Fact Book Q3 2007 Supplementary Information for Investors and Analysts Unaudited Updated: October 30, 2007 1
Table of contents 1.1. Financial goals 4 1.2. Share Data 4 1.3. Ratings 5 1.4. Changes in accounting principles and presentation 6 2. Financial statistics 2.1. Income statement - Danske Bank Group 8 2.1.1. Breakdown of income 9 2.1.2. Breakdown of expenses 13 2.2. Balance sheet 15 2.2.1. Breakdown of balance sheet 16 2.3. Key ratios 20 3. Business segments and key statistics 3.1. Banking Activities 23 3.1.1. Banking Activities, Denmark 24 3.1.2. Banking Activities, Finland 25 3.1.3. Banking Activities, Sweden 26 3.1.4. Banking Activities, Norway 27 3.1.5. Banking Activities, Northern Ireland 28 3.1.6. Banking Activities, The Rep. of Ireland 29 3.1.7. Banking Activities, Baltics 30 3.1.8. Other Banking Activities 32 3.2. Mortgage Finance 33 3.3. Danske Markets 35 3.4. Danske Capital 36 3.5. Danica Pension 38 3.6. Other areas 39 4. Macroeconomics 4.1.Tables and charts 41 2
Fact Book Q3 2007 This publication is meant as a supplement to the information published in the quarterly interim reports and the annual report. Additional information can be found on www.danskebank.com and www.danskebank.dk. For further information, please contact: Financial calendar Tonny Thierry Andersen, Chief Financial Officer Direct: +45 45 14 07 07 Mobile: +45 22 65 65 97 tonan@danskebank.dk Martin Gottlob, Head of Investor Relations Direct: +45 45 14 07 92 Mobile: +45 25 27 25 41 mgot@danskebank.dk Date January 31, 2008 April 29, 2008 August 7, 2008 October 28, 2008 Event & location Annual report Quarterly report first quarter Interim report Quarterly report first nine months Lars Holm, Senior IR Officer Direct: +45 45 14 06 04 Mobile: +45 25 10 47 17 laho@danskebank.dk Heidi Sørensen, IR assistant Direct: +45 45 14 06 80 Fax: +45 45 14 97 87 heis@danskebank.dk Disclaimer This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offers to purchase or sell any securities, currency or financial instrument. Whilst reasonable care has been taken to ensure that the contents of this publication are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff may perform business services, hold, establish, change or cease to hold positions in any securities, currency or financial instrument mentioned in this publication. The Danske Bank Groups research analysts are not permitted to invest in securities under coverage in their research sector. This publication is not intended for private customers in the UK or any person in the US. Danske Bank is regulated by the FSA for the conduct of investment business in the UK and is a member of the London Stock Exchange. Copyright 2007 Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission. 3
1.1. Financial goals The Group bases its capital management on a set of overall capital targets. Below are the targets for the third quarter of 2007 as well as the realised ratios. Financial goals Target Realised Q3 2007 (%) (%) Core (tier 1) capital ratio (excl. hybrid core capital) 5.5-6.0 5.7 Hybrid core capital 1.0-1.5 0.9 Solvency ratio 9.0-10.0 9.3 Expected payout ratio 30-50 40 Dividends and share buybacks If the bank have surplus capital above our target, which is not needed for future growth, the bank's policy is to return this surplus to the shareholders through share buybacks. The total amount of dividends and share buybacks since 2000 can be seen in the table below. Total distribution (DKr m) 2006 2005 2004 2003 2002 2001 2000 Dividends 5,416 6,383 5,277 4,661 3,477 3,477 3,382 Share buybacks - - 5,000 5,000 3,000-4,999 Total 5,416 6,383 10,277 9,661 6,477 3,477 8,381 Net profit for the year 13,545 12,822 9,317 9,286 8,242 8,713 6,304 Total as % of the net profit for the year 40% 50% 110% 104% 79% 40% 133% * In November 2006, shareholders equity was raised by DKr14.5bn in connection with the acquisition of Sampo Bank. The dividend of 40% has been calculated based on the increased share capital at the end of 2006. 1.2. Share data The Danske Bank Group is the largest financial services organisation in Denmark. The average daily trading volume of Danske Bank shares in the third quarter of 2007 was DKr 714m. With a total trading volume of Dkr133.6bn, the Danske Bank share was the most actively traded share on the Copenhagen Stock Exchange in the first nine months of 2007. At the end of September 2007, there were 698,804,276 shares at a nominal value of DKr10 per share. Danske Bank shares are negotiable, and no special rights are attached to them. No shareholder is obligated to redeem shares in full or in part. The shares are issued to the bearer, but they can be registered by name in the Banks register of shareholders. No. of shares Year 2007 Issued shares at January 1 698,804,276 Buyback programme, preceding year - Issued shares, preceding year - Issued shares at September 30 698,804,276 The Group's trading portfolio of own shares 8,865,637 The Group's investments in own shares on customers' behalf 6,563,972 Shares outstanding at September 30 683,374,667 Average number of shares outstanding, Q1-Q3 684,133,865 4
1.3. Ratings Danske Bank rating overview The agencies each use their own rating scales, on which the highest possible ratings are AAA and Aaa (see the table below). Ratings in the A categories are considered "investment grade", indicating only a marginal risk that the issuer will go default. The Danske Bank Group is currently rated by the three large international credit rating agencies: Moody's, Standard & Poor's and Fitch Ratings. Moody s Standard & Poor s S&P s Insurer Financial Strength Fitch Short term Long term Short term Long term Long term Short term Long term P-1 Aaa A-1+ AAA AAA F1+ AAA P-2 Aa1 A-1 AA+ AA+ F1 AA+ P-3 Aa2 A-2 AA AA F2 AA Aa3 A-3 AA- AA- F3 AA- A1 A+ A+ A+ A2 A A A A3 A- A- A- Baa1 BBB+ BBB+ BBB+ Baa2 BBB BBB BBB Baa3 BBB- BBB- BBB- 5
1.4. Changes in accounting principles and presentation Changes in accounting principles The Group has not changed its accounting principles from those presented in the Fact Book Q2 2007. Changes in presentation In November 2006, the Danske Bank Group entered into an agreement to buy all shares of the Finnish Sampo Bank. The acquisition was approved on January 30, 2007, and effected on February 1, 2007, from which date the Sampo Bank group was consolidated in the accounts of Danske Bank. Due to the acquisition of Sampo Bank, beginning the first quarter of 2007, the Groups reporting was expanded with two segments Banking Activities Finland and Banking Activities Baltics. Comparative figures in the financial reporting on the activities of Finland, the Baltic countries, Danske Markets, Danske Capital and Other Areas have been restated on a pro forma basis to include the financial results of the Sampo Bank group as of February 1, 2006. Consequently, the results of these areas in the first quarter of 2007 are compared with pro forma figures for 2006. The pro forma financial highlights were calculated before the time of acquisition in accordance with the accounting policies of the Sampo Bank group (IFRS). The breakdown of expenses under 2.1 Income statement does not match the expenses allocated to the business areas, as integration expenses incurred by the business areas are stated separately. Comparative figures have been restated. 6
Financial statistics 7
