The core earnings for the first quarter of the year were DKK 152 million against DKK 118 million in 2013, an increase of 29%. The profit before tax was DKK 176 million, representing a return on equity of 25% p.a., which is considered highly satisfactory. (Million DKK) 1st qtr. 1st qtr. 2013 2012 2011 2010 2014 2013 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total core income 234 202 844 823 767 758 Total costs and -67 -63 -273 -265 -248 -240 depreciations Core earnings before 167 139 571 558 519 518 impairments Impairment charges for loans -15 -21 -120 -157 -129 -138 etc. Core earnings 152 118 451 401 390 380 Result for portfolio +24 +6 +23 +49 +1 +38 Expenses for bank packages 0 -1 -2 -2 -11 -80 Profit before tax 176 123 472 448 380 338 The quarter – highlights: -- 44% improvement in profit before tax to DKK 176 million, equivalent to a 25% p.a. return on equity after payment of dividend -- Increase in core earnings from DKK 118 million in 2013 to DKK 152 million in 2014 - a 29% increase -- Earnings in the first quarter realised above budget for the quarter -- 12% increase in the bank’s loans and 8% increase in deposits -- The bank’s new branch in Aarhus was opened on 1 April 2014 -- Satisfactory conclusion to the Danish Financial Supervisory Authority’s ordinary inspection -- The number of new customers in both the branch network and the niche concepts remains satisfactory Please do not hesitate to contact the bank’s management if you have any questions. Yours sincerely, Ringkjøbing Landbobank John Fisker Management report Core income Net interest income was DKK 158 million in the first quarter of 2014 against DKK 153 million in 2013, an increase of 4%. Compared with the first quarter of 2013, the bank noted increasing average loans and deposits in the quarter, but also noted a fall in the interest margin from the first quarter of 2013 to the first quarter of 2014. Fees, commissions and foreign exchange income amounted to net DKK 59 million in the first quarter of 2014 against net DKK 47 million in 2013, an increase of 27%. The increase is attributable to greater activity and volumes within asset management and pensions, which has strengthened the earnings. The total core income was 16% higher in the first quarter of the year, with an increase from DKK 202 million in 2013 to DKK 234 million in 2014. The DKK 32 million increase in total core income was affected positively by an extraordinary once-only income including dividend of the order of DKK 10 million in connection with the sale of the bank’s shares in Nets. Corrected for the once-only income, the bank considers the increase in core income satisfactory. Costs and depreciations Total costs including depreciations for tangible assets in the first quarter of 2014 amounted to DKK 67 million against DKK 63 million last year, an increase of 8%. The rate of costs was computed at 28.7, still the lowest in the country. A low rate of costs is especially important in periods of difficult economic conditions as this provides a high level of robustness in the bank’s results. Impairment charges for loans Impairment charges for loans amounted to DKK 15 million in the first quarter of 2014. The level of impairment charges is falling relative to the same quarter of last year and is equivalent to 0.4% p.a. of total average loans, impairment charges, guarantees and provisions. The bank’s customers still appear to be coping better with the weak economic conditions than the average in Denmark. The bank’s total account for impairment charges and provisions amounted to DKK 875 million at the end of the quarter, equivalent to 5.2% of total loans and guarantees. Actual losses and write-offs on loans etc. continue to be very low, and they were exceeded during the quarter by the items “Interest on the impaired part of loans” and “Receivables previously written-off”, such that the account for impairment charges and provisions increased by net DKK 22 million during the first quarter of the year. The portfolio of loans with suspended calculation of interest amounts to DKK 82 million, equivalent to 0.5% of the bank’s total loans and guarantees at the end of the quarter. Given the low growth in the Danish economy for a number of years, which, however, is expected to improve weakly this year, the bank is satisfied with the credit policy on the basis of which the bank is operated. Based on an expected development in the economic cycle, the bank expects that impairment charges in 2014 will show a falling trend relative to 2013. Core earnings (Million DKK) 1st qtr. 1st qtr. 2013 2012 2011 2010 2014 2013 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total core income 234 202 844 823 767 758 Total costs and -67 -63 -273 -265 -248 -240 depreciations Core earnings before 167 139 571 558 519 518 impairments Impairment charges for loans -15 -21 -120 -157 -129 -138 etc. Core earnings 152 118 451 401 390 380 The core earnings were DKK 152 million against DKK 118 million last year, an increase of 29%. The realised earnings are above budget for the quarter. Result for portfolio and market risk The result for the portfolio for the first quarter of 2014 was positive by DKK 24 million including funding costs for the portfolio. The bank’s holding of shares etc. at the end of the quarter amounted to DKK 230 million, DKK 39 million of which was in listed shares, while DKK 191 million was in sector shares etc. The bond portfolio amounted to DKK 4,582 million, and the majority of the portfolio consists of AAA-rated Danish mortgage credit bonds and short-term bank bonds issued by rated counterparties. The total interest rate risk, computed as the impact on the result of a one percentage point change in the interest level, was 0.9% of the bank’s tier 1 capital after deduction at the end of the quarter. The bank’s total market risk within exposure to interest rate risk, exposure in listed shares and foreign currency exposure remains at a low level. The bank’s risk of losses calculated on the basis of a Value-at-Risk model (computed with a 10-day horizon and 99% probability) in the first quarter of 2014 was as follows: Risk in Risk relative to equity million DKK end of 1st quarter 2014 in % ---------------------------------------------------------------- ---------------------------------------------------------------- Highest risk of loss: 10.6 0.37% Lowest risk of loss: 5.1 0.18% Average risk of loss 8.8 0.30% The bank’s policy remains to keep the market risk at a low level. Profit after tax The profit after tax was DKK 136 million for the first quarter of 2014 against DKK 92 million last year. The profit after tax is equivalent to a return on equity at the beginning of the period of 20% p.a. after payment of dividend. Balance sheet The bank’s balance sheet at the end of the quarter stood at DKK 19,713 million against last year’s DKK 17,747 million. The bank’s deposits increased by 8% from DKK 12,797 million to DKK 13,775 million and the bank’s loans increased by 12% from DKK 12,433 million to DKK 13,961 million. The growth in the bank’s loans is broadly based on sectors with growth from both the branch network and the bank’s niche concepts, and the bank also experienced good underlying growth in new customers in 2014. The bank’s portfolio of guarantees at the end of the quarter was DKK 1,896 million against DKK 2,196 million at the end of the first quarter of 2013. Liquidity The bank’s liquidity is good, with the bank’s loans and deposits at the same level. The excess solvency relative to the statutory liquidity requirement is 171%. The bank’s short-term funding with term to maturity of less than 12 months amounts to DKK 1,0 billion, balanced by DKK 5,0 billion in short-term money market placings, primarily in Danish banks and liquid securities. The bank is thus not dependent on the short-term money market. The bank’s loans portfolio is more than fully financed by deposits and the bank’s equity. In addition, a part of the loans portfolio for wind turbines in Germany is refinanced back-to-back with the KfW Bankengruppe, and the DKK 1,139 million in question can thus be disregarded in terms of liquidity. The bank requires no financing for the coming year to meet the minimum requirement that it must always be able to manage for up to 12 months without access to the financial markets. Share buy-back programme It was decided at the annual general meeting in February 2014 to cancel 60,000 own shares, and the capital reduction is expected to be finally implemented within the next month. The bank was further authorised at the general meeting to buy up to 110,000 own shares for later cancellation. As of 22 April 2014, 20,000 own shares have been set aside for later cancellation under the new buy-back programme, and the bank’s holding of own shares at the end of March 2014 totalled 85,296 shares. Capital The equity at the beginning of 2014 was DKK 2,901 million. To this must be added the profit for the period, while the dividend paid and the value of the own shares bought must be subtracted, after which the equity at the end of the quarter was DKK 2,891 million. The bank’s solvency ratio (Tier 2) was computed at 18.1 at the end of the first quarter of 2014. The tier 1 core capital ratio was computed at 18.1. Solvency cover 1st qtr. 1st qtr. 2013 2012 2011 2010 2014 2013 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Core tier 1 capital ratio 18.1 18.3 18.7 19.6 18.3 17.1 (excl. hybrid core capital) (%) Tier 1 capital ratio (%) 18.1 19.5 19.2 20.9 19.8 18.6 