BankNordik P/F - Financial Statement Release

Annual Report 2010

BankNordik achieved pre-tax profit of DKK 416m in 2010

Growth in income of 30% was primarily ascribable to the international
expansion. BankNordik maintains its cautious strategy and continues to be among
the most solvent banks in the Nordic region 

  -- Pre-tax profit DKK 416m compared to DKK 135m in 2009
  -- Return on equity pre-tax 22.4 % compared to 8.5% in 2009
  -- Earnings from banking and insurance activities DKK 644m compared to DKK
     497m in 2009
  -- Impairments on loans amounting to DKK 167m compared to DKK 128m in 2009,
     corresponding to 1,5 % of loans and off balance sheet items
  -- Solvency ratio of 17%, twice the requirement to the Bank
  -- Loan volume lower than deposits (DKK 8.7bn and DKK 8.8bn, respectively)
  -- Liquidity approximately 3 times higher than the statutory requirements

2010 was characterized by several significant changes in BankNordik. Early in
the year, the Bank acquired 12 branches in Denmark and Greenland from Sparbank.
With this move the Bank gained 30,000 new customers, expanded its business
volume by more than one-third, turned its deposits deficit into a surplus, and
strengthened its platform for continued healthy growth. 

In March, BankNordik sold its stake in the large fish-processing company
Bakkafrost in connection with a successful listing in Oslo. The sale increased
the Bank's already strong capital base with a gain of DKK 380m. 

Well ahead of the termination of the government backed guarantee for the
banking sector and its customers, the Bank accumulated ample liquidity. The
time after the termination showed that the normalized market conditions were to
the benefit of a well-consolidated bank such as BankNordik, and consequently a
gradual reduction of the contingency liquidity could be initiated at the end of
the year and the beginning of this year. 

Internally, all IT systems were converted to the IT provider SDC system. This
put some stress on the organisation, but the conversion was strategically
important for the continued development of customer service and improvement in
efficiency. Both are important objectives for BankNordik. 

“BankNordik has had an unusually eventful period of time” says Janus Petersen,
CEO of the BankNordik group. “While other banks have cut back, we have doubled
our size in only two years and are now active in four markets: Greenland,
Iceland, Faroe Islands and Denmark. This provides us with new challenges, but
more importantly with new opportunities to continue our line of progress, based
on a firm and focused strategy and a continuous stringent control of the risk
profile.” 

With an equity capital of DKK 2.0bn and DKK 203m in additional capital,
BankNordik had a solvency ratio of 17% year-end 2010. The figure shall be
assessed relative to the standard requirement of 8% of the Danish Banking Act
and the individual solvency requirement of less than 8%. Thus BankNordik is
among the best consolidated banks in Northern Europe. 

With a 9.5% increase in the price, the BankNordik share was among the best
performing shares on the stock exchange in 2010. This position should be seen
in the light of the Bank's relatively low risk profile. 

As a consequence of participating in the governmentally backed guarantee scheme
for the banking sector during 2008-10, BankNordik's payment of dividends
remains subject to restrictions. It will be proposed to the Annual General
Meeting on 25 March 2011 that DKK 40m, corresponding to the profit since the
termination of the guarantee on 1 October 2010, will be distributed while
additional dividend will be paid in 2012 (providing continued ample solvency). 

“The greatest tasks this year will be to create additional growth and, at the
same time, maintaining low risk and focus on efficiency. Our many important
steps last year provide great opportunities for a sound continued development,”
says Janus Petersen. The Bank has planned several initiatives, both internally
and externally, but some of these will not contribute fully until the next two
to three years. For 2011, management expects a profit of DKK 100-140m excluding
value adjustments. 

Conference call and web-cast today at 11.00 (CET)

As usual in connection with the publication of financial results, BankNordik
will host a conference call and web-cast for analysts and investors today at
11.00 (CET). 

Dial-in numbers for the conference are:

UK                 + 44 207 509 5139

Danish            + 45 32 71 47 67

US                 + 1 718 354 1226

International    + 44 (0) 207 509 5139

Link to the web-cast can be found at www.banknordik.fo. Participants are kindly
asked to call in a few minutes before the conference begins. 

The live presentation and the Annual Report (available in English only) can be
found on the Bank's website www.banknordik.fo. 

BankNordik was founded more than 100 years ago on the Faroe Islands. The
BankNordik Group operates banking activities in Greenland, Denmark and on the
Faroe Islands, and insurance activities in Iceland and on the Faroe Islands. In
2010, the Bank had total assets of DKK 14bn and 430 employees. BankNordik is
regulated by the Danish Financial Supervisory Authority and participates in the
Danish Deposit Guarantee Fond. BankNordik is listed on the NASDAQ OMX exchanges
in Reykjavik and Copenhagen, where it is currently among the 10 largest banks
measured on market value and sixth largest measured on assets. 




         Further information:
         Janus Petersen, CEO, tel. +298 330 340, Investor Relations:
ir@banknordik.fo

Attachments:

Press Release BankNordik AR2010 - pdf.pdf

BankNordik Annual Report 2010.pdf