2.1. Income statement Danske Bank Group Year to date Full year Income statement (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Net interest income 6,231 6,053 5,724 6,204 5,775 5,593 5,038 18,008 22,610 Hereof amortisation of loans and deposits* 46 46 31 - - - - 123 - Financing 417 409 392 346 334 364 348 1,218 1,392 Investment 395 425 517 400 293 416 575 1,337 1,684 Services 12 25 33 6 39 35 58 70 138 Fees generated by activities 824 859 942 752 666 815 981 2,625 3,214 Financing 56 47 88 126 104 107 102 191 439 Investment 640 632 549 504 373 392 384 1,821 1,653 Services 646 676 603 498 508 492 497 1,925 1,995 Fees generated by portfolios 1,342 1,355 1,240 1,128 985 991 983 3,937 4,087 Net fee income, Sampo - - - 471 406 424 275-1,576 Net fee income, total 2,166 2,214 2,182 2,351 2,057 2,230 2,239 6,562 8,877 Net trading income 1,990 2,310 1,893 1,632 1,868 1,672 2,108 6,193 7,280 Other income 586 679 873 887 733 780 552 2,138 2,952 Net income from insurance business 269 358 311 554 768-165 198 938 1,355 Total other income 2,845 3,347 3,077 3,073 3,369 2,287 2,858 9,269 11,587 Total income 11,242 11,614 10,983 11,628 11,201 10,110 10,135 33,839 43,074 Staff expenses 2,918 3,062 2,771 2,638 2,509 2,326 2,240 8,751 9,713 Severance pay 61 259 92 39 20 17 23 412 99 Holiday payment** -114 74 27 37-105 76 29-13 37 Bonuses 298 341 322 153 194 214 283 961 844 IT expenses 705 700 648 533 451 547 621 2,053 2,152 Other expenses 1,114 1,296 1,185 1,069 989 1,171 1,065 3,595 4,294 Staff and administration expenses 4,982 5,732 5,045 4,469 4,058 4,351 4,261 15,759 17,139 Staff and administration expenses, Sampo - - - 862 647 724 478-2,711 Staff and administration expenses, total 4,982 5,732 5,045 5,331 4,705 5,075 4,739 15,759 19,850 Depreciation, intangibles 428 429 364 221 215 186 192 1,221 814 Depreciation, tangibles 423 486 448 555 478 431 510 1,357 1,974 Other operating expenses 133 16 10-4 1-3 159 2 Operating expenses*** 5,966 6,663 5,867 6,107 5,402 5,693 5,438 18,496 22,640 Hereof integration expenses 261 326 139 80 53 262 209 726 604 Profit before credit loss expenses 5,276 4,951 5,116 5,521 5,799 4,417 4,697 15,343 20,434 Credit loss expenses 255 183-178 61-68 -349-128 260-484 Profit before tax 5,021 4,768 5,294 5,460 5,867 4,766 4,825 15,083 20,918 Tax 1,344 961 1,472 1,271 1,562 1,363 1,353 3,777 5,549 Net profit 3,677 3,807 3,822 4,189 4,305 3,403 3,472 11,306 15,369 Attributable to minority interests 34 25 1 10 8 20 41 60 79 Net profit after minority interest 3,643 3,782 3,821 4,179 4,297 3,383 3,431 11,246 15,290 * The fair value of loans, advances and deposits in the opening balance sheet has been increased by DKr439m compared with the carrying amount of these items recognised before the acquisition. The effect of the value adjustment on interest income generated by Banking Activities Finland is a decrease of DKr171m in 2007 and DKr67m in each of the following four years. ** In Denmark, second quarter affected by 6 th week Holiday payment. *** See specificifaction hereof in section 2.1.2. The pro forma figures include the Sampo Bank group as of February 2006. 8
2.1.1. Breakdown of income Country distribution of net interest income Money market rates Q3 2007 Baltics; 2.5% Others; 3.2% Ireland; 5.1% Northern Ireland; 7.8% 8.00 7.00 Finland; 13.2% Denmark; 51.9% 6.00 5.00 Q3 2006 Norway; 7.9% Northern Ireland; 7.5% Sweden; 8.4% Ireland; 4.2% Baltics; 1.3% Others; 2.9% 4.00 3.00 2.00 1.00 0.00 Finland; 14.1% Denmark; 54.6% jan-02 apr-02 jul-02 okt-02 jan-03 apr-03 jul-03 okt-03 jan-04 apr-04 jul-04 okt-04 jan-05 apr-05 jul-05 okt-05 jan-06 apr-06 jul-06 okt-06 jan-07 apr-07 jul-07 okt-07 Norway; 7.1% CIBOR 3 month STIBOR 3 month NIBOR 3 month Danish discount rate LIBOR 3 month EURIBOR 3 month Sweden; 8.2% The pro forma figures include the Sampo Bank group as of February 2006. 9
Interest income margins, Banking Activities Denmark, Sweden, Norway, Northern Ireland and Ireland 2.50 2.30 2.10 1.90 1.70 1.50 1.30 1.10 0.90 0.70 0.50 Q306 Q406 Q107 Q207 Q307 2.50 2.30 2.10 1.90 1.70 1.50 1.30 1.10 0.90 0.70 0.50 Q306 Q406 Q107 Q207 Q307 Lending spread (1) (from Tom/next interest rate) (%) Denmark Lending spread (1) (from Tom/next interest rate) (%) Sweden Lending spread (1) (from Tom/next interest rate) (%) Norway Lending spread (1) (from Tom/next interest rate) (%) Northern Ireland Lending spread (1) (from Tom/next interest rate) (%) Ireland Deposit spread (2) (from Tom/next interest rate) (%) Denmark Deposit spread (2) (from Tom/next interest rate) (%) Sweden Deposit spread (2) (from Tom/next interest rate) (%) Norway Deposit spread (2) (from Tom/next interest rate) (%) Northern Ireland Deposit spread (2) (from Tom/next interest rate) (%) Ireland Net interest income in Banking Activities, Denmark (YOY) Historical net interest income in Banking Activities, Denmark (DKr m) Q306 Change Q307 Net interest income 2,555 Loan volume 201 Loan margins -148 Deposit volume 78 Deposit margins -51 Other 63 Net interest income 2,698 10
Exchange rates (Cross currency: Danish krone (DKK)), end of period Exchange rate (end of period) Q307 Q207 Q107 Q406 Q306 Q206 Q106 Euro (EUR) 745.44 744.22 745.08 745.60 745.76 745.92 746.24 US Dollars (USD) 525.74 551.07 559.45 566.14 589.07 586.74 616.52 English pound (GBP) 1,069.80 1,104.18 1,096.03 1,110.35 1,100.43 1,077.76 1,071.57 Swedish kroner (SEK) 80.90 80.43 79.72 82.47 80.36 80.74 79.12 Norwegian kroner (NOK) 96.58 93.35 91.77 90.51 90.56 93.99 93.66 Polish zloty (PLN) 197.57 197.53 192.69 194.62 187.79 183.97 189.28 Estonian kroner (EEK) 47.64 47.56 47.62 47.65 47.66 47.67 47.69 Latvian lats (LVL) 1,059.16 1,068.82 1,049.85 1,069.42 1,071.49 1,071.57 1,072.03 Lithuanian litas (LTL) 215.89 215.54 215.79 215.94 215.99 216.03 216.13 Net interest income Dkr m 6,500 5,200 3,900 2,600 1,300 0 Q306 Q406 Q107 Q207 Q307 The pro forma figures include the Sampo Bank group as of February 2006. 11
Net fee income Dkr m 2,500 2,000 1,500 1,000 500 0 Q306 Q406 Q107 Q207 Q307 Fees generated by activities Fees generated by portfolios Net fee income, Sampo The pro forma figures include the Sampo Bank group as of February 2006. As of Q1 2007, no specific net fee income for Sampo Bank is shown, as this has been included in fees generated by activities and portfolios respectively. Total other income DKr m 4,000 3,200 2,400 1,600 800 0 Q306 Q406 Q107 Q207 Q307 Net trading income Other income Net income from insurance business The pro forma figures include the Sampo Bank group as of February 2006. 12
2.1.2. Breakdown of expenses Operating expenses Year to date Full year DKr m Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Operating expenses 5,966 6,663 5,867 6,107 5,402 5,693 5,438 18,496 22,640 Amortisation, intangibles Banking activities, Finland 179 135 128 - - - - 442 - Banking activities, Northern Ireland 104 115 113 118 118 112 111 332 459 Banking activities, Ireland 25 26 25 26 25 25 26 76 102 Danske Markets 3 - - - - - - 3 - Danske Capital 11 9 6 - - - - 26 - Amortisation, intangibles, total 322 285 272 144 143 137 137 879 561 Integration expenses Banking activities, Denmark 80 55 13 - - - - 148 - Banking activities, Finland 112 84 12 - - - - 208 - Banking activities, Northern Ireland 26 191 30 72 49 194 130 247 445 Banking activities, Ireland 43 50 30 8 4 68 79 123 159 Banking activities, Baltics - - - - - - - - - Other areas - -54 54 - - - - - - Integration expenses, total 261 326 139 80 53 262 209 726 604 Total expenses, excl. Amortisation of intangible assets and integration expenses 5,383 6,052 5,456 5,883 5,206 5,294 5,092 16,891 21,475 The pro forma figures include the Sampo Bank group as of February 2006. 13