Solvency ratio - Tier 2 (%) 18.1 20.6 20.0 22.4 21.4 22.4 Individual solvency 8.8 8.7 8.9 8.0 8.0 8.0 requirement (%) Solvency cover 206% 237% 225% 280% 268% 280% The bank’s capital adequacy ratios at the end of the first quarter of 2014 was calculated for the first time under the CRV rules. As described in the bank’s 2013 annual report, the bank’s calculation of capital cover is affected by the new rules, including the introduction of a phasing out arrangement for inclusion of hybrid core capital and subordinated loan capital. Certain changes have also been implemented for the calculation of risk-weighted assets, hereunder have the rules been changed with respect to the weighting and calculation of exposures in default, and a temporary discount on the risk weighting of exposures to certain SME commitments has also been introduced. The European banking supervisory authority, the EBA, and the Danish Financial Supervisory Authority have also published new rules in relation to the calculation of capital in 2014. The published rules indicates both that in future, buy-back programmes approved by the authorities must be deducted from the capital on publication of the programme in contrast to the previous practice, where the deduction from the capital was made in step with the actual purchase of shares, and that the calculated dividend must be deducted from ongoing earnings in contrast to previously, where the proposed dividend was not deducted until the end of the year. The bank has calculated the individual solvency requirement on the basis of the so-called 8+ model. The method of calculation in this model starts with 8%, to which are added any supplements calculated inter alia for customers with financial problems. The 8+ model thus takes no account of the bank’s earnings and cost base or its robust business model. Despite this, the bank’s individual solvency requirement at the end of the quarter was calculated at 8.8% - equivalent to a fall of 0.1 of a percentage point relative to the end of 2013. The Danish Financial Supervisory Authority’s ordinary inspection The Danish Financial Supervisory Authority has performed an ordinary inspection of the bank in the period February-April 2014. The bank has not yet received the Authority’s final report on this inspection. The inspection was concluded satisfactorily and the results were included in the bank’s individual solvency requirement as of 31 March 2014 and in the impairment charges for the quarter. Good increase in customer numbers In 2013 the bank carried out various outreach initiatives towards existing and new customers, including by investing in further disseminating the bank’s Private Banking platform at national level and by carrying out outreach activities in the branch network in Central and West Jutland. The activities were carried out to create healthy organic growth in the bank, as the biggest challenge in times of low growth in society is to create growth in the bank’s top line. The active initiatives in question were continued in 2014, and a positive increase in customer numbers in the branch network and within the niche concepts is thus still being registered. Apart from the above initiatives, the bank opened the new Private Banking branch in Aarhus on 1 April 2014, from where the bank will service affluent private and business customers in east Jutland. Accounting policies and key figures The accounting policies are unchanged relative to those in the submitted and audited 2013 annual report. Expected result in 2014 The bank’s core earnings for the first quarter of 2014 were DKK 152 million, which is above budget for the quarter. Expectations for core earnings for 2014 remain in the range DKK 410-460 million. Main and key figures 1st qtr. 1st qtr. Full year 2014 2013 2013 -------------------------------------------------------------------------------- Main figures for the bank (million DKK) -------------------------------------------------------------------------------- Total core income 234 202 844 -------------------------------------------------------------------------------- Total costs and depreciations -67 -63 -273 -------------------------------------------------------------------------------- Core earnings before impairments 167 139 571 -------------------------------------------------------------------------------- Impairment charges for loans etc. -15 -21 -120 -------------------------------------------------------------------------------- Core earnings 152 118 451 -------------------------------------------------------------------------------- Result for portfolio +24 +6 +23 -------------------------------------------------------------------------------- Expenses for bank packages 0 -1 -2 -------------------------------------------------------------------------------- Profit before tax 176 123 472 -------------------------------------------------------------------------------- Profit after tax 136 92 358 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Shareholders’ equity 2,891 2,695 2,901 -------------------------------------------------------------------------------- Deposits 13,775 12,797 14,114 -------------------------------------------------------------------------------- Loans 13,961 12,433 13,849 -------------------------------------------------------------------------------- Balance sheet total 19,713 17,747 19,583 -------------------------------------------------------------------------------- Guarantees 1,896 2,196 1,902 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Key figures for the bank (per cent) -------------------------------------------------------------------------------- Return on equity before tax, beginning of year, 25.3 18.8 18.1 p.a. -------------------------------------------------------------------------------- Return on equity after tax, beginning of year, 19.6 14.1 13.7 p.a. -------------------------------------------------------------------------------- Rate of costs 28.7 30.9 32.4 -------------------------------------------------------------------------------- Core tier 1 capital ratio 18.1 18.6 18.7 -------------------------------------------------------------------------------- Tier 1 capital ratio 18.1 19.5 19.2 -------------------------------------------------------------------------------- Solvency ratio - Tier 2 18.1 20.6 20.0 -------------------------------------------------------------------------------- Individual solvency requirement 8.8 8.7 8.9 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Key figures per 5 DKK share (DKK) -------------------------------------------------------------------------------- Core earnings 32 24 94 -------------------------------------------------------------------------------- Profit before tax 37 25 99 -------------------------------------------------------------------------------- Profit after tax 28 19 75 -------------------------------------------------------------------------------- Net asset value 605 557 607 -------------------------------------------------------------------------------- Price, end of period 1,180 866 1,099 -------------------------------------------------------------------------------- Dividend - - 25 -------------------------------------------------------------------------------- Profit and loss account Note 1.1-31.3 1.1-31.3 1.1-31.12 2014 2013 2013 DKK 1,000 DKK 1,000 DKK 1,000 -------------------------------------------------------------------------------- 1 Interest receivable 197,171 198,270 776,268 -------------------------------------------------------------------------------- 2 Interest payable 36,579 39,371 146,037 -------------------------------------------------------------------------------- Net income from interest 160,592 158,899 630,231 -------------------------------------------------------------------------------- 3 Dividend on capital shares etc. 830 22 12,610 -------------------------------------------------------------------------------- 4 Income from fees and commissions 64,123 50,010 229,813 -------------------------------------------------------------------------------- 4 Fees and commissions paid 8,065 8,210 31,123 -------------------------------------------------------------------------------- Net income from interest and fees 217,480 200,721 841,531 -------------------------------------------------------------------------------- 5 Value adjustments +39,334 +6,276 +23,074 -------------------------------------------------------------------------------- Other operating income 1,052 374 2,730 -------------------------------------------------------------------------------- 6,7 Staff and administration costs 62,209 58,143 254,909 -------------------------------------------------------------------------------- Amortisations, depreciations and 1,470 700 4,270 write-downs on intangible and tangible assets -------------------------------------------------------------------------------- Other operating costs -------------------------------------------------------------------------------- Miscellaneous other operating costs 27 22 28 -------------------------------------------------------------------------------- Costs Deposit Guarantee Fund 3,611 4,633 16,091 -------------------------------------------------------------------------------- 8 Impairment charges for loans and other -14,759 -21,402 -120,175 debtors etc. -------------------------------------------------------------------------------- Result of capital shares in associated 0 0 -3 companies -------------------------------------------------------------------------------- Profit before tax 175,790 122,471 471,859 -------------------------------------------------------------------------------- 9 Tax 39,750 30,625 114,199 -------------------------------------------------------------------------------- Profit after tax 136,040 91,846 357,660 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Other comprehensive income 0 0 0 -------------------------------------------------------------------------------- Total comprehensive income 136,040 91,846 357,660 -------------------------------------------------------------------------------- Core earnings 1.1-31.3 1.1-31.3 1.1-31.12 2014 2013 2013 DKK 1,000 DKK 1,000 DKK 1,000 --------------------------------------- Net income from interest 158,443 152,597 614,719 -------------------------------------------------------------------------------- Net income from fees and provisions 45,068 35,606 171,765 excl. commission -------------------------------------------------------------------------------- Income from sector shares 15,836 2,091 14,403 -------------------------------------------------------------------------------- Foreign exchange income 3,079 4,820 13,293 -------------------------------------------------------------------------------- Other operating income 1,052 374 2,730 -------------------------------------------------------------------------------- Total core income excl. trade income 223,478 195,488 816,910 -------------------------------------------------------------------------------- Trade income 10,990 6,194 26,925 -------------------------------------------------------------------------------- Total core income 234,468 201,682 843,835 -------------------------------------------------------------------------------- Staff and administration costs 62,209 58,143 254,909 -------------------------------------------------------------------------------- Amortisations, depreciations and 1,470 700 4,270 write-downs on intangible and tangible assets -------------------------------------------------------------------------------- Other operating costs 3,522 3,472 13,827 -------------------------------------------------------------------------------- Total costs etc. 67,201 62,315 273,006 -------------------------------------------------------------------------------- Core earnings before impairments 167,267 139,367 570,829 -------------------------------------------------------------------------------- Impairment charges for loans and other -14,759 -21,402 -120,175 debtors etc. -------------------------------------------------------------------------------- Core earnings 152,508 117,965 450,654 -------------------------------------------------------------------------------- Result for portfolio +23,398 +5,689 +23,497 -------------------------------------------------------------------------------- Expenses for bank packages -116 -1,183 -2,292 -------------------------------------------------------------------------------- Profit before tax 175,790 122,471 471,859 -------------------------------------------------------------------------------- Tax 39,750 30,625 114,199 -------------------------------------------------------------------------------- Profit after tax 136,040 91,846 357,660 -------------------------------------------------------------------------------- Balance sheet Note End End End March 2014 March 2013 Dec. 2013 DKK 1,000 DKK 1,000 DKK 1,000 -------------------------------------------------------------------------------- Assets -------------------------------------------------------------------------------- Cash in hand and claims at call on 264,989 52,176 63,064 central banks -------------------------------------------------------------------------------- 10 Claims on credit institutions and 316,064 954,668 416,913 central banks -------------------------------------------------------------------------------- Claims at notice on central banks 0 0 0 -------------------------------------------------------------------------------- Money market operations and 113,183 749,948 214,032 bilateral loans - term to maturity under 1 year -------------------------------------------------------------------------------- Bilateral loans - term to maturity 202,881 204,720 202,881 over 1 year -------------------------------------------------------------------------------- 11,12, Loans and other debtors at amortised 13,961,252 12,432,734 13,849,285 13 cost price -------------------------------------------------------------------------------- Loans and other debtors at amortised 12,822,547 11,624,594 12,880,717 cost price -------------------------------------------------------------------------------- Wind turbine loans with direct 1,138,705 808,140 968,568 funding -------------------------------------------------------------------------------- 14 Bonds at current value 4,582,261 3,567,573 4,669,732 -------------------------------------------------------------------------------- 15 Shares etc. 229,657 235,030 208,697 -------------------------------------------------------------------------------- Capital shares in associated 540 543 540 companies -------------------------------------------------------------------------------- Land and buildings total 73,318 75,692 73,871 -------------------------------------------------------------------------------- Investment properties 8,015 8,165 8,015 -------------------------------------------------------------------------------- Domicile properties 65,303 67,527 65,856 -------------------------------------------------------------------------------- Other tangible assets 4,593 3,709 4,385 -------------------------------------------------------------------------------- Actual tax assets 8,796 29,318 24,501 -------------------------------------------------------------------------------- Temporary assets 1,000 3,875 1,000 -------------------------------------------------------------------------------- Other assets 264,297 385,121 263,856 -------------------------------------------------------------------------------- Periodic-defined items 5,878 7,001 6,977 -------------------------------------------------------------------------------- Total assets 19,712,645 17,747,440 19,582,821 -------------------------------------------------------------------------------- Balance sheet Note End End End March 2014 March 2013 Dec. 2013 DKK 1,000 DKK 1,000 DKK 1,000 -------------------------------------------------------------------------------- Liabilities and equity -------------------------------------------------------------------------------- 16 Debt to credit institutions and central 2,244,738 1,249,451 1,754,884 banks -------------------------------------------------------------------------------- Money market operations and bilateral 937,482 362,783 656,258 credits - term to maturity under 1 year -------------------------------------------------------------------------------- Bilateral credits - term to maturity 168,551 78,528 130,058 over 1 year -------------------------------------------------------------------------------- Bilateral credits from KfW Bankengruppe 1,138,705 808,140 968,568 -------------------------------------------------------------------------------- 17 Deposits and other debts 13,774,721 12,796,547 14,113,816 -------------------------------------------------------------------------------- 18 Issued bonds at amortised cost price 246,895 323,495 249,814 -------------------------------------------------------------------------------- Other liabilities 167,456 279,556 173,806 -------------------------------------------------------------------------------- Periodic-defined items 164 175 917 -------------------------------------------------------------------------------- Total debt 16,433,974 14,649,224 16,293,237 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Provisions for deferred tax 13,188 15,151 13,188 -------------------------------------------------------------------------------- 12 Provisions for losses on guarantees 4,543 10,603 4,256 -------------------------------------------------------------------------------- Total provisions for liabilities 17,731 25,754 17,444 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Subordinated loan capital 201,579 199,429 200,193 -------------------------------------------------------------------------------- Hybrid core capital 168,214 177,659 170,847 -------------------------------------------------------------------------------- 19 Total subordinated debt 369,793 377,088 371,040 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 20 Share capital 24,200 24,700 24,200 -------------------------------------------------------------------------------- Reserve for net revaluation under the 189 192 189 intrinsic value method -------------------------------------------------------------------------------- Profit carried forward 2,866,758 2,670,482 2,755,211 -------------------------------------------------------------------------------- Proposed dividend etc. - - 121,500 -------------------------------------------------------------------------------- Total shareholders’ equity 2,891,147 2,695,374 2,901,100 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total liabilities and equity 19,712,645 17,747,440 19,582,821 -------------------------------------------------------------------------------- 21 Own capital share -------------------------------------------------------------------------------- 22 Contingent liabilities