Financial results year end 2007

Financial results year ended 2007

31st January, 2008

Profit up 25% to Ł91m before one-offs and costs associated with the migration to Danske Bank’s banking platform
Total income up 8% year on year to Ł225m
Net interest income up 9% to Ł169m
Total commercial lending up 23%
Commercial deposit growth up 8%
Operating expenses fell 1% to Ł131m excluding migration expenses
Credit losses remained modest at Ł3m
Overall net profit before tax including costs associated with migration is Ł26m compared to a loss of Ł9m in 2006

BANKING ACTIVITIES NORTHERN IRELAND (Łm)	2007	2006	Index 07/06
Net interest income	169	155	109
Net fee income	45	44	102
Net trading income	10	8	125
Other income	1	2	50
Total income	225	209	108
Amortisation of intangible assests	39	42	93
Integration expenses	26	40	65
Other operating expenses	131	132	99
Operating expenses	196	214	92
Profit before credit loss expenses	29	-5	-
Credit loss expenses	3	4	75
Profit before tax	26	-9	-
Loans and advances, end of period	5,795	5,263	110
Deposits, end of period	5,548	5,491	101
Risk-weighted items (avg)	4,117	3,516	117
Allocated capital (avg)	226	229	99
Profit before credit loss expenses as % p.a of allocated capital	12.8	-2.2	-
Pre-tax profit as % p.a of allocated capital (ROE)	11.5	-3.9	-
Cost/income ratio %	87.1	102.4	-
Cost/income ratio,excl total integration expenses %	58.2	63.2	-

Northern Bank has reported a Ł91m pre-tax profit excluding costs associated with the migration to Danske Bank’s banking platform. Total income rose by 8% to Ł225m which reflects good growth in lending and deposits. Operating expenses fell by 1% primarily as a result of realised cost synergies.

Growth in business volume and higher interest rates resulted in a 9% increase in net interest income. Total commercial lending increased by 23% with total deposits rising by 8%.

The relatively modest credit loss expenses reflect the consistently high credit quality of the loan portfolio.

Commenting on the results Northern Bank’s Chief Executive Don Price said: “2007 was a year of sustained growth and marked an important stage in the transformation of Northern Bank under Danske Bank. The synergies from the successful integration together with good economic growth formed the basis for a good return.

“Throughout the year our competitive packages for both business and per-sonal customers have been well received, with new personal packages accounting for a quarter of all current accounts. We introduced a new package developed for teenagers, Northern Discovery, and were first of the local banks to introduce a new Base Rate Tracker Mortgage which allows customers to benefit from the equity in their home by paying a lower interest rate.

“Corporate lending remains very strong. Our Cash Management and business e-banking systems were developed solely to meet business’ needs and are really adding value to them.

“Our flagship city centre branch opened in the Donegall Square West Headquarters and in November we opened a branch in London in the Dan-ske Bank Group’s existing offices. The Group has transferred responsibility for the corporate customer activities of Danske Bank London Branch to Northern Bank, which serves both corporate and retail customers. The opening of this branch reflects the Group’s wish to benefit from our product range and position within the UK banking sector.

“Having taken advantage of the benefits of synergies and the investment in technology, we are well placed to realise our ambitions for continued strength and growth in 2008.”

-ENDS-

The full Danske Bank Group Annual Report 2007 is available at www.danskebank.com.
Northern Bank is a subsidiary of Danske Bank.
The results relate to the Banking Activities of Northern Bank which serves both Retail and Corporate customers. Banking Activities Northern Ireland has four regions with 94 branches and around 1,300 employees.
Danske Bank Group is the largest bank in Denmark and one of Europe's leading financial institutions.
Danske Bank Group currently has ratings of AA1 long term and P-1 short term (Mood's(; AA- long term and A-1+ short term (Standards & Poor's); and AA- long term F1+ short term (Fitch).
Based on Danske Bank's powerful technology platform, Northern Bank offers a leading edge product and service proposition for Personal, Business and Corporate customers.