Total IT expenses Year to date Full year IT expenses (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Total IT expenses (development and operations) 1,035 1,156 963 782 668 703 849 3,154 3,002 Hereof IT integration expenses (development and operations) 111 102 20 - - - - 233 - Total IT expenses/operating expenses, % 17.3 17.3 16.4 12.8 14.4 14.4 17.4 17.1 13.3 Total IT expenses/profit before tax, % 20.6 24.2 18.2 14.3 13.1 17.1 19.4 20.9 14.4 Total IT integration expenses/operating expenses, % 1.9 1.5 0.3 - - - - 1.3 - Total IT integration expenses/profit before tax, % 2.2 2.1 0.4 - - - - 1.5 - Note: Total IT expenses include costs related to software, hardware, internal IT staff, external IT consultants, rent on premises, depreciation, phone and MIPS etc. Sampo Bank was consolidated in the accounts with effect from the first quarter of 2007. Comparative figures have not been restated. Full-time employees broken down by business area End of period End of year FTE - end of period Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Banking Activities, Denmark 5,968 5,934 6,025 6,168 6,285 6,273 6,258 5,968 6,168 Banking Activities, Finland 2,096 2,119 2,124 2,083 2,012 1,981 1,993 2,096 2,083 Banking Activities, Sweden 918 920 921 1,135 1,122 1,114 1,142 918 1,135 Banking Activities, Norway 1,069 1,069 1,071 1,323 1,293 1,152 1,148 1,069 1,323 Banking Activities, Northern Ireland 1,279 1,313 1,378 1,862 1,845 1,866 1,905 1,279 1,862 Banking Activities, The Republic of Ireland 627 653 666 698 724 717 717 627 698 Banking Activities, Baltics 1,296 1,212 1,158 1,046 1,008 978 943 1,296 1,046 Banking Activities, Others 420 403 392 392 405 391 377 420 392 Banking Activities total 13,673 13,623 13,735 14,707 14,694 14,472 14,483 13,673 14,707 Mortgage Finance 717 720 736 740 755 752 772 717 740 Danske Markets 881 886 861 875 868 844 856 881 875 Danske Capital 564 561 541 464 460 444 418 564 464 Danica Pension 954 936 909 898 907 875 844 954 898 Shared services center* 4,939 4,855 4,879 3,827 3,824 3,771 3,795 4,939 3,827 Others 1,942 1,954 1,989 2,035 2,080 2,153 2,121 1,942 2,035 Group total 23,670 23,535 23,650 23,546 23,588 23,311 23,289 23,670 23,546 * The large increase in full time employees from Q406 to Q107 is due to the transfer of employees from Sweden, Norway, Northern Ireland and the Republic of Ireland to the Shared Services Center. The pro forma figures include the Sampo Bank group as of February 2006. 14
2.2. Balance sheet End of period End of year Balance sheet (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Cash in hand and demand deposits with central banks 13,524 18,934 17,594 25,158 28,850 22,731 39,095 13,524 25,158 Due from credit institutions and central banks 313,520 289,967 293,226 278,817 310,010 283,366 278,868 313,520 278,817 Trading portfolio assets 587,228 539,256 475,451 504,308 445,173 408,468 371,237 587,228 504,308 Financial investment securities 33,309 32,728 26,124 28,970 32,272 26,819 32,320 33,309 28,970 Assets held for sale - - - 1,796 - - - - 1,796 Repo lending 289,230 293,930 294,916 294,555 284,099 273,816 217,261 289,230 294,555 Bank loans and advances (ex repo) 1,041,262 991,129 932,784 916,970 877,337 848,432 786,750 1,041,262 916,970 Mortgage loans 614,033 600,337 607,725 602,584 592,784 573,105 567,002 614,033 602,584 Assets under pooled schemes and unit-linked investment contracts 38,792 40,215 39,006 39,602 37,945 36,540 37,501 38,792 39,602 Assets under insurance contracts 192,893 194,564 195,069 194,302 190,226 181,366 187,732 192,893 194,302 Holdings in associated undertakings 984 977 1,114 1,068 1,045 1,021 1,095 984 1,068 Intangible assets 29,780 30,093 30,391 7,869 8,055 8,073 8,098 29,780 7,869 Investment property 3,863 3,957 3,831 3,914 3,818 3,679 3,580 3,863 3,914 Tangible assets 8,638 8,643 8,658 8,525 8,078 8,087 7,918 8,638 8,525 Current tax assets 413 209 211 63 100 198 145 413 63 Deferred tax assets 540 523 456 619 488 490 578 540 619 Others 26,753 26,392 24,591 28,915 29,791 27,404 34,185 26,753 28,915 Other assets 27,706 27,124 25,258 29,597 30,379 28,092 34,908 27,706 29,597 Total assets 3,194,762 3,071,854 2,951,147 2,938,035 2,850,071 2,703,595 2,573,365 3,194,762 2,938,035 Due to credit institutions and central banks 529,209 517,013 539,104 569,142 552,060 478,095 428,972 529,209 569,142 Trading portfolio liabilities 342,458 281,413 271,281 240,304 232,672 222,605 208,078 342,458 240,304 Liabilities held for sale - - - 888 - - - - 888 Repo deposits 114,711 125,115 102,333 104,044 115,114 121,756 104,890 114,711 104,044 Due to customers (ex repo) 796,808 762,356 680,007 693,142 654,084 658,956 597,856 796,808 693,142 Issued mortgage bonds 489,926 485,650 483,066 484,217 470,227 456,298 446,806 489,926 484,217 Deposits under pooled schemes and unit-linked investment contracts 48,143 48,298 47,553 46,983 44,603 42,731 43,863 48,143 46,983 Liabilities under insurance contracts 215,448 213,966 215,313 215,793 213,770 205,805 210,402 215,448 215,793 Other issued bonds 438,809 423,345 403,757 365,761 377,750 333,014 360,071 438,809 365,761 Provisions 2,152 2,199 2,159 2,620 2,650 2,972 3,098 2,152 2,620 Current tax liabilities 2,386 1,340 1,032 539 3,017 1,801 958 2,386 539 Deferred tax liabilities 3,243 3,324 3,325 2,046 1,823 1,764 1,722 3,243 2,046 Others 53,536 52,965 46,409 61,059 57,405 56,504 48,123 53,536 61,059 Other liabilities 61,317 59,828 52,925 66,264 64,895 63,041 53,901 61,317 66,264 Subordinated debt 56,583 57,391 62,120 56,325 48,017 47,832 48,175 56,583 56,325 Total liabilities 3,093,412 2,974,375 2,857,459 2,842,863 2,773,192 2,630,133 2,503,014 3,093,412 2,842,863 Share capital 6,988 6,988 6,988 6,988 6,383 6,383 6,383 6,988 6,988 Foreign currency translation 3 3 4 9 9 1-14 3 9 Proprosed dividend - - - 5,416 - - - - 5,416 Profit brought forward 94,223 90,415 86,645 82,713 70,440 67,029 63,933 94,223 82,713 Minority interests 136 73 51 46 47 49 49 136 46 Shareholders' equity 101,350 97,479 93,688 95,172 76,879 73,462 70,351 101,350 95,172 Total liabilities and equity 3,194,762 3,071,854 2,951,147 2,938,035 2,850,071 2,703,595 2,573,365 3,194,762 2,938,035 Risk-weighted items (avg.) (Group) 1,194,682 1,184,313 1,182,191 1,197,993 1,153,106 1,114,492 1,069,817 1,187,108 1,134,256 Risk-weighted items (end of period) (Group) 1,259,820 1,193,507 1,137,443 1,252,645 1,186,466 1,152,488 1,097,825 1,259,820 1,252,645 The pro forma figures include the Sampo Bank group as of February 2006. 15
2.2.1. Breakdown of balance sheet Lending portfolio broken down by segment Lending portfolio breakdown, end of period End of period End of year Volume (DKr bn) Segment Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Banking Activities, Denmark Retail 143.2 139.1 135.0 130.6 124.3 118.5 113.7 143.2 130.6 Hereof bank loans secured on real property 62.9 61.5 59.8 57.8 54.3 50.9 47.1 62.9 57.8 Corporate 197.6 198.7 187.1 183.3 172.4 172.2 160.1 197.6 183.3 Banking Activities, Finland Retail 83.4 81.2 78.1 77.4 75.2 72.5 69.1 83.4 77.4 Corporate 76.3 73.4 71.0 69.4 69.2 69.5 68.3 76.3 69.4 Banking Activities, Sweden Retail 55.6 54.0 51.5 52.2 48.4 46.9 43.0 55.6 52.2 Corporate 99.0 92.8 86.7 86.3 85.1 81.3 73.7 99.0 86.3 Banking Activities, Norway Retail 55.8 52.2 49.3 46.8 46.6 46.6 44.6 55.8 46.8 Corporate 75.2 66.0 60.5 58.5 54.0 50.1 45.7 75.2 58.5 Banking Activities, Northern Ireland* Retail 18.2 18.3 17.5 17.5 17.3 16.7 18.6 18.2 17.5 Corporate 42.7 42.4 38.6 40.9 40.1 36.1 23.1 42.7 40.9 Banking Activities, The Republic of Ireland* Retail 26.5 26.1 22.8 20.6 19.6 19.3 14.4 26.5 20.6 Corporate 40.2 37.4 33.7 30.6 27.1 22.7 22.1 40.2 30.6 Banking Activities, Baltics Retail 12.0 11.1 9.0 8.1 7.3 6.4 5.6 12.0 8.1 Corporate 12.9 11.5 11.5 