etc. -------------------------------------------------------------------------------- 23 Assets furnished as security -------------------------------------------------------------------------------- 24 Capital adequacy computation -------------------------------------------------------------------------------- 25 The supervisory diamond -------------------------------------------------------------------------------- 26 Miscellaneous comments -------------------------------------------------------------------------------- Statement of shareholders’ equity DKK 1,000 Share Reserve for net Profit Proposed Total capita revaluation under carried dividend share-hol l the intrinsic forward etc. ders’ value method equity -------------------------------------------------------------------------------- On 31 March 2014: 24,200 189 2,755,211 121,500 2,901,100 Shareholders’ equity at the end of the previous financial year -------------------------------------------------------------------------------- Dividend etc. paid -121,500 -121,500 -------------------------------------------------------------------------------- Dividend received 2,022 2,022 on own shares -------------------------------------------------------------------------------- Shareholders’ 24,200 189 2,757,233 0 2,781,622 equity after allocation of dividend etc. -------------------------------------------------------------------------------- Purchase and sale -26,515 -26,515 of own shares -------------------------------------------------------------------------------- Total comprehensive 136,040 136,040 income -------------------------------------------------------------------------------- Shareholders’ 24,200 189 2,866,758 0 2,891,147 equity on the balance sheet date -------------------------------------------------------------------------------- On 31 March 2013: 24,700 192 2,581,588 69,660 2,676,140 Shareholders’ equity at the end of the previous financial year -------------------------------------------------------------------------------- Dividend etc. paid -69,660 -69,660 -------------------------------------------------------------------------------- Dividend received on own shares 1,427 1,427 -------------------------------------------------------------------------------- Shareholders’ equity after 24,700 192 2,583,015 0 2,607,907 allocation of dividend etc. -------------------------------------------------------------------------------- Purchase and sale of own shares -4,379 -4,379 -------------------------------------------------------------------------------- Total comprehensive income 91,846 91,846 -------------------------------------------------------------------------------- Shareholders’ equity on the balance 24,700 192 2,670,482 0 2,695,374 sheet date -------------------------------------------------------------------------------- On 31 December 2013: 24,700 192 2,581,588 69,660 2,676,140 Shareholders’ equity at the end of the previous financial year -------------------------------------------------------------------------------- Reduction of share capital -500 500 0 -------------------------------------------------------------------------------- Dividend etc. paid -69,660 -69,660 -------------------------------------------------------------------------------- Dividend received on own shares 1,427 1,427 -------------------------------------------------------------------------------- Shareholders’ equity after 24,200 192 2,583,515 0 2,607,907 allocation of dividend etc. -------------------------------------------------------------------------------- Purchase and sale of own shares -64,467 -64,467 -------------------------------------------------------------------------------- Total comprehensive income -3 236,163 121,500 357,660 -------------------------------------------------------------------------------- Shareholders’ equity on the balance 24,200 189 2,755,211 121,500 2,901,100 sheet date -------------------------------------------------------------------------------- Notes Note 1.1-31. 1.1-31. 1.1-31.12 3 3 2013 2014 2013 DKK 1,000 DKK DKK 1,000 1,000 -------------------------------------------------------------------------------- 1 Interest receivable -------------------------------------------------------------------------------- Claims on credit institutions and central 5,762 5,167 23,425 banks -------------------------------------------------------------------------------- Loans and other debtors 184,645 183,105 719,154 -------------------------------------------------------------------------------- Loans - interest concerning the impaired part -10,954 -10,747 -43,913 of loans -------------------------------------------------------------------------------- Bonds 21,765 20,394 86,007 -------------------------------------------------------------------------------- Total derivatives financial instruments, -4,292 351 -8,617 -------------------------------------------------------------------------------- of which -------------------------------------------------------------------------------- Currency contracts 229 -1,337 -4,104 -------------------------------------------------------------------------------- Interest-rate contracts -4,521 1,688 -4,513 -------------------------------------------------------------------------------- Other interest receivable 245 0 212 -------------------------------------------------------------------------------- Total interest receivable 197,171 198,270 776,268 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 2 Interest payable -------------------------------------------------------------------------------- Credit institutions and central banks 6,628 6,228 23,385 -------------------------------------------------------------------------------- Deposits and other debts 24,636 27,215 101,280 -------------------------------------------------------------------------------- Issued bonds 2,207 2,798 8,015 -------------------------------------------------------------------------------- Subordinated debt 3,098 3,115 13,221 -------------------------------------------------------------------------------- Other interest payable 10 15 136 -------------------------------------------------------------------------------- Total interest payable 36,579 39,371 146,037 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 3 Dividend from shares etc. -------------------------------------------------------------------------------- Shares 830 22 12,610 -------------------------------------------------------------------------------- Total dividend from shares etc. 830 22 12,610 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 4 Gross income from fees and commissions -------------------------------------------------------------------------------- Securities trading 13,630 7,608 33,646 -------------------------------------------------------------------------------- Asset management 20,572 13,728 84,785 -------------------------------------------------------------------------------- Payment handling 5,571 4,946 21,524 -------------------------------------------------------------------------------- Loan fees 1,097 1,879 6,273 -------------------------------------------------------------------------------- Guarantee commissions 12,954 11,773 61,527 -------------------------------------------------------------------------------- Other fees and commissions 10,299 10,076 22,058 -------------------------------------------------------------------------------- Total gross income from fees and commissions 64,123 50,010 229,813 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Net income from fees and commissions -------------------------------------------------------------------------------- Securities trading 10,990 6,194 26,925 -------------------------------------------------------------------------------- Asset management 19,092 12,583 79,755 -------------------------------------------------------------------------------- Payment handling 5,014 4,470 19,347 -------------------------------------------------------------------------------- Loan fees 650 1,344 4,204 -------------------------------------------------------------------------------- Guarantee commissions 12,954 11,773 61,527 -------------------------------------------------------------------------------- Other fees and commissions 7,358 5,436 6,932 -------------------------------------------------------------------------------- Total net income from fees and commissions 56,058 41,800 198,690 -------------------------------------------------------------------------------- Foreign exchange income 3,079 4,820 13,293 -------------------------------------------------------------------------------- Total net income from fees, commissions and 59,137 46,620 211,983 foreign exchange income -------------------------------------------------------------------------------- Notes Note 1.1-31. 1.1-31. 