Danske bank 3 t 2011

company announcement
1 november 2011

InterIm report – FIrst nIne montHs 2011

MANAGEMENT'S REPORT 3 INTERIM FINANCIAL STATEMENTS –
DANSKE BANK GROUP 24
Highlights – Danske Bank Group 3
Overview 4 Income statement 24
Financial results for the period 5 Statement of comprehensive income 25
Balance sheet 9 Balance sheet 26
Outlook for 2011 15 Statement of capital 27
Banking Activities 17 Cash flow statement 29
Danske Markets and Treasury 19 Notes 30
Danske Capital 20
Danica Pension 21 STATEMENT BY THE
Other Activities 23 MANAGEMENT 47
AUDITORS' REVIEW REPORTS 48
SUPPLEMENTARY INFORMATION 50

Interim Report – First Nine Months 2011 is a translation of the
original report in the Danish language (Delårsrapport – 1.-3. kvartal
2011). In case of discrepancies, the Danish version prevails.

OPERATIONS IN 15 COUNTRIES / 661 BRANCHES / 5 MILLION CUSTOMERS / 21,567 EMPLOYEES

DANSKE BANK INTERIM REPORT — FIRST NINE MONTHS 2011 2/50

Highlights – Danske Bank Group

INCOME STATEMENT Q1-Q3 Q1-Q3 Index Q3 Q2 Q1 Q4 Q3 Full year
(DKK millions) 2011 2010 11/10 2011 2011 2011 2010 2010 2010

Net interest income 17,355 17,774 98 6,016 5,785 5,554 6,069 5,840 23,843
Net fee income 6,080 6,303 96 1,938 2,049 2,093 2,396 2,095 8,699
Net trading income 5,687 7,005 81 267 2,445 2,975 702 1,904 7,707
Other income 2,799 2,847 98 825 972 1,002 1,035 703 3,882
Net income from insurance business -407 1,461 - -735 261 67 685 705 2,146

Total income 31,514 35,390 89 8,311 11,512 11,691 10,887 11,247 46,277
Expenses 19,528 19,553 100 5,499 6,678 7,351 6,457 6,294 26,010

Profit before loan impairment charges 11,986 15,837 76 2,812 4,834 4,340 4,430 4,953 20,267
Loan impairment charges 8,396 10,835 77 2,802 2,753 2,841 2,982 3,083 13,817

Profit before tax 3,590 5,002 72 10 2,081 1,499 1,448 1,870 6,450
Tax 2,067 2,409 86 394 881 792 377 983 2,786

Net profit for the period 1,523 2,593 59 -384 1,200 707 1,071 887 3,664

Attributable to non-controlling interests 12 - - - 14 -2 3 - 3

BALANCE SHEET (END OF PERIOD)
(DKK millions)

Due from credit institutions
and central banks 145,300 218,533 66 145,300 142,088 170,692 228,100 218,533 228,100
Loans and advances 1,693,518 1,680,100 101 1,693,518 1,666,608 1,661,983 1,679,965 1,680,100 1,679,965
Repo loans 155,196 165,934 94 155,196 198,293 178,372 168,481 165,934 168,481
Trading portfolio assets 911,584 810,111 113 911,584 644,915 630,831 641,993 810,111 641,993
Investment securities 108,465 119,685 91 108,465 111,061 110,897 118,556 119,685 118,556
Assets under insurance contracts 225,568 220,524 102 225,568 222,203 218,980 217,515 220,524 217,515
Other assets 141,393 146,229 97 141,393 141,893 154,126 159,276 146,229 159,276

Total assets 3,381,024 3,361,116 101 3,381,024 3,127,061 3,125,881 3,213,886 3,361,116 3,213,886

Due to credit institutions and
central banks 373,622 314,513 119 373,622 317,167 309,688 317,988 314,513 317,988
Deposits 788,921 763,514 103 788,921 792,037 794,604 800,613 763,514 800,613
Repo deposits 99,717 64,257 155 99,717 99,509 71,758 60,440 64,257 60,440
Bonds issued by Realkredit
Danmark 534,245 563,519 95 534,245 529,808 542,065 555,486 563,519 555,486
Other issued bonds 359,022 447,277 80 359,022 410,409 422,272 450,219 447,277 450,219
Trading portfolio liabilities 677,319 658,039 103 677,319 429,391 447,881 478,386 658,039 478,386
Liabilities under insurance contracts 240,519 242,917 99 240,519 237,074 235,556 238,132 242,917 238,132
Other liabilities 111,930 123,993 90 111,930 113,410 120,938 130,544 123,993 130,544
Subordinated debt 70,059 79,578 88 70,059 72,288 75,626 77,336 79,578 77,336
Shareholders' equity 125,670 103,509 121 125,670 125,968 105,493 104,742 103,509 104,742

Total liabilities and equity 3,381,024 3,361,116 101 3,381,024 3,127,061 3,125,881 3,213,886 3,361,116 3,213,886

RATIOS AND KEY FIGURES

Earnings per share (DKK) 1.8 3.5 -0.4 1.3 0.9 1.4 1.2 4.9
Diluted earnings per share (DKK) 1.8 3.5 -0.4 1.3 0.9 1.4 1.2 4.9
Return on average shareholders'
equity (%) 1.7 3.4 -1.2 3.8 2.7 4.1 3.4 3.6
Cost/income ratio (%) 62.0 55.3 66.2 58.0 62.9 59.3 56.0 56.2
Total capital ratio (%) 18.0 17.4 18.0 18.8 17.4 17.7 17.4 17.7
Tier 1 capital ratio (%) 16.0 14.4 16.0 16.6 14.6 14.8 14.4 14.8
Share price (end of period) (DKK) 78.6 122.1 78.6 95.3 116.5 132.3 122.1 132.3
Book value per share (DKK) 135.7 138.4 135.7 136.3 140.7 140.0 138.4 140.0
Full-time-equivalent staff
(end of period) 21,567 21,634 21,567 21,536 21,434 21,522 21,634 21,522

Share ratios covering the first quarter of 2011 and previous periods have been divided by a factor of 1.0807 to reflect the share capital increase
in April 2011.


Overview
First nine months of 2011
The Danske Bank Group posted a net profit of DKK 1.5 billion for the first nine months of 2011. Results were ad-
versely affected by low interest rates, low economic growth and turbulent capital markets.

• Total income was DKK 31.5 billion, down 11% from the level in the first nine months of 2010.
• As expected, net interest income declined from the year-earlier level, but the trend reversed towards the
end of the period following the Group’s decision to raise lending rates.
• Net trading income was satisfactory in the first two quarters of the period but suffered from the global fi-
nancial turmoil in the third quarter.
• The Group’s insurance business showed a loss, mainly as a result of postponed booking of the risk al-
lowance to income and a strengthening of technical provisions necessitated by adverse developments in
the credit bond and equity markets.

• Despite an extraordinary commitment of DKK 1.0 billion to the Danish Guarantee Fund for Depositors and In-
vestors to cover losses on distressed banks, expenses remained at the year-earlier level.

• Loan impairment charges totalled DKK 8.4 billion, down 23% from the level in the first nine months of 2010.
The fall reflected improved conditions in several markets, with the most notable fall in charges in Denmark and
the Baltics. The difficult market conditions in Ireland and Northern Ireland persisted.

• Lending and deposits matched the levels at the end of 2010. Lending as a percentage of bonds issued by
Realkredit Danmark and deposits rose to 112% from 110% at the end of 2010.

• In April 2011, the Group strengthened its capital position through a share offering with pre-emption rights for
existing shareholders. The net proceeds were DKK 19.8 billion. The issue lifted the Danske Bank Group’s core
tier 1 capital ratio by about 2.2 percentage points (calculated at 30 September 2011).
• Danske Bank and the Danish government could not agree on terms for a prepayment of the state hybrid
capital that were financially acceptable to Danske Bank. The loan will be repaid in 2014.

• At 30 September 2011, the tier 1 capital and total capital ratios were solid at 16.0% and 18.0%, respectively,
against 14.8% and 17.7% at the end of 2010. The core tier 1 capital ratio was 11.8%, against 10.1% at the end of
2010.
• A recalibration of the Group’s internal ratings-based (IRB) approach increased total risk-weighted assets
to DKK 895 billion at 30 September 2011, up from DKK 844 billion at 31 December 2010.

• In the first nine months of 2011, the Group issued covered bonds and senior debt for a total of DKK 48.6 billion.
• In the third quarter of 2011, banks’ access to long-term funding through issues on the financial markets
was extremely limited. Nonetheless, the Group has met the objectives set out in the long-term funding
plan for 2011.

• In order to ensure the Group’s future earnings capacity, the Group is launching a three-year cost-savings pro-
gramme that will reduce expenses by about DKK 2 billion in the 2012-14 period. The cost reduction is also a
consequence of customers’ use of the Group’s new self-service products, such as mobile banking, for an increas-
ing number of banking transactions. The focus will be on improving customer service and making the Group
more efficient.

• Peter Straarup, Chairman of the Executive Board, wishes to retire. Consequently, the Board of Directors is initi-
ating the process of finding a new chief executive officer.

Third quarter 2011
The Group posted a pre-tax profit of DKK 10 million in the third quarter of 2011. Higher net interest income and
lower expenses could not offset a fall in net trading income, a loss on the insurance business and higher loan losses.

• The third quarter of 2011 saw a positive trend in net interest income because of interest rate increases.
• Volatile interest rates, equity prices and exchange rates led to low net trading income and a loss on the insur-
ance business.
• Loan impairment charges related mainly to facilities to commercial property, agricultural and personal custom-
ers in Denmark.

Outlook for 2011
The global economy remains very fragile, and growth rates in the Western world are expected to be low in the re-
mainder of 2011. Structural challenges in the economies of southern Europe and Ireland and a heavy budget deficit
in the US are constraining economic growth and affecting the stability of the financial markets.

• Activity at the banking units and at Danske Capital is likely to remain stable, while the trend in earnings at the
other capital markets units will depend on financial market trends.
• The Group will continue to focus on tight cost control.
• The global economic developments could contribute to making the Group’s loan impairment charges higher in
the fourth quarter than in the third quarter, but the figure for the full year is still expected to be lower than the
2010 figure.


Financial results for the period
The Danske Bank Group posted a profit before tax of The Group’s core business area, the banking units,
DKK 3.6 billion for the first nine months of 2011. The generated a 10% increase in earnings before loan im-
net profit for the period was DKK 1.5 billion. pairment charges compared with the year-earlier
Excluding the third-quarter results of the insurance level. Loan impairment charges declined substan-
business and Danske Markets and Treasury, the net tially, and this contributed to acceptable results at Re-
profit was in line with expectations. tail Banking Denmark and Retail Banking Sweden.
The Irish and Northern Ireland banking units recog-
Interest rates remained low in the first nine months of nised substantial loan impairment charges, and both
2011. The European Central Bank postponed ex- units posted losses.
pected rate hikes because of the financial unrest.
Moreover, the Danish central bank lowered its certifi- At Danske Markets, profit before impairment charges
cate of deposit rate twice in the third quarter. These was DKK 2.5 billion, down from DKK 4.1 billion a
rate changes were made to stabilise the Danish krone year earlier. Danske Markets delivered satisfactory re-
rather than in response to interest rate changes in the sults in the first two quarters of the period, but in the
euro zone. third quarter, income was adversely affected by the
global financial turmoil.
The capital markets were adversely affected to an in-
creasing degree by the European debt crisis and the Danske Capital posted a profit before impairment
consequent focus on the banking sector’s credit expo- charges of DKK 0.6 billion, an 18% rise from the
sure and funding needs. In the autumn of 2011, profit in the same period in 2010. The rise was driven
money market spreads widened, although not nearly by higher average assets under management and
as much as during the 2008 crisis. wider margins.

The intense unrest led to a generally more difficult The insurance business showed a loss since the
business environment, which affected the Group’s net Group had to postpone booking the risk allowance to
trading income and Danica Pension’s performance in income and to strengthen technical provisions be-
particular. cause of adverse developments in the credit bond and
equity markets.

Other Activities posted a loss because of the com-
mitment of an estimated DKK 1.0 billion to the Dan-
ish Guarantee Fund for Depositors and Investors to
cover losses on distressed banks.

Profitability
The Group maintains a strong focus on profitability
and efficiency. Since 2008, it has cut costs in a num-
ber of areas, reducing the headcount by about 2,000
employees and the number of branches by about 140.
This development has been a natural consequence of
customers’ use of eBanking, mobile banking and the
24/7 Contact Centre for an increasing number of
banking transactions. The Group expects this trend to
continue, and the changing customer behaviour con-
tributes significantly to ongoing cost savings.

PROFIT BEFORE LOAN
IMPAIRMENT CHARGES Q1-Q3 Q1-Q3 Index Q3 Q2 Q1 Q4 Q3 Full year
(DKK millions) 2011 2010 11/10 2011 2011 2011 2010 2010 2010

Total Retail Banking Denmark 5,911 4,998 118 2,188 1,880 1,843 1,909 1,741 6,907
Total Retail Banking international 2,994 3,171 94 1,169 950 875 924 1,138 4,095
Corporate & Institutional Banking 1,401 1,203 116 493 484 424 554 377 1,757

Total Banking Activities 10,306 9,372 110 3,850 3,314 3,142 3,387 3,256 12,759

Danske Markets and Treasury 2,502 4,137 60 -650 1,367 1,785 -102 908 4,035
Danske Capital 586 497 118 212 170 204 336 173 833
Danica Pension -407 1,461 - -735 261 67 685 705 2,146
Other Activities -1,001 370 - 135 -278 -858 124 -89 494

Total Group 11,986 15,837 76 2,812 4,834 4,340 4,430 4,953 20,267

Total Retail Banking International comprises retail banking and other retail units outside Denmark.


In order to ensure the Group’s future earnings capac- Other income fell 2% from the year-earlier level be-
ity, the Group is launching a three-year cost-savings cause of lower one-off income.
programme that will reduce expenses by 10% or
about DKK 2 billion in the 2012-14 period. The Group’s insurance business posted a loss of
DKK 0.4 billion, against a profit of DKK 1.5 billion a
The focus will be on improving customer service and year earlier. The results were adversely affected by
making the Group more efficient. the transfer of the risk allowances for all four interest
rate groups at Danica Pension to the shadow account
The cost reduction is also a consequence of custom- and a strengthening of technical provisions necessi-
ers’ use of the Group’s new self-service products, tated by adverse developments in the credit bond and
such as mobile banking, for an increasing number of equity markets. Danica Pension will be able to reverse
banking transactions. This change in customer behav- the booking of the risk allowances if it realises results
iour is affecting the number of employees required. for each of the interest rate groups that are suffi-
The cost-savings programme therefore includes a ciently positive, also to restore the bonus potential of
headcount reduction of about 2,000 employees over paid-up policies.
the period. The Group expects that a substantial
number of the reductions can be made without re- Expenses
dundancies, provided that attrition and retirements at Expenses remained at the year-earlier level, DKK 19.5
the Group remain at the usual levels. billion. Excluding one-off expenses, the first nine
months of 2011 saw a 3% increase in expenses owing
The Group has also launched initiatives aimed at im- mainly to higher IT development costs, higher mar-
proving earnings and ensuring that its business keting costs and general wage and price increases.
model creates value even in times of low economic
growth. A key measure is wider lending margins to ORDINARY EXPENSES Q1-Q3 Q1-Q3
compensate for increasing capital, liquidity and fund- (DKK billions) 2011 2010
ing costs. The Group has made a number of price in-
Expenses 19.5 19.6
creases and plans further measures. Commission (Bank Package 1) - 1.9
The Danish Guarantee Fund 1.0 -
Income Severance payments 0.2 0.1
Total income was DKK 31.5 billion, down 11% from Adjustment of write-downs, assets of a
the income in the first nine months of 2010, mainly temporarily acquired company 0.1 -
because of lower net trading income and the insur-
Ordinary expenses 18.2 17.6
ance business loss.
Cost/income ratio (%) 62.0 55.3
Net interest income amounted to DKK 17.4 billion, a Ordinary expenses/income ratio (%) 57.8 49.6
fall of 2% from the level in the first nine months of
2010. The fall was caused primarily by low interest The IT investment programme continues in 2011. The
rates in the early months of 2011. Rising money mar- aim is to invest in a number of new products and ser-
ket rates led to wider deposit margins in the second vices to ensure the innovative use of digital technol-
and third quarters. The general increase in lending ogy.
margins from mid-2011 had a positive effect on net
interest income towards the end of the period. A revaluation of the assets and liabilities of
Amagerbanken A/S under bankruptcy allowed an
The allocation of funding costs for lending and de- increase in the dividend percentage that reduced the
posit activities was changed at 1 January 2011 to bet- initially estimated DKK 0.9 billion commitment to
ter reflect the duration of loans and deposits. This re- the Danish Guarantee Fund for Depositors and
duced net interest income by about DKK 180 million Investors by DKK 0.2 billion in the second quarter
and lifted net trading income at Group Treasury by and by DKK 0.4 billion in the third quarter of 2011.
the same amount.
The resolution of Max Bank A/S under Bank Package
Net fee income fell 4% from the year-earlier figure, 4 resulted in a commitment to the Danish Guarantee
mainly because of a charge for the commission on Fund for Depositors and Investors of an estimated
government-guaranteed bonds of DKK 209 million. DKK 0.2 billion in the third quarter of 2011.

