Company Announcement 2 - 2008
The Copenhagen Stock Exchange
16 January 2008
Adjustment of expectations of core earnings for 2007
Due to speculations in the market as to the Forstædernes Bank statement for
2007 the Bank is now publishing its expectations. The final accounting figures
will be published as scheduled on 7 February 2008.
• Expectations of core earnings are being adjusted to a record level of some
DKK 440m, which is DKK 20-30m higher than the latest adjusted expectations at
the end of the first six months of 2007. These will be the Bank's biggest core
earnings ever and about 34 % higher than in 2006.
• Core earnings include the recognition of impairments of DKK 50m which is
slightly lower than budgeted.
• Earnings from investment portfolios have been marked by unrest in the
financial markets and will at the level of DKK 80 to 85m, which corresponds to
a loss of about 1 % of the total investment portfolio of DKK 6-7bn.
• Expectations are that profit before tax will come to DKK 355 to 360m,
corresponding to a 21 % return on equity as of the beginning of the year.
Solid capital and liquidity
• The solvency ratio as of 31 December 2007 will be about 11 %.
• Excess liquidity cover compared to the 10 % requirement laid down in Section
152 of the Danish Financial Business Act is more than 100 %.
• In Q4 of 2007 the Bank increased its deposits by about DKK 2bn at normal
market prices. For all 2007 the increase in loans/advances comes to 25 % and
the increase in deposits to 18 %.
As announced earlier on, the Bank expected a stagnation in the property market
already in the autumn of 2005, and among other things we reduced the Bank's
involvement in property projects and property financing. However, the Bank is
still a partner to bridge financing tasks.
Investment credits are covered by stop-loss agreements which effectively
protect the Bank against losses.
Positive expectations of 2008
The Bank's position in Scandinavia's most attractive market area forms the
basis for continued growth in the currency, investment and pension areas.
In 2008 core earnings are expected to come to somewhere near DKK 400 to 450m,
which is level with the record-breaking results in 2007´. Relative to the
equity at the beginning of the year this will correspond to a return of -about
18 to 20 %.
The Executive Board
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Contact person:
Steffen Torvits, Investor Relations and Communication Manager,
tel. +45 22 22 20 36
This announcement has been issued both in Danish and English. In case of any
discrepancies, the Danish version shall prevail.