1.1-31.1 3 3 2 2013 2014 2013 DKK DKK DKK 1,000 1,000 1,000 -------------------------------------------------------------------------------- 5 Value adjustments -------------------------------------------------------------------------------- Loans and other debtors, current value -201 -4,305 -974 adjustment -------------------------------------------------------------------------------- Bonds 20,344 3,563 1,653 -------------------------------------------------------------------------------- Shares etc. 18,117 5,192 9,479 -------------------------------------------------------------------------------- Investment properties 0 0 150 -------------------------------------------------------------------------------- Foreign exchange income 3,079 4,820 13,293 -------------------------------------------------------------------------------- Total derivatives financial instruments, -4,607 -5,108 -7,846 -------------------------------------------------------------------------------- of which -------------------------------------------------------------------------------- Interest-rate contracts -4,607 -5,124 -7,846 -------------------------------------------------------------------------------- Share contracts 0 16 0 -------------------------------------------------------------------------------- Issued bonds 1,204 773 2,491 -------------------------------------------------------------------------------- Other liabilities 1,398 1,341 4,828 -------------------------------------------------------------------------------- Total value adjustments 39,334 6,276 23,074 -------------------------------------------------------------------------------- 6 Staff and administration costs -------------------------------------------------------------------------------- Payments to general management, board of directors and shareholders’ committee -------------------------------------------------------------------------------- General management 960 951 3,973 -------------------------------------------------------------------------------- Board of directors 0 0 1,294 -------------------------------------------------------------------------------- Shareholders’ committee 0 0 366 -------------------------------------------------------------------------------- Total 960 951 5,633 -------------------------------------------------------------------------------- Staff costs -------------------------------------------------------------------------------- Salaries 28,054 25,937 117,365 -------------------------------------------------------------------------------- Pensions 3,181 2,926 12,066 -------------------------------------------------------------------------------- Social security expenses 250 227 900 -------------------------------------------------------------------------------- Costs depending on number of staff 3,307 2,891 16,195 -------------------------------------------------------------------------------- Total 34,792 31,981 146,526 -------------------------------------------------------------------------------- Other administration costs 26,457 25,211 102,750 -------------------------------------------------------------------------------- Total staff and administration costs 62,209 58,143 254,909 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 7 Number of full-time employees -------------------------------------------------------------------------------- Average number of employees during the period 258 244 251 converted into full-time employees -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 8 Impairment charges on loans and other debtors etc. -------------------------------------------------------------------------------- Net changes in impairment charges on loans and 21,805 26,604 95,058 other debtors and provisions for losses on guarantees -------------------------------------------------------------------------------- Actual realised net losses 3,907 5,545 69,030 -------------------------------------------------------------------------------- Interest concerning the impaired part of loans -10,953 -10,747 -43,913 -------------------------------------------------------------------------------- Total impairment charges on loans and other 14,759 21,402 120,175 debtors etc. -------------------------------------------------------------------------------- Notes Note 1.1-31.3 1.1-31.3 1.1-31.12 2014 2013 2013 DKK 1,000 DKK 1,000 DKK 1,000 -------------------------------------------------------------------------------- 9 Tax -------------------------------------------------------------------------------- Tax calculated on the period’s profit 39,750 30,625 114,967 -------------------------------------------------------------------------------- Adjustment of deferred tax 0 0 -1,660 -------------------------------------------------------------------------------- Adjustment of deferred tax due to 0 0 -303 change in tax rate -------------------------------------------------------------------------------- Adjustment of tax calculated for 0 0 1,195 previous years -------------------------------------------------------------------------------- Total tax 39,750 30,625 114,199 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Effective tax rate (%): -------------------------------------------------------------------------------- The current tax rate of the bank 24.5 25.0 25.0 -------------------------------------------------------------------------------- Permanent deviations -1.9 0.0 -1.0 -------------------------------------------------------------------------------- Adjustment of deferred tax due to 0.0 0.0 -0.1 change in tax rate -------------------------------------------------------------------------------- Adjustment of tax calculated for 0.0 0.0 0.3 previous years -------------------------------------------------------------------------------- Total effective tax rate 22.6 25.0 24.2 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Note End End End March 2014 March 2013 Dec. 2013 DKK 1,000 DKK 1,000 DKK 1,000 -------------------------------------------------------------------------------- 10 Claims on credit institutions and central banks -------------------------------------------------------------------------------- Claims at call 113,183 648,514 114,032 -------------------------------------------------------------------------------- Up to and including 3 months 0 0 100,000 -------------------------------------------------------------------------------- More than 3 months and up to and 0 101,434 0 including 1 year -------------------------------------------------------------------------------- More than 1 year and up to and 202,881 204,220 202,881 including 5 years -------------------------------------------------------------------------------- More than 5 years 0 500 0 -------------------------------------------------------------------------------- Total claims on credit institutions 316,064 954,668 416,913 and central banks -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 11 Loans and other debtors at amortised cost price -------------------------------------------------------------------------------- At call 1,232,979 1,814,888 1,311,786 -------------------------------------------------------------------------------- Up to and including 3 months 487,944 588,553 674,795 -------------------------------------------------------------------------------- More than 3 months and up to and 1,783,855 1,558,352 1,542,624 including 1 year -------------------------------------------------------------------------------- More than 1 year and up to and 4,831,618 4,195,401 4,601,579 including 5 years -------------------------------------------------------------------------------- More than 5 years 5,624,856 4,275,540 5,718,501 -------------------------------------------------------------------------------- Total loans and other debtors at 13,961,252 12,432,734 13,849,285 amortised cost price -------------------------------------------------------------------------------- Notes Note End End End March March Dec. 2014 2013 2013 DKK DKK DKK 1,000 1,000 1,000 -------------------------------------------------------------------------------- 12 Impairment charges for loans and other debtors and provisions for losses on guarantees -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Individual impairment charges -------------------------------------------------------------------------------- Cumulative individual impairment charges for 736,513 632,529 632,529 loans and other debtors at the end of the previous financial year -------------------------------------------------------------------------------- Impairment charges/value adjustments during the 73,460 74,293 255,157 period -------------------------------------------------------------------------------- Reverse entry - impairment charges made in -80,229 -36,107 -90,895 previous financial years -------------------------------------------------------------------------------- Booked losses covered by impairment charges -3,796 -7,359 -60,278 -------------------------------------------------------------------------------- Cumulative individual impairment charges for 725,948 663,356 736,513 loans and other debtors on the balance sheet date -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Collective impairment charges -------------------------------------------------------------------------------- Cumulative collective impairment charges for 112,652 114,876 114,876 loans and other debtors at the end of the previous financial year -------------------------------------------------------------------------------- Impairment charges/value adjustments during the 32,082 -3,870 -2,224 period -------------------------------------------------------------------------------- Cumulative collective impairment charges for 144,734 111,006 112,652 loans and other debtors on the balance sheet date -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total cumulative impairment charges for loans 870,682 774,362 849,165 and other debtors on the balance sheet date -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Provisions for losses on guarantees -------------------------------------------------------------------------------- Cumulative