t DKK t DKK t Effective tax rate Current tax rate 25.0% 28.0% 25.0% Adjustments to this: Non-deductible expenses 0.1% 0.0% 0.1% Non-taxable income -1.5% -2.3% -1.6% Property depreciation, etc. -0.1% 2.3% 0.3% Adjustment of tax for previous years 0.0% 0.0% -0.1% Total effective tax rate 23.5% 28.0% 23.7%

19 Notes to Balance Sheet 19 Loans and advances and other accounts receivable Individual Collective impairment impairment Total DKK t DKK t DKK t Q Impairment at the beginning of the period 163,254 3, ,964 Impairment during the period 24, ,882 Reversal of impairment charges from previous financial years -19,404-2,048-21,452 Other movements 4, ,167 Previously impaired now finally lost -3, ,628 Impairment 31/3/ ,172 2, ,933 Q Impairment at the beginning of the period 200,581 4, ,437 Impairment during the period 18, ,179 Reversal of impairment charges from previous financial years -19, ,548 Other movements 10, ,434 Previously impaired now finally lost -3, ,830 Impairment 31/3/ ,816 4, ,672 Full year 2007 Impairment at the beginning of the period 200,581 4, ,437 Impairment during the period 59,617 3,710 63,327 Reversal of impairment charges from previous financial years -71,913-4,856-76,769 Other movements 10, ,434 Previously impaired now finally lost -35, ,465 Impairment 31/12/ ,254 3, ,964 No impairment charges have been recognised on accounts receivable at credit institutions or on other accounts receivable. However, provisions have been made for losses on guarantees, cf. the liability item Provisions for losses on guarantees.

20 Notes to Balance Sheet 20 Q1 Q1 Full year DKK t DKK t DKK t Bonds Mortgage credit bonds 1,919,909 1,328,155 1,868,319 Government bonds 15,083 15, Additional bonds 384, , ,416 Total bonds at current value 2,319,218 1,575,147 2,378,866 Pledged as security for drawing right at Danmarks Nationalbank: Total nominal value 376, , ,672 Total market value 374, , ,264 Of which charged Shares, etc. Shares/investment units listed at OMX Nordic Exchange Copenhagen 94,669 96,293 93,324 Shares/investment units listed at other stock exchanges 26,191 23,988 22,716 Unlisted shares carried at current value 238, , ,422 Unlisted shares, etc. carried at cost price 5,438 5,438 5,438 Additional shares 51,909 51,363 53,101 Total shares, etc. 416, , ,001 Deposits On demand 5,464,523 4,791,009 5,421,851 At notice 67,829 75,074 72,929 Time deposits 2,644,692 2,303,510 2,470,661 Special deposits 1,194,417 1,029,801 1,209,002 Total deposits 9,371,461 8,199,394 9,174,443

21 Notes to Balance Sheet 21 Q1 Q1 Full year DKK t DKK t DKK t Subordinated debt Supplementary capital of EUR 15m 111, , ,849 Current interest rate 5.868% 4.754% 5.868% Date of maturity 31/10/ /10/ /10/2015 The loan may, with the approval of the Danish Financial Supervisory Authority, be prepaid on 31/10/2010. Supplementary capital of DKK 100m 100, , ,000 Current interest rate 5.625% 4.958% 5.815% Date of maturity 01/11/ /11/ /11/2013 The loan may, with the approval of the Danish Financial Supervisory Authority, be prepaid on 1/11/2010. Supplementary capital of NOK 135m 125, , ,239 Current interest rate 6.710% 4.900% 6.470% Date of maturity 16/05/ /05/ /05/2014 The loan may, with the approval of the Danish Financial Supervisory Authority, be prepaid on 16/5/2011. Supplementary capital of DKK 100m 100, ,000 Current interest rate 5.575% % Date of maturity 01/05/ /05/2015 The loan may, with the approval of the Danish Financial Supervisory Authority, be prepaid on 1/5/2012. Supplementary capital of DKK 100m 100, Current interest rate 6.350% - - Date of maturity 18/02/ Supplementary capital of DKK 100m 100, Current interest rate 6.370% - - Date of maturity 22/02/ Continued on the following page

22 Notes to Balance Sheet 22 Q1 Q1 Full year DKK t DKK t DKK t Supplementary capital of DKK 25m 25, Current interest rate 6.380% - - Date of maturity 03/03/ The loan may, with the approval of the Danish Financial Supervisory Authority, be prepaid on 3/3/2011. Supplementary capital of DKK 25m 25, Current interest rate 5.630% - - Date of maturity 03/03/ The loan may, with the approval of the Danish Financial Supervisory Authority, be prepaid on 3/3/2013. Total subordinated debt 686, , ,088 All of the Bank s subordinated debt is irredeemable. Subordinated debt to be stated as part of the capital base 636, , ,088 Costs in connection with raising loans Interest relating to subordinated debt included in the income statement 8,313 3,998 21,720

