BankNordik P/F - Financial Statement Release

Cautiousness among the customers resulted in limited credit demands and lower core earnings for BankNordik in the first quarter

Highlights:

  -- Pre-tax profit amounts to DKK 7m
  -- Value adjustments were negative by DKK 17m
  -- Core earnings decreased by 10% compared to Q4 2010
  -- Impairments were DKK 22m
  -- External funding in the first quarter has been reduced by DKK 1.5bn
  -- Deposits increased and funding loan repaid to optimise liquidity surplus to
     163%
  -- The Group's solvency at the end of Q1 2011 amount to 17%
  -- BankNordik meets by far all the criteria of the “Supervisory Diamond” - the
     Danish FSA's risk standard

The level of activity in the first quarter was influenced by some uncertainty
in customers' expectations to the economic development. This resulted in
relatively few new investments and consequently a limited credit demand.
Repayment of loans exceeded new loans, and total loans decreased from DKK 8.7bn
to DKK 8.4bn in the quarter, corresponding to 3%. 

Likewise a decrease appeared in the Group's interest, fees and insurance
income, which fell by 5% from DKK 158m in Q1 last year to 150m in Q1 this year. 

Personnel and administrative costs decreased from DKK 111m in the fourth
quarter 2010 to DKK 101m in the first quarter this year, corresponding to 9%. 

Impairments on loans amounted to DKK 22m in the quarter compared with DKK 51
million in the first quarter last year and a total DKK 167m in impairments on
loans in 2010. 

Interest rates increased significantly in the first quarter which is reflected
in the negative value adjustments on securities of DKK 17m compared with a
positive amount of DKK 16m in the same period last year. The negative impact
from this difference in value adjustments amount on the pre-tax profit thus
amount to DKK 33m. 

The pre-tax profit in the first quarter amounted to DKK 7m. In the same period
last year the pre-tax profit amounted to DKK 411m, but this was because of the
divestment of Bakkafrost generating a capital gain of DKK 380m. 

Management retains the guidance that the pre-tax profit for 2011 is in the
range of DKK 100-140m before value adjustments - but most likely in the lower
end of the range. 

The transaction of the newly acquired 50% of the strategically important life
insurance company Føroya Lívstrygging, which has a 60% market share on the
Faroese market with 18,000 customers and DKK 3bn of pensions savings is,
(dependent on approval) expected to be closed before year end. 


         For further information, please contact:
         Janus Petersen, CEO, tel. +298 330 340 or Investor Relations,
ir@banknordik.fo

Attachments:

Q1 2011 Interim Report.docx.pdf