Net trading income amounted to DKK 5.7 billion, Loan impairment charges
down 19% from the level in the first nine months of Loan impairment charges totalled DKK 8.4 billion,
2010. Net trading income was satisfactory in the first against DKK 10.8 billion a year earlier. The charges
two quarters of the period but suffered from the related mainly to the commercial property segments
global financial turmoil in the third quarter. As a re- in Ireland and Northern Ireland and to agricultural,
sult of the market conditions, financial players’ risk commercial property and personal customer expo-
tolerance declined. This led to lower interest rates, sures in Denmark.
higher volatility and less liquidity on the interbank
markets in the third quarter. Income from customer- At 30 September 2011, loan impairment charges
driven activity improved. equalled 0.6% of lending and guarantees, against
0.7% at 30 September 2010.


Loan impairment charges rose at Retail Banking At Retail Banking Denmark, excluding Realkredit
Denmark in the third quarter. The charges related Danmark, the charges recognised in the period related
mainly to agricultural, commercial property and per- mainly to agricultural, commercial property and per-
sonal customer exposures. sonal customer exposures.

The agricultural segment continued to struggle with
very challenging market conditions. Low prices make
it difficult for pig farmers in particular to operate at a
profit. Individual loan impairment charges against fa-
cilities to agricultural customers amounted to
DKK 1.8 billion at 30 September 2011, with pig farm-
ers accounting for DKK 0.9 billion. In addition, the
Group recognised collective charges of DKK 0.3 bil-
lion against facilities to agricultural customers. Retail
Banking Denmark’s total credit exposure to agricul-
tural customers was DKK 10 billion.

The residential and commercial property markets saw
higher vacancy rates, and the decline in consumer
spending hit retailers hard. Charges relating to the
commercial property segment totalled DKK 2.4 bil-
Charges against facilities to personal customers lion at the end of the period.
amounted to DKK 1.1 billion, and charges against fa-
cilities to business customers to DKK 8.2 billion, with Activity in the housing market was subdued, with
small and medium-sized enterprises accounting for prices declining throughout the period. The Group
DKK 6.3 billion. Charges against facilities to financial expects a rising number of personal customers to suf-
counterparties saw a net reversal of DKK 0.9 billion. fer losses on the sale of their homes. As customers are
thus more likely to default on their loans in the event
Individual charges amounted to a net DKK 8.4 bil- of rising unemployment, the Group has increased its
lion. Collective charges were unchanged. charges against facilities to personal customers.
Charges relating to the personal customer segment to-
talled DKK 3.6 billion at the end of the period.
LOAN IMPAIRMENT CHARGES Q1-Q3 Q1-Q3
(DKK millions) 2011 2010
Ireland
Retail Banking Denmark 2,649 6,487 At Banking Activities Ireland, loan impairment
Retail Banking Finland 57 76 charges in the first nine months of 2011 amounted to
Retail Banking Sweden 47 67 DKK 4.7 billion.
Retail Banking Norway 271 89
Banking Activities Northern Ireland 1,654 783
Charges were higher than expected, reflecting a fur-
Banking Activities Ireland 4,711 3,756
Banking Activities Baltics -156 171
ther deterioration of conditions in the commercial
Other Banking Activities 96 59 property market. In the investment property segment,
Corporate & Institutional Banking 95 26 rents declined and vacancy rates rose. Moreover, the
rate of return required by investors increased, and
Total Banking Activities 9,424 11,514
this had an adverse effect on collateral values.
Danske Markets and Treasury -981 -683
Danske Capital -47 4 At 30 September 2011, charges and actual losses to-
talled DKK 16.9 billion, or 23% of the entire expo-
Total 8,396 10,835
sure. Total charges against facilities to the commer-
cial property and construction segments, and actual
Denmark losses on the segments amounted to DKK 12.5 billion,
Loan impairment charges at Retail Banking Denmark
or 46% of the entire exposure. With a total of
totalled DKK 2.6 billion, with banking activities
DKK 4.6 billion, or 55% of the entire exposure, the
accounting for DKK 1.9 billion and mortgage finance
property development segment occasioned the largest
for DKK 0.7 billion. The charges reflect a
charges and losses.
compensation of DKK 0.8 billion deriving from the
termination of a credit insurance contract covering
Actual losses on and charges against facilities to other
potential losses on certain types of lending.
business segments and personal customers were low,
totalling DKK 4.4 billion, or 9% of the entire expo-
Realkredit Danmark recognised charges against facili-
sure.
ties to personal customers of DKK 0.5 billion, while
charges against facilities to other customers
Northern Ireland
amounted to DKK 0.2 billion. Delinquency rates for
At Banking Activities Northern Ireland, loan impair-
residential mortgage loans remained low.
ment charges in the first nine months of 2011
amounted to DKK 1.7 billion.


Charges were high, primarily because of lower com- Net interest income rose 4% from the second-quarter
mercial property prices. The property development level. As expected, increased lending rates at Retail
segment saw the largest charges, mainly because of Banking Denmark added DKK 0.1 billion to income.
lower residential construction activity.
Net trading income suffered from the global financial
At 30 September 2011, charges and actual losses to- turmoil in the third quarter and amounted to DKK 0.3
talled DKK 5.2 billion, or 9% of the entire exposure. billion, down from DKK 2.4 billion in the second
Total charges against facilities to the commercial quarter. As a result of the market conditions, finan-
property and construction segments, and actual cial players’ risk tolerance declined. This led to lower
losses on the segments amounted to DKK 4.2 billion, interest rates, higher volatility and less liquidity on
or 28% of the entire exposure. The property devel- the interbank markets. Income from customer-driven
opment segment accounted for total charges and activity remained high.
losses of DKK 1.9 billion, or 50% of the entire expo-
sure. The Group’s insurance business posted a loss of
DKK 0.7 billion, against a profit of DKK 0.3 billion in
Actual losses on and charges against facilities to other the second quarter. The results were adversely af-
business segments, including agricultural customers, fected since the Group had to postpone booking the
and personal customers were low, totalling DKK 1.0 risk allowances for all four interest rate groups at
billion, or 3% of the entire exposure. Danica Pension to income and to strengthen the tech-
nical provisions because of adverse developments in
Other units the credit bond and equity markets.
Loan impairment charges were low at Retail Banking
Sweden, Retail Banking Norway, Retail Banking Expenses fell 18% from the second-quarter level and
Finland and Banking Activities Baltics and related amounted to DKK 5.5 billion. The higher dividend
mostly to a few exposures. Altogether, charges were percentage from Amagerbanken A/S’s bankruptcy re-
lower than the expected average over a business cy- duced the initially estimated DKK 0.9 billion com-
cle. At 30 September 2011, loan impairment charges mitment to the Danish Guarantee Fund for Depositors
equalled 0.1% of lending and guarantees. and Investors by DKK 0.2 billion in the second quar-
ter and by DKK 0.4 billion in the third quarter. The
Impairment charges at Corporate & Institutional resolution of Max Bank A/S under Bank Package 4 re-
Banking related to a few exposures. Overall credit sulted in a commitment to the Danish Guarantee
quality remained good. The charges equalled 0.1% of Fund for Depositors and Investors of an estimated
lending and guarantees. DKK 0.2 billion in the third quarter. Expenses bene-
fited from lower expenses for holiday pay and lower
Loan impairment charges at Danske Markets included IT development and marketing costs in the third
reversals of previously recognised charges, for exam- quarter.
ple charges against the exposure to Lehman Brothers.
Compared with the level in the second quarter, loan
Actual losses rose from DKK 2.8 billion in the first impairment charges mainly reflected higher charges
nine months of 2010 to DKK 7.2 billion, mainly be- in Denmark. As forecast, impairment charges in Ire-
cause of the settlement of DKK 3.3 billion for the land and Northern Ireland were high because of the
Group’s commitment under Bank Package 1. persistently difficult market conditions, although
charges were lower than in the second quarter at Na-
Tax tional Irish Bank. Altogether, charges fell in the
Tax on the profit for the period, including adjust- Group’s other markets, and Danske Markets saw a re-
ments of prior-year tax charges, amounted to DKK 2.1 versal of previously recognised charges.
billion. The tax charge is high relative to the profit for
the period, mainly because of losses in Ireland. The
tax value of losses is booked and capitalised only if it
is likely that, in the future, the Group will book a tax-
able income that can absorb any tax-loss carryfor-
wards made.

Third quarter 2011
The pre-tax profit for the third quarter of 2011 was
DKK 10 million, down from a profit of DKK 2.1 bil-
lion in the second quarter.

Higher net interest income and lower expenses could
not offset declining net trading income and a loss on
the insurance business. Total income was down 28%
from the level in the second quarter.


Balance sheet

LENDING (END OF PERIOD) Q1-Q3 Q1-Q3 Index Q3 Q2 Q1 Q4 Q3 Full year
(DKK millions) 2011 2010 11/10 2011 2011 2011 2010 2010 2010

Retail Banking Denmark 963,637 969,173 99 963,637 950,340 945,213 961,686 969,173 961,686
Retail Banking Finland 148,387 139,684 106 148,387 146,803 142,693 140,587 139,684 140,587
Retail Banking Sweden 180,317 175,917 103 180,317 182,218 182,866 178,715 175,917 178,715
Retail Banking Norway 129,799 121,120 107 129,799 130,249 125,488 124,774 121,120 124,774
Banking Activities Northern Ireland 52,831 54,032 98 52,831 48,929 49,229 52,130 54,032 52,130
Banking Activities Ireland 66,657 72,740 92 66,657 67,861 69,251 70,233 72,740 70,233
Banking Activities Baltics 21,444 24,736 87 21,444 22,254 23,198 23,833 24,736 23,833
Other Banking Activities 17,095 17,026 100 17,095 16,318 16,661 16,126 17,026 16,126
Corporate & Institutional Banking 108,034 106,227 102 108,034 103,483 102,550 102,578 106,227 102,578

Total Banking Activities 1,688,201 1,680,655 100 1,688,201 1,668,455 1,657,149 1,670,662 1,680,655 1,670,662

Danske Markets and Treasury 46,407 40,847 114 46,407 40,671 42,602 48,665 40,847 48,665
Danske Capital 6,266 6,195 101 6,266 6,293 6,356 6,450 6,195 6,450
Other Activities -936 -5,388 - -936 -4,878 -3,571 -6,163 -5,388 -6,163
Allowance account 46,420 42,209 110 46,420 43,933 40,553 39,649 42,209 39,649

Total lending 1,693,518 1,680,100 101 1,693,518 1,666,608 1,661,983 1,679,965 1,680,100 1,679,965

BONDS ISSUED BY REALKREDIT DANMARK AND DEPOSITS (END OF PERIOD)
(DKK millions)

Retail Banking Finland 104,568 100,658 104 104,568 102,431 102,984 97,314 100,658 97,314
Retail Banking Sweden 65,301 67,713 96 65,301 66,719 68,208 72,762 67,713 72,762
Retail Banking Norway 56,749 52,083 109 56,749 56,799 54,150 54,101 52,083 54,101
Banking Activities Northern Ireland 53,540 50,367 106 53,540 49,408 50,917 53,166 50,367 53,166
Banking Activities Ireland 37,462 31,685 118 37,462 37,921 42,446 39,416 31,685 39,416
Banking Activities Baltics 20,137 19,420 104 20,137 20,822 20,138 20,521 19,420 20,521
Other Banking Activities 6,649 5,356 124 6,649 4,936 5,484 5,413 5,356 5,413
Corporate & Institutional Banking 67,957 68,456 99 67,957 68,990 72,800 71,754 68,456 71,754


Danske Markets and Treasury 96,768 81,491 119 96,768 101,854 97,840 102,777 81,491 102,777
Danske Capital 6,584 6,073 108 6,584 6,424 6,075 5,869 6,073 5,869
Other Activities -8,055 -8,069 - -8,055 -7,194 -7,367 -4,178 -8,069 -4,178

Total deposits 788,921 763,514 103 788,921 792,037 794,604 800,613 763,514 800,613

Danmark 534,245 563,519 95 534,245 529,808 542,065 555,486 563,519 555,486
Own holdings of Realkredit
Danmark bonds 182,930 160,056 114 182,930 170,094 153,351 172,643 160,056 172,643

Total Realkredit Danmark bonds 717,175 723,575 99 717,175 699,902 695,416 728,129 723,575 728,129

Danmark and deposits 1,506,096 1,487,089 101 1,506,096 1,491,939 1,490,020 1,528,742 1,487,089 1,528,742
Lending as % of bonds issued by
Realkredit Danmark and deposits 112 113 112 112 112 110 113 110

Lending mortgage lending accounted for DKK 10.8 billion of
At 30 September 2011, total lending to personal and new lending to personal customers.
business customers largely matched the level at the
end of 2010. Lending equalled 112% of the total amount of bonds
issued by Realkredit Danmark and deposits, against
Third-quarter lending at Retail Banking Denmark was 110% at the end of 2010.
up DKK 13 billion from the second-quarter level,
mainly because of market value adjustments of mort- Bonds issued by Realkredit Danmark and
gage loans. deposits
Total deposits from personal customers largely
In Denmark, new lending, excluding repo loans, came matched the level at 31 December 2010, while depos-
to DKK 34.8 billion. This amount included lending to its from business customers declined a little.
personal customers of DKK 15.4 billion. Net new


Deposits at Retail Banking Denmark were on a par lion of that amount. Most of the home loans were
with the end-2010 level. Excluding exchange rate ef- variable-rate loans.
fects, total deposits at the units outside Denmark also
matched the level at the end of 2010. In Denmark, personal customer credit quality re-
mained good. Delinquencies as a percentage of total
Primarily because of market value adjustments, the payments on Realkredit Danmark loans remained at
total value of mortgage bonds issued to fund loans the year-earlier level. The three-month delinquency
provided by Realkredit Danmark, including the rate for home loans was 0.35%, down from 0.36% at
Group’s own holdings, was DKK 717 billion, down 30 September 2010. Still, the slowdown in the hous-
2% from the level at the end of 2010. ing market and declining prices are likely to cause an
increasing number of personal customers to suffer
Credit exposure losses on the sale of their homes.
At 30 September 2011, total credit exposure
amounted to DKK 3,552 billion, against DKK 3,402
billion at the end of 2010. Some DKK 2,246 billion
derived from Danish and international lending activi-
ties and DKK 1,021 billion from trading and invest-
ment activities.

Credit exposure from lending activities
In addition to exposure resulting from actual lending,
total credit exposure from lending activities includes
amounts due from credit institutions and central
banks, guarantees and irrevocable loan commitments.
The exposure is measured net of accumulated im-
pairment charges and includes repo loans.

Personal customers accounted for 39% of credit ex-
posure from lending activities, business customers for
40%, and financial counterparties for 16%. The re- At the other Nordic retail banking units, personal
mainder was exposure to central banks and govern- customer credit quality was stable at the level at the
ments. Of the exposure to business customers, small end of 2010, and delinquency rates remained low.
and medium-sized enterprises accounted for 69%.
At the units in Ireland and Northern Ireland, credit
CREDIT EXPOSURE FROM quality suffered because of high unemployment rates
LENDING ACTIVITIES 30 Sept. Share of 31 Dec. Share of and a continued decline in disposable incomes. De-
(DKK millions) 2011 total (%) 2010 total (%) linquency rates rose slightly at the Irish unit but were
below the average in Ireland. The units in Northern
Retail Banking Denmark 971,156 43 973,075 41
Retail Banking Finland 155,548 7 146,697 6
Ireland and Ireland take a conservative approach
Retail Banking Sweden 193,751 9 198,334 8 when granting home loans and setting loan-to-value
Retail Banking Norway 142,573 6 138,386 6 (LTV) ratio limits.
Banking Activities
Northern Ireland 52,244 2 51,872 2 Loan demand from personal customers fell from the
Banking Activities Ireland 55,168 3 62,678 3 level in the first nine months of 2010. The share of
Banking Activities Baltics 22,554 1 25,314 1 approved personal customer loan applications was
Other Banking Activities 58,771 3 63,443 3 unchanged at 91%.
Corporate &
Institutional Banking 251,357 11 254,535 11
Business customers
Total Banking Act. 1,903,122 85 1,914,334 81 At 30 September 2011, credit exposure to business
customers amounted to DKK 895 billion. The Group
Danske Markets and
Treasury 333,986 15 439,065 19
monitors high-risk industries on an ongoing basis.
Danske Capital 9,229 - 10,057 -
In the third quarter of 2011, business customer credit
Total 2,246,337 100 2,363,456 100 quality was largely unchanged, although business
customers in Ireland and Northern Ireland were fac-
Personal customers ing difficulties. In Denmark, lower credit quality
Credit exposure to personal customers covers loans among small and medium-sized enterprises also af-
secured on the customers’ assets and unsecured or fected overall credit quality.
partially secured consumer loans and credits.

At 30 September 2011, credit exposure to personal
customers amounted to DKK 878 billion. Home fi-
nancing accounted for DKK 783 billion, and
Realkredit Danmark loans accounted for DKK 421 bil-


Financial counterparties
Credit exposure to financial counterparties amounted
to DKK 364 billion at 30 September 2011, against
DKK 441 billion at the end of 2010. Most of it related
to highly secured bank facilities, for which the collat-
eral consisted mainly of repo transactions.

Exposure to small and medium-sized Danish banks
(groups 2-4 as defined by the Danish central bank)
amounted to DKK 1.8 billion at 30 September 2011.

