Spar Nord Bank

Earnings Release • Aug 24, 2016

Satisfactory pre-tax profits of DKK 469 million:
Net profit of DKK 383 million yields an annualized 10% return on equity

• Core income for H1 totalled DKK 1,551 million, which is 19% down on H1 2015 –
if adjusted for the one-off impact of the sale of Spar Nord’s shareholding in
Nørresundby Bank at year-start 2015, this represented a 9% drop.

• Net interest income dropped 9% on H1 2015 – the lending volume grew 3% since
the same time last year, but during the past 12 months the interest margin has
dropped some 40 basis points.

• Net income from fees, charges and commissions amounted to DKK 518 million in
H1, equal to a 9% drop on last year’s exceptionally good H1.

• Market-value adjustments and dividends aggregated DKK 187 million, down 8%
compared with H1 last year if figures are adjusted for the sale of the
shareholding in Nørresundby Bank.

• In aggregate, costs and expenses totalled DKK 948 million, which is a 2%
decrease compared with H1 2015 – payroll costs grew 2%, while other operating
expenses fell by 8%.

• The period’s total core earnings before impairment added up to DKK 603
million, which, viewed against the announced full-year forecast of DKK 1.1
billion, are thus satisfactory.

• Impairment of the Group’s loans totalled DKK 133 million, corresponding to an
impairment ratio of 0.52% p.a. – the impact on agricultural exposures amounted
to DKK 132 million, equal to 99% of the combined profit impact.

Q2: TOP-LINE GROWTH, SUCCESSFUL IT MIGRATION AND CHALLENGES FOR DAIRY PRODUCERS

• Core income was 11% up compared with Q1: Net interest income increased 5%
while net income from fees, charges and commissions grew 7% as both activity
levels and prices improved satisfactorily, while market-value adjustments and
dividends swelled 59%, driven by a variety of positive factors.

• The IT migration from SDC to BEC was successfully completed at the beginning
of May after a highly satisfactory process – the previously announced benefits
by way of cost savings and stronger development momentum are still expected to
be realized.

• The Group’s total costs and expenses hovered around the same level as in Q1
after a decline in operating expenses while payroll costs increased as a result
of the recent IT migration.

• Loan impairment rose from DKK 54 million to DKK 79 million driven by
increased impairment of dairy producer exposures.

FORECAST AND STRATEGY

• In light of developments in H1, Spar Nord Bank maintains its full-year
forecast for core earnings before impairment of around DKK 1.1 billion, while
loan impairment losses are now expected to be slightly lower than in 2015.

• In conjunction with the Q1-Q3 quarterly report this year Spar Nord expects to
publish a new strategy plan containing targets for the coming years.

Contact: Ole Madsen, Senior Vice President, Communication & Business
Development, tel.: +45 9634 4010