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Company Announcement No 2 February 10, 2011


Company Announcement No 2/2011

Danske Bank prepares fully underwritten rights issue

Danske Bank plans to raise approximately DKK 20 billion of new share capital through a fully underwritten discounted rights issue. The rights issue will strengthen Danske Bank’s core tier 1 capital in light of forthcoming regulation. The Bank has approached the Danish Government with a request to prepay the Danish State hybrid capital. The rights issue is expected to be launched in April 2011 at the latest.

On 18 January 2009, the Danish government and a broad majority of the Danish parliament adopted legislation to permit the Danish State to strengthen the capital base of the financial sector. This step was taken to ensure that customers could continue to borrow from the banks even if the international economic crisis worsened materially.

To strengthen its capital base and accommodate customers’ need for financing, Danske Bank and Realkredit Danmark borrowed DKK 24 billion and DKK 2 billion, respectively, from the Danish State in the form of subordinated hybrid capital with redemption options exercisable from 11 April 2014 and 11 May 2012.

The forthcoming regulation includes new capital requirements that allocate a higher value to shareholders’ equity than to hybrid capital, an approach that is also favoured by the international rating agencies.

To prepare for these changes, Danske Bank’s Board of Directors finds it appropriate to increase the Bank’s share capital. The Board of Directors plans to increase Danske Bank’s share capital in accordance with Article 6 of the Bank’s Articles of Association by issuing new shares in a fully underwritten discounted rights issue to raise proceeds of about DKK 20 billion.

The purpose of the issue is, initially, to bring Danske Bank’s shareholders’ equity to a level that management considers appropriate in view of the forthcoming regulation. At the same time, Danske Bank will seek to prepay the hybrid capital to the Danish State.

Consequently, Danske Bank has approached the Danish Government with a request to repay the hybrid capital in May 2012. Furthermore, the Bank has asked for cancellation of the option to convert the hybrid capital into shares.

Rights issue
Danske Bank will act as Global Coordinator and Bookrunner. Bank of America Merrill Lynch has been appointed as Joint Bookrunner and has agreed to underwrite the rights issue subject to customary terms and conditions.

A.P. Møller og Hustru Chastine Mc-Kinney Møllers Fond til almene Formaal and A.P. Møller – Mærsk A/S, which together represent 22.76% of the share capital, and Realdania, which represents 10.07%, have informed the Bank that they will subscribe for their proportionate shares of the offering.

Further information
Danske Bank will publish a prospectus stating all offer terms and the offer period for the rights issue when the Board of Directors makes the final decision to proceed.

The rights issue and the planned redemption of the State hybrid capital would increase the Group’s core tier 1 capital ratio from the current 10.1% to about 12.5% (calculated on the basis of end-2010 figures). The Group’s tier 1 capital ratio would decrease from the current 14.8% to about 14.1% (calculated on the basis of end-2010 figures), with nearly 90% deriving from shareholders’ equity.

"Danske Bank will be pleased to be able to repay the Danish State with the proceeds from the issue,” says chief executive Peter Straarup. “By increasing our shareholders’ equity at the same time, Danske Bank will be one of the best capitalised banks in the EU. Danske Bank will then be  in a better position to develop its business and pursue attractive opportunities."

Danske Bank A/S

Contact persons:
Peter Straarup, Chairman of the Executive Board, tel. +45 45 14 60 01
Henrik Ramlau-Hansen, Chief Financial Officer, tel. +45 45 14 06 66
Martin Gottlob, Head of Investor Relations, tel. +45 45 14 07 92

This is a translation of a press release in the Danish language. In case of discrepancies, the Danish version prevails.

Important Notice:
This press release contains certain forward-looking statements, including statements about the Bank's business and a potential offering of shares of the Bank. Such forward-looking statements are based on data, assumptions and estimates that the Bank considers to be reasonable. They are subject to numerous risks and uncertainties, including matters not yet known to the Bank or not currently considered material by the Bank, and there can be no assurance that anticipated events will occur or that the objectives set out will actually be achieved.

The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Canada, Australia or Japan.  These written materials do not constitute an offer of securities for sale in the United States, nor may the securities be offered or sold in the United States absent registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder.  There is no intention to register any portion of the offering in the United States or to conduct a public offering of securities in the United States.

The issue, exercise or sale of securities in the offering are subject to specific legal or regulatory restrictions in certain jurisdictions.  The Bank  assumes no responsibility in the event there is a violation by any person of such restrictions.

The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. Investors must neither accept any offer for, nor acquire, any securities to which this document refers, unless they do so on the basis of the information contained in the applicable prospectus published or offering circular distributed by the Bank.

This press release is an advertisement for the purposes of applicable measures implementing Directive 2003/71/EC (such Directive, together with amendments thereto and any applicable implementing measures in the relevant home Member State under such Directive, the ("Prospectus Directive"). A prospectus prepared pursuant to the Prospectus Directive will be published in connection with any offering of securities. Any offer of securities to the public that may be deemed to be made pursuant to this press release in any EEA Member State that has implemented the Prospectus Directive is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive.

This communication is directed only at (i) persons who are outside the United Kingdom or (ii) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as “relevant persons”).  Any investment activity to which this communication relates will only be available to and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.