Allowance account
At 30 September 2011, accumulated impairment
charges amounted to DKK 47.2 billion, against
DKK 43.8 billion at 31 December 2010. Collective
charges accounted for DKK 4.6 billion of the total
amount.

ALLOWANCE ACCOUNT 30 Sept. 31 Dec.
(DKK millions) 2011 2010
The Group’s general recalibration of its rating models
Retail Banking Denmark 17,185 19,089
affected business ratings.
Retail Banking Finland 2,198 2,036
Retail Banking Sweden 1,101 1,193
At 30 September 2011, credit exposure from property Retail Banking Norway 1,730 1,469
loans amounted to DKK 254 billion. At Retail Bank- Banking Activities Northern Ireland 4,702 3,078
ing Denmark, credit quality was adversely affected by Banking Activities Ireland 14,123 9,564
higher vacancy rates for residential and commercial Banking Activities Baltics 2,522 2,892
property. The decline in consumer spending hit re- Other Banking Activities 336 348
tailers hard. Corporate & Institutional Banking 589 935
Danske Markets and Treasury 2,518 2,954
The property sectors in Ireland and Northern Ireland Danske Capital 161 211

continued to suffer from falling property prices. Total 47,165 43,769
Property developers in particular struggled with
lower property values. The drop in rental prices and Rating categories 11 and 10 comprise individually
higher vacancy rates squeezed earnings on rental impaired exposures.
property, reducing credit quality. At 30 September
2011, exposure to the Irish and Northern Ireland
property sectors amounted to DKK 12 billion and EXPOSURE AT 30 SEPTEMBER 2011 Rating category
DKK 8 billion, respectively. Property developers in (DKK billions) 11 10

Ireland accounted for DKK 4 billion (7% of the total Credit exposure before impairment charges 60.9 45.2
exposure in Ireland). In Northern Ireland, the figure Impairment charges 30.0 12.5
was DKK 2 billion (4% of the total exposure in
Credit exposure 30.9 32.7
Northern Ireland).
Collateral value 23.2 19.4

Among small and medium-sized enterprises in Den- Total unsecured exposure 7.7 13.3
mark, agricultural customers had the lowest credit Covered by impairment charges and collateral (%) 87.3 70.6
quality because of persistently low earnings, high
gearing and falling property prices. Low prices
Rating category 11 contains exposures to customers
squeezed the credit quality of pig farmers in particu-
that, according to the Group’s definition, are in de-
lar. At the end of September 2011, credit exposure to
fault. These customers are subject to debt collection,
agricultural customers amounted to DKK 69 billion,
suspension of payments, restructuring or bankruptcy,
with DKK 45 billion deriving from loans provided by
or have one or more facilities on which a payment is
Realkredit Danmark. The exposure to pig farmers was
more than 90 days past due. If a customer defaults on
DKK 14 billion. The average LTV ratio for agricultural
just a single facility, the downgrade to category 11
properties mortgaged to Realkredit Danmark was
applies to the entire exposure to the customer. Down-
73%, against 71% at the end of 2010.
grading takes place even if the exposure is fully se-
cured.
Accumulated impairment charges against facilities to
business customers accounted for 73% of total
The net exposure to customers in default (rating cate-
charges and equalled 4.3% of lending and guarantees
gory 11) totalled DKK 30.9 billion, against DKK 29.9
to business customers.
billion at the end of 2010. The total unsecured expo-
sure was DKK 7.7 billion. The Group expects bank-
ruptcy dividends to cover the unsecured exposure.


Rating category 10 contains customers with impaired Capital and solvency
exposures that are not in default. Other evidence of In April 2011, the Group raised new share capital
financial difficulty exists for these customers, how- through a rights issue. The gross proceeds were
ever, such as a need for financial restructuring in the DKK 20.0 billion, and the net proceeds DKK 19.8 bil-
future. Most of these customers continue to service lion. The issue lifted the Danske Bank Group’s core
their loans in a timely manner. tier 1 capital ratio by about 2.2 percentage points
(calculated at 30 September 2011).
The net exposure to customers in category 10 totalled
DKK 32.7 billion, against DKK 34.0 billion at the end One purpose of the share capital increase was to
of 2010. make it possible for Danske Bank to repay the hybrid
capital raised in 2009 from the Danish state as early
Trading and investment activities as 2012. An agreement on prepayment terms that was
Credit exposure from trading and investment activi- financially satisfactory for Danske Bank could not be
ties rose from DKK 761 billion at 31 December 2010 reached, however, and Danske Bank decided not to
to DKK 1,021 billion at 30 September 2011. prepay the loan.

The rise was caused mainly by an increase in the At 30 September 2011, the total capital ratio was
value of derivatives as lower market rates led to 18.0%, with 16.0 percentage points deriving from tier
higher fair values of conventional interest rate con- 1 capital. The core tier one capital ratio was 11.8%.
tracts. The Group has made agreements with many of Subordinated loan capital raised from the Danish
its counterparties to net positive and negative market state accounted for 2.9 percentage points of the total
values. The net exposure was limited, and most of it capital and tier 1 capital ratios. At 31 December 2010,
was secured by collateral management agreements. the total capital ratio was 17.7% and the tier 1 capital
ratio 14.8%. At 30 September 2011, the Group’s sol-
The value of the Group’s bond portfolio was DKK 474 vency need stood at DKK 90 billion, unchanged from
billion, with DKK 74.1 billion recognised at fair value the need at 31 December 2010.
according to the rules on available-for-sale financial
assets. Of the total bond portfolio, 97.5% was recog- At the end of September 2011, the capital base to-
nised at fair value and 2.5% at amortised cost. The talled DKK 160.7 billion, against DKK 149.7 billion at
Group has not reclassified bonds since 2008. the end of 2010. The calculation of the capital base
takes into account the prepayment of a subordinated
Most of the bond portfolio is liquid and can be used loan raised by Danica of DKK 3.0 billion.
as collateral for loans from central banks and thus
forms part of the liquidity reserve. At 30 September 2011, risk-weighted assets totalled
DKK 895 billion, against DKK 844 billion at 31 De-
BOND PORTFOLIO 30 Sept. 31 Dec. cember 2010. The Group uses primarily the internal
(%) 2011 2010 ratings-based (IRB) approach to calculate risk-
weighted assets for credit risk. In 2010, the Group re-
Government bonds and bonds guaranteed by calibrated its IRB approach. Related initiatives were
central or local governments 36 29
implemented in the third quarter of 2011 to improve
Bonds issued by quasi-government institutions 2 2
models and parameters, and they caused an increase
Danish mortgage bonds 41 45
Swedish covered bonds 11 13
in risk-weighted assets of DKK 34 billion, mainly re-
Other covered bonds 5 5 lating to the Group’s activities outside Denmark (in
Short-dated bonds (CP etc.), primarily with banks 2 2 Ireland in particular). The increase in risk-weighted
Corporate bonds 3 4 assets had no significant effect on the Group’s sol-
vency need because it had already been taken into
Total holdings 100 100
account. The Group believes that its models are ro-
Available-for-sale bonds included in total holdings 16 21 bust and sufficiently conservative. The Group con-
tinues to monitor its models and the calculated re-
The Group’s holdings of government bonds consist sults, and will, if necessary, make adjustments for
primarily of bonds issued by the Nordic countries, changes in economic, financial or regulatory condi-
Germany, France and the UK. Government bonds is- tions.
sued by Ireland, Portugal, Spain and Italy accounted
for only DKK 12.0 billion of the total bond portfolio. The rules for calculating capital requirements for
Excluding unsettled transactions and hedging trans- market risks (stressed VaR) are likely to be changed in
actions, the net exposure to these countries was the fourth quarter of 2011. The Group expects these
DKK 3.3 billion. The government bond exposure to changes to increase risk-weighted assets by about
Italy was DKK 8.1 billion, with a net exposure of DKK 40 billion and reduce the core tier one capital
DKK 2.4 billion. All government bonds issued by Ire- ratio by about 0.5 percentage points (calculated at 30
land, Portugal, Spain and Italy were recognised at September 2011).
market value. The Group’s bond portfolio did not in-
clude any government bonds issued by Greece. Under Danish law, the Group must publish its sol-
vency need on a quarterly basis. More detailed infor-
mation is available at www.danskebank.com/ir.


The Committee of the European Banking Authority DKK 9.8 billion, were issued under the Group’s US
(EBA) included Danske Bank in the group of 90 note programme.
European banks covered by the July 2011 EU-wide
stress testing exercise. On 1 October 2011, the Danish central bank widened
Danish banks’ access to its collateralised credit facili-
More details on the stress test are available at ties. The collateral basis was expanded to include
www.danskebank.com/ir. banks’ credit claims of good quality (banks may pro-
vide their own lending as security). The Group sup-
Funding and liquidity ports this measure to strengthen the sector’s transi-
In the first nine months of 2011, the capital markets tion at the expiry of the guarantee from the Danish
again exhibited high volatility because of sovereign state and to improve the banks’ access to liquidity in
debt problems in several European countries. The in- a difficult market but does not currently plan to use
ternational capital markets froze in the third quarter these funding facilities.
of 2011. Hardly any banks were able to obtain senior
funding, and the short-term interbank lending market Ratings
was at times very sluggish. At the same time, Den- In the first nine months of 2011, Standard & Poor’s
mark attracted negative attention when a number of and Fitch Ratings maintained their ratings of Danske
banks had their activities transferred to the Financial Bank at A and A+, respectively, while Moody’s
Stability Company and Moody’s downgraded several downgraded Danske Bank from Aa3 to A2.
Danish banks, including Danske Bank.
At the end of September 2011, the rating agencies
The Group maintained a strong liquidity position maintained a negative outlook on Danske Bank.
throughout these events, and the Group can continue
operations even if access to the capital markets is cut In addition to the statutory requirements for supple-
off for much more than 12 months, as shown by the mentary collateral, the external rating agencies re-
Moody’s liquidity curve. The Group uses this curve quire further overcollateralisation if they are to assign
as one of the elements in its liquidity management. top ratings to mortgage bonds.
The Group’s 12-month liquidity curve is positive for
more than two and a half years. In June 2011, Realkredit Danmark terminated its col-
laboration with Moody’s. The reason was disagree-
ment over the fundamentals of the model used by
Moody’s for rating Danish mortgage bonds. In
Realkredit Danmark’s opinion, the overcollateralisa-
tion requirement was unnecessarily high.

The mortgage bonds and mortgage-covered bonds
issued by Realkredit Danmark are rated AAA by
Standard & Poor’s.

Regulation
In July 2011, the European Commission published its
proposal for a major overhaul of the Capital Require-
ments Directive (CRD IV). The main purpose is to
implement the Basel III rules in the EU. The draft di-
rective must now be considered by the European Par-
liament and the Council of the European Union for
the general rules to take effect in early 2013. Deci-
sions on detailed liquidity rules, for example, will be
made subsequently, and transitional rules on capital
requirements will apply for a number of years.
The Group’s raising of substantial long-term funding
and the favourable changes in the loan-to-deposit ra- The proposal does not appear to significantly change
tio in 2009 and 2010 contributed to this positive li- the capital requirements introduced by the Basel III
quidity position, and both will help the Group meet rules. Danske Bank will thus be well prepared to
future regulatory requirements for liquidity. meet future EU capital requirements.

In the first nine months of 2011, the Group issued As regards liquidity, the European Commission is
covered bonds for an amount of DKK 27.7 billion, proposing a definition of liquid assets under the
and there is still unexploited potential in loans that short-term Liquidity Coverage Ratio (LCR) that is
can serve as collateral for covered bonds. broader than the Basel III definition. This will allow
Danish mortgage bonds to be included in the liquid-
The Group also issued senior debt for DKK 20.9 bil- ity buffer in line with government bonds, for exam-
lion in the period. A large portion of this debt was is- ple. The final criteria for liquid assets must be deter-
sued in April, when notes worth USD 1.9 billion, or mined before the LCR becomes effective as a mini-


mum requirement in 2015. The Group finds it posi-
tive that the European Commission plans to postpone
until 2016 the decision on whether to introduce long-
term stable funding requirements, such as the Basel
III Net Stable Funding Ratio, in 2018.

Danske Bank’s Annual Report 2010 and Risk Man-
agement 2010 provide more details on the new rules
and a preliminary assessment of the implications for
the Group.

Executive management
Peter Straarup, Chairman of the Executive Board,
reached the age of 60 this summer, and he wishes to
retire in accordance with the terms of his employ-
ment contract. Consequently, the Board of Directors
is initiating the process of finding a new chief execu-
tive officer. External as well as internal candidates
will be considered. Peter Straarup will continue as
CEO until his successor takes over.

Per Skovhus, member of the Executive Board, wishes
to resign for personal reasons and will leave the Ex-
ecutive Board no later than 1 July 2012.


Outlook for 2011
The global economic recovery remains a substantial Expenses are estimated to be about 3% higher than in
challenge for central banks and political systems. The 2010 because of the unforeseen commitment to the
expected improvement in the global economy has Danish Guarantee Fund for Depositors and Investors
failed to materialise. Structural challenges in the and other one-off expenses. In the first nine months
economies of southern Europe and Ireland and a of the year, expenses for the Fund amounted to
heavy budget deficit in the US are still constraining DKK 1.0 billion. Danske Bank’s share is just over one
economic growth and affecting the stability of and third of the total sector commitment to cover the
confidence in the financial markets. losses incurred by the Fund.

The European economies are expected to see gener- The global economic developments could contribute
ally lower growth in 2011 than in 2010. The Danish to making the Group’s loan impairment charges
economy is set to grow at a slower pace than the euro higher in the fourth quarter than in the third quarter,
zone generally, whereas the other Nordic economies but the figure for the full year is still expected to be
are likely to see higher growth rates. lower than the 2010 figure. Despite a small decline in
property prices, relatively low interest rates and
Interest rates are forecast to be generally unchanged slightly declining unemployment give reason to ex-
in the remainder of 2011. Renewed financial turbu- pect generally better credit quality for both personal
lence is preventing the European Central Bank (ECB) and business customers in the remainder of 2011.
from hiking rates any further. It may even decide to
cut rates if the financial crisis worsens. The Danish The Irish economy will continue to face structural
central bank lowered its certificate of deposit rate challenges, and because of the economic climate, the
twice in the third quarter of 2011. These rate changes level of future impairment charges is uncertain. The
were made to stabilise the Danish krone rather than situation for rental property and property developers
in response to interest rate changes in the euro zone. in the Northern Ireland market is also uncertain. Loan
impairment charges at the units in Ireland and North-
In May, Danske Bank raised interest rates generally ern Ireland are likely to remain high in coming quar-
by 0.25% because of monetary policy changes. When ters.
the ECB and the Danish central bank hiked rates in
July, Retail Banking Denmark did not change its ad- The performance of capital market activities – at
ministratively fixed interest rates. Similarly, the Dan- Danske Markets and Danica Pension – will depend
ish central bank’s latest lowerings of its certificate of greatly on financial market trends, including the level
deposit and current account rates in August and Sep- of securities prices at the end of the year. Danica
tember did not bring about any changes in the admin- Pension’s net income is expected to be substantially
istratively fixed interest rates. But on 1 August and 20 lower than in 2010. Depending on its performance-
October 2011, Retail Banking Denmark made extraor- related fees, Danske Capital expects its profit to
dinary increases of up to 0.5% in a number of lending increase.
rates to cover higher expenses for the resolution of
distressed Danish banks and higher funding costs. The Group’s effective tax rate is expected to be high.

Stricter requirements for supplementary collateral for
mortgage-covered bonds will raise funding costs and
necessitate increases in administration margins. The
Group has therefore announced margin increases to
take effect in 2012.

The implemented and announced initiatives are ex-
pected to boost the Group’s income by about DKK 2.5
billion a year. At the release of its interim report for
the first half of 2011, the Group forecast an increase
in net interest income in the second half of 2011 of
about DKK 500 million. Because of the two extraor-
dinary rate increases, the Group still expects to meet
this target despite the recent rate cuts from the Dan-
ish central bank and the ECB’s decision not to make
further rate hikes.