individual provisions for losses on 4,256 10,958 10,958 guarantees at the end of the previous financial year -------------------------------------------------------------------------------- Provisions/value adjustments during the period 829 415 3,282 -------------------------------------------------------------------------------- Reverse entry - provisions made in previous -529 -499 -9,245 financial years -------------------------------------------------------------------------------- Booked losses covered by provisions -13 -271 -739 -------------------------------------------------------------------------------- Cumulative individual provisions for losses on 4,543 10,603 4,256 guarantees on the balance sheet date -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total cumulative impairment charges for loans 875,225 784,965 853,421 and other debtors and provisions for losses on guarantees on the balance sheet date -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 13 Suspended calculation of interest -------------------------------------------------------------------------------- Loans and other debtors with suspended 81,698 106,825 85,258 calculation of interest on the balance sheet date -------------------------------------------------------------------------------- Notes Note End End End March 2014 March 2013 Dec. 2013 DKK 1,000 DKK 1,000 DKK 1,000 -------------------------------------------------------------------------------- 14 Bonds at current value -------------------------------------------------------------------------------- Listed on the stock exchange 4,582,261 3,567,573 4,669,732 -------------------------------------------------------------------------------- Total bonds at current value 4,582,261 3,567,573 4,669,732 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 15 Shares etc. -------------------------------------------------------------------------------- Listed on NASDAQ OMX Copenhagen 38,694 39,948 15,700 -------------------------------------------------------------------------------- Unlisted shares at current value 1,372 1,507 1,372 -------------------------------------------------------------------------------- Sector shares at current value 189,591 193,575 191,625 -------------------------------------------------------------------------------- Total shares etc. 229,657 235,030 208,697 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 16 Debt to credit institutions and central banks -------------------------------------------------------------------------------- Debt payable on demand 220,529 171,464 298,236 -------------------------------------------------------------------------------- Up to and including 3 months 725,183 206,610 315,311 -------------------------------------------------------------------------------- More than 3 months and up to and 97,653 97,974 137,287 including 1 year -------------------------------------------------------------------------------- More than 1 year and up to and 652,142 501,908 560,112 including 5 years -------------------------------------------------------------------------------- More than 5 years 549,231 271,495 443,938 -------------------------------------------------------------------------------- Total debt to credit institutions and 2,244,738 1,249,451 1,754,884 central banks -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 17 Deposits and other debts -------------------------------------------------------------------------------- On demand 8,205,431 7,395,909 8,325,047 -------------------------------------------------------------------------------- Deposits and other debts at notice: -------------------------------------------------------------------------------- Up to and including 3 months 1,546,311 1,716,858 1,205,176 -------------------------------------------------------------------------------- More than 3 months and up to and 858,229 637,588 1,426,171 including 1 year -------------------------------------------------------------------------------- More than 1 year and up to and 1,515,063 1,751,797 1,501,668 including 5 years -------------------------------------------------------------------------------- More than 5 years 1,649,687 1,294,395 1,655,754 -------------------------------------------------------------------------------- Total deposits and other debts 13,774,721 12,796,547 14,113,816 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Distributed as follows: -------------------------------------------------------------------------------- On demand 7,794,891 6,909,027 7,933,649 -------------------------------------------------------------------------------- At notice 350,965 225,596 337,480 -------------------------------------------------------------------------------- Time deposits 2,322,800 2,505,533 2,549,938 -------------------------------------------------------------------------------- Long term deposit agreements 1,884,775 1,908,971 1,883,569 -------------------------------------------------------------------------------- Special types of deposits 1,421,290 1,247,420 1,409,180 -------------------------------------------------------------------------------- 13,774,721 12,796,547 14,113,816 -------------------------------------------------------------------------------- Notes Note End End End March March Dec. 2013 2014 2013 DKK 1,000 DKK 1,000 DKK 1,000 -------------------------------------------------------------------------------- 18 Issued bonds at amortised cost price -------------------------------------------------------------------------------- Up to and including 3 months 0 0 3,727 -------------------------------------------------------------------------------- More than 3 months and up to and 2,573 213,697 0 including 1 year -------------------------------------------------------------------------------- More than 1 year and up to and including 244,322 109,798 246,087 5 years -------------------------------------------------------------------------------- Total issued bonds at amortised cost 246,895 323,495 249,814 price -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Distributed as follows: 0 220,000 0 Issues in Danish kroner: Nom. 220 million DKK -------------------------------------------------------------------------------- Own holding 0 -10,030 0 -------------------------------------------------------------------------------- Issues in Norwegian kroner: -------------------------------------------------------------------------------- Nom. 100 million NOK 90,440 99,740 88,540 -------------------------------------------------------------------------------- Regulation at amortised cost price and 4,564 7,485 5,768 adjustment to current value of issues -------------------------------------------------------------------------------- Issues in euro: -------------------------------------------------------------------------------- Nom. 20 million EUR 149,318 0 149,206 -------------------------------------------------------------------------------- Other issues 2,573 6,300 6,300 -------------------------------------------------------------------------------- 246,895 323,495 249,814 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 19 Subordinated debt -------------------------------------------------------------------------------- Subordinated loan capital: -------------------------------------------------------------------------------- Floating rate loan, principal EUR 27 201,579 201,226 201,428 million, expiry 30 June 2021 -------------------------------------------------------------------------------- Hybrid core capital: -------------------------------------------------------------------------------- 4.795% bond loan, nom, DKK 200 million, 200,000 200,000 200,000 indefinite term -------------------------------------------------------------------------------- Own holding -35,500 -32,000 -35,500 -------------------------------------------------------------------------------- Regulation at amortised cost price and 3,714 7,862 5,112 adjustment to current value of subordinated loan capital and hybrid core capital -------------------------------------------------------------------------------- Total subordinated debt 369,793 377,088 371,040 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 20 Share capital -------------------------------------------------------------------------------- Number of shares at DKK 5 each: -------------------------------------------------------------------------------- Beginning of period 4,840,000 4,940,000 4,940,000 -------------------------------------------------------------------------------- Changes during the period 0 0 -100,000 -------------------------------------------------------------------------------- End of period 4,840,000 4,940,000 4,840,000 -------------------------------------------------------------------------------- Of which reserved for approved capital 60,000 100,000 0 reduction -------------------------------------------------------------------------------- Of which reserved for subsequent 20,000 0 60,000 cancellation -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total share capital 24,200 24,700 24,200 -------------------------------------------------------------------------------- Notes Note End End End March March Dec. 2013 2014 2013 DKK 1,000 DKK 1,000 DKK 1,000 -------------------------------------------------------------------------------- 21 Own capital shares -------------------------------------------------------------------------------- Own capital shares included in the