Capinordic's best quarter so far - even in a market displaying a negative trend

Q2 2008
- Net interest and fee income amounted to DKK 136m (DKK 49m)
- EBTDA came to DKK 70m (DKK 20m)
- The profit after tax was DKK 42m (DKK 17m)
- Total assets amounted to DKK 3,452m (DKK 3,155m)
- Equity totalled DKK 2,297m (DKK 2,036m)

H1 2008
- Net interest and fee income amounted to DKK 181m (DKK 88m)
- EBTDA came to DKK 61m (DKK 56m)
- The profit after tax was DKK 11m (DKK 36m)
- Total assets amounted to DKK 3,452m (DKK 3,155m)
- Equity totalled DKK 2,297m (DKK 2,036m)


Comment by Lasse Lindblad, Group CEO:
“We recorded the best quarter so far, the numbers are confirming that
Capinordic has a business model that works: 
- Capinordic achieved record earnings in a difficult market - operating income
was 30 per cent better than our best operating income so far. 
- We have a diversified funding strategy that makes us less dependent on the
rather closed interbank market, and we have a solid capital base. 
- In Q2 2008, we saw a continued positive development in our repeat income
combined with strong earnings from our Investment Banking activities.” 

	
Best quarter so far
- The Capinordic Group saw its best quarter so far despite the otherwise
negative trend in the financial markets: EBTDA was 30 per cent higher than in
Q4 2007, which was our previous earnings record. 
- Increase in net interest and fee income of 178 per cent compared with Q2
2007. The increase originates from both higher consolidated repeat income and
the Group's Investment Banking activities, among which a number of projects
were completed in Q2 2008. 
- Consolidated repeat income continues to increase despite the negative trend
in the markets, and the Group's Swedish activities generate an ever increasing
contribution to consolidated earnings. 
- Within Investment Banking, the Group has a high rate of execution. In
addition to a good positioning in the Investment Banking market, this also
implies a continued inflow of projects. This contributes to a strong pipeline
for the Group for Q3 and Q4 2008. 
- Also in Q2, EBTDA was influenced by negative market value adjustments of the
trading portfolio due to the global bear market. In Q2 2008, market value and
translation adjustments came to a negative figure of DKK 16m (a positive figure
of DKK 21m). 

Bank branch in Sweden
- Capinordic A/S has been granted a licence to operate a branch of Capinordic
Bank A/S in Sweden. The bank will be launched in early September, starting with
very attractive 3, 6 and 12 months' time deposit products. Existing Capinordic
customers, business partners and the distribution network have given the news
about the launch of the bank branch a very positive reception. 


Strong funding strategy: Diversification results in less dependence on the
interbank market 
In the recent quarters, Capinordic has profited from a strong capital base
secured already in 2006 and 2007. The Group thus never depended and still does
not depend on funding through the interbank market, and the Group is not
vulnerable relative to the refinancing of its loan portfolio. 

- The financial market development, which was characterised by a negative trend
and increased volatility, also resulted in changes to the interbank market, in
which the access to liquidity (cash) became more difficult and financing costs
increased. Capinordic expects a continuous increase in the differentiation of
the conditions for and access to liquidity and a resulting fragmentation within
the interbank market. 

- The Group's funding strategy is based on the exploitation of intra-Group
synergies and an increase in the range of products available to the Group's
existing Danish and Swedish customer base of more than 200,000 customer
agreements. The Group expects to be able to attract deposits from these
customers to function as the basis for the Group's funding. Accordingly,
relative to the build-up of its deposit and loan portfolios, Capinordic is not
dependent on funding through the interbank market. 

- The potential of the Group's Swedish customer base is large as Swedish
financial consumers are characterised by paying great attention to and actively
participating in their investments and savings. Moreover, Sweden generally has
a good savings culture, and the Group will therefore begin launching a number
of savings and investment products targeted at the Group's Swedish customers. 

Loans: Good spread and adequate collateral
- Relative to the current situation in the financial markets, the Group's key
ratios for capital adequacy and cash were satisfactory compared with the sector
average. 
- The Group's loan portfolio is well diversified, and already in Q1 2008 the
Group reduced its loan portfolio as a result of the financial unrest. As part
of its credit policy, the Group assesses and adapts collateral received on an
ongoing basis. Loan losses and impairment for H1 2008 amounted to DKK 19m (DKK
0m). 
- Moreover, Capinordic maintains a high focus on pricing, security and risk
relative to lending activities. In H1 2008, the Group raised its interest
rates, and collateral was also adjusted on a continuous basis. Capinordic's
loan exposures are characterised by short terms, and all of them are associated
with subsequent transactions, for example within Investment Banking or Markets. 

Inflow of new customers and AUM
- The Swedish activities continue their positive development in terms of inflow
of new customers, product launches and earnings. The positive development is a
result of the corporate growth strategy and greatly supports the future
earnings basis of the Group. 
- Despite the negative trend in the financial markets, the Group saw an average
net monthly inflow of customer agreements of 2,200 in H1 2008 (2007: 2,137
customer agreements), and the Group maintained AUM of approx. DKK 20bn (DKK
10bn). The net customer inflow was slightly lower than normal, which is,
however, characteristic of periods with a negative trend in the financial
markets, and the summer months are also characterised by a lower inflow of
customers. 
- Compared with relevant market indices, the return on assets under management
was satisfactory. Particularly the funds Capinordic MM Global Focus and
Capinordic Global Opportunities did really well relative to comparable funds in
Morning Star. 

Expectations
Capinordic maintains its previously communicated expectations for 2008:
- An increase in the net interest and fee income of about 35 per cent to a
level of DKK 410m 
- An increase in EBTDA of about 15 per cent to a level of DKK 175m 
- An increase in the number of customer agreements by 20-25 per cent to approx.
250,000 customer agreements by year-end 2008. 

The market is characterised by instability, and certain factors may point
towards a more negative development in growth and inflation. Due to the
financial market instability, Capinordic's expectations are subject to greater
uncertainty than usual and are based on the assumption that the development in
the financial markets will not experience a notable deterioration in H2 2008.