Alm. Brand — M&A Activity 2018

Feb 5, 2018

As part of Alm. Brand’s strategic growth ambition, Alm. Brand Bank A/S acquires
the majority of Saxo Privatbank A/S’s activities. The acquisition will increase
Alm. Brand Bank’s business volume by about 50%. Alm. Brand Bank expects to
significantly improve its earnings once the integration with its current
activities has been completed.

• We are extremely pleased to get this opportunity to acquire a
  healthy and well-run business such as Saxo Privatbank. The acquisition aligns
  perfectly with the Alm. Brand Group’s growth strategy and the ambition to help
  as many customers as possible across the full spectrum of their financial
  needs, said Søren Boe Mortensen, CEO of Alm. Brand A/S. He continued:

• Our new customers transferring from Saxo Privatbank will experience
  becoming customers of a bank with an unfaltering focus on conventional banking
  with a high level of service, on private banking and on Asset Management
  activities. They will also experience getting a number of additional benefits
  from the combination with a bank that forms part of a major financial services
  group.

• The business combination will significantly grow Alm. Brand Bank,
  providing scope for a number of synergies both in the bank and across the
  group’s business areas and staff functions. This will significantly improve the
  bank’s earnings, said Søren Boe Mortensen. He concluded:

• Moreover, we will be entering a partnership with Saxo Bank A/S
  concerning Saxo TraderGO, which will provide our customers with access to a
  professional and unique trading platform.

Transaction highlights

· The acquisition price is DKK 360 million, corresponding to the book
value of the acquired assets and liabilities.

· The acquisition is financed with equity from the Alm. Brand Group.

· Customer relationships taken over are assessed to represent a value
of DKK 150-200 million, which amount will be capitalised and written down over
a number of years.

· Implementation costs are expected to amount to about DKK 200 million,
relating primarily to the transition to a common data centre including system
development.

· Annual synergies in the order of DKK 75 million are expected to
materialise from 2019.

· The acquisition is expected to be completed on 1 April 2018, subject
to approval by the Danish Financial Supervisory Authority and the Danish
Competition and Consumer Authority.

· The seller of the activities is Saxo Privatbank A/S, a wholly-owned
subsidiary of Saxo Bank A/S.

Saxo Privatbank A/S today has a healthy customer portfolio with good credit
quality which is similar to Alm. Brand Bank