Business units

INCOME Q1-Q3 Q1-Q3 Index Q3 Q2 Q1 Q4 Q3 Full year
(DKK millions) 2011 2010 11/10 2011 2011 2011 2010 2010 2010

Retail Banking Finland 2,657 2,564 104 891 924 842 896 852 3,460
Retail Banking Sweden 2,365 2,069 114 791 801 773 778 718 2,847
Retail Banking Norway 1,890 2,013 94 631 640 619 667 672 2,680
Banking Activities Northern Ireland 1,179 1,210 97 408 404 367 387 404 1,597
Banking Activities Ireland 769 924 83 259 252 258 284 296 1,208
Banking Activities Baltics 544 574 95 185 182 177 191 193 765
Other Banking Activities 1,647 1,576 105 539 522 586 499 477 2,075


Danske Markets and Treasury 4,470 6,116 73 -106 2,049 2,527 543 1,546 6,659
Danske Capital 1,366 1,199 114 442 453 471 674 395 1,873
Danica Pension -407 1,461 - -735 261 67 685 705 2,146
Other Activities 515 627 82 72 119 324 217 -8 844

Total Group 31,514 35,390 89 8,311 11,512 11,691 10,887 11,247 46,277

Banking Activities consists of the Group’s banking Management, which are marketed through the
units and Corporate & Institutional Banking (CIB). banking units and directly to businesses, institutional
The banking units serve all types of personal custom- clients and external distributors. Danske Capital also
ers, small businesses and medium-sized companies supports the advisory and asset management
as well as private banking customers served at the fi- activities of the banking units. Through Danske Bank
nance centres. Mortgage finance operations in Den- International in Luxembourg, Danske Capital
mark are carried out through Realkredit Danmark. provides international private banking services to
Real estate agency operations are conducted by the clients outside the Group’s home markets. Danske
home, Skandia Mäklarna and Fokus Krogsveen real Capital operates in Denmark, Sweden, Norway,
estate agency chains. The results of the Group’s prop- Finland, Estonia, Lithuania and Luxembourg.
erty finance operations are included in the banking
unit figures. Danica Pension carries out the Group’s activities in
the life insurance and pensions market. Danica
CIB is responsible for the largest and most complex Pension serves both personal and business customers.
companies in the Nordic countries and for the multi- Its products are marketed through a range of
national companies with which the Group does Nor- distribution channels within the Group, primarily
dic banking business. The unit offers customers fi- banking units and Danica Pension’s own insurance
nancial products, advisory services on mergers and brokers and advisers. Danica Pension offers two
acquisitions, and assistance with equity and debt is- market-based products: Danica Balance and Danica
sues in the international financial markets. The divi- Link. These products allow customers to select their
sion into retail banking units and CIB applies to the own investment profiles, and the return on savings
Nordic markets, where there are specialised local CIB depends on market trends. Danica Pension also offers
functions. From its northern European base, CIB sup- Danica Traditionel. This product does not offer
ports the local Banking Activities units in providing individual investment profiles, and Danica Pension
services to the largest corporate customers and insti- sets the rate of interest on policyholders’ savings.
tutional clients.
Other Activities consists of the Group’s real property
Danske Markets is responsible for the Group’s activi- activities, expenses for the Group’s support functions,
ties in the financial markets. Trading activities in- and eliminations, including the elimination of re-
clude trading in fixed-income products, foreign ex- turns on own shares.
change and equities. Group Treasury is responsible
for the Group’s strategic fixed-income, foreign ex- Capital is allocated to the individual business units
change and equity portfolios and serves as the on the basis of the units’ share of the Group’s average
Group’s internal bank. Institutional banking covers risk-weighted assets calculated prior to the transition
facilities with international financial institutions out- to the Capital Requirements Directive. After the capi-
side the Nordic region. Facilities with Nordic finan- tal increase, the rate was increased to 7.5% of the in-
cial institutions are part of Banking Activities. dividual business unit’s average risk-weighted assets
(end-2010: 5.5%).
Danske Capital develops and sells asset and wealth
management products and services, including Wealth


BRANCHES EMPLOYEES PROFIT BEFORE TAX
661 13,538 DKK 882 million

Banking Activities

BANKING ACTIVITIES Q1-Q3 Q1-Q3 Index Q3 Q2 Q1 Q4 Q3 Full year
(DKK millions) 2011 2010 11/10 2011 2011 2011 2010 2010 2010

Net interest income 17,157 17,565 98 5,964 5,724 5,469 5,976 5,854 23,541
Net fee income 4,867 5,255 93 1,542 1,648 1,677 1,774 1,741 7,029
Net trading income 1,011 861 117 344 328 339 239 314 1,100
Other income 2,535 2,306 110 788 930 817 779 700 3,085

Total income 25,570 25,987 98 8,638 8,630 8,302 8,768 8,609 34,755

State guarantee commission
(Bank Package 1) - 1,875 - - - - - 625 1,875
Other expenses 15,264 14,740 104 4,788 5,316 5,160 5,381 4,728 20,121

Expenses 15,264 16,615 92 4,788 5,316 5,160 5,381 5,353 21,996

Profit before loan impairment charges 10,306 9,372 110 3,850 3,314 3,142 3,387 3,256 12,759

Impairment charges under the
state guarantee - 1,393 - - - - - 466 1,393
Other loan impairment charges 9,424 10,121 93 3,552 3,148 2,724 2,907 2,400 13,028

Loan impairment charges 9,424 11,514 82 3,552 3,148 2,724 2,907 2,866 14,421

Profit before tax 882 -2,142 - 298 166 418 480 390 -1,662

Loans and advances (end of period) 1,688,201 1,680,655 100 1,688,201 1,668,455 1,657,149 1,670,662 1,680,655 1,670,662
Allowance account, total
(end of period) 44,486 41,888 106 44,486 41,853 38,399 40,604 41,888 40,604
Deposits (end of period) 693,624 684,019 101 693,624 690,953 698,056 696,145 684,019 696,145
Bonds issued by Realkredit Danmark
(end of period) 717,175 723,575 99 717,175 699,902 695,416 728,129 723,575 728,129
Allocated capital (avg.) 84,439 67,492 125 90,383 90,011 72,926 67,114 67,700 67,396

Profit before loan impairment charges
as % p.a. of allocated capital 16.3 18.5 17.0 14.7 17.2 20.2 19.2 18.9
Pre-tax profit as % p.a. of allocated
capital (ROE) 1.4 -4.2 1.3 0.7 2.3 2.9 2.3 -2.5
Full-time-equivalent staff 13,538 13,531 100 13,538 13,524 13,423 13,426 13,531 13,426

• Profit before loan impairment charges up 10% to Net interest income amounted to DKK 17.2 billion,
DKK 10.3 billion down 2% from the year-earlier level. Widening de-
• Net interest income down 2% because posit margins could not offset narrowing lending
of narrowing lending margins margins and lower lending volumes.
• Loan impairment charges down 18%
• Lending and deposits unchanged from the levels At Retail Banking Denmark, net interest income fell
at the end of 2010 5% from the level in the first nine months of 2010.
Higher lending rates added DKK 0.1 billion in in-
Market conditions come, but this effect was offset by narrowing lending
In the early months of 2011, interest rates rose in margins and lower lending volumes.
most of the Group’s markets. Because of the financial
crisis in the EU, however, the European Central Bank There were also positive trends, though. At Retail
(ECB) postponed rate hikes previously expected to be Banking Sweden and Corporate & Institutional Bank-
made in the third quarter. The Irish and Northern Ire- ing, net interest income rose 16% and 7%, respec-
land economies continued to toil under considerable tively, because of wider deposit margins. At Retail
public budget deficits and remained under pressure. Banking Finland, net interest income was unchanged
from the year-earlier level. At Banking Activities Ire-
land, however, net interest income fell 15% because
Financial summary
of the suspension of interest payments, narrowing
At DKK 25.6 billion, total income from Banking
lending margins and lower lending volumes.
Activities was down 2% from the level in the first
nine months of 2010, mainly because of lower net
interest income.


Net interest income was squeezed further by changes phones in its Nordic and Irish markets. The customer
in the allocation of funding costs for lending and de- response to mobile banking has been positive.
posit activities that took effect on 1 January 2011.
The Group continues to meet customer needs for
In the third quarter of 2011, net interest income rose more flexibility and has developed an online banking
4% from the second-quarter level. All business units solution for the iPad. It will be launched in the Nor-
contributed to the rise except Banking Activities Ire- dic markets in November 2011 and subsequently in
land. Retail Banking Denmark in particular lifted net the Group’s other markets.
interest income as higher lending rates generated
higher earnings. Macroeconomic outlook
Most of the Group’s markets saw improved economic
Concern about the global economy is keeping funding conditions in the first six months of 2011. Conditions
costs in the banking sector high. Retail Banking Den- became more difficult over the summer, however,
mark therefore raised lending rates again on 20 Octo- when financial and economic uncertainty increased
ber 2011. considerably.

Total expenses declined 8% from the year-earlier The ECB raised its key lending rates in April and July
level, mainly because of the expiry of Bank Package 2011, and the Danish central bank followed suit. In
1. Adjusted for this factor, severance payments and the autumn of 2011, the Danish central bank then
other one-off expenses, expenses rose 3% owing pri- lowered interest rates on two occasions. The central
marily to IT costs, marketing costs and general in- banks in Norway and Sweden also hiked interest
creases in wages and prices. rates. There are no indications of further rate changes
in 2011, though.
Loan impairment charges dropped 18% from the
year-earlier level. The positive trend continued in Recent data on house prices in Denmark show a fall
most of the Group’s core markets. Impairment charges in prices in the first nine months of 2011. The fall is
at Retail Banking Denmark also reflected a compensa- likely to continue during the rest of the year. The
tion of DKK 0.8 billion deriving from the termination same trend is expected in Ireland and Northern Ire-
of a credit insurance contract covering potential land. Swedish and Finnish house prices are forecast
losses on certain types of lending. The Irish and to be virtually unchanged, while prices in Norway are
Northern Ireland banking units still posted substan- likely to continue upwards.
tial charges, however, because of the persistently dif-
ficult market conditions.

Impairment charges in the third quarter rose 13%
from the level in the second quarter primarily be-
cause of higher charges relating to commercial prop-
erty, agricultural and personal customer exposures in
Denmark. The Irish and Northern Ireland banking
units continued to suffer under the tough market
conditions, with charges relating mainly to the com-
mercial property segment. At the Group’s other bank-
ing units, impairment charges remained low.
MARKET SHARE OF LENDING 30 September 30 September
Total deposits remained at the end-2010 level and (%) 2011 2010
amounted to DKK 694 billion at 30 September 2011.
Denmark, including mortgage loans 28.8 28.0
Operations Finland 11.9 12.1
Sweden 5.7 5.6
The Group has launched initiatives aimed at improv-
Norway 5.3 5.4
ing earnings and ensuring that its business model Ireland 3.2 3.0
creates value even in times of low economic growth.
A key measure is wider lending margins to compen-
sate for increasing capital, liquidity and funding MARKET SHARE OF DEPOSITS 30 September 30 September
costs. The results are beginning to show at Retail (%) 2011 2010
Banking Denmark. Denmark 30.9 29.4
Finland 12.6 13.2
The Group continues to invest heavily in digital Sweden 5.0 5.1
technology to drive product innovation, focusing on Norway 5.1 4.9
usability and increased accessibility for customers. Ireland 2.5 2.1
For example, since September 2010, the Group has
introduced a mobile banking application for smart-


EMPLOYEES TOTAL INCOME PROFIT BEFORE TAX
859 DKK 4,470 million DKK 3,483 million

Danske Markets and Treasury

DANSKE MARKETS AND TREASURY Q1-Q3 Q1-Q3 Index Q3 Q2 Q1 Q4 Q3 Full year
(DKK millions) 2011 2010 11/10 2011 2011 2011 2010 2010 2010

Total income 4,470 6,116 73 -106 2,049 2,527 543 1,546 6,659
Expenses 1,968 1,979 99 544 682 742 645 638 2,624

Profit before loan impairment charges 2,502 4,137 60 -650 1,367 1,785 -102 908 4,035
Loan impairment charges -981 -683 - -750 -396 165 66 221 -617

Profit before tax 3,483 4,820 72 100 1,763 1,620 -168 687 4,652

Due from credit institutions and
repo loans (end of period) 300,496 384,467 78 300,496 340,381 349,064 396,581 384,467 396,581
Loans and advances (end of period) 46,407 40,847 114 46,407 40,671 42,602 48,665 40,847 48,665
Allowance account, total
(end of period) 2,518 4,202 60 2,518 2,583 2,916 2,954 4,202 2,954
Net trading and investment portfolio
(end of period) 442,221 344,628 128 442,221 408,688 357,452 350,990 344,628 350,990

Profit before loan impairment charges
as % p.a. of allocated capital 40.3 114.4 -24.9 65.9 117.1 -7.6 64.9 81.3
Pre-tax profit as % p.a. of allocated
capital (ROE) 56.1 133.3 3.8 84.9 106.2 -12.5 49.1 93.7
Cost/income ratio (%) 44.0 32.4 - 33.3 29.4 118.8 41.3 39.4

TOTAL INCOME
(DKK millions)

Danske Markets 3,877 5,206 74 218 1,389 2,270 738 1,447 5,944
Group Treasury 593 910 65 -324 660 257 -195 99 715

Total Danske Markets and Treasury 4,470 6,116 73 -106 2,049 2,527 543 1,546 6,659

• Lower net trading income because of difficult Danske Markets’ exposure to southern European gov-
market conditions ernment bonds was extremely limited in the period,
• Reduction of market risks and the effect on the results was equally limited.
• Customer activity still strong Group Treasury’s earnings from investment portfolios
Profit before tax at Danske Markets was DKK 3.5 bil- fell from DKK 0.9 billion in the first nine months of
lion, down 28% from the level in the first nine 2010 to DKK 0.6 billion. The unit’s income reflects a
months of 2010. Lower net trading income and earn- decline in the unrealised capital gain on Danske
ings from investment portfolios in the third quarter of Bank’s shareholding in Nets Holding A/S from
2011 were the main reasons for the decline. Net trad- DKK 0.7 billion in the same period last year to
ing income was satisfactory in the first two quarters DKK 0.3 billion. The tough market conditions com-
of the period but suffered from the global financial bined with higher funding costs also had an adverse
turmoil in the third. As a result of the market condi- effect on net trading income.
tions, financial players’ risk tolerance declined. This Loan impairment charges saw a DKK 1.0 billion re-
led to lower interest rates, higher volatility and less versal of previously recognised charges relating to
liquidity in the interbank markets. The lack of liquid- Lehman Brothers, among others, against a net reversal
ity in particular made it more expensive for banks to of DKK 0.7 billion in the same period a year earlier.
fund their activities.
The Group’s average VaR (10-day horizon, confidence
The high volatility did not allow market makers to level of 95%) was DKK 274 million in the period,
maintain the high earnings of the preceding quarters, against DKK 346 million in the year-earlier period. As
but during this difficult period Danske Markets con- a result of greater uncertainty in the markets, Danske
tinued to provide liquidity and risk-hedging facilities Markets actively reduced its risk. At 30 September
to customers. 2011, the VaR was DKK 86 million, against DKK 163
Danske Markets estimates that both its market share million at 30 June 2011.
and customer satisfaction have risen.


MARKET SHARE IN
EMPLOYEES PROFIT BEFORE TAX THE NORDIC REGION
558 DKK 633 million 11.9 %

Danske Capital

DANSKE CAPITAL Q1-Q3 Q1-Q3 Index Q3 Q2 Q1 Q4 Q3 Full year
(DKK millions) 2011 2010 11/10 2011 2011 2011 2010 2010 2010

Net interest income 88 94 94 33 28 27 26 25 120
Net fee income 1,229 1,074 114 399 410 420 633 360 1,707
Other income 49 31 158 10 15 24 15 10 46

Total income 1,366 1,199 114 442 453 471 674 395 1,873
Expenses 780 702 111 230 283 267 338 222 1,040

Profit before loan impairment charges 586 497 118 212 170 204 336 173 833
Loan impairment charges -47 4 - - 1 -48 9 -4 13

Profit before tax 633 493 128 212 169 252 327 177 820

Loans and advances (end of period) 6,266 6,195 101 6,266 6,293 6,356 6,450 6,195 6,450
Allowance account, total (end of period) 161 293 55 161 163 160 211 293 211
Allocated capital (avg.) 302 305 99 319 315 273 250 277 291

Assets under management (DKK billions) 587 590 99 587 603 598 602 590 602

• Profit before loan impairment charges up 18% At 30 September 2011, Danske Capital’s market share
• Total income up 14% owing to higher average as- of the Nordic unit trust market was 11.9%. This is an
sets under management and wider margins increase of 0.7% of a percentage point from the end-
• Positive net sales to institutional customers con- 2010 figure.
tinued
• Nordic market position strengthened Danske Capital’s unit trust business posted above-
benchmark returns on 46% of its funds. Of the bond-
Total income at Danske Capital rose 14% to DKK 1.4 based funds, 37% delivered above-benchmark re-
billion, up from DKK 1.2 billion a year earlier. Asset turns, and for equity-based funds, the figure was
Management and International Private Banking at 50%.
Danske Bank International Luxembourg contributed
to the rise through an increase in average assets under
management and wider margins.

Expenses were up 11% because of higher perform-
ance-based compensation and extra work on the mi-
gration of Danske Invest to the shared Danske Bank IT
platform.

At 30 September 2011, assets under management to-
talled DKK 587 billion, on a par with the year-earlier
level. Net sales to institutional and retail banking cus-
tomers amounted to DKK 14 billion. In the period up
to 30 September 2011, however, financial market
trends led to negative market value adjustments of
DKK 29 billion.

Of the net sales of DKK 14 billion, institutional cus-
tomers accounted for DKK 11 billion and retail bank-
ing customers for DKK 3 billion. In the third quarter
of 2011, sales slowed down because of financial mar-
ket trends, and this led to negative net sales to retail
banking customers of DKK 4 billion. Net sales to in-
stitutional customers remained positive at DKK 4 bil-
lion.


