Danske Bank will not prepay
state loan

August 25, 2011

Announcement No. 18/2011

Danske Bank will not prepay state loan
Danske Bank and the Danish government have discussed the possibilities of Danske Bank prepaying the hybrid capital of DKK 24 billion raised from the Danish state in 2009. The negotiations showed, however, that an agreement on prepayment on terms financially satisfactory to Danske Bank could not be reached. Consequently, Danske Bank has decided not to prepay the loan, which can thus be repaid at the earliest in April 2014.

Danske Bank and the Danish government have agreed on certain changes to the terms and conditions of the loan agreement, however. Thus, the possibility of converting and the obligation to convert all or a portion of the hybrid capital into share capital under certain circumstances is terminated, as is Danske Bank’s option to make interest payments in the form of shares. The total annual payment for the hybrid capital will not change.

The changes are conditional on approval by Danske Bank’s General Meeting on 27 March 2012.

“After the capital increase carried out in the spring, Danske Bank is one of the best-capitalised banks in the EU, and we are well prepared for the new Basel III rules. One purpose of the capital increase was indeed to allow us to repay the state hybrid capital in 2012 rather than in 2014. We have regrettably not been able to reach a financially satisfactory agreement with the Danish government. But we are pleased with the changes to the loan agreement that we and the Danish government have agreed on,” says Dan-ske Bank’s CEO Peter Straarup.

In April 2011, the Group strengthened its capital position through a rights issue with net proceeds of DKK 19.8 billion. The issue lifted the Danske Bank Group’s core tier 1 capital ratio by about 2.3 per-centage points. Calculated at 30 June 2011, the Group’s tier 1 capital and total capital ratios were thus 16.6% and 18.8%, respectively.

Danske Bank

Peter Straarup, Chairman of the Executive Board, tel. +45 45 14 60 01
Anders Klinkby, First Vice President, tel. +45 45 14 57 95, mobile +45 25 10 19 19

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