23 Notes to Balance Sheet 23 31/3/ /3/ /12/2007 DKK t DKK t DKK t Share capital Number of shares of DKK 10 (no. of units) 8,600,000 8,800,000 8,600,000 Total share capital 86,000 88,000 86,000 Own shares Beginning of period Number of own shares in units of 1, Face value in DKK 1,000 3,353 1,361 1,361 Percentage of share capital 3.9% 1.5% 1.5% Additions Acquisition of own shares in units of 1, Face value in DKK 1,000 3,324 3,784 10,320 Percentage of share capital 3.9% 4.3% 12.0% Total acquision price in DKK 1,000 76, , ,501 Outflow Sale of own shares in units of 1, Own shares annulled in units of 1, Total outflow in units of 1, Face value in DKK 1,000 4,625 1,480 8,328 Percentage of share capital 5.4% 1.7% 9.7% Total sales price in DKK 1,000 97,940 47, ,104 End of period Number of own shares in units of 1, Face value in DKK 1,000 2,052 3,665 3,353 Percentage of share capital 2.4% 4.2% 3.9% Contingent liabilities Guarantees Financial guarantees 1,222,459 1,442,012 1,625,978 Loss guarantees for mortgage credit loans 606,032 1,753,364 1,896,413 Land registration and conversion guarantees 306, , ,295 Other guarantees 1,563,529 1,095,361 1,536,204 Total guarantees, etc. 3,698,818 4,472,671 5,438,890 Other contingent liabilities Other liabilities 2,803 2,856 2,803 Total other contingent liabilities 2,803 2,856 2,803

24 Notes to Balance Sheet 24 Capital requirements 31/3/ /3/ /12/2007 DKK t DKK t DKK t Shareholders equity excl. profit for the period 1,702,521 1,540,864 1,491,742 Profit included ,299 Proposed dividends ,000 Revaluation reserves -15,750-15,750-15,750 Other deductions in core capital -65,380-71,447-59,625 Core capital after deductions 1,621,391 1,453,667 1,595,666 Subordinated loan capital 636, , ,088 Revaluation reserves 15,750 15,750 15,750 Capital base before deductions 2,274,030 1,805,069 2,049,504 Deductions in capital base -65,380-69,447-54,848 Capital base after reductions 2,208,650 1,735,622 1,994,656 Total weighted items 20,265, ,823 21,913,315 Core capital after deductions in percent of total weighted items 8.0% 8.5% 7.3% Solvency ratio according to section 124(2) of the Danish Financial Business Act 10.9% 10.2% 9.1% The Bank uses the standard method for assessing credit and market risks, and the basic indicator method for operational risks. Up until 1 January 2008 the Bank applied transitional provisions.

25 vestjyskbank is oriented towards sound growth and solid financial latitude for our customers as well as ourselves. Our Head Office and Key Account Branch are situated in Lemvig, while our 16 local branches are centrally located in Jutland. In addition, our Remote Customer Branch advises customers living in the rest of Denmark. The Bank has 460 employees, who work with approximately 56,500 retail customers and approximately 6,500 corporate customers. The Bank has a business volume of DKK 29.2bn. vestjyskbank applies value-based management based on our three core values: PRESENCE, COMPETENCE and DYNAMISM. bureaufrydensberg.dk Bøvlingbjerg Tangsøgade 23 DK-7650 Bøvlingbjerg Phone Fax Holstebro Store Torv Vestergade 1 DK-7500 Holstebro Phone Fax Key Accounts Torvet 4-5 DK-7620 Lemvig Phone Fax Esbjerg Kongensgade 70 DK-6700 Esbjerg Phone Fax Horsens Strandkærvej 30 DK-8700 Horsens Phone Fax Struer Vestergade 5 DK-7600 Struer Phone Fax Remote Customers Vestergade 1 DK-7500 Holstebro Phone Fax Kolding Esbjergvej 20 DK-6000 Kolding Phone Fax Thisted Jernbanegade 19 DK-7700 Thisted Phone Fax Harboøre Søndergade 28 DK-7673 Harboøre Phone Fax Lemvig Torvet 4-5 DK-7620 Lemvig Phone Fax Thyborøn Bredgade 2 DK-7680 Thyborøn Phone Fax Herning Dalgasgade 29 B DK-7400 Herning Phone Fax Randers Store Voldgade 4 DK-8900 Randers C Phone Fax Viborg St. Sct. Peder Stræde 4 DK-8800 Viborg Phone Fax Holstebro Nørreport Nørregade 57 DK-7500 Holstebro Phone Fax Silkeborg Borgergade 28 DK-8600 Silkeborg Phone Fax Århus Åboulevarden 67 DK-8000 Århus C Phone Fax Head Office Torvet 4-5 DK-7620 Lemvig Phone Fax Solid commitment