10.4 9.1 8.0 7.0 12.9 10.4 Danske Markets Retail - - - - - - - - - Corporate 62.4 39.6 34.4 38.7 38.0 39.4 35.7 62.4 38.7 Other business segments Retail 10.2 7.8 8.0 9.9 8.8 9.4 7.3 10.2 9.9 Corporate 30.1 39.6 38.1 35.7 34.8 32.7 34.7 30.1 35.7 Bank lending total (ex. repos) Retail 404.9 389.8 371.2 363.1 347.5 336.3 316.3 404.9 363.1 Corporate 636.4 601.4 561.6 553.8 529.8 512.0 470.4 636.4 553.8 Repos, total Retail - - - - - - - - - Corporate 289.2 293.9 294.9 294.6 284.1 273.8 217.3 289.2 294.6 Mortgage finance lending total Retail 372.8 363.6 373.0 371.4 363.6 348.3 346.6 372.8 371.4 Corporate 241.2 236.7 234.7 231.2 229.2 224.9 220.4 241.2 231.2 Lending total Retail 777.7 753.4 744.2 734.5 711.1 684.6 662.9 777.7 734.5 Corporate 1,166.8 1,132.0 1,091.2 1,079.6 1,043.1 1,010.7 908.1 1,166.8 1,079.6 Total lending 1,944.5 1,885.4 1,835.4 1,814.1 1,754.2 1,695.3 1,571.0 1,944.5 1,814.1 * After the conversion at Easter 2006, a new method of grouping customers into retail customers and corporate customers has been introduced in Northern Bank and National Irish Bank. The improved method affects the figures for retail and corporate customers from the first half of 2006. In addition, the method has resulted in the transfer of deposits with National Irish Bank of DKr5bn to Danske Markets. The pro forma figures include the Sampo Bank group as of February 2006. 16
Deposit portfolio broken down by segment Deposit portfolio breakdown, end of period End of period End of year Volume (DKr bn) Segment Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Banking Activities, Denmark Retail 158.1 159.1 151.7 146.7 144.1 145.9 138.4 158.1 146.7 Corporate 141.9 143.9 136.1 128.4 121.2 121.4 120.4 141.9 128.4 Banking Activities, Finland Retail 42.2 41.4 40.6 41.9 40.9 40.3 38.4 42.2 41.9 Corporate 51.5 47.6 44.0 47.4 45.9 47.1 42.5 51.5 47.4 Banking Activities, Sweden Retail 17.8 16.6 13.8 13.7 13.8 13.0 11.5 17.8 13.7 Corporate 35.2 34.6 33.5 36.3 32.2 31.6 27.9 35.2 36.3 Banking Activities, Norway Retail 15.6 15.4 13.9 12.7 12.9 13.7 12.5 15.6 12.7 Corporate 42.1 42.1 34.6 34.0 27.5 30.8 27.8 42.1 34.0 Banking Activities, Northern Ireland* Retail 29.5 29.6 27.8 27.7 25.7 24.2 24.1 29.5 27.7 Corporate 30.4 31.0 29.1 33.3 33.7 30.2 17.6 30.4 33.3 Banking Activities, The Republic of Ireland* Retail 14.3 13.5 13.0 12.9 12.2 10.8 11.6 14.3 12.9 Corporate 9.0 9.0 7.9 8.5 7.5 6.3 9.8 9.0 8.5 Banking Activities, Baltics Retail 2.7 2.7 2.5 2.4 2.2 2.2 1.9 2.7 2.4 Corporate 7.8 6.5 6.5 6.3 5.6 5.2 4.5 7.8 6.3 Danske Markets Retail 0.7 0.7 0.7 0.7 0.7 0.7 0.6 0.7 0.7 Corporate 141.1 108.9 112.3 130.5 118.8 124.9 97.9 141.1 130.5 Other business segments Retail 5.7 6.0 5.1 4.6 4.1 4.3 4.3 5.7 4.6 Corporate 51.2 53.8 6.9 5.2 5.1 6.3 6.2 51.2 5.2 Bank deposits total (ex. repos) Retail 286.6 285.0 269.1 263.3 256.6 255.1 243.3 286.6 263.3 Corporate 510.2 477.4 410.9 429.9 397.5 403.8 354.6 510.2 429.9 Repos, total Retail - - - - - - - - - Corporate 114.7 125.1 102.3 104.0 115.1 121.8 104.9 114.7 104.0 Deposits total Retail 286.6 285.0 269.1 263.3 256.6 255.1 243.3 286.6 263.3 Corporate 624.9 602.5 513.2 533.9 512.6 525.6 459.5 624.9 533.9 Total deposits 911.5 887.5 782.3 797.2 769.2 780.7 702.8 911.5 797.2 Pooled schemes 40.3 40.5 40.3 40.0 38.7 37.3 38.6 40.3 40.0 * After the conversion at Easter 2006, a new method of grouping customers into retail customers and corporate customers has been introduced in Northern Bank and National Irish Bank. The improved method affects the figures for retail and corporate customers for the first half of 2006. In addition, the method has resulted in the transfer of deposits with National Irish Bank of DKr5bn to Danske Markets. The pro forma figures include the Sampo Bank group as of February 2006. 17
Bank lending, retail Q307 Bank lending, corporate Q307 Northern Ireland 4% Norway 14% Ireland 7% Baltics 3% Others 3% Denmark 34% Baltics 2% Ireland 6% Northern Ireland 7% Danske Markets 10% Others 5% Denmark 30% Sweden 14% Finland 21% Norway 12% Sweden 16% Finland 12% Bank deposits, retail Q307 Bank deposits, corporate Q307 Northern Ireland 10% Ireland 5% Baltics 1% Others 2% Others 10% Denmark 27% Norway 5% Sweden 6% Denmark 56% Danske Markets 28% Finland 10% Finland 15% Baltics 2% Ireland 2% Northern Ireland 6% Norway 8% Sweden 7% 18
Impairment charges and non performing loans Impairment charges and non performing loans Year to date Full year (Danske Bank Group) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Accumulated impairment charges (DKr bn end period)* 4.64 4.55 4.53 4.20 4.31 4.49 4.78 4.64 4.20 Non performing loans (Dkr bn end period) 3.56 3.25 2.87 3.14 3.16 2.60 3.44 3.56 3.14 Impairment charges as % of loans and guarantees p.a. 0.05 0.04-0.04 0.01-0.03-0.08-0.03 0.02-0.03 Accumulated impairment charges as % of loans and guarantees 0.23 0.23 0.24 0.22 0.22 0.24 0.28 0.23 0.22 Credit loss expenses coverage ratio** 130 140 158 134 136 173 139 130 134 * Impairment charges against loans, advances and gurantees. ** Accumulated impairment charges as % of non performing loans. Sampo Bank was consolidated in the accounts with effect from the first quarter of 2007. Comparative figures have not been restated. Change in accumulated impairment charges Change in accumulated impairment charges (DKr m) Accumulated impairment charges beg. 2007 4,204 Impairment charges 2,762 Reversals of impairment charges 2,402 Currency effect 10 Earlier impairment charges now written off 713 Other inflows and outflows 778 Accumulated impairment charges, end Q307 4,639 19
2.3. Key ratios Year to date Full year Key ratios Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Net profit for the period per share, DKr 5.3 5.5 5.6 6.0 5.9 4.7 5.0 16.4 21.5 Diluted net profit for the period per share, DKr 5.3 5.5 5.6 5.9 5.9 4.7 5.0 16.4 21.4 Net profit for the period as % p.a. of average shareholders' equity 14.7 15.8 15.9 17.6 19.7 16.4 16.8 15.5 17.5 Cost/income ratio for the period, % 53.1 57.4 53.4 50.8 48.1 56.2 53.4 54.7 52.0 Solvency ratio, incl. net profit for the period, % 9.3 9.7 10.1 11.4 9.7 9.8 10.2 9.3 11.4 Core (tier 1) capital ratio, excl. hybrid core capital, % 5.7 5.8 5.6 7.6 6.5 6.5 6.4 5.7 7.6 Core (tier 1) capital ratio, % 6.6 6.7 6.6 8.6 7.1 7.1 7.3 6.6 8.6 Risk-weighted items, end of period (DKr bn) 1,260 1,194 1,137 1,119 1,053 1,019 972 1,260 1,119 Share price end of period, DKr 212.3 226.0 259.5 250.0 230.7 221.5 229.0 212.3 250.0 Book value per share end of period, DKr 148.3 142.5 136.7 139.1 123.1 117.5 112.5 148.3 139.1 Full-time-equivalent staff, end of period* 23,670 23,535 23,650 23,546 23,588 23,311 23,289 23,670 23,546 Price/earnings, end of period 40.0 41.1 46.3 41.7 39.1 47.1 45.8 12.9 11.6 Dividend per share, DKr - - - 7.75 - - - - 7.75 Dividend yield, % - - - 5.0 - - - - 5.0 Pay-out ratio, % - - - 40 - - - - 40 Outstanding shares, end of period (m) 683 684 685 684 624 625 625 683 684 Issued shares, end of period (m) 699 699 699 699 638 638 638 699 699 Share price/book value per share end of period 1.4 1.6 1.9 1.8 1.9 1.9 2.0 1.4 1.8 Market capital, end of period, DKr m 144,967 154,584 177,758 171,027 143,976 138,438 143,100 144,967 171,027 For 2006, the key ratios are calculated in accordance with the Group's organisation- and capital structure prior to the acquisition of the Sampo Bank group. * The pro forma figures include the Sampo Bank group as of February 2006. 20
