NYKREDIT BRINGS ADMINISTRATION MARGIN CASE BEFORE THE COURTS

But Nykredit continues its dialogue with the Danish Competition Authority about
discontinuing or adjusting the ceiling on administration margins 

- Nykredit is surprised at the decision of the Danish Competition Appeals
Tribunal. Nykredit is the only mortgage bank which is unable to adjust
administration margins on private residential mortgages despite the fact that
the cost of granting mortgage loans has risen. The right to raise
administration margins is so fundamental to the future development of our
business that we will now bring the case before the courts. We will continue
the dialogue with the Danish Competition Authority about whether market and
regulatory conditions have changed to an extent that warrants adjustment or
discontinuation of the ceiling on Nykredit's administration margins since its
acquisition of Totalkredit. 

This comment was made by Peter Engberg Jensen, Group Chief Executive, on
today's decision of the Danish Competition Appeals Tribunal that went against
Nykredit in a case about administration margins. 

In June this year, the Danish Competition Council refused Nykredit the
opportunity to adjust administration margins as otherwise announced on the
grounds that the adjustment conflicted with the undertaking to reduce
administration margins given by Nykredit to the competition authorities in
connection with its acquisition of Totalkredit in 2003. 

Nykredit disagreed with the decision of the Danish Competition Council and
ap-pealed to the Danish Competition Appeals Tribunal, which has decided to
uphold the decision of the Danish Competition Council. 

- Some of our competitors have raised their margins since February 2010 when we
announced our intention to adjust administration margins, which clearly shows
that a margin increase is warranted. We have consistently stated three reasons
for raising margins: Higher housing loan losses, stricter requirements as to
the capital which Nykredit and Totalkredit have to provide as security for
customer loans and a higher cost of capital. Although the loss scenario is
slightly brighter than expected, the other reasons are very important, adds
Peter Engberg Jensen. 

 
Peter Engberg Jensen is pleased with the continued dialogue between Nykredit
and the Danish Competition Authority and refers to the decision of the
Competition Appeals Tribunal, which states that the Danish Competition Council
may reconsider the justification of the undertakings: 

- Pending the outcome of the appeals case, we have been in dialogue with the
Danish Competition Authority about the possibility of discontinuing or changing
the agreement we made in 2003 when we acquired Totalkredit. We are pursuing
this dialogue, but the outcome is uncertain, although we hope to find a
solution in this way. 

- The right to raise administration margins is so fundamental to us, however,
that we will continue to have two approaches: the dialogue with the Danish
Competition Authority and a resolution of the legal disagreement by bringing
the case before the courts. 

In February this year, Nykredit and Totalkredit announced an increase of the
ad-ministration margins on existing and new mortgage loans. For existing
mortgage loans, the increase came to 0.1 percentage point - from 0.5% to 0.6%.
For new mortgage loans, the size of the announced margin adjustment depended on
the loan type. 

Nykredit has been and still is of the opinion that the announced administration
margin increase does not conflict with the undertaking from 2003. Nykredit has
consistently claimed that it was never agreed that the undertaking was to be
indefinite or to be of a duration stretching beyond the undertakings made in
the partnership agreements with the former owners of Totalkredit, which
undertakings all expired on 1 April 2010. 



Contacts:
Peter Engberg Jensen, Group Chief Executive, or Nels Petersen, Head of
Corporate Communications, tel +45 44 55 14 70 or +45 20 22 22 72