Increased activity level and growth potential, but downward adjustment as a result of financial turbulence

Financial report January-September 2008
Q3: Net interest and fee income amounted to DKK 73m (DKK 49m).
Q3: EBTDA came to a negative DKK 31m (positive figure of DKK 45m).
YTD: Net interest and fee income amounted to DKK 255m (DKK 138m).
YTD: EBTDA came to DKK 30m (DKK 101m).
YTD: 218 (187) thousand customer agreements. 

Capinordic increases its activity level
- Consolidated net interest and fee income for Q3 2008 amounted to DKK 73m, as
against DKK 49m for the same period of 2007, corresponding to an increase of 48
per cent. 
- Capinordic maintained the high activity level with an average net inflow of 2
(2) thousand customer agreements per month, thereby achieving a net inflow of
assets under management. 
- Since the beginning of the year, Capinordic has seen an increase in the
number of customer agreements of 8 per cent. 
- In early September, Capinordic launched a branch of Capinordic Bank in
Sweden. The launch was successful, and already now both new customers and
customers from the Group's existing customer base are beginning to flow in. 

Downward adjustment as a result of financial turbulence
- Capinordic adjusts its expectations for 2008 downwards. The adjustment is a
result of the extraordinary, financial turbulence, which has accelerated since
the beginning of September. The international capital markets were
characterized by substantial asset losses and an extreme scarcity of cash,
which implied very difficult conditions for all market players. 
- Capinordic adjusts its expectations downwards, mainly as a result of losses
on its own portfolio of securities and of loan losses and impairment (loan loss
provisions) made in Q4. The primary parameters included in our adjusted
expectations for 2008 are outlined below: 
- Own portfolio: Loss of DKK 50m as a result of falling prices in the financial
markets. Since the end of August alone, the OMX C20 has dropped by 39 per cent
and MSCI World by 36 per cent. 
- Loans and advances: Total loan losses and impairment (loan loss provisions)
at a level of DKK 200m, only DKK 2m of which are realised losses. The financial
turbulence and particularly the scarcity of cash have resulted in a global loss
in the values and transferability of assets in a large number of categories. In
the light of the international financial crisis, Capinordic has critically
reviewed the Group's total loan portfolio and the realisation values of the
collateral deposited and has made provision for impairment (loan loss
provisions) of about DKK 200m as a result of this review. 
- Other results: In spite of complex market conditions, the Group's Investment
Banking activities achieved strong earnings. By contrast, the Group recorded
lower commission income and income from the management of assets and property.
The reduced income is mainly attributable to falling prices in the financial
markets. 
- As a result of the financial market development, Capinordic expects to make
total extraordinary write-downs of goodwill and other intangibles assets at a
level of DKK 100m for 2008. 
- Despite the loan loss provisions, the Group can maintain an capital adequacy
ratio of about 50 per cent due to its strong capital base. 
- After the above write-downs, etc., consolidated equity may be estimated at
DKK 2.1bn. 

Expectations for the year
Capinordic adjusts its expectations of the results for the financial year 2008.
As a result of the complex market development and high volatility in the
financial markets, expectations are set within wide intervals. Capinordic
expects: 
- An increase in the net interest and fee income of about 12-18 per cent to a
level of DKK 320-360m (as opposed to the previously announced increase of about
35 per cent to a level of DKK 410m) 
- Negative EBTDA of DKK 50-100m (as opposed to the previously announced
increase of about 15 per cent to EBTDA of DKK 175m) 
- An increase in the number of customer agreements of 10-15 per cent to about
220-230 thousand customer agreements at year-end 2008 (as opposed to the
previously announced increase of about 20-25 per cent to about 250 thousand
customer agreements). 

Due to the financial market instability, Capinordic's expectations are subject
to greater uncertainty than usual. 

Growth potential of Capinordic
- Capinordic has a strong capital base with equity of DKK 2.1bn.
- More than 200 thousand customer agreements and a continued high net inflow of
customer agreements averaging 2 thousand per month in 2008. 
- Sweden's largest distribution network of more than 900 insurance brokers.
- Increasing income from both Investment Banking and asset management
activities. 
- The Group is not exposed to the interbank market. 
- Many important investments have been made in connection with mergers,
official licences and customer bases. 

Post-period events:
- Capinordic Bank A/S has joined the Danish Contingency Committee for Winding
Up and Transfer of Banks and Savings Banks. The scheme applies until 30
September 2010. 

Lasse Lindblad, CEO, says:
"Capinordic has suffered losses and recorded impairments as a result of the
financial crisis. The crisis implies a more difficult earnings environment for
the financial sector and increased complexity. Despite its loan loss
provisions, Capinordic can maintain an capital adequacy ratio of about 50 per
cent due to its strong capital base. 

However, Capinordic's business model with a strong funding strategy, focus on
synergies, cost structures and repeat income gives Capinordic a good foundation
for achieving its earnings and growth targets up to 2012. 

The financial crisis currently experienced is frighteningly brutal, and also
Capinordic is clearly affected, but we have a solid capital base for countering
continued turbulence." 

Additional information:
Lasse Lindblad
CEO
Mobile: +45 4094 0708
Tel.: +45 8816 3000
E-mail: info@capinordic.com