Cost/income ratio, % Earnings per share, DKr 65.0 52.0 50.4 52.7 52.4 52.0 54.7 30.0 24.0 20.2 21.5 39.0 26.0 18.0 12.0 13.3 14.4 16.4 13.0 6.0 0.0 2003 2004 2005 2006 Q1-Q3 2007 0.0 2003 2004 2005 2006 Q1-Q3 2007 Return on equity (after tax) p.a., % Total assets, Dkr bn 20.0 16.0 12.0 15.2 13.9 18.4 17.5 15.5 3,750 3,000 2,250 1,826 2,052 2,432 2,938 3,195 8.0 1,500 4.0 750 0.0 2003 2004 2005 2006 Q1-Q3 2007 0 2003 2004 2005 2006* Q1-Q3 2007 As of 2004 the figures are presented in accordance with IFRS. *The pro forma figures include the Sampo Bank group as of February 2006. 21
Business segments and key statistics 22
3.1. Financial performance, Banking Activities Banking Activities encompasses all banking activities in Danske Bank Group both national and international. Year to date Full year Banking Activities (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Net interest income 5,637 5,411 4,943 5,418 5,127 4,874 4,324 15,991 19,743 Hereof amortisation of loans and deposits* 46 46 31 - - - - 123 - Net fee income 1,934 1,984 1,928 1,980 1,812 1,980 2,003 5,846 7,775 Net trading income 358 303 291 290 315 307 289 952 1,201 Other income 508 578 574 626 497 494 466 1,660 2,083 Total income 8,437 8,276 7,736 8,314 7,751 7,655 7,082 24,449 30,802 Amortisation of intangible assets 308 276 266 144 143 137 137 850 561 Integration expenses 261 380 85 80 53 262 209 726 604 Staff cost ex bonuses 1,663 1,768 1,671 1,567 1,461 1,614 1,537 5,102 6,179 Bonuses 85 89 43 48 61 51 46 217 206 Other costs 2,469 2,842 2,515 2,188 1,991 1,993 1,987 7,826 8,159 Operating expenses BA Finland and BA Baltic - - - 886 678 744 500-2,808 Operating expenses 4,786 5,355 4,580 4,913 4,387 4,801 4,416 14,721 18,517 Profit before credit loss expenses 3,651 2,921 3,156 3,401 3,364 2,854 2,666 9,728 12,285 Credit loss expenses 238 175-168 117 119-273 -109 245-146 Profit before tax 3,413 2,746 3,324 3,284 3,245 3,127 2,775 9,483 12,431 Loans and advances, end of period 972,636 937,924 885,225 865,334 827,379 797,823 738,903 972,636 865,334 Deposits, end of period 602,479 597,121 558,517 555,788 528,367 525,842 491,931 602,479 555,788 Risk-weighted items (avg.) 853,138 820,194 800,924 761,376 741,072 709,142 674,628 824,943 721,845 Allocated capital (avg.) 46,923 45,111 44,051 49,489 48,170 46,094 43,851 45,372 46,920 Profit before credit loss expenses as % p.a. of allocated capital 31.1 25.9 28.7 27.5 27.9 24.8 24.3 28.6 26.2 Pre-tax profit as % p.a. of allocated capital (ROE) 29.1 24.3 30.2 26.5 26.9 27.1 25.3 27.9 26.5 Cost/income ratio 56.7 64.7 59.2 59.1 56.6 62.7 62.4 60.2 60.1 Cost/income ratio, excluding total integration expenses, % 50.0 56.8 54.7 56.4 54.1 57.5 57.5 53.8 56.3 No. of full-time employees (end of period) 13,673 13,623 13,735 14,707 14,694 14,472 14,483 13,673 14,707 * The fair value of loans, advances and deposits in the opening balance sheet has been increased by DKr439m compared with the carrying amount of these items recognised before the acquisition. The effect of the value adjustment on interest income generated by Banking Activities Finland is a decrease of DKr171m in 2007 and DKr67m in each of the following four years. The pro forma ratios and key figures include the Sampo Bank group as of February 2006. 23
3.1.1. Financial performance, Denmark Banking Activities Denmark encompasses the banking activities of Danske Bank in Denmark. Danske Bank caters to all types of retail and corporate customers. Danske Banks finance centres serve large corporate and private banking customers. Banking Activities Denmark has nine regions with 423 branches, six agricultural centres, nine finance centres and around 6,000 employees. Year to date Full year Banking Activities, Denmark (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Net interest income 2,698 2,612 2,552 2,693 2,555 2,437 2,283 7,862 9,968 Net fee income 1,118 1,145 1,208 1,149 1,074 1,230 1,360 3,471 4,813 Net trading income 183 173 174 154 158 173 190 530 675 Other income 14 17 10 7 4 1 2 41 14 Total income 4,013 3,947 3,944 4,003 3,791 3,841 3,835 11,904 15,470 Integration expenses 80 55 13 - - - - 148 - Staff cost ex bonuses 772 852 843 834 776 877 850 2,467 3,337 Bonuses 27 31 25 20 33 23 21 83 97 Other costs 1,066 1,217 1,096 1,200 1,069 1,062 1,104 3,379 4,435 Operating expenses 1,945 2,155 1,977 2,054 1,878 1,962 1,975 6,077 7,869 Profit before credit loss expenses 2,068 1,792 1,967 1,949 1,913 1,879 1,860 5,827 7,601 Credit loss expenses -55 155-305 84 59-127 -179-205 -163 Profit before tax 2,123 1,637 2,272 1,865 1,854 2,006 2,039 6,032 7,764 Loans and advances, end of period 340,787 337,793 322,058 313,943 296,715 290,754 273,794 340,787 313,943 Deposits, end of period 300,031 302,959 287,799 275,117 265,352 267,304 258,864 300,031 275,117 Risk-weighted items (avg.) 325,122 316,367 310,951 295,560 292,166 281,140 267,119 317,532 284,097 Allocated capital (avg.) 17,882 17,400 17,102 19,211 18,991 18,274 17,363 17,464 18,466 Profit before credit loss expenses as % p.a. of allocated capital 46.3 41.2 46.0 40.6 40.3 41.1 42.9 44.5 41.2 Pre-tax profit as % p.a. of allocated capital (ROE) 47.5 37.6 53.1 38.8 39.1 43.9 47.0 46.1 42.0 Cost/income ratio 48.5 54.6 50.1 51.3 49.5 51.1 51.5 51.1 50.9 Cost/income ratio, excluding integration expenses, % 46.5 53.2 49.8 51.3 49.5 51.1 51.5 49.8 50.9 Lending spread (1) (from Tom/next interest rate) (%)* 1.83 1.82 1.91 2.03 2.10 2.16 2.24 1.85 2.13 Deposit spread (2) (from Tom/next interest rate) (%) 0.79 0.84 0.81 0.91 0.88 0.80 0.75 0.81 0.84 Margin (1+2) (%) 2.62 2.66 2.72 2.94 2.98 2.96 2.99 2.66 2.97 Market share, lending (%) (end of period) (retail)** 34.5 35.3 35.8 36.0 36.4 36.7 37.0 34.5 36.0 Market share, lending (%) (end of period) (corporate)** 23.1 23.5 23.3 24.3 25.4 25.4 26.4 23.1 24.3 Market share, lending (%) (end of period) (total)** 26.8 27.3 27.3 28.1 29.0 29.0 29.7 26.8 28.1 Market share, deposits (%) (end of period) (retail)** 35.3 35.8 35.8 35.6 35.7 35.7 36.0 35.3 35.6 Market share, deposits (%) (end of period) (corporate)** 25.4 26.5 26.9 28.5 29.1 27.5 31.0 25.4 28.5 Market share, deposits (%) (end of period) (total)** 30.4 31.4 31.4 32.2 32.6 31.9 33.6 30.4 32.2 No. of full-time employees (end of period) 5,968 5,934 6,025 6,168 6,285 6,273 6,258 5,968 6,168 No. of branches (end of period) 429 429 461 458 462 463 465 429 458 No. of customers (m) (end of period)*** 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 Customer packages (000s) (end of period)***/**** 937 893 747 725 710 694 654 937 725 No. of netbank customers (000s) (end of period)***** 1,017 993 976 946 920 893 849 1,017 946 * Part of the fall in the lending margin from the fourth quarter of 2006 to the first quarter of 2007 is attributable to organisational changes. ** Based on sector numbers published by the Central Bank of Denmark (Danmarks Nationalbank). *** Beginning in the first half of 2006, a new customer count measure is applied. The change of the measure has resulted in a change in the figures for the first half of 2006. Comparative figures have not been restated. **** Customer packages are bundled products. Products in a customer package include: Visa card, American Express, MasterCard, competitive interest on loans and deposits and Internet banking. ***** Consists only of active Internet customers. 24