EMPLOYEES INCOME TOTAL PREMIUMS
844 DKK -407 million DKK 20,000 million

Danica Pension

DANICA PENSION Q1-Q3 Q1-Q3 Index Q3 Q2 Q1 Q4 Q3 Full year
(DKK millions) 2011 2010 11/10 2011 2011 2011 2010 2010 2010

Danica Traditionel 822 837 98 275 283 264 289 282 1,126
Unit-linked business 245 209 117 66 89 90 118 72 327
Health and accident business 33 -15 - 21 13 -1 96 -3 81
Return on investments 345 828 42 199 125 21 -29 308 799
Financing result -126 -98 - -48 -45 -33 -32 -31 -130
Special allotment -150 -300 - -25 -62 -63 -341 -100 -641
Change in shadow account -1,576 - - -1,223 -142 -211 584 177 584

Net income from insurance business -407 1,461 - -735 261 67 685 705 2,146

Premiums, insurance contracts 14,951 13,529 111 4,786 4,973 5,192 4,842 4,638 18,371
Premiums, investment contracts 5,049 4,200 120 1,016 2,076 1,957 1,578 910 5,778

Provisions, insurance contracts 236,708 237,997 99 236,708 233,336 232,363 233,062 237,997 233,062
Provisions, investment contracts 22,302 20,315 110 22,302 24,770 23,990 22,397 20,315 22,397

Customer funds, investment assets
Danica Traditionel 185,849 197,663 94 185,849 182,456 183,280 188,057 197,663 188,057
Danica Balance 25,527 19,161 133 25,527 25,410 23,313 21,752 19,161 21,752
Danica Link 42,622 41,032 104 42,622 46,438 45,655 44,509 41,032 44,509

Net income as % p.a. of allocated capital -8.0 34.7 -33.5 17.9 4.6 45.0 48.1 37.4

• Loss of DKK 0.4 billion on insurance business investments in the fourth quarter of 2011 that exceeds
• Total premiums up 13% to DKK 20.0 billion the interest payable on policyholders’ savings. In
• Expense ratio continued to decline 2012 or later, Danica Pension will be able to book the
deferred risk allowance to income and reverse any ex-
The Group’s insurance business posted a loss of traordinary strengthening of technical provisions out-
DKK 0.4 billion, against a profit of DKK 1.5 billion a standing at 31 December 2011 if it realises results for
year earlier. The results were adversely affected since each of the interest rate groups that are sufficiently
the Group had to postpone booking the risk allow- positive, also to restore the bonus potential of paid-
ances for all four interest rate groups to income and up policies.
to strengthen the technical provisions because of ad-
verse developments in the credit bond and equity The return on assets allocated to equity and to the
markets. This strengthening of technical provisions health and accident business was 2.0%. At 30 Sep-
amounted to DKK 0.7 billion. Lower investment re- tember 2011, the equity and credit bond exposure
turns also hurt the development in results. from these assets amounted to DKK 1.8 billion. The
return on customer funds in Danica Traditionel was
The collective bonus potential of the interest rate 4.5%, while the return including changes in technical
groups fell to zero and amounted to DKK 0.2 billion provisions stood at 0.4%. The return on the market-
for the cost and risk groups. Danica Pension used based products, Danica Balance and Danica Link,
DKK 1.9 billion of the bonus potential of paid-up was a loss of DKK 3.7 billion, or an average rate of re-
policies to cover losses and introduced a charge on turn of -7.4%.
policy transfers and surrenders for all interest rate
groups. The paid-up policies of the two interest rate The third quarter results thus suffered from the tur-
groups with the highest benefit guarantees no longer moil in the financial markets. During the period,
have a bonus potential that can be used to cover a Danica Pension reduced the risk on the equity and
negative return on investments. At 30 September credit bond investments of customer funds in Danica
2011, the equity and credit bond exposures of these Traditionel and adjusted its interest rate exposure.
two interest rate groups totalled DKK 2.9 billion and
DKK 16.8 billion, respectively. Further losses on At 30 September 2011, Danica Pension’s exposure to
credit bonds and equities will necessitate a further government bonds included DKK 5.5 billion in bonds
extraordinary strengthening of technical provisions issued by Italy, DKK 1.7 billion in bonds issued by
and thus additional transfers to the shadow account. Spain and DKK 0.4 billion in bonds issued by Ire-
land. The two interest rate groups with the highest
Danica Pension will be able to reverse the increase in benefit guarantees accounted for DKK 3.0 billion of
technical provisions if it realises a positive return on this exposure, and the health and accident business,
which also affects the return on investments, ac-


counted for DKK 0.2 billion of the exposure. Danica
Pension had no exposure to government bonds issued
by Greece or Portugal.

Net income included a DKK 150 million special al-
lotment payable to certain policyholders of the for-
mer Statsanstalten for Livsforsikring (Annual Report
2010 provides further information). The amount for
the full year will depend on developments in Danica
Pension’s net income and business volume, including
changes in the shadow account.

The volume of unit-linked business increased, result-
ing in an improvement of the technical result over the
year-earlier figure. The health and accident result
improved because of a positive run-off on claims. The
technical result for the unit-linked business de-
creased in the third quarter, primarily because of a
lower risk result in Norway.

Total expenses were just above the level in the first
nine months of 2010, with lower expenses in Den-
mark and higher acquisition costs in Sweden. Ex-
penses as a percentage of premiums fell from 5.1% to
4.7%.

Total premiums rose 13% to DKK 20.0 billion. In
Denmark, premiums rose 14%, primarily because of
new business schemes. Premiums for market-based
products in Denmark rose 29%.


EMPLOYEES PROFIT BEFORE TAX
5,768 DKK -1,001 million

Other Activities

OTHER ACTIVITIES Q1-Q3 Q1-Q3 Index Q3 Q2 Q1 Q4 Q3 Full year
(DKK millions) 2011 2010 11/10 2011 2011 2011 2010 2010 2010

Net interest income 110 115 96 19 33 58 67 -39 182
Net fee income -16 -26 - -3 -9 -4 -11 -6 -37
Net trading income 159 4 - 19 54 86 -95 36 -91
Other income 262 534 49 37 41 184 256 1 790

Total income 515 627 82 72 119 324 217 -8 844
Expenses 1,516 257 - -63 397 1,182 93 81 350

Profit before loan impairment charges -1,001 370 - 135 -278 -858 124 -89 494
Loan impairment charges - - - - - - - - -

Profit before tax -1,001 370 - 135 -278 -858 124 -89 494

PROFIT BEFORE TAX
(DKK millions)

Real property 205 251 82 74 80 51 32 42 283
Own shares 252 19 - 94 99 59 -103 32 -84
Other, including Group support
functions -1,458 100 - -33 -457 -968 195 -163 295

Total Other Activities -1,001 370 - 135 -278 -858 124 -89 494

Other Activities consists of the Group’s real prop- Amagerbanken A/S’s bankruptcy caused an esti-
erty activities, support functions and eliminations, mated expense of DKK 850 million in the first quar-
including the elimination of returns on own shares ter of 2011. A subsequent revaluation of the assets
and bonds. and liabilities of Amagerbanken A/S under bank-
ruptcy allowed an increase in the dividend per-
Other Activities posted a loss before tax of DKK 1.0 centage. The increase resulted in additional interim
billion, against a profit before tax of DKK 0.4 billion dividends of DKK 172 million in the second quarter
in the first nine months of 2010. The decline was and DKK 355 million in the third quarter of 2011.
caused mainly by the commitment to the Danish The estimated commitment for the first nine
Guarantee Fund for Depositors and Investors recog- months of 2011 thus totalled DKK 323 million.
nised in the first nine months of 2011.
Fjordbank Mors A/S’s bankruptcy resulted in a
The Group’s real property activities posted a profit commitment to the Fund of an estimated DKK 467
of DKK 205 million, down DKK 46 million from the million in the second quarter of 2011.
year-earlier figure. The main reasons for the decline
were a drop in rental income and higher mainte- The resolution of Max Bank A/S under Bank Package
nance costs. 4 resulted in a commitment to the Fund of an esti-
mated DKK 172 million in the third quarter of 2011.
The elimination of returns on own shares led to in-
come of DKK 252 million in the first nine months of Expenses also rose because of severance payments
2011, against DKK 19 million in the year-earlier pe- and a DKK 113 million adjustment of write-downs
riod. of the assets of a temporarily acquired company.

Other income stood at DKK 0.3 billion, against
DKK 0.5 billion a year earlier. It consisted mainly of
a refund of excess VAT and financial services em-
ployer tax paid in previous periods.

Expenses totalled DKK 1.5 billion in the first nine
months of 2011, against DKK 0.3 billion a year ear-
lier. The increase was caused primarily by the
DKK 1.0 billion commitment to the Fund.


Income statement – Danske Bank Group

Q1-Q3 Q1-Q3 Q3 Q3 Full year
(DKK millions) 2011 2010 2011 2010 2010

Interest income 60,042 60,101 21,045 19,515 79,625
Interest expense 35,708 32,812 12,838 10,796 43,642

Net interest income 24,334 27,289 8,207 8,719 35,983
Fee income 8,767 8,508 2,753 2,850 11,803
Fee expenses 3,027 2,644 925 858 3,714
Net trading income -7,092 4,536 -9,195 2,816 5,984
Other income 3,714 3,622 947 1,124 4,798
Net premiums 14,848 13,374 4,788 4,599 18,253
Net insurance benefits 8,955 19,063 -2,103 7,533 26,172
Income from associated undertakings 164 38 65 -25 84
Profit on sale of associated and group undertakings 15 659 2 - 659
Staff costs and administrative expenses 18,229 18,018 5,138 5,943 24,014
Amortisation, depreciation and impairment charges 2,553 2,464 795 796 3,397

Profit before loan impairment charges 11,986 15,837 2,812 4,953 20,267
Loan impairment charges 8,396 10,835 2,802 3,083 13,817

Profit before tax 3,590 5,002 10 1,870 6,450
Tax 2,067 2,409 394 983 2,786

Net profit for the period 1,523 2,593 -384 887 3,664

Portion attributable to
shareholders of Danske Bank A/S (the Parent Company) 1,511 2,593 -384 887 3,661
non-controlling interests 12 - - - 3


Earnings per share (DKK) 1.8 3.5 -0.4 1.2 4.9
Diluted earnings per share (DKK) 1.8 3.5 -0.4 1.2 4.9
Proposed dividend per share (DKK) - - - - -

Share ratios covering the first quarter of 2011 and previous periods have been divided by a factor of 1.0807 to reflect the share capital increase
in April 2011.


Statement of comprehensive income – Danske Bank Group

Q1-Q3 Q1-Q3 Q3 Q3 Full year
(DKK millions) 2011 2010 2011 2010 2010

Other comprehensive income
Translation of units outside Denmark -295 843 361 -441 1,009
Hedging of units outside Denmark 173 -851 -385 450 -961
Unrealised value adjustments of available-for-sale financial assets -453 -10 -198 73 -145
Realised value adjustments of available-for-sale financial assets 17 69 4 38 44
Tax on other comprehensive income 67 174 131 -120 242

Total other comprehensive income -491 225 -87 - 189

Total comprehensive income for the period 1,032 2,818 -471 887 3,853

Portion attributable to
shareholders of Danske Bank A/S (the Parent Company) 1,020 2,818 -471 887 3,850
non-controlling interests 12 - - - 3

Total comprehensive income for the period 1,032 2,818 -471 887 3,853


Balance sheet – Danske Bank Group

30 Sept. 31 Dec. 30 Sept.
(DKK millions) 2011 2010 2010

ASSETS
Cash in hand and demand deposits with central banks 19,663 35,403 21,645
Due from credit institutions and central banks 145,300 228,100 218,533
Trading portfolio assets 911,584 641,993 810,111
Investment securities 108,465 118,556 119,685
Loans and advances at amortised cost 1,135,217 1,146,731 1,138,322
Loans at fair value 713,497 701,715 707,712
Assets under pooled schemes and unit-linked investment contracts 58,762 59,698 57,213
Assets under insurance contracts 225,568 217,515 220,524
Holdings in associated undertakings 1,069 1,040 989
Intangible assets 22,357 22,936 23,079
Investment property 4,622 4,799 5,170
Tangible assets 7,064 7,861 8,103
Current tax assets 1,379 1,404 1,529
Deferred tax assets 1,774 1,693 1,835
Other assets 24,703 24,442 26,666

Total assets 3,381,024 3,213,886 3,361,116

LIABILITIES
Due to credit institutions and central banks 373,622 317,988 314,513
Trading portfolio liabilities 677,319 478,386 658,039
Deposits 888,638 861,053 827,771
Bonds issued by Realkredit Danmark 534,245 555,486 563,519
Deposits under pooled schemes and unit-linked investment contracts 65,181 67,277 63,218
Liabilities under insurance contracts 240,519 238,132 242,917
Other issued bonds 359,022 450,219 447,277
Current tax liabilities 474 858 680
Deferred tax liabilities 6,587 6,003 5,350
Other liabilities 39,688 56,406 54,745
Subordinated debt 70,059 77,336 79,578

Total liabilities 3,255,354 3,109,144 3,257,607

SHAREHOLDERS' EQUITY
Share capital 9,317 6,988 6,988
Foreign currency translation reserve -258 -136 -192
Reserve for available-for-sale financial assets -1,766 -1,330 -1,170
Retained earnings 118,322 99,205 97,883
Proposed dividends - - -

Shareholders of Danske Bank A/S (the Parent Company) 125,615 104,727 103,509
Non-controlling interests 55 15 -

Total shareholders' equity 125,670 104,742 103,509

Total liabilities and equity 3,381,024 3,213,886 3,361,116


Statement of capital – Danske Bank Group
(DKK millions)

Changes in shareholders' equity
Shareholders of Danske Bank A/S (the Parent Company)

Foreign Reserve for
currency available- Non-
translation for-sale Retained Proposed controlling
Share capital reserve assets earnings dividends Total interests Total

Shareholders' equity at 1 January 2011 6,988 -136 -1,330 99,205 - 104,727 15 104,742
Net profit for the period - - - 1,511 - 1,511 12 1,523
Translation of units outside Denmark - -295 - - - -295 - -295
Hedging of units outside Denmark - 173 - - - 173 - 173
Unrealised value adjustments of
available-for-sale financial assets - - -453 - - -453 - -453
Realised value adjustments of
available-for-sale financial assets - - 17 - - 17 - 17
Tax on other comprehensive income - - - 67 - 67 - 67

Total other comprehensive income - -122 -436 67 - -491 - -491

Total comprehensive income for the period - -122 -436 1,578 - 1,020 12 1,032

Transactions with owners
Share capital increase 2,329 - - 17,703 - 20,032 - 20,032
Share offering costs - - - -271 - -271 - -271
Acquisition of own shares - - - -13,684 - -13,684 - -13,684
Sale of own shares - - - 13,762 - 13,762 - 13,762
Share-based payments - - - - - - - -
Acquisition of non-controlling interests - - - - - - 28 28
Tax on entries on shareholders' equity - - - 29 - 29 - 29

Shareholders' equity at 30 September 2011 9,317 -258 -1,766 118,322 - 125,615 55 125,670

Shareholders' equity at 1 January 2010 6,988 -184 -1,229 95,084 - 100,659 - 100,659
Net profit for the period - - - 2,593 - 2,593 - 2,593
Translation of units outside Denmark - 843 - - - 843 - 843
Hedging of units outside Denmark - -851 - - - -851 - -851
Unrealised value adjustments of
available-for-sale financial assets - - -10 - - -10 - -10
Realised value adjustments of
available-for-sale financial assets - - 69 - - 69 - 69
Tax on other comprehensive income - - - 174 - 174 - 174

Total other comprehensive income - -8 59 174 - 225 - 225

Total comprehensive income for the period - -8 59 2,767 - 2,818 - 2,818

Transactions with owners
Acquisition of own shares - - - -14,649 - -14,649 - -14,649
Sale of own shares - - - 14,694 - 14,694 - 14,694
Share-based payments - - - 9 - 9 - 9
Tax on entries on shareholders' equity - - - -22 - -22 - -22

Shareholders' equity at 30 September 2010 6,988 -192 -1,170 97,883 - 103,509 - 103,509

For as long as the Danish state holds hybrid capital in Danske Bank and guarantees bond issues, Danske Bank may distribute dividends if such
dividends can be paid in full out of the net profit.

2011 2010 2010

Share capital (DKK) 9,317,390,340 6,988,042,760 6,988,042,760
Number of shares 931,739,034 698,804,276 698,804,276
Number of shares outstanding 926,396,658 748,151,246 748,115,037
Average number of shares outstanding for the period 863,253,687 747,892,756 747,793,182
Average number of shares outstanding, including dilutive shares, for the period 863,253,687 747,892,756 747,793,182

The number of shares outstanding, the average number of shares outstanding for the period, and the average number of shares outstanding,
including dilutive shares, for the period have been adjusted for the share capital increase in April 2011.


Statement of capital – Danske Bank Group

(DKK millions) 2011 2010 2010

Capital base and total capital ratio
Shareholders' equity 125,670 104,742 103,509
Revaluation of domicile property 1,264 1,253 1,284
Pension obligations at fair value -213 -73 -1,434
Tax effect 110 2 463
Non-controlling interests 2,991 3,002 3,002

Shareholders' equity calculated in accordance with the rules of the Danish FSA 129,822 108,926 106,824
Expected dividends -500 - -
Intangible assets of banking operations -22,215 -22,666 -22,813
Deferred tax assets -1,665 -1,548 -2,025
Deferred tax on intangible assets 969 1,069 1,132
Revaluation of real property -677 -675 -747

Core tier 1 capital 105,734 85,106 82,371
Hybrid capital 41,909 42,208 41,996
Difference between expected losses and impairment charges - - -
Statutory deduction for insurance subsidiaries -4,120 -2,422 -2,632
Other statutory deductions - -55 -

Total tier 1 capital 143,523 124,837 121,735

Subordinated debt, excluding hybrid capital 20,629 26,710 26,736
Hybrid capital - - -
Revaluation of real property 677 675 747
Difference between expected losses and impairment charges - - -
Statutory deduction for insurance subsidiaries -4,120 -2,422 -2,632
Other statutory deductions - -55 -

Capital base 160,709 149,745 146,586

Risk-weighted assets 894,790 844,209 843,435

Core tier 1 capital ratio (%) 11.8 10.1 9.8
Tier 1 capital ratio (%) 16.0 14.8 14.4
Total capital ratio (%) 18.0 17.7 17.4

The total capital and tier 1 capital ratios have been calculated in accordance with the Capital Requirements Directive. Risk-weighted assets
calculated under the Basel I rules amounted to DKK 1,413,211 million at 30 September 2011 (31 December 2010: DKK 1,359,397 million).
The solvency need, calculated on the basis of the transitional rules, was DKK 90,446 million, equal to 80% of the capital requirement of 8% of
risk-weighted assets (31 December 2010: DKK 87,001 million).


