Stock Exchange Announcement No 01/08 - issued on 21 January 2008 - provided
information on Sydbank's acquisition of bankTrelleborg in accordance with a
conditional merger agreement. The merger between Sydbank and bankTrelleborg
became effective on 27 March 2008, cf Stock Exchange Announcement No 04/2008.
2007 Interim Report bankTrelleborg
On 31 August 2007 bankTrelleborg issued a stock exchange announce-ment
concerning the 2007 Interim Report. The Interim Report, which was signed by the
board of directors and executive management of bankTrelle-borg, recorded a
profit after tax of the group and of the parent, of DKK 30.0m and DKK 26.6m,
respectively, as well as shareholders' equity of DKK 679m and DKK 667m,
respectively. A subsequent review of the interim financial statements has
disclosed that the interim financial statements were not presented correctly.
Therefore Sydbank must disclose that as a consequence of the errors found,
which predominantly comprise a number of minor adjustments to the impairment
charges of bankTrelleborg as well as the measurement of investment property,
the interim report of the group and of the parent must be reduced by DKK 87,000
and DKK 3.8m, respectively, after tax, due to the above-mentioned errors.
Finally it can be noted that as a result of an erroneous accounting treat-ment
of the bank's guarantee capital, shareholders' equity as made up for the first
six months is DKK 4.7m less in the group as well as the parent.
In addition the adjustments imply that the balance sheet total is reduced by
DKK 3.1m in the group and the parent, bringing the balance sheet total to DKK
7,586m and DKK 7,594m, respectively.
2007 Annual Report bankTrelleborg
On 26 February 2008 the 2007 Annual Report of bankTrelleborg was re-leased.
Compared with this previous information a number of additional disclosures are
stated below to illustrate the acquired loan portfolio which
as stated previously is greatly characterised by the very strong involve-
ment of bankTrelleborg in property-related exposures. The released finan-
cial statements as well as the below corrective/supplementary disclosures
show that 56% of bankTrelleborg's total corporate credit portfolio has been
granted to this category and that the share of exposures exceeding DKK 60m
total around DKK 4,5bn, including weak and risky exposures of around 35%. In
addition it can be noted that at year-end 2007 bankTrelle-borg had more than 55
exposures in the category of property-related ex-posures, each constituting
more than 5% of the shareholders' equity of bankTrelleborg.
At the same time it must be emphasised that a renewed review of the 2007 Annual
Report of bankTrelleborg has not had any impact on profit or bal-ance sheet
total as regards the annual report released on 26 February 2008.
Implementation of bankTrelleborg
The implementation of bankTrelleborg is largely according to schedule. The
branch networks of bankTrelleborg in Copenhagen, Hillerød, Aarhus as well as 1
of 2 branches in Odense have been closed/sold. Moreover 3 of bankTrelleborg's
partly or wholly owned subsidiaries have been sold. The organisation is in
place and the staff number target of Sydbank's new Zea-land Region is within
reach. Net client defection stands at approximately 1,500 clients since
Sydbank's acquisition.
Property market developments since Sydbank's acquisition have confirmed the
necessity of the market value adjustment of the acquired credit portfolio.
However it is still the opinion of Sydbank that the value adjustment is
sufficient. In future Sydbank will submit half-yearly reports in this respect.