3.1.2. Financial performance, Finland Banking Activities Finland encompasses the banking activities of Sampo Bank in Finland and Danske Banks Helsinki Branch. Sampo Bank, which is the third- largest bank in Finland, caters to retail customers, small and medium-sized businesses and institutional clients. Sampo Bank has 123 branches in Finland and around 2,100 employees. Year to date Full year Banking Activities, Finland (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Net interest income 825 822 534 848 816 785 499 2,181 2,948 Hereof amortisation of loans and deposits* 46 46 31 - - - - 123 - Net fee income 322 326 230 336 298 314 196 878 1,144 Net trading income 12-1 6-5 15 16 11 17 37 Other income 55 40 44 93 54 56 38 139 241 Total income 1,214 1,187 814 1,272 1,183 1,171 744 3,215 4,370 Amortisation of intangible assets 179 135 128 - - - - 442 - Integration expenses 112 84 12 - - - - 208 - Staff cost ex bonuses 201 245 158 - - - - 604 - Bonuses 28 25-10 - - - - 43 - Other costs 373 424 302 - - - - 1,099 - Operating expenses 893 913 590 776 598 658 447 2,396 2,479 Profit before credit loss expenses 321 274 224 496 585 513 297 819 1,891 Credit loss expenses 104 17-14 -53 49-67 -6 107-77 Profit before tax 217 257 238 549 536 580 303 712 1,968 Profit before tax in local currency 30 34 32 73 72 78 41 96 264 Loans and advances, end of period 159,738 154,574 149,097 146,803 144,378 142,046 137,399 159,738 146,803 Deposits, incl. pooled deposits, end of period 93,705 88,956 84,624 89,293 86,752 87,488 80,968 93,705 89,293 Risk-weighted items (avg.) 131,939 132,664 132,728 129,335 128,821 127,658 123,731 132,441 127,405 Allocated capital (avg.) 7,257 7,297 7,300 8,407 8,373 8,298 8,043 7,284 8,281 Profit before credit loss expenses as % p.a. of allocated capital 17.7 15.0 18.4 23.6 27.9 24.7 22.2 16.9 24.9 Pre-tax profit as % p.a. of allocated capital (ROE) 12.0 14.1 19.6 26.1 25.6 28.0 22.6 14.7 25.9 Cost/income ratio 73.6 76.9 72.5 61.0 50.5 56.2 60.1 74.5 56.7 Cost/income ratio, excluding total integration expenses, % 49.6 58.5 55.3 61.0 50.5 56.2 60.1 54.3 56.7 Market share, lending (%) (end of period)** 15.5 15.7 15.7 15.7 16.0 16.0 16.0 15.5 15.7 Market share, deposits (%) (end of period)** 13.3 12.7 13.3 13.7 13.5 13.8 13.5 13.3 13.7 No. of branches (end of period) 123 123 127 127 127 129 139 123 127 No. of customers (000s) (end of period) 1,171 1,171 1,169 1,170 1,167 1,164 1,161 1,171 1,170 No. of netbank customers (000s) (end of period)*** 866 858 851 842 834 826 816 866 842 No. of full-time employees (end of period) 2,096 2,119 2,124 2,083 2,012 1,981 1,993 2,096 2,083 * The fair value of loans, advances and deposits in the opening balance sheet has been increased by DKr439m compared with the carrying amount of these items recognised before the acquisition. The effect of the value adjustment on interest income generated by Banking Activities Finland is a decrease of DKr171m in 2007 and DKr67m in each of the following four years. ** Market shares Q3 2007 are calculated as of end of August 2007. *** Consists only of active Internet customers. The pro forma ratios and key figures include the Sampo Bank group as of February 2006. 25
3.1.3. Financial performance, Sweden Banking Activities Sweden encompasses the banking activities of Östgöta Enskilda Bank and Provinsbankerne in Sweden, which serve all types of retail and corporate customers. Banking Activities Sweden has four regions with 59 branches, four finance centres and around 920 employees. Real-estate agency business is carried out primarily through the 75 offices of Skandia Mäklarna. Year to date Full year Banking Activities, Sweden (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Net interest income 521 510 499 505 473 434 400 1,530 1,812 Net fee income 144 175 161 176 137 158 143 480 614 Net trading income 26 24 21 20 20 15 16 71 71 Other income 13 15 11 15 12 13 7 39 47 Total income 704 724 692 716 642 620 566 2,120 2,544 Staff cost ex bonuses 153 162 160 181 180 174 174 475 709 Bonuses 5 5 4 2 3 6 2 14 13 Other costs 182 235 201 211 168 194 165 618 738 Operating expenses 340 402 365 394 351 374 341 1,107 1,460 Profit before credit loss expenses 364 322 327 322 291 246 225 1,013 1,084 Credit loss expenses -29 21 70 31 7-50 83 62 71 Profit before tax 393 301 257 291 284 296 142 951 1,013 Profit before tax in local currency 488 374 315 356 353 366 178 1,177 1,253 Loans and advances, end of period 154,603 146,832 138,199 138,454 133,499 128,151 116,709 154,603 138,454 Deposits, end of period 53,018 51,178 47,345 50,062 45,917 44,537 39,472 53,018 50,062 Risk-weighted items (avg.) 126,190 118,166 118,381 114,843 110,053 102,850 96,425 120,941 106,104 Allocated capital (avg.) 6,940 6,499 6,511 7,465 7,153 6,685 6,268 6,652 6,897 Profit before credit loss expenses as % p.a. of allocated capital 21.0 19.8 20.1 17.3 16.3 14.7 14.4 20.3 15.7 Pre-tax profit as % p.a. of allocated capital (ROE) 22.6 18.5 15.8 15.6 15.9 17.7 9.1 19.1 14.7 Cost/income ratio 48.3 55.5 52.7 55.0 54.7 60.3 60.2 52.2 57.4 Lending spread (1) (from Tom/next interest rate) (%) 0.79 0.86 0.88 0.90 0.94 0.92 0.94 0.84 0.93 Deposit spread (2) (from Tom/next interest rate) (%) 0.88 0.91 0.94 0.90 0.85 0.78 0.80 0.91 0.84 Margin (1+2) (%) 1.67 1.77 1.82 1.80 1.79 1.70 1.74 1.75 1.77 Market share (lending) (%) (end of period)* 5.7 5.7 5.6 5.6 5.7 5.5 5.3 5.7 5.6 Market share (retail deposits) (%) (end of period) 4.5 4.4 4.3 4.3 4.4 4.4 4.1 4.5 4.3 No. of branches (end of period) 59 59 59 59 57 57 57 59 59 No. of customers (000s) (end of period)** 215 211 198 194 191 188 195 215 194 No. of netbank customers (000s) (end of period)*** 122 117 111 106 102 99 74 122 106 No. of full-time employees (end of period) 918 920 921 1,135 1,122 1,114 1,142 918 1,135 * Total market incl. property finance. ** Beginning in the first half of 2006, a new customer count measure is applied. The change of the measure has resulted in a change in the figures from the first half of 2006. Comparative figures have not been restated. *** Consists only of active Internet customers. 26
3.1.4. Financial performance, Norway Banking Activities Norway encompasses the banking activities of Fokus Bank in Norway. Fokus Bank serves all types of retail and corporate customers. Banking Activities Norway has five regions with 55 branches, five finance centres and around 1,100 employees. Real-estate agency business is carried out through the 40 offices of Fokus Krogsveen Nylander. Year to date Full year Banking Activities, Norway (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Net interest income 493 442 423 418 410 385 354 1,358 1,567 Net fee income 122 110 114 118 90 107 101 346 416 Net trading income 40 37 34 28 33 23 27 111 111 Other income 78 95 77 96 88 74 54 250 312 Total income 733 684 648 660 621 589 536 2,065 2,406 Staff cost ex bonuses 203 179 198 235 194 181 174 580 784 Bonuses 3 5 6 8 11 4 3 14 26 Other costs 207 224 203 184 190 180 188 634 742 Operating expenses 413 408 407 427 395 365 365 1,228 1,552 Profit before credit loss expenses 320 276 241 233 226 224 171 837 854 Credit loss expenses 8-37 27 43-12 -69 7-2 -31 Profit before tax 312 313 214 190 238 293 164 839 885 Profit before tax in local currency 330 339 233 210 259 308 177 902 954 Loans and advances, end of period 130,960 118,228 109,731 105,319 100,610 96,718 90,329 130,960 105,319 Deposits, end of period 57,737 57,482 48,506 46,667 40,385 44,447 40,344 57,737 46,667 Risk-weighted items (avg.) 99,831 93,077 88,106 83,573 80,246 73,450 69,579 93,714 76,760 Allocated capital (avg.) 5,491 5,119 4,846 5,432 5,216 4,774 4,523 5,154 4,989 Profit before credit loss expenses as % p.a. of allocated capital 23.3 21.6 19.9 17.2 17.3 18.8 15.1 21.7 17.1 Pre-tax profit as % p.a. of allocated capital (ROE) 22.7 24.5 17.7 14.0 18.3 24.5 14.5 21.7 17.7 Cost/income ratio 56.3 59.6 62.8 64.7 63.6 62.0 68.1 59.5 64.5 Lending spread (1) (from Tom/next interest rate) (%) 0.78 0.80 0.91 0.92 0.97 1.01 1.02 0.82 0.98 Deposit spread (2) (from Tom/next interest rate) (%) 0.82 0.83 0.75 0.77 0.78 0.73 0.75 0.80 0.76 Margin (1+2) (%) 1.60 1.63 1.66 1.69 1.75 1.74 1.77 1.62 1.74 Market share (lending) (%) (end of period) 5.7 5.5 5.5 5.5 5.4 5.2 5.2 5.7 5.5 Market share (deposits) (%) (end of period) 5.0 4.8 4.9 4.6 4.4 4.1 4.3 5.0 4.6 No. of branches (end of period) 55 55 56 61 63 70 70 55 61 No. of customers (000s) (end of period)* 230 229 227 237 236 234 260 230 237 No. of netbank customers (000s) (end of period)** 108 106 104 106 103 99 75 108 106 No. of full-time employees (end of period) 1,069 1,069 1,071 1,323 1,293 1,152 1,148 1,069 1,323 * Beginning in the first half of 2006, a new customer count measure is applied. The change of the measure has resulted in a change in the figures for the first half of 2006. Comparative figures have not been restated. ** Consists only of active Internet customers. 27