Cash flow statement – Danske Bank Group

Q1-Q3 Q1-Q3 Full year
(DKK millions) 2011 2010 2010

Cash flow from operations
Net profit for the period 1,523 2,593 3,664
Adjustment for non-cash operating items 12,520 13,104 12,381
Change in working capital -124,857 1,315 24,220

Total -110,814 17,012 40,265

Cash flow from investing activities
Acquisition/sale of businesses 19 - -
Acquisition/sale of own shares 78 45 121
Acquisition of intangible assets -322 -245 -362
Acquisition/sale of tangible assets -156 -1,128 -372

Total -381 -1,328 -613

Cash flow from financing activities
Changes in subordinated debt and hybrid capital -7,873 -4,226 -4,848
Dividends - - -
Share capital increase 19,761 - -
Change in non-controlling interests 40 - 15

Total 11,928 -4,226 -4,833

Cash and cash equivalents at 1 January 260,607 225,788 225,788
Change in cash and cash equivalents -99,267 11,458 34,819

Cash and cash equivalents, end of period 161,340 237,246 260,607


Notes – Danske Bank Group

Note

1 Significant accounting policies
The Danske Bank Group’s interim report for the first nine Measurement of liabilities under insurance contracts and the
months of 2011 has been prepared in accordance with IAS net obligation for defined benefit pension plans
34, Interim Financial Reporting, as adopted by the EU, and ad- The calculation of liabilities under insurance contracts and the
ditional Danish disclosure requirements for interim reports of net obligation for defined benefit pension plans is based on a
listed financial institutions. number of actuarial computations that rely on assumptions
about a number of variables, including mortality and disability
The Group has not changed its significant accounting policies rates and salary increases. The liabilities are also affected by
from those followed in Annual Report 2010, which provides a the discount rate.
full description of the Group’s significant accounting policies.
The Group has made changes to note disclosures to comply Recognition of deferred tax assets
with IAS 34 as amended by the IASB’s Improvements to IFRSs Deferred tax assets arising from unused tax losses are recog-
2010. nised to the extent that such losses can be offset against tax
on future profit. Recognition of deferred tax assets requires
Critical accounting policies and estimates management to assess the probability and amount of future
Management’s estimates and assumptions of future events taxable profit at units with unused tax losses.
that will significantly affect the carrying amounts of assets and
liabilities underlie the preparation of the Group’s consolidated Annual Report 2010 and Risk Management 2010 provide a
financial statements. The estimates and assumptions that are detailed description of the Group’s significant risks and the ex-
deemed critical to the consolidated financial statements are ternal factors that may affect the Group. Risk Management
2010 is not covered by the statutory audit.
• the fair value measurement of financial instruments
• the measurement of loans and advances Standards and interpretations not yet in force
• the measurement of goodwill The IASB has issued a number of amendments to Interna-
• the measurement of liabilities under insurance contracts tional Financial Reporting Standards that have not yet come
and the net obligation for defined benefit pension plans into force. The paragraphs below list the standards that are
• the recognition of deferred tax assets likely to affect the Group’s financial reporting.

The estimates and assumptions are based on premises that In October 2010, the IASB issued an amended IFRS 9, Finan-
management finds reasonable but are inherently uncertain cial Instruments. This version is the first part of a standard
and unpredictable. The premises may be incomplete, unex- expected to replace the requirements of IAS 39 in 2012. The
pected future events or situations may occur, and other par- amended IFRS 9 now includes principles on classification and
ties may arrive at other estimated values. derecognition of financial instruments, while the next parts will
contain principles to govern impairment, hedge accounting
Fair value measurement of financial instruments and offsetting of financial assets and liabilities. The transi-
Measurements of financial instruments based on prices tional rules adopted in the amended IFRS 9 imply implementa-
quoted in an active market or based on generally accepted tion of the standard by 2013. A postponement of the imple-
models employing observable market data are not subject to mentation deadline to 2015 is currently under consideration,
critical estimates. Measurements of financial instruments however. The EU has decided to postpone adoption of the
that are only to a limited extent based on observable market amended IFRS 9 until the details of the entire standard are
data, such as unlisted shares and certain bonds for which known.
there is no active market, are subject to estimates.
The Group does not expect the amended IFRS 9 to materially
Measurement of loans and advances affect the measurement of its financial instruments, although
The Group makes impairment charges to account for any im- the standard does not allow classification of bonds as avail-
pairment of loans and advances that occurs after initial rec- able-for-sale assets. Such instruments are measured at amor-
ognition. Impairment charges consist of individual and collec- tised cost or fair value through profit or loss. Meaningful clas-
tive charges and rely on a number of estimates, including iden- sification of financial assets is not possible without informa-
tification of loans or portfolios of loans with objective evidence tion about the future parts of IFRS 9 to clarify the overall ac-
of impairment, expected future cash flows and the value of col- counting effects of the standard.
lateral.
The IASB ended its project on consolidation in May 2011 by
Measurement of goodwill issuing a number of new International Financial Reporting
Goodwill on acquisition is tested for impairment at least once Standards (IFRS 10, IFRS 11 and IFRS 12) and revised stan-
a year. Impairment testing requires management to estimate dards (IAS 27 and IAS 28). The IASB has established a uni-
future cash flows from acquired units. A number of factors af- form definition of control to be used for determining whether
fect the value of such cash flows, including discount rates, an entity should be consolidated and has introduced enhanced
changes in the real economy, customer behaviour and compe- disclosure requirements for consolidated and unconsolidated
tition. entities, joint arrangements and associated undertakings. The
standards, which have not yet been adopted by the EU, must
be implemented in 2013 at the latest. The Group does not ex-
pect the new requirements to significantly change its consoli-
dation of undertakings.



Note

1 In May 2011, the IASB issued IFRS 13, Fair Value Measure-
(cont’d) ment. The standard introduces a new definition of fair value
and provides guidance on how to measure and disclose fair
value. IFRS 13 applies when another standard requires fair
value to be used or disclosed. The standard, which has not yet
been adopted by the EU, must be implemented in 2013 at the
latest. The Group does not expect IFRS 13 to significantly af-
fect its financial results.

In June 2011, the IASB issued an amended IAS 19, Employee
Benefits. The amended standard eliminates the option to defer
the recognition of actuarial gains and losses on defined benefit
pension plans, known as the “corridor method”. The present
value of net pension assets and obligations must be recog-
nised in the balance sheet instead. The amended standard,
which has not yet been adopted by the EU, must be imple-
mented in 2013 at the latest. At 30 September 2011, the new
requirements would have reduced shareholders’ equity by
DKK 134 million (the amount deferred under the corridor
method net of tax). The effect on the net profit will be immate-
rial, as actuarial gains and losses are recognised in other
comprehensive income. Other comprehensive income and
shareholders’ equity items will become more volatile, though.
The Statement of capital will not be affected as it is already
prepared without the use of the corridor method.



Note (DKK millions)

2 Business segments Q1-Q3 2011

Banking Danske Markets Danske Danica Other Elimina- Reclassi-
Activities and Treasury Capital Pension Activities tions Total fication Highlights

Net interest income 17,157 2,464 88 4,395 110 120 24,334 -6,979 17,355
Net fee income 4,867 291 1,229 -631 -16 - 5,740 340 6,080
Net trading income 1,011 1,591 47 -9,780 -92 131 -7,092 12,779 5,687
Other income 2,528 8 2 399 856 -79 3,714 -915 2,799
Net premiums - - - 14,848 - - 14,848 -14,848 -
Net insurance benefits - - - 8,955 - - 8,955 -8,955 -
Income from equity
investments 7 116 - 34 21 1 179 -179 -
Net income from
insurance business - - - - - - - -407 -407

Total income 25,570 4,470 1,366 310 879 173 32,768 -1,254 31,514
Expenses 15,264 1,968 780 717 2,132 -79 20,782 -1,254 19,528

Profit before loan
impairment charges 10,306 2,502 586 -407 -1,253 252 11,986 - 11,986
Loan impairment charges 9,424 -981 -47 - - - 8,396 - 8,396

Profit before tax 882 3,483 633 -407 -1,253 252 3,590 - 3,590

Loans and advances,
excluding reverse
transactions 1,649,585 43,889 6,127 - 12,801 -18,884 1,693,518 - 1,693,518
Other assets 473,658 5,645,488 16,755 283,505 341,608 -5,073,508 1,687,506 - 1,687,506

Total assets 2,123,243 5,689,377 22,882 283,505 354,409 -5,092,392 3,381,024 - 3,381,024

Deposits, excluding
repo deposits 693,624 96,768 6,584 - 4,528 -12,583 788,921 - 788,921
Other liabilities 1,345,180 5,584,330 15,996 276,705 324,031 -5,079,809 2,466,433 - 2,466,433
Allocated capital 84,439 8,279 302 6,800 25,850 - 125,670 - 125,670

Total liabilities and
equity 2,123,243 5,689,377 22,882 283,505 354,409 -5,092,392 3,381,024 - 3,381,024

Internal income -1,186 12,951 75 348 -12,188 - -
Amortisation and
depreciation charges 1,774 4 29 - 633 - 2,440
Impairment charges for
intangible and tangible
assets - - - - 113 - 113
Reversals of impairment
charges - - - - - - -
Pre-tax profit as % p.a. of
allocated capital (avg.) 1.4 56.1 279.5 -8.0 -6.5 - 3.8
Cost/income ratio (%) 59.7 44.0 57.1 231.3 242.5 - 63.4
Full-time-equivalent
staff (avg.) 13,482 856 547 842 5,771 - 21,498

In its financial highlights, the Group recognises earnings contributed by Danske Markets as net trading income and earnings contributed
by Danica Pension as net income from insurance business. Other income includes earnings contributed by fully consolidated subsidiaries
taken over by the Group under non-performing loan agreements and held for sale. The Reclassification column shows the adjustments
made to the detailed figures in the calculation of the highlights.

Internal income and expenses are allocated to the individual segments on an arm’s-length basis. The funding costs for lending and deposit
activities are allocated on the basis of a maturity analysis of loans and deposits, interbank rates and funding spreads and depend on
financial market trends. The Group changed its allocation of costs at 1 January 2011 to better reflect the duration of loans and deposits.
The change affects only the allocation between segments and the highlights.

Capital is allocated to Other Activities at a rate of 7.5% of its average risk-weighted assets (31 December 2010: 5.5%). The allocation is
based on the business unit’s share of the Group’s average risk-weighted assets calculated prior to the transition to the Capital
Requirements Directive.



Note (DKK millions)

2 Business segments Q1-Q3 2010
(cont’d) Banking Danske Markets Danske Danica Other Elimina- Reclassi-
Activities and Treasury Capital Pension Activities tions Total fication Highlights

Net interest income 17,565 4,616 94 4,761 113 140 27,289 -9,515 17,774
Net fee income 5,255 107 1,074 -546 -26 - 5,864 439 6,303
Net trading income 861 690 24 3,095 -15 -119 4,536 2,469 7,005
Other income 2,306 18 5 568 774 -49 3,622 -775 2,847
Net premiums - - - 13,374 - - 13,374 -13,374 -
Net insurance benefits - - - 19,063 - - 19,063 -19,063 -
Income from equity
investments - 685 2 6 6 -2 697 -697 -
Net income from
insurance business - - - - - - - 1,461 1,461

Total income 25,987 6,116 1,199 2,195 852 -30 36,319 -929 35,390
Expenses 16,615 1,979 702 734 501 -49 20,482 -929 19,553

Profit before loan
impairment charges 9,372 4,137 497 1,461 351 19 15,837 - 15,837
Loan impairment charges 11,514 -683 4 - - - 10,835 - 10,835

Profit before tax -2,142 4,820 493 1,461 351 19 5,002 - 5,002

Loans and advances,
excluding reverse
transactions 1,644,880 36,724 5,922 - 3,466 -10,892 1,680,100 - 1,680,100
Other assets 482,598 5,580,833 16,615 282,603 174,689 -4,856,322 1,681,016 - 1,681,016

Total assets 2,127,478 5,617,557 22,537 282,603 178,155 -4,867,214 3,361,116 - 3,361,116

Deposits, excluding
repo deposits 684,019 81,491 6,073 - - -8,069 763,514 - 763,514
Other liabilities 1,375,967 5,531,244 16,159 276,989 152,879 -4,859,145 2,494,093 - 2,494,093
Allocated capital 67,492 4,822 305 5,614 25,276 - 103,509 - 103,509

Total liabilities and
equity 2,127,478 5,617,557 22,537 282,603 178,155 -4,867,214 3,361,116 - 3,361,116

Internal income 2,339 9,993 82 1,663 -14,077 - -
Amortisation and
depreciation charges 1,767 3 30 - 650 - 2,450
Impairment charges
for intangible and
tangible assets - - - - 14 - 14
Reversals of impairment
charges - - - - - - -
allocated capital (avg.) -4.2 133.3 215.5 34.7 1.9 - 6.4
Cost/income ratio (%) 63.9 32.4 58.5 33.4 58.8 - 56.4
Full-time-equivalent
staff (avg.) 13,748 820 539 898 5,877 - 21,882



Note (DKK millions)

3 Banking Activities Q1-Q3 2011
Retail Banking Banking Activities

Northern
Denmark Finland Sweden Norway Ireland Ireland Baltics Other CIB Total

Net interest income 9,097 1,531 1,754 1,149 845 686 363 249 1,483 17,157
Net fee income 2,400 741 452 187 231 48 109 95 604 4,867
Net trading income 465 73 104 82 95 29 65 27 71 1,011
Other income 343 312 55 472 8 6 7 1,276 56 2,535

Total income 12,305 2,657 2,365 1,890 1,179 769 544 1,647 2,214 25,570
Expenses 6,523 2,371 1,256 1,358 842 532 264 1,305 813 15,264

Profit before loan
impairment charges 5,782 286 1,109 532 337 237 280 342 1,401 10,306
Loan impairment charges 2,649 57 47 271 1,654 4,711 -156 96 95 9,424

Profit before tax 3,133 229 1,062 261 -1,317 -4,474 436 246 1,306 882

Loans and advances 963,637 148,387 180,317 129,799 52,831 66,657 21,444 17,095 108,034 1,688,201
Credit exposure 971,156 155,548 193,751 142,573 52,244 55,168 22,554 58,771 251,357 1,903,122
Allowance account 17,185 2,198 1,101 1,730 4,702 14,123 2,522 336 589 44,486

Profit before loan
impairment charges as %
p.a. of allocated capital 18.3 6.1 15.0 10.4 21.2 10.0 28.7 27.5 16.8 16.3
allocated capital (ROE) 9.9 4.9 14.4 5.1 -83.0 -188.2 44.8 19.8 15.7 1.4
Cost/income ratio (%) 53.0 89.2 53.1 71.9 71.4 69.2 48.5 79.2 36.7 59.7

Banking Activities Q1-Q3 2010

Net interest income 9,536 1,514 1,508 1,282 899 809 376 253 1,388 17,565
Net fee income 2,598 736 439 228 232 80 115 83 744 5,255
Net trading income 392 60 85 86 64 30 75 22 47 861
Other income 346 254 37 417 15 5 8 1,218 6 2,306

Total income 12,872 2,564 2,069 2,013 1,210 924 574 1,576 2,185 25,987
Expenses 7,973 2,219 1,091 1,281 867 655 259 1,288 982 16,615

Profit before loan
impairment charges 4,899 345 978 732 343 269 315 288 1,203 9,372
Loan impairment charges 6,487 76 67 89 783 3,756 171 59 26 11,514

Profit before tax -1,588 269 911 643 -440 -3,487 144 229 1,177 -2,142

Loans and advances 969,173 139,684 175,917 121,120 54,032 72,740 24,736 17,026 106,227 1,680,655
Credit exposure 994,159 145,113 193,457 133,217 53,488 65,098 26,157 51,221 250,453 1,912,363
Allowance account 19,093 2,038 1,334 1,474 2,839 10,744 3,034 402 930 41,888

Profit before loan
impairment charges as %
p.a. of allocated capital 19.1 9.7 19.3 18.4 24.1 12.6 36.0 24.6 17.7 18.5
allocated capital (ROE) -6.2 7.6 18.0 16.1 -30.9 -163.4 16.4 19.5 17.4 -4.2
Cost/income ratio (%) 61.9 86.5 52.7 63.6 71.7 70.9 45.1 81.7 44.9 63.9

The tables above break down the Group’s banking activities.