balance 0 0 0 sheet at -------------------------------------------------------------------------------- The market value is 100,649 87,979 68,747 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Number of own shares: -------------------------------------------------------------------------------- Beginning of year 62,554 96,075 96,075 -------------------------------------------------------------------------------- Purchases during the period 78,434 109,116 318,806 -------------------------------------------------------------------------------- Sales during the period -55,692 -103,599 -252,327 -------------------------------------------------------------------------------- Cancellation during the period 0 0 -100,000 -------------------------------------------------------------------------------- End of period 85,296 101,592 62,554 -------------------------------------------------------------------------------- Of which reserved for approved capital 60,000 100,000 0 reduction -------------------------------------------------------------------------------- Of which reserved for subsequent 20,000 0 60,000 cancellation -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Nominal value of holding of own shares, 426 508 313 end of period -------------------------------------------------------------------------------- Own shares’ proportion of share capital, 1.8 2.1 1.3 end of period (%) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 22 Contingent liabilities etc. -------------------------------------------------------------------------------- Contingent liabilities -------------------------------------------------------------------------------- Finance guarantees 937,856 1,243,249 949,047 -------------------------------------------------------------------------------- Guarantees against losses on mortgage 56,647 50,138 55,841 credit loans -------------------------------------------------------------------------------- Guarantee against losses Totalkredit 121,920 109,887 112,284 -------------------------------------------------------------------------------- Registration and conversion guarantees 44,766 75,168 55,605 -------------------------------------------------------------------------------- Sector guarantees 48,175 46,816 48,175 -------------------------------------------------------------------------------- Other contingent liabilities 686,313 670,926 680,982 -------------------------------------------------------------------------------- Total contingent liabilities 1,895,677 2,196,184 1,901,934 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 23 Assets furnished as security -------------------------------------------------------------------------------- First mortgage loans are provided for 1,138,705 808,140 968,568 German wind turbine projects. The loans are funded directly by KfW Bankengruppe, to which security in the associated loans has been provided. Each repayment of the first mortgage loans is deducted directly from the funding from the KfW Bankengruppe. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- As security for clearing, the bank has 365,272 194,522 321,192 pledged securities from its holding to the Central Bank of Denmark to a total market price of -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Provision of security under CSA agreements 63,207 89,686 75,372 -------------------------------------------------------------------------------- Notes Note End End End March 2014 March 2013 Dec. 2013 DKK 1,000 DKK 1,000 DKK 1,000 -------------------------------------------------------------------------------- 24 Capital adequacy computation -------------------------------------------------------------------------------- Computed pursuant to the Executive order on Capital Adequacy issued by the Danish Financial Supervisory Authority. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Weighted items with credit and 11,935,074 11,389,669 12,235,761 counterpart risk -------------------------------------------------------------------------------- Market risk 1,267,580 1,582,421 1,110,690 -------------------------------------------------------------------------------- Operational risk 1,567,369 1,522,813 1,522,813 -------------------------------------------------------------------------------- Total risk weighted items 14,770,023 14,494,903 14,869,264 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Shareholders’ equity 2,891,143 2,695,374 2,901,100 -------------------------------------------------------------------------------- Proposed dividend etc. 0 0 -121,500 -------------------------------------------------------------------------------- Deduction for the sum of equity -73,973 0 0 investments etc. > 10% -------------------------------------------------------------------------------- Deductions for accruals related to -141,196 0 0 calculated dividend and the residual frame of the share buy-back programme -------------------------------------------------------------------------------- Reserve for net revaluation -189 -192 -189 -------------------------------------------------------------------------------- Core tier 1 capital (excl. hybrid core 2,675,785 2,695,182 2,779,411 capital) -------------------------------------------------------------------------------- Hybrid core capital 131,600 168,000 164,500 -------------------------------------------------------------------------------- Deduction for equity investments etc. 0 -21,716 -19,963 > 10% -------------------------------------------------------------------------------- Deduction for the sum of equity -131,600 -20,830 -63,503 investments etc. > 10% -------------------------------------------------------------------------------- Tier 1 capital 2,675,785 2,820,636 2,860,445 -------------------------------------------------------------------------------- Subordinated loan capital 161,100 201,226 201,428 -------------------------------------------------------------------------------- Reserve for net revaluation 189 192 189 -------------------------------------------------------------------------------- Deduction for equity investments etc. 0 -21,716 -19,963 > 10% -------------------------------------------------------------------------------- Deduction for the sum of equity -161,289 -20,830 -63,503 investments etc. > 10% -------------------------------------------------------------------------------- Capital base after deductions 2,675,785 2,979,508 2,978,596 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Core tier 1 capital ratio (excl. hybrid 18.1 18.6 18.7 core capital) (%) -------------------------------------------------------------------------------- Tier 1 capital ratio (%) 18.1 19.5 19.2 -------------------------------------------------------------------------------- Solvency ratio - Tier 2 (%) 18.1 20.6 20.0 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Capital base requirements under Section 1,181,602 1,159,592 1,189,541 124 (2,1) of the Danish Financial Business Act -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 25 The supervisory diamond (Danish Financial Supervisory Authority limits) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Stable funding (funding ratio) (< 1) 0.7 0.7 0.7 -------------------------------------------------------------------------------- Excess liquidity (> 50%) 169.6% 159.2% 166.2% -------------------------------------------------------------------------------- Total large exposures (< 125%) 39.1% 16.8% 35.0% -------------------------------------------------------------------------------- Growth in loans (< 20%) 0.8% 0.1% 11.5% -------------------------------------------------------------------------------- Real estate exposure (< 25%) 12.7% 11.7% 11.4% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 26 Miscellaneous comments on: -------------------------------------------------------------------------------- Main and key figures for the bank · Return on equity at the beginning of the year before and after tax are computed per annum after allocation of dividend etc., net. · Key figures per DKK 5 shareare calculated on the basis of respectively 1st quarter 2014: 4,780,000, 1st quarter 2013: 4,840,000 shares,2013: 4,780,000 shares. -------------------------------------------------------------------------------- Main figures summary 1st 1st Full qtr. qtr. year 2014 2013 2013 -------------------------------------------------------------------------------- Profit and loss account summary (million DKK) -------------------------------------------------------------------------------- - Net income from interest 161 159 630 -------------------------------------------------------------------------------- Dividend on capital shares etc. 1 0 12 -------------------------------------------------------------------------------- Net income from fees and commissions 56 42 199 -------------------------------------------------------------------------------- Net income from interest and fees 218 201 841 -------------------------------------------------------------------------------- Value adjustments +39 +6 +23 -------------------------------------------------------------------------------- Other operating income 1 0 3 -------------------------------------------------------------------------------- Staff and administration costs 62 58 255 -------------------------------------------------------------------------------- Amortisations, depreciations and write-downs on 1 1 4 intangible and tangible assets -------------------------------------------------------------------------------- Other