3.1.5. Financial performance, Northern Ireland Banking Activities Northern Ireland encompasses the banking activities of Northern Bank, which serves both retail and corporate customers. Banking Activities Northern Ireland has four regions with 94 branches and around 1,300 employees. Year to date Full year Banking Activities, Northern Ireland (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Net interest income 483 452 447 451 435 415 401 1,382 1,702 Net fee income 126 117 128 122 129 101 133 371 485 Net trading income 40 18 24 22 24 26 15 82 87 Other income 3 4 4 7 5 5 2 11 19 Total income 652 591 603 602 593 547 551 1,846 2,293 Amortisation of intangible assets 104 115 113 118 118 112 111 332 459 Integration expenses 26 191 30 72 49 194 130 247 445 Staff cost ex. bonuses 138 136 136 167 167 217 193 410 744 Bonuses 7 8 7 8 9 11 11 22 39 Other costs 197 229 228 166 193 162 145 654 666 Operating expenses 472 679 514 531 536 696 590 1,665 2,353 Profit before credit loss expenses 180-88 89 71 57-149 -39 181-60 Credit loss expenses 2-11 30 30-2 11 5 21 44 Profit before tax 178-77 59 41 59-160 -44 160-104 Profit before tax in local currency 16-7 5 4 6-15 -4 14-9 Loans and advances, end of period 60,845 60,677 56,070 58,442 57,372 52,851 41,654 60,845 58,442 Deposits, end of period 59,845 60,601 56,856 60,969 59,379 54,351 41,708 59,845 60,969 Risk-weighted items (avg.) 47,787 44,225 42,371 38,569 37,138 38,949 39,263 44,814 38,474 Allocated capital (avg.) 2,628 2,432 2,330 2,507 2,414 2,532 2,552 2,465 2,501 Profit before credit loss expenses as % p.a. of allocated capital 27.4-14.5 15.3 11.3 9.4-23.5-6.1 9.8-2.4 Pre-tax profit as % p.a. of allocated capital (ROE) 27.1-12.7 10.1 6.5 9.8-25.3-6.9 8.7-4.2 Cost/income ratio 72.4 114.9 85.2 88.2 90.4 127.2 107.1 90.2 102.6 Cost/income ratio, excluding total integration expenses, % 52.5 63.1 61.5 56.6 62.2 71.3 63.3 58.8 63.2 Lending spread (1) (from Tom/next interest rate) (%) 1.18 1.20 1.23 - - - - 1.20 - Deposit spread (2) (from Tom/next interest rate) (%) 2.41 2.29 2.33 - - - - 2.34 - Margin (1+2) (%) 3.59 3.49 3.56 - - - - 3.54 - Market share (retail) (%) (end of period)* 19.0 20.0 20.0 20.0 20.2 19.7 19.8 19.0 20.0 Market share (corporate) (%) (end of period)* 31.0 31.0 31.0 31.0 31.0 32.4 32.4 31.0 31.0 No. of branches (end of period) 94 95 95 95 95 95 95 94 95 No. of customers (000s) (end of period) 436 432 431 429 427 425 421 436 429 No. of netbank customers (000s) (end of period)** 92 83 73 58 47 37 27 92 58 No. of full-time employees (end of period) 1,279 1,313 1,378 1,862 1,845 1,866 1,905 1,279 1,862 * The market shares of Northern Bank are not calculated in the same way as the market shares of the other retail banks because there is no central bank for Northern Ireland alone. ** Consists only of active Internet customers. As of Q2 2006, loans and advances granted by the bank in Northern Ireland are no longer set off against deposits held by the same customers in the financial statements. 28
3.1.6. Financial performance, The Republic of Ireland Banking Activities Ireland encompasses the banking activities of National Irish Bank, which caters primarily to retail and corporate customers. Banking Activities Ireland has four regions with 61 branches and around 625 employees. Year to date Full year Banking Activities, The Rep. of Ireland (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Net interest income 317 288 264 258 240 219 201 869 918 Net fee income 41 55 38 34 36 28 35 134 133 Net trading income 13 23 15 19 9 19 14 51 61 Other income 2 3 3 2 1 2 1 8 6 Total income 373 369 320 313 286 268 251 1,062 1,118 Amortisation of intangible assets 25 26 25 26 25 25 26 76 102 Integration expenses 43 50 30 8 4 68 79 123 159 Staff cost ex. bonuses 92 91 93 92 88 110 91 276 381 Bonuses 5 5 5 5 3 5 5 15 18 Other costs 116 122 119 124 93 127 91 357 435 Operating expenses 281 294 272 255 213 335 292 847 1,095 Profit before credit loss expenses 92 75 48 58 73-67 -41 215 23 Credit loss expenses 28 20 8 - -24 23-2 56-3 Profit before tax 64 55 40 58 97-90 -39 159 26 Profit before tax in local currency 8 8 5 8 13-12 -5 21 4 Loans and advances, end of period 66,732 63,465 56,482 51,250 46,677 41,957 36,449 66,732 51,250 Deposits, end of period 23,307 22,488 20,880 21,390 19,738 17,045 21,392 23,307 21,390 Risk-weighted items (avg.) 58,444 52,750 47,254 42,441 38,127 33,103 30,143 52,857 35,993 Allocated capital (avg.) 3,214 2,901 2,599 2,759 2,478 2,152 1,959 2,907 2,340 Profit before credit loss expenses as % p.a. of allocated capital 11.4 10.3 7.4 8.4 11.8-12.5-8.4 9.9 1.0 Pre-tax profit as % p.a. of allocated capital (ROE) 8.0 7.6 6.2 8.4 15.7-16.7-8.0 7.3 1.1 Cost/income ratio 75.3 79.7 85.0 81.5 74.5 125.0 116.3 79.8 97.9 Cost/income ratio, excluding total integration expenses, % 57.1 59.1 67.8 70.6 64.3 90.3 74.5 61.0 74.6 Lending spread (1) (from Tom/next interest rate) (%) 1.14 1.14 1.18 - - - - 1.16 - Deposit spread (2) (from Tom/next interest rate) (%) 1.78 1.68 1.69 - - - - 1.74 - Margin (1+2) (%) 2.92 2.82 2.87 - - - - 2.90 - Market share (lending) (%) (end of period), incl. property finance* 4.8 4.7 4.4 4.2 4.0 3.8 3.5 4.8 4.2 Market share (deposits) (%) (end of period)* 3.2 3.3 3.3 3.3 3.2 3.0 2.9 3.2 3.3 No. of branches (end of period) 61 61 59 59 59 59 59 61 59 No. of customers (000s) (end of period) 192 189 187 184 180 176 173 192 184 No. of netbank customers (000s) (end of period)** 32 31 29 28 23 19 14 32 28 No. of full-time employees (end of period) 627 653 666 698 724 717 717 627 698 * Retail Clearing Banks market (AIB, Bank of Ireland, Ulster Bank and National Irish Bank). ** Consists only of active Internet customers. As of Q2 2006, loans and advances granted by the bank in the Republic of Ireland are no longer set off against deposits held by the same customers in the financial statements. 29