Since 1 January 2011, Corporate & Institutional Banking (CIB) has comprised the largest corporate customers and institutional clients,
previously served by the Group’s Nordic units, and the Group’s corporate finance business, previously organised under Danske Markets.
The transfer of the corporate finance business to CIB involves reallocating annual income of about DKK 200 million and annual expenses of
about DKK 150 million. Comparative figures have been restated.



Note (DKK millions)

3 Profit before loan impairment charges Q1-Q3 Q1-Q3 Index Q3 Q2 Q1 Q4 Q3 Full year
(cont'd) 2011 2010 11/10 2011 2011 2011 2010 2010 2010
Retail Banking Finland 286 345 83 161 102 23 13 150 358
Retail Banking Sweden 1,109 978 113 395 355 359 353 356 1,331
Retail Banking Norway 532 732 73 197 179 156 223 254 955
Banking Activities Northern Ireland 337 343 98 154 81 102 71 125 414
Banking Activities Ireland 237 269 88 88 70 79 95 78 364
Banking Activities Baltics 280 315 89 102 89 89 97 109 412
Other Banking Activities 342 288 119 106 104 132 104 97 392


Danske Markets and Treasury 2,502 4,137 60 -650 1,367 1,785 -102 908 4,035
Danske Capital 586 497 118 212 170 204 336 173 833
Danica Pension -407 1,461 - -735 261 67 685 705 2,146

Total Group 11,986 15,837 76 2,812 4,834 4,340 4,430 4,953 20,267

Profit before tax

Retail Banking Denmark 3,133 -1,588 - 1,037 1,108 988 715 212 -873
Retail Banking Finland 229 269 85 99 136 -6 -2 124 267
Retail Banking Sweden 1,062 911 117 399 350 313 306 330 1,217
Retail Banking Norway 261 643 41 66 163 32 218 250 861
Banking Activities Northern Ireland -1,317 -440 - -565 -525 -227 -393 -284 -833
Banking Activities Ireland -4,474 -3,487 - -1,490 -1,780 -1,204 -1,118 -942 -4,605
Banking Activities Baltics 436 144 - 125 182 129 61 127 205
Other Banking Activities 246 229 107 103 28 115 138 85 367

Total Banking Activities 882 -2,142 - 298 166 418 480 390 -1,662

Danske Markets and Treasury 3,483 4,820 72 100 1,763 1,620 -168 687 4,652
Danske Capital 633 493 128 212 169 252 327 177 820
Danica Pension -407 1,461 - -735 261 67 685 705 2,146

Total Group 3,590 5,002 72 10 2,081 1,499 1,448 1,870 6,450



Note (DKK millions)

4 Contingent liabilities
The Group uses a variety of loan-related financial instruments to meet customers’ financial requirements. Instruments include loan offers
and other credit facilities, guarantees and instruments not recognised in the balance sheet.

2011 2010 2010

Guarantees
Financial guarantees 11,738 12,061 10,858
Mortgage finance guarantees 1,907 3,001 2,730
Loss guarantee for the Private Contingency Association - - 3,333
Other guarantees 67,848 75,228 71,783

Total 81,493 90,290 88,704

Other contingent liabilities
Irrevocable loan commitments shorter than 1 year 61,172 61,551 55,605
Irrevocable loan commitments longer than 1 year 99,012 109,407 108,212
Other unutilised commitments 860 852 899

Total 161,044 171,810 164,716

In addition to credit exposure relating to lending activities, the Group has granted loan offers and revocable credit facilities in the amount
of DKK 426 billion (31 December 2010: DKK 396 billion). These items are included in the calculation of risk-weighted assets in accor-
dance with the Capital Requirements Directive.

Owing to its business volume, the Danske Bank Group is continually a party to various lawsuits or disputes. In view of its size, the Group
does not expect the outcomes of lawsuits or disputes to have any material effect on its financial position.

A limited number of employees are employed under terms which grant them, if they are dismissed before reaching their normal
retirement age, an extraordinary severance and/or pension payment in excess of their entitlement under ordinary terms of employment.
As a sponsoring employer, the Group is liable for the pension obligations of a number of company pension funds.

Depositors’ claims are covered by the Danish Guarantee Fund for Depositors and Investors. Through participation in the statutory Fund,
Danish banks undertake to cover the losses incurred by the Fund from the resolution of distressed banks. Danske Bank’s share is just
over one third of any loss incurred by the Fund. In early October 2011, Max Bank A/S entered into resolution proceedings under Bank
Package 4. Danske Bank recognised an estimated DKK 172 million commitment to the Fund to cover losses on Max Bank A/S in the third
quarter of 2011.

5 Related parties
Related parties with significant influence subscribed for DKK 4.6 billion of the total amount of new shares offered in April 2011. The
members of the Board of Directors elected by the general meeting and the members of the Executive Board fully exercised their
subscription rights.



Note (DKK millions)

6 Fair value information for financial instruments

Financial instruments are recognised in the balance sheet at fair value or amortised cost.

30 September 2011 31 December 2010

Amortised Amortised
Fair value cost Fair value cost

Financial assets
Cash in hand and demand deposits with central banks - 19,663 - 35,403
Due from credit institutions and central banks - 145,300 - 228,100
Trading portfolio assets 911,584 - 641,993 -
Investment securities 96,416 12,049 107,699 10,857
Loans and advances at amortised cost - 1,135,217 - 1,146,731
Loans at fair value 713,497 - 701,715 -
Assets under pooled schemes and unit-linked investment contracts 58,762 - 59,698 -
Assets under insurance contracts 194,450 - 193,088 -

Total 1,974,709 1,312,229 1,704,193 1,421,091

Financial liabilities
Due to credit institutions and central banks - 373,622 - 317,988
Trading portfolio liabilities 677,319 - 478,386 -
Deposits - 888,638 - 861,053
Bonds issued by Realkredit Danmark 534,245 - 555,486 -
Deposits under pooled schemes and unit-linked investment contracts 65,181 - 67,277 -
Other issued bonds - 359,022 - 450,219
Subordinated debt - 70,059 - 77,336
Irrevocable loan commitments and guarantees - 391 - 3,753

Total 1,276,745 1,691,732 1,101,149 1,710,349

Fair value calculations for financial instruments recognised at amortised cost are affected significantly by estimates as almost all cal-
culations are made on the basis of non-observable input. The Group uses fair value hedge accounting for most of its interest rate risk.
Fair value adjustments to the credit risk on loans and advances measured at amortised cost are recognised in loan impairment
charges.

Capital market trends have occasioned a widening of bond credit spreads, causing the fair value of bonds issued by the Group and
recognised at amortised cost to decline from 98.9% of the amortised cost at 31 December 2010 to 96.9% at 30 September 2011.
The gain that would arise from redemption at the lower fair value is not recognised in the income statement.

Financial instruments at fair value
Note 43 of Annual Report 2010 provides more information about fair value calculation methods for financial instruments.

Financial instruments valued on the basis of quoted prices in an active market are recognised in the Quoted prices category. Financial
instruments valued substantially on the basis of other observable input are recognised in the Observable input category. This category
covers derivatives valued on the basis of observable yield curves or exchange rates and illiquid mortgage bonds valued by reference to
the value of similar, liquid bonds. Other financial instruments are recognised in the Non-observable input category. This category
covers unlisted shares and derivatives, and valuation relies on extrapolation of yield curves, correlations or other model input of
material importance to valuation.

Developments in the financial markets did not result in any significant reclassification of bonds between the Quoted prices and
Observable input categories in the first nine months of 2011.



Note (DKK millions)

6 Quoted Observable Non-observable
(cont'd) 30 September 2011 prices input input Total

Financial assets
Derivatives 8,721 518,048 15,786 542,555
Trading portfolio bonds 356,017 12,133 91 368,241
Trading portfolio shares 378 - 410 788
Investment securities, bonds 90,238 3,463 - 93,701
Investment securities, shares 137 - 2,578 2,715
Loans at fair value - 713,497 - 713,497
Assets under pooled schemes and unit-linked investment contracts 58,762 - - 58,762
Assets under insurance contracts, bonds 144,544 3,190 192 147,926
Assets under insurance contracts, shares 37,763 - 3,947 41,710
Assets under insurance contracts, derivatives 400 4,414 - 4,814

Total 696,960 1,254,745 23,004 1,974,709

Derivatives 9,271 489,199 16,482 514,952
Obligations to repurchase securities 162,191 158 18 162,367
Bonds issued by Realkredit Danmark 534,245 - - 534,245
Deposits under pooled schemes and unit-linked investment contracts - 65,181 - 65,181

Total 705,707 554,538 16,500 1,276,745

31 December 2010

Financial assets
Derivatives 4,117 321,236 8,390 333,743
Trading portfolio bonds 286,270 20,490 - 306,760
Trading portfolio shares 1,140 - 350 1,490
Investment securities, bonds 100,309 4,017 - 104,326
Investment securities, shares 1,010 - 2,363 3,373
Loans at fair value - 701,715 - 701,715
Assets under pooled schemes and unit-linked investment contracts 59,698 - - 59,698
Assets under insurance contracts, bonds 142,449 2,791 1,157 146,397
Assets under insurance contracts, shares 42,128 - 3,253 45,381
Assets under insurance contracts, derivatives 73 1,237 - 1,310

Total 637,194 1,051,486 15,513 1,704,193

Derivatives 3,859 305,969 9,108 318,936
Obligations to repurchase securities 158,981 445 24 159,450
Bonds issued by Realkredit Danmark 555,486 - - 555,486
Deposits under pooled schemes and unit-linked investment contracts - 67,277 - 67,277

Total 718,326 373,691 9,132 1,101,149



Note (DKK millions)

6 At 30 September 2011, financial instruments valued on the basis of non-observable input comprised unlisted shares of DKK 6,935
(cont’d) million (31 December 2010: DKK 5,966 million), illiquid bonds of DKK 283 million (31 December 2010: DKK 1,157 million) and
derivatives with a net market value of DKK -696 million (31 December 2010: DKK -718 million).

The estimated fair value of illiquid bonds significantly depends on the estimated current credit spread. If the credit spread widens
50bp, fair value will decrease DKK 3 million. If the credit spread narrows 50bp, fair value will increase DKK 3 million. A substantial
number of derivatives valued on the basis of non-observable input are hedged by similar derivatives or are used for hedging the credit
risk on bonds also valued on the basis of non-observable input.

In the first nine months of 2011, the Group recognised unrealised value adjustments of unlisted shares and credit bonds valued on
the basis of non-observable input in the amount of DKK 382 million (31 December 2010: DKK 593 million). Holdings in Nets Holding
A/S accounted for DKK 291 million of the total amount.

Shares, bonds and derivatives valued on the basis of non-observable input Q1-Q3 2011 Full year 2010

Fair value at 1 January 15,513 13,901
Value adjustment through profit or loss 6,236 6,272
Value adjustment through other comprehensive income - -
Acquisitions 6,862 4,352
Sale and redemption -4,725 -8,402
Transferred from quoted prices and observable input 73 -
Transferred to quoted prices and observable input -955 -610

Fair value, end of period 23,004 15,513



(DKK millions)

Risk management
Annual Report 2010 and Risk Management 2010 provide a detailed description of the Danske Bank Group’s risk management practices. Both
publications are available at www.danskebank.com/ir. Risk Management 2010 is not covered by the statutory audit.

Breakdown of credit risk exposure Credit risk, Contracts,
Credit risk, Counterparty risk other trading and full risk assumed
30 September 2011 Total lending activities (derivatives) investing activities Insurance risk by customers

Balance sheet items:
Demand deposits with central banks 10,646 10,646 - - - -
central banks 81,036 81,036 - - - -
Repo loans with credit institutions and
central banks 64,264 64,264 - - - -
Trading portfolio assets 911,584 - 542,555 369,029 - -
Investment securities 108,465 - - 108,465 - -
Loans and advances at amortised cost 980,021 980,021 - - - -
Repo loans 155,196 155,196 - - - -
Loans at fair value 713,497 713,497 - - - -
Assets under pooled schemes and
unit-linked investment contracts 58,762 - - - - 58,762
Assets under insurance contracts 225,568 - - - 225,568 -
Off-balance-sheet items:
Guarantees 81,493 81,493 - - - -
Irrevocable loan commitments
shorter than 1 year 61,172 61,172 - - - -
longer than 1 year 99,012 99,012 - - - -
Other unutilised commitments 860 - - 860 - -

Total 3,551,576 2,246,337 542,555 478,354 225,568 58,762

31 December 2010

Balance sheet items:
Demand deposits with central banks 25,662 25,662 - - - -
central banks 89,619 89,619 - - - -
Repo loans with credit institutions and
central banks 138,481 138,481 - - - -
Trading portfolio assets 641,993 - 333,743 308,250 - -
Investment securities 118,556 - - 118,556 - -
Loans and advances at amortised cost 978,250 978,250 - - - -
Repo loans 168,481 168,481 - - - -
Loans at fair value 701,715 701,715 - - - -
Assets under pooled schemes and
unit-linked investment contracts 59,698 - - - - 59,698
Assets under insurance contracts 217,515 - - - 217,515 -
Off-balance-sheet items:
Guarantees 90,290 90,290 - - - -
shorter than 1 year 61,551 61,551 - - - -
longer than 1 year 109,407 109,407 - - - -
Other unutilised commitments 852 - - 852 - -

Total 3,402,070 2,363,456 333,743 427,658 217,515 59,698

In addition to credit exposure relating to lending activities, the Group has granted loan offers and revocable credit facilities in the amount of
DKK 426 billion (31 December 2010: DKK 396 billion). These items are included in the calculation of risk-weighted assets in accordance with the
Capital Requirements Directive.



(DKK millions)

Credit exposure relating to lending activities
The table named Credit exposure broken down by industry (GICS) shows the credit exposure of the Group’s core banking business by industry and
customer segment. The breakdown is based on the Global Industry Classification Standard (GICS) with the following additional categories: personal
customers, subsidised housing companies, and central and local governments.

Credit exposure broken down by industry (GICS)

Impaired

Personal Commercial Financial Past due but Not in
30 September 2011 customers customers customers Governments Total not impaired default In default

Central and local governments - - - 109,885 109,885 1 - -
Subsidised housing companies - 122,466 - - 122,466 41 1,226 1,796
Banks - - 140,316 - 140,316 - 160 2
Diversified financials - - 171,724 - 171,724 54 743 4,714
Other financials - - 51,955 - 51,955 12 3 195
Energy and utilities - 39,696 - - 39,696 17 49 29
Consumer discretionary and
consumer staples - 204,451 - - 204,451 847 7,300 3,272
Commercial property - 253,565 - - 253,565 904 11,912 9,029
Construction, engineering and
building products - 39,773 - - 39,773 101 1,414 1,937
Transportation and shipping - 68,734 - - 68,734 114 1,441 171
Other industrials - 77,954 - - 77,954 170 2,451 833
IT - 15,137 - - 15,137 18 136 37
Materials - 43,139 - - 43,139 44 409 557
Health care - 25,642 - - 25,642 39 50 35
Telecommunication services - 4,230 - - 4,230 - 2 5
Personal customers 877,670 - - - 877,670 5,228 5,400 8,315

Total 877,670 894,787 363,995 109,885 2,246,337 7,590 32,696 30,927

31 December 2010

Central and local governments - - - 162,200 162,200 6 - -
Subsidised housing companies - 114,980 - - 114,980 148 121 1,606
Banks - - 190,921 - 190,921 - - 6
Diversified financials - - 186,174 - 186,174 165 1,045 4,524
Other financials - - 64,359 - 64,359 12 - 627
Energy and utilities - 38,475 - - 38,475 14 59 30
Consumer discretionary and
consumer staples - 203,211 - - 203,211 1,061 6,910 2,365
Commercial property - 245,459 - - 245,459 1,368 12,697 9,775
Construction, engineering and
building products - 36,429 - - 36,429 185 1,856 1,974
Transportation and shipping - 73,223 - - 73,223 220 1,451 193
Other industrials - 83,319 - - 83,319 364 3,204 283
IT - 15,641 - - 15,641 83 90 72
Materials - 46,222 - - 46,222 271 2,139 627
Health care - 24,660 - - 24,660 67 43 40
Telecommunication services - 4,836 - - 4,836 1 - 8
Personal customers 873,347 - - - 873,347 5,523 4,387 7,816

Total 873,347 886,455 441,454 162,200 2,363,456 9,488 34,002 29,946



(DKK millions)

Credit exposure broken down by geographical area
The table shows the credit exposure of the Group’s core banking business by country and customer segment.