operating costs 4 4 16 -------------------------------------------------------------------------------- Impairment charges for loans and other debtors etc. -15 -21 -120 -------------------------------------------------------------------------------- Profit before tax 176 123 472 -------------------------------------------------------------------------------- Tax 40 31 114 -------------------------------------------------------------------------------- Profit after tax 136 92 358 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- - Main figures from the balance sheet (million DKK) -------------------------------------------------------------------------------- - Loans and other debtors 13,961 12,433 13,849 -------------------------------------------------------------------------------- Deposits and other debts 13,775 12,797 14,114 -------------------------------------------------------------------------------- Subordinated debt 370 377 371 -------------------------------------------------------------------------------- Shareholders’ equity 2,891 2,695 2,901 -------------------------------------------------------------------------------- Balance sheet total 19,776 17,747 19,583 -------------------------------------------------------------------------------- Quarterly overview (Million 1st 4rd 3rd 2nd 1st 4th 3rd 2nd 1st DKK) qtr. qtr. qtr. qtr. qtr. qtr. qtr. qtr. qtr. 2014 2013 2013 2013 2013 2012 2012 2012 2012 -------------------------------------------------------------------------------- Net 158 156 155 151 153 146 153 156 160 income from interes t -------------------------------------------------------------------------------- Net 45 48 33 55 36 51 30 48 33 income from fees and provisi ons excl. commissi on -------------------------------------------------------------------------------- Income 16 5 3 4 2 5 -1 2 0 from sector shares -------------------------------------------------------------------------------- Foreign 3 3 3 2 5 4 3 2 4 exchang e income -------------------------------------------------------------------------------- Other 1 1 1 1 0 0 1 1 1 operati ng income -------------------------------------------------------------------------------- Total 223 213 195 213 196 206 186 209 198 core income excl. trade income -------------------------------------------------------------------------------- Trade 11 7 5 9 6 8 5 5 6 income -------------------------------------------------------------------------------- Total 234 220 200 222 202 214 191 214 204 core income -------------------------------------------------------------------------------- Staff 62 70 61 66 58 69 59 64 61 and adminis tration costs -------------------------------------------------------------------------------- Amortisa 1 2 1 0 1 0 1 1 1 tions, depreci ations and write-d owns on intangi ble and tangibl e assets -------------------------------------------------------------------------------- Other 4 4 3 3 4 3 0 4 2 operati ng costs -------------------------------------------------------------------------------- Total 67 76 65 69 63 72 60 69 64 costs etc. -------------------------------------------------------------------------------- Core 167 144 135 153 139 142 131 145 140 earning s before impairm ents -------------------------------------------------------------------------------- Impairme -15 -25 -34 -40 -21 -33 -45 -55 -24 nt charges for loans and other debtors etc. -------------------------------------------------------------------------------- Core 152 119 101 113 118 109 86 90 116 earning s -------------------------------------------------------------------------------- Result +24 +12 -4 +9 +6 -9 +25 +6 +27 for portfol io -------------------------------------------------------------------------------- Expenses 0 0 -1 0 -1 0 0 0 -2 for bank package s -------------------------------------------------------------------------------- Profit 176 131 96 122 123 100 111 96 141 before tax -------------------------------------------------------------------------------- Tax 40 30 23 30 31 33 28 24 35 -------------------------------------------------------------------------------- Profit 136 101 73 92 92 67 83 72 106 after tax -------------------------------------------------------------------------------- Danish Financial Supervisory Authority key figures for Danish banks 1st 1st Full qtr. qtr. year 2014 2013 2013 -------------------------------------------------------------------------------- Solvency: -------------------------------------------------------------------------------- Solvency ratio - Tier 2 % 18.1 20.6 20.0 -------------------------------------------------------------------------------- Tier 1 capital ratio % 18.1 19.5 19.2 -------------------------------------------------------------------------------- Individual solvency requirement % 8.8 8.7 8.9 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Earnings: -------------------------------------------------------------------------------- Return on equity before tax % 6.1 4.6 16.9 -------------------------------------------------------------------------------- Return on equity after tax % 4.7 3.4 12.8 -------------------------------------------------------------------------------- Income/cost ratio DKK 3.14 2.44 2.19 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Market risk: -------------------------------------------------------------------------------- Interest rate risk % 0.9 1.5 0.6 -------------------------------------------------------------------------------- Foreign exchange position % 0.7 0.6 1.6 -------------------------------------------------------------------------------- Foreign exchange risk % 0.0 0.0 0.0 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Liquidity risk: -------------------------------------------------------------------------------- Excess cover relative to statutory liquidity % 170.6 159.2 166.2 requirement -------------------------------------------------------------------------------- Loans and impairments thereon relative to % 107.7 103.2 104.1 deposits -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Credit risk: -------------------------------------------------------------------------------- Loans relative to shareholders’ equity 4.8 4.6 4.8 -------------------------------------------------------------------------------- Growth in loans for the period % 0.8 0.1 11.5 -------------------------------------------------------------------------------- Total large exposures % 39.1 16.8 35.0 -------------------------------------------------------------------------------- Cumulative impairment percentage % 5.2 5.1 5.1 -------------------------------------------------------------------------------- Impairment percentage for the period % 0.09 0.14 0.72 -------------------------------------------------------------------------------- Proportion of debtors at reduced interest % 0.5 0.7 0.5 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Share return: -------------------------------------------------------------------------------- Profit for the period after tax per share * / DKK 562.1 379.5 1,462.8 *** -------------------------------------------------------------------------------- Book value per share * / ** DKK 12,161 11,142 12,145 -------------------------------------------------------------------------------- Share price relative to profit for the period DKK 42.0 45.6 15.0 per share * -------------------------------------------------------------------------------- Share price relative to profit for the period 1.94 1.55 1.81 per share * / *** -------------------------------------------------------------------------------- * Calculated on the basis of a denomination of DKK 100 per share. ** Calculated on the basis of number of shares outstanding at the end of the period. *** Calculated on the basis of the average number of shares. The average number of shares is calculated as a simple average of the shares at the beginning of the period and at the end of the period. -------------------------------------------------------------------------------- - Management’s statement The board of directors and the general management have today considered and approved the quarterly report for Ringkjøbing Landbobank A/S for the period 1 January - 31 March 2014. The quarterly report was prepared in accordance with the provisions of the Danish Act on Financial Activities and further Danish requirements on listed financial companies concerning disclosure. We consider the accounting policies to be appropriate and the accounting estimates made to be responsible, such that the quarterly report provides a true and fair view of the bank’s assets, liabilities and financial position as of 31 March 2014 and of the bank’s activities for the period 1 January - 31 March 2014. We also believe that the management report contains a true and fair account of the bank’s activities and financial position as well as a description of the most important risks and uncertainties which can affect the bank. The quarterly report is not audited or reviewed, but the external auditors have checked that the conditions for ongoing inclusion of the earnings for the period in the core capital have been met. Ringkøbing, 23 April 2014 General Management: John Fisker CEO Board of Directors: Jens Lykke Kjeldsen Martin Krogh Pedersen Chairman Deputy chairman Gert Asmussen Inge Sandgrav Bak Gravers Kjærgaard Jørgen Lund Pedersen Bo Bennedsgaard Gitte E. S. Vigsø Employee board member Employee board member