3.1.7. Financial performance, Baltics Banking Activities Baltics encompasses the Groups banking activities in Estonia, Latvia and Lithuania, which serve all types of retail and corporate customers. Banking Activities Baltics has 41 branches and around 1,300 employees. Year to date Full year Banking Activities, Baltics (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Net interest income 158 145 88 104 77 91 52 391 324 Net fee income 37 32 20 26 24 19 15 89 84 Net trading income 22 13 9 40 45 22 10 44 117 Other income 2 6 3 4 4 4 2 11 14 Total income 219 196 120 174 150 136 79 535 539 Integration expenses - - - - - - - - - Staff cost ex bonuses 47 46 33 - - - - 126 - Bonuses 6 6 3 - - - - 15 - Other costs 50 59 36 - - - - 145 - Operating expenses 103 111 72 110 80 86 53 286 329 Profit before credit loss expenses 116 85 48 64 70 50 26 249 210 Credit loss expenses 12 17 16 7 4-3 45 14 Profit before tax 104 68 32 57 66 50 23 204 196 Loans and advances, end of period 24,848 22,605 20,458 18,535 16,368 14,516 12,581 24,848 18,535 Deposits, end of period 10,512 9,153 8,994 8,704 7,784 7,364 6,313 10,512 8,704 Risk-weighted items (avg.) 22,831 21,808 20,076 17,668 15,625 13,732 11,546 21,582 14,662 Allocated capital (avg.) 1,256 1,199 1,104 1,148 1,016 893 750 1,187 953 Profit before credit loss expenses as % p.a. of allocated capital 37.0 28.3 26.1 22.3 27.6 22.4 20.8 31.5 24.0 Pre-tax profit as % p.a. of allocated capital (ROE) 33.1 22.7 17.4 19.9 26.0 22.4 18.4 25.8 22.4 Cost/income ratio 47.0 56.6 60.0 63.2 53.3 63.2 67.1 53.5 61.0 Expenses, excl. integration expenses as % of income 47.0 56.6 60.0 63.2 53.3 63.2 67.1 53.5 61.0 The pro forma ratios and key figures include the Sampo Bank group as of February 2006. Year to date Full year Profit before tax (Dkr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Estonia (EEK) 71 53 26 44 46 35 18 150 143 Latvia (LVT) 3 2-2 - 2 - - 3 2 Lithuania (LTL) 30 13 8 13 18 15 5 51 51 Total Banking Activities Baltics 104 68 32 57 66 50 23 204 196 The pro forma ratios and key figures include the Sampo Bank group as of February 2006. 30
3.1.7. Financial performance, Baltics, continued Year to date Full year Banking Activities, Baltics (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 ESTONIA Market share (lending) (%) (end of period)* 11.7 11.0 11.1 10.6 10.4 9.5 8.9 11.7 10.6 Market share (deposits) (%) (end of period)* 11.7 10.3 10.8 10.3 10.3 10.0 9.4 11.7 10.3 No. of branches (end of period) 21 21 20 19 19 18 16 21 19 No. of customers (000s) (end of period) 160 156 149 145 141 136 129 160 145 No. of netbank customers (000s) (end of period)** 145 141 134 128 122 117 109 145 128 No. of full-time employees (end of period) 644 623 599 578 569 562 551 644 578 LATVIA Market share (lending) (%) (end of period)* 1.1 1.1 1.1 1.1 0.9 0.8 0.8 1.1 1.1 Market share (deposits) (%) (end of period)* 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.4 0.4 No. of branches (end of period) 4 4 4 3 3 2 2 4 3 No. of customers (000s) (end of period) 8 7 7 6 6 5 4 8 6 No. of netbank customers (000s) (end of period)** 1 1 - - - - - 1 - No. of full-time employees (end of period) 102 82 75 61 50 42 33 102 61 LITHUANIA Market share (lending) (%) (end of period)* 8.4 8.6 8.7 8.9 8.9 8.9 8.8 8.4 8.9 Market share (deposits) (%) (end of period)* 3.5 3.3 3.3 3.6 3.5 3.2 3.0 3.5 3.6 No. of branches (end of period) 16 16 16 14 14 13 12 16 14 No. of customers (000s) (end of period) 92 80 80 74 67 59 53 92 74 No. of netbank customers (000s) (end of period)** 58 53 49 44 38 32 28 58 44 No. of full-time employees (end of period) 550 507 484 407 389 374 359 550 407 * Market shares Q2 2007 are calculated as of end of August 2007. ** Consists only of active Internet customers. The pro forma ratios and key figures include the Sampo Bank group as of February 2006. 31
3.1.8. Financial performance, Other Banking Activities Other Banking Activities comprises the activities of Nordania Leasing and the Groups banking activities in Germany and Poland. Year to date Full year Other Banking Activities (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Net interest income 142 140 136 141 121 108 134 418 504 Net fee income 24 24 29 19 24 23 20 77 86 Net trading income 22 16 8 12 11 13 6 46 42 Other income 341 398 422 402 329 339 360 1,161 1,430 Total income 529 578 595 574 485 483 520 1,702 2,062 Staff cost ex bonuses 57 57 50 58 56 55 55 164 224 Bonuses 4 4 3 5 2 2 4 11 13 Other costs 278 332 330 303 278 268 294 940 1,143 Operating expenses 339 393 383 366 336 325 353 1,115 1,380 Profit before credit loss expenses 190 185 212 208 149 158 167 587 682 Credit loss expenses 168-7 - -25 38 6-20 161-1 Profit before tax 22 192 212 233 111 152 187 426 683 Loans and advances, end of period 34,123 33,750 33,130 32,588 31,760 30,830 29,988 34,123 32,588 Deposits, end of period 4,324 4,304 3,513 3,586 3,060 3,306 2,870 4,324 3,586 Risk-weighted items (avg.) 40,993 41,137 41,057 39,387 38,897 38,261 36,822 41,062 38,350 Allocated capital (avg.) 2,255 2,263 2,258 2,560 2,528 2,487 2,393 2,258 2,493 Profit before credit loss expenses as % p.a. of allocated capital 33.7 32.7 37.6 32.5 23.6 25.4 27.9 34.7 27.4 Pre-tax profit as % p.a. of allocated cap. (ROE) 3.9 33.9 37.6 36.4 17.6 24.4 31.3 25.2 27.4 Cost/income ratio, % 64.1 68.0 64.4 63.8 69.3 67.3 67.9 65.5 66.9 No. of full-time employees (end of period) 420 403 392 392 405 391 377 420 392 Year to date Full year Profit before tax (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Nordania 93 113 137 163 50 80 128 343 421 Germany -96 66 61 62 52 62 48 31 224 Poland 25 13 14 8 9 10 11 52 38 Other Banking Activities 22 192 212 233 111 152 187 426 683 32
3.2. Financial performance, Mortgage Finance Mortgage Finance encompasses the Danske Bank Groups mortgage finance and real-estate agency business in Denmark. The division markets its financing solutions through Realkredit Danmark, Danske Bank and home. Real-estate agency business is carried out through home, which has 199 offices throughout the country. Year to date Full year Mortgage finance (DKr m) Q307 Q207 Q107 Q406 Q306 Q206 Q106 2007 2006 Net interest income 998 943 935 967 899 880 875 2,876 3,621 Net fee income -92-87 -80-59 -61-53 -61-259 -234 Net trading income 53 45 43 105 53 15 42 141 215 Other income 41 46 42 36 44 47 52 129 179 Total income 1,000 947 940 1,049 935 889 908 2,887 3,781 Staff cost ex bonuses 118 121 118 127 97 117 117 357 458 Bonuses 2 2 2 3-3 2 6 8 Other costs 164 181 176 171 182 176 181 521 710 Operating expenses 284 304 296 301 279 296 300 884 1,176 Profit before credit loss expenses 716 643 644 748 656 593 608 2,003 2,605 Credit loss expenses 17 8-14 -19-23 -53-10 11-105 Profit before tax 699 635 658 767 679 646 618 1,992 2,710 Mortgage loans 614,033 600,337 607,725 602,584 592,784 573,105 567,002 614,033 602,584 Loans and advances to customers (end of period) 467 483 470 435 468 379 343 467 435 Risk-weighted items (avg.) 304,941 304,187 300,410 298,500 287,955 282,105 279,380 303,196 287,040 Allocated capital (avg.) 16,772 16,730 16,523 19,403 18,717 18,337 18,160 16,676 18,658 Profit before credit loss expenses as % p.a. of allocated capital 17.1 15.4 15.6 15.4 14.0 12.9 13.4 16.0 14.0 Pre-tax profit as % p.a. of allocated capital (ROE) 16.7 15.2 15.9 15.8 14.5 14.1 13.6 15.9 14.5 Cost/income ratio 28.4 32.1 31.5 28.7 29.8 33.3 33.0 30.6 31.1 Lending spread, % 0.45 0.45 0.45 0.46 0.46 0.46 0.46 0.45 0.46 Gross-lending (total market) (DKr bn)* 115 100 88 139 104 117 109 303 469 Loan to value (end of period), % 53 53 53 53 54 57 57 53 53 Market share (gross-lending) (%)* 23 25 26 28 29 33 30 25 30 Market share, loan portfolio (%)* 32 32 33 33 33 33 33 32 33 Euro loans as % of total gross lending 7 7 7 4 4 5 3 7 4 FlexLån (floaters) as % of total stock of loans 40 41 41 42 43 43 45 40 42 FlexLån (floaters) as % of gross lending 31 31 37 38 40 42 32 33 38 FlexGaranti (floaters) as % of total stock of loans 10 10 11 11 11 10 10 10 11 FlexGaranti (floaters) as % of gross lending 9 6 11 9 13 13 24 9 14 RD Cibor6 as % of total stock of loans 4 3 3 3 2 2 2 4 3 RD Cibor6 as % of gross lending 10 6 6 11 4 4 8 7 7 Rating (Covered bond/longterm - S&P/Moody's) AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa No. of full-time employees (end of period) 717 720 736 740 755 752 772 717 740 * Source: Realkreditrådet (Danish mortgage finance council). www.realkreditraadet.dk. 33