Impaired

Personal Commercial Financial Past due but Not in
30 September 2011 customers customers customers Governments Total not impaired default In default

Denmark 559,050 433,920 129,811 60,687 1,183,468 2,639 21,181 9,586
Finland 99,630 87,180 2,881 6,347 196,038 1,911 930 2,265
Sweden 81,871 151,705 19,192 6,974 259,742 345 657 1,097
Ireland 25,294 27,459 7,387 2,150 62,290 601 5,349 8,520
UK 19,264 32,880 71,633 21,847 145,624 340 946 2,527
Germany 564 12,058 15,983 381 28,986 24 48 217
Baltics 11,680 8,962 1,280 585 22,507 755 709 1,273
Other EU member states 2,715 10,836 61,957 172 75,680 7 113 99
Norway 73,645 102,592 9,182 9,512 194,931 949 2,501 830
Eastern Europe 75 1,516 1,269 65 2,925 - 2 1
Other European countries 1,027 2,835 6,872 1 10,735 7 145 198
North America 1,018 17,267 25,386 - 43,671 6 103 4,297
Central and South America 111 636 1,632 127 2,506 1 2 -
Africa 144 1,292 1,414 696 3,546 - 2 2
Asia 1,434 2,965 8,015 341 12,755 5 7 13
Oceania 148 684 101 - 933 - 1 2

Total 877,670 894,787 363,995 109,885 2,246,337 7,590 32,696 30,927

31 December 2010

Denmark 562,450 426,439 157,847 98,037 1,244,773 4,295 18,723 9,144
Finland 94,918 85,894 4,901 8,306 194,019 1,961 3,111 2,156
Sweden 80,287 146,236 55,907 17,899 300,329 320 972 1,185
Ireland 26,843 32,468 15,067 4,432 78,810 740 5,280 8,446
UK 19,010 33,915 87,510 16,749 157,184 369 1,876 2,505
Germany 511 12,560 2,490 385 15,946 9 534 23
Baltics 12,096 8,560 3,821 562 25,039 765 886 1,213
Other EU member states 2,727 12,894 56,213 297 72,131 30 238 186
Norway 70,805 104,254 10,089 8,223 193,371 968 2,158 849
Eastern Europe 61 1,225 969 70 2,325 - 1 3
Other European countries 1,027 2,254 4,487 - 7,768 13 - 371
North America 988 14,362 30,651 432 46,433 6 220 3,834
Central and South America 109 326 2,299 141 2,875 - - -
Africa 123 1,397 1,239 446 3,205 1 - 2
Asia 1,259 2,990 7,898 6,221 18,368 11 3 27
Oceania 133 681 66 - 880 - - 2

Total 873,347 886,455 441,454 162,200 2,363,456 9,488 34,002 29,946

Geographical segmentation is based on the customer’s country of residence rather than the location in which the individual transaction is re-
corded.

Credit exposure to government bonds issued by Ireland, Portugal, Italy, Greece and Spain amounted to DKK 2.2 billion at 30 September 2011
(31 December 2010: DKK 4.4 billion), with the exposure to government bonds issued by Greece accounting for DKK 0.0 billion (31 December
2010: DKK 0.0 billion).



(DKK millions)

Credit exposure broken down by rating category

30 September 2011 Upper Lower Personal Commercial Financial
Rating category PD PD customers customers customers Governments Total

1 0.00 0.01 6,625 2,569 10,964 65,732 85,890
2 0.01 0.03 77,065 10,094 59,925 21,504 168,588
3 0.03 0.06 121,602 103,787 120,400 5,254 351,043
4 0.06 0.14 170,650 151,639 42,234 4,117 368,640
5 0.14 0.31 178,094 171,683 39,442 3,368 392,587
6 0.31 0.63 118,974 167,082 59,277 4,220 349,553
7 0.63 1.90 108,066 133,408 15,328 4,158 260,960
8 1.90 7.98 66,180 76,017 7,571 1,162 150,930
9 7.98 25.70 16,699 34,417 3,037 370 54,523
10 25.70 99.99 5,400 26,390 906 - 32,696
11 100.00 100.00 8,315 17,701 4,911 - 30,927

Total 877,670 894,787 363,995 109,885 2,246,337

31 December 2010
Rating category

1 0.00 0.01 22,953 279 16,544 118,981 158,757
2 0.01 0.03 80,256 11,711 73,833 19,660 185,460
3 0.03 0.06 103,477 100,774 171,339 12,697 388,287
4 0.06 0.14 122,120 143,698 45,520 835 312,173
5 0.14 0.31 160,931 170,567 60,982 7,319 399,799
6 0.31 0.63 143,287 164,145 45,445 701 353,578
7 0.63 1.90 129,823 133,192 13,398 1,812 278,225
8 1.90 7.98 83,778 77,597 5,605 163 167,143
9 7.98 25.70 14,519 38,949 2,586 32 56,086
10 25.70 99.99 4,387 28,570 1,045 - 34,002
11 100.00 100.00 7,816 16,973 5,157 - 29,946

Total 873,347 886,455 441,454 162,200 2,363,456



(DKK millions)

Credit exposure relating to trading and investing activities
At 30 September 2011, the Group’s credit exposure relating to trading and investing activities was DKK 1,021 billion, with DKK 474 billion
deriving from bonds and DKK 543 billion deriving from derivatives with positive fair value.

Bond portfolio broken down by geographical area

Central and Quasi- Danish Swedish Other
local govern- government mortgage covered covered Short-dated Corporate
30 September 2011 ment bonds bonds bonds bonds bonds bonds (CP etc.) bonds Total

Denmark 43,343 - 196,207 - - 891 2,807 243,248
Finland 6,875 21 - - 400 440 689 8,425
Sweden 39,504 - - 51,494 - 3,120 4,106 98,224
Norway 7,811 - - - 3,503 1,864 3,503 16,681
Ireland 661 - - - 90 - 141 892
UK 15,690 33 - - 8,439 287 21 24,470
Germany 22,784 - - - 1 410 139 23,334
Spain 3,085 - - - 6,313 155 217 9,770
France 11,448 - - - 2,992 1,799 287 16,526
Italy 8,065 - - - - 214 - 8,279
Portugal 187 - - - - - - 187
Greece - - - - - - - -
North America 1,264 4,892 - - 233 2 599 6,990
Other 9,374 4,267 - - 558 394 2,367 16,960

Total 170,091 9,213 196,207 51,494 22,529 9,576 14,876 473,986

31 December 2010

Denmark 39,499 - 190,906 - - 608 2,605 233,618
Finland 5,015 1,235 - - 190 273 1,128 7,841
Sweden 17,561 - - 56,238 - 2,490 4,561 80,850
Norway 5,145 - - - 1,061 3,195 3,087 12,488
Ireland 2,372 - - - 90 112 212 2,786
UK 11,930 1 - - 8,319 113 570 20,933
Germany 22,666 877 - - 1 98 249 23,891
Spain 748 - - - 5,796 256 962 7,762
France 6,840 - - - 2,233 674 1,406 11,153
Italy 2,966 - - - - 215 30 3,211
Portugal 835 - - - 224 - - 1,059
Greece 11 - - - - - - 11
North America 2,035 4,800 - - 232 14 719 7,800
Other 5,476 1,086 - - 247 619 1,112 8,540

Total 123,099 7,999 190,906 56,238 18,393 8,667 16,641 421,943

Credit exposure to government bonds issued by Ireland, Portugal, Italy, Spain and Greece amounted to DKK 12.0 billion at 30 September 2011
(31 December 2010: DKK 6.0 billion). Excluding unsettled transactions in bonds issued by these countries and hedging transactions, the net ex-
posure was DKK 3.3 billion (31 December 2010: DKK 5.0 billion).

Derivatives with positive fair value 30 Sept. 2011 31 Dec. 2011

Interest rate contracts 398,185 240,682
Currency contracts 138,628 90,762
Other contracts 5,742 2,299

Derivatives with positive fair value, total 542,555 333,743
Netting (under capital adequacy rules) 436,270 259,112

Net current exposure 106,285 74,631



(DKK millions)

Impairment charges
Rating categories 10 and 11 include customers with exposures for which objective evidence of impairment exists and individual impairment
charges are made. Exposure to customers in the other rating categories is subject to collective impairment testing.

The allowance account consists of all impairment charges for loans and advances at amortised cost, loans at fair value, amounts due from
credit institutions and central banks, and irrevocable loan commitments and guarantees.

Allowance account broken down by segment and type of impairment

Allowance
Personal Commercial Financial account, Impairment charges
customers customers customers Governments total Individual Collective

1 January 2010 4,229 24,615 8,251 - 37,095 32,681 4,414
New impairment charges 4,955 13,523 2,673 7 21,158 18,984 2,174
Reversals of impairment charges from
previous periods 774 5,288 1,386 5 7,453 5,380 2,073
Write-offs debited to allowance account 1,260 4,556 2,153 - 7,969 7,969 -
Foreign currency translation 69 386 462 - 917 864 53
Other items -13 26 8 - 21 21 -

31 December 2010 7,206 28,706 7,855 2 43,769 39,201 4,568
New impairment charges 3,091 11,433 624 4 15,152 13,915 1,237
Reversals of impairment charges from
previous periods 1,304 3,418 713 - 5,435 4,291 1,144
Write-offs debited to allowance account 643 2,102 3,581 - 6,326 6,326 -
Foreign currency translation -18 -72 -57 - -147 -131 -16
Other items 86 90 -24 - 152 152 -

30 September 2011 8,418 34,637 4,104 6 47,165 42,520 4,645

Collective impairment charges include charges made upon the up- or downgrading of customers. If all customers were downgraded one rating
category with no corresponding interest rate change, collective impairment charges would increase by about DKK 4.4 billion (31 December 2010:
DKK 5.4 billion].

If the value of collateral provided by customers in rating categories 10 and 11 decreased 10%, individual impairment charges would increase by
about DKK 2.9 billion (31 December 2010: DKK 3.0 billion).

Allowance account broken down by balance sheet item
30 Sept. 31 Dec.
2011 2010

Due from credit institutions and central banks 94 87
Loans and advances at amortised cost 44,185 37,630
Loans at fair value 2,235 2,019
Other liabilities 651 4,033

Total 47,165 43,769

Loan impairment charges
Q1-Q3 Q1-Q3
2011 2010

New and increased impairment charges 15,152 16,295
Reversals of impairment charges 5,435 5,629
Write-offs charged directly to income statement 832 709
Received on claims previously written off 2,039 661
Interest income, effective interest method -114 121

Total 8,396 10,835

For the first nine months of 2011, Received on claims previously written off included a compensation of DKK 0.8 billion deriving from the
termination of a credit insurance contract covering potential losses on certain types of lending.



(DKK millions)

Allowance account and impairment charges broken down by industry
Credit exposure Allowance account Impairment charges

30 Sept. 31 Dec. 30 Sept. 31 Dec. Q1-Q3 Q1-Q3
2011 2010 2011 2010 2011 2010

Central and local governments 109,885 162,200 6 2 5 -
Subsidised housing companies 122,466 114,980 988 836 248 437
Banks 140,316 190,921 94 3,421 8 1,412
Diversified financials 171,724 186,174 3,893 4,310 -948 -481
Other financials 51,955 64,359 117 124 -4 71
Energy and utilities 39,696 38,475 69 23 37 -109
Consumer discretionary and consumer staples 204,451 203,211 7,658 6,702 1,561 1,321
Commercial property 253,565 245,459 16,118 11,931 4,952 3,502
Construction, engineering and building products 39,773 36,429 3,988 2,862 987 887
Transportation and shipping 68,734 73,223 1,324 1,366 112 219
Other industrials 77,954 83,319 2,407 2,395 508 290
IT 15,137 15,641 512 514 -36 166
Materials 43,139 46,222 1,393 1,894 -126 732
Health care 25,642 24,660 103 110 9 4
Telecommunication services 4,230 4,836 77 73 3 -5
Personal customers 877,670 873,347 8,418 7,206 1,080 2,389

Total 2,246,337 2,363,456 47,165 43,769 8,396 10,835

Allowance account and impairment charges broken down by geographical area
Credit exposure Allowance account Impairment charges

30 Sept. 31 Dec. 30 Sept. 31 Dec. Q1-Q3 Q1-Q3
2011 2010 2011 2010 2011 2010

Denmark 1,183,468 1,244,773 17,654 19,133 2,491 6,339
Finland 196,038 194,019 2,290 2,653 242 369
Sweden 259,742 300,329 1,144 1,264 35 70
Ireland 62,290 78,810 14,116 9,586 4,698 3,790
UK 145,624 157,184 5,005 3,685 1,629 919
Germany 28,986 15,946 128 134 -6 30
Baltics 22,507 25,039 2,507 2,881 -161 141
Other EU member states 75,680 72,131 164 292 -46 46
Norway 194,931 193,371 1,804 1,530 286 30
Eastern Europe 2,925 2,325 5 2 3 -1
Other European countries 10,735 7,768 148 156 -3 -6
North America 43,671 46,433 2,107 2,370 -777 -886
Central and South America 2,506 2,875 2 2 1 -8
Africa 3,546 3,205 10 9 1 -
Asia 12,755 18,368 75 66 3 -1
Oceania 933 880 6 6 - 3

Total 2,246,337 2,363,456 47,165 43,769 8,396 10,835


Statement by the management
The Board of Directors and the Executive Board (the management) have considered and approved Interim Report –
First Nine Months 2011 of the Danske Bank Group.

The interim financial statements for the first nine months of 2011 have been prepared in accordance with IAS 34,
Interim Financial Reporting, as adopted by the EU. Furthermore, the interim report has been prepared in accordance
with Danish disclosure requirements for interim reports of listed financial institutions.

In our opinion, the interim financial statements give a true and fair view of the Group’s assets, liabilities, sharehold-
ers’ equity and financial position at 30 September 2011 and of the results of the Group’s operations and the consoli-
dated cash flows for the period starting on 1 January 2011 and ending on 30 September 2011. Moreover, in our opi-
nion, the management’s report includes a fair review of developments in the Group’s operations and financial posi-
tion and describes the significant risks and uncertainty factors that may affect the Group.

Copenhagen, 1 November 2011

Executive Board

Peter Straarup
Chairman

Tonny Thierry Andersen Thomas F. Borgen Henrik Ramlau-Hansen
Member of the Member of the Member of the
Executive Board Executive Board Executive Board

Georg Schubiger Per Skovhus
Member of the Member of the
Executive Board Executive Board

Board of Directors

Eivind Kolding Ole Gjessø Andersen Niels B. Christiansen
Chairman Vice Chairman

Michael Fairey Peter Højland Mats Jansson

Majken Schultz Claus Vastrup Susanne Arboe

Helle Brøndum Carsten Eilertsen Charlotte Hoffmann

Per Alling Toubro


Auditors’ review reports

Internal Audit’s review report

We have reviewed the interim financial statements of the Danske Bank Group for the period starting on 1 January
2011 and ending on 30 September 2011 (pages 24-46).

Scope of review
A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. The scope of a review is substantially
less than the scope of an audit and therefore provides less assurance that we will become aware of all significant
matters that might be identified in an audit. We have not conducted an audit, and, accordingly, we express no audit
opinion.

Opinion
Based on our review, nothing has come to our attention that causes us to believe that the interim financial state-
ments have not been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU, and
Danish disclosure requirements for interim reports of listed financial institutions.

Copenhagen, 1 November 2011

Jens Peter Thomassen
Group Chief Auditor


Independent auditors’ review report

To the shareholders of Danske Bank A/S

We have reviewed the interim financial statements of the Danske Bank Group for the period starting on 1 January
2011 and ending on 30 September 2011, which comprise the income statement, statement of comprehensive in-
come, balance sheet, statement of capital, cash flow statement and notes. The interim financial statements have been
prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU, and Danish disclosure re-
quirements for listed financial institutions.

Management is responsible for the preparation and presentation of the interim financial statements. Our responsibil-
ity is to express a conclusion on the interim financial statements based on our review.

Scope of review
We conducted our review in accordance with the Danish Standard on Auditing RS 2410, Review of Interim Finan-
cial Information Performed by the Independent Auditor. A review of interim financial statements consists of making
inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other
review procedures. The scope of a review is substantially less than the scope of an audit conducted in accordance
with Danish Standards on Auditing and therefore provides less assurance that we will become aware of all signifi-
cant matters that might be identified in an audit. We have not conducted an audit, and, accordingly, we express no
audit opinion.

Opinion
Based on our review, nothing has come to our attention that causes us to believe that the interim financial state-
ments have not been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU, and
Danish disclosure requirements for listed financial institutions.

Copenhagen, 1 November 2011 Copenhagen, 1 November 2011

KPMG PricewaterhouseCoopers Danmark
Statsautoriseret Revisionspartnerselskab Statsautoriseret Revisionsaktieselskab

Lars Rhod Søndergaard Mona Blønd Ole Fabricius Christian F. Jakobsen
State Authorised Public Accountants State Authorised Public Accountants


Supplementary information

Conference call
Danske Bank will hold a conference call on 1 November 2011 at 2.30pm CET upon the presentation of its in-
terim report for the first nine months of 2011. The conference call will be webcast live at www.danskebank.com.

Financial calendar

9 February 2012 Annual Report 2011
27 March 2012 Annual general meeting
10 May 2012 Interim Report – First Quarter 2012
7 August 2012 Interim Report – First Half 2012
30 October 2012 Interim Report – First Nine Months 2012
7 February 2013 Annual Report 2012
7 May 2013 Interim Report – First Quarter 2013

Contacts

Peter Straarup,
Chairman of the Executive Board +45 45 14 60 01

Henrik Ramlau-Hansen,
Member of the Executive Board +45 45 14 06 66

Martin Gottlob,
Head of Investor Relations +45 45 14 07 92

Useful links

The Danske Bank Group www.danskebank.com
Retail Banking Denmark www.danskebank.dk
Retail Banking Finland www.sampobank.com
Retail Banking Sweden www.danskebank.se
Retail Banking Norway www.fokus.no
Banking Activities Northern Ireland www.northernbank.co.uk
Banking Activities Ireland www.nationalirishbank.ie
Realkredit Danmark www.rd.dk
Danske Capital www.danskecapital.com
Danica Pension www.danicapension.dk

The Group’s financial statements are available online at www.danskebank.com/reports.


Danske bank 3 t 2011

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