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Interim report - first six months of 2004

August 17, 2004

Press release: Net profit of DKr4,423m for the first half of 2004

Danske Bank today announced its financial results for the first half of 2004. The report can be viewed at Highlights are shown below:

  • The Danske Bank Group recorded a net profit of DKr4,423m, against a net profit of DKr4,803m for the first half of 2003.
  • Core income was DKr13,226m, against DKr13,872m in the first half of 2003.
  • Costs fell by 5%, and the cost/core income ratio improved from 54.0% to 53.7%.
  • Provisions for bad and doubtful debts fell to DKr452m from DKr947m in the same period the year before.
  • Core earnings rose by 4% from DKr5,431m to DKr5,672m.
  • Earnings from investment portfolios totalled DKr601m, against DKr1,282m in 2003.
  • In the course of the second half of the year, Danske Bank will make a further repurchase of own shares at a market value of up to DKr3bn, taking the total repurchase in 2004 to DKr6bn.
  • Core earnings are expected to be between DKr11bn and DKr12bn for full-year 2004.

Commenting on the results, chief executive Peter Straarup said, "The core banking business shows good growth, and our core earnings have risen 4%. The Bank achieved sound growth in lending in Denmark, Norway and Sweden. In Denmark, growth is driven, among other things, by the demand for our home financing products Danske Prioritet and Bolig Plus. We expect this favourable growth to continue."

Danske Bank to outsource its IT operations
In its interim report, Danske Bank announces that it will outsource its decentralised IT operations to DMdata. Today, DMdata is in charge of the centralised IT operations of the Danske Bank Group. In addition, the parties to the sale will agree to extend the remaining term of the operating agreement from three and a half years to ten years. Danske Bank will continue to carry out system and product development itself. These changes mean that some 330 staff members currently employed by the Group will work for DMdata.

"With this decision, we aim to ensure the future development and stability of our increasingly complex IT operations. Another aspect is the substantial future savings inherent in the outsourcing of the operations," says chief executive Peter Straarup.

Danske Bank also expects to sell its holding of 45% of the shares in DMdata a/s to IBM Danmark A/S.

In the second half of 2004, the Group will book a capital gain of just over DKr100m on the sale of its shares in DMdata. In addition, the Group expects to cut IT operating expenses during the 10-year term of the agreement. The savings, which will increase progressively over the next ten years, will amount to more than DKr100m in 2005.

Tuesday, August 17, from 2pm

Peter Straarup, Chairman of the Executive Board,
tel.: +45 33 44 01 07

Tonny Thierry Andersen, Chief Financial Officer,
tel.: +45 33 44 11 47

The financial results will be presented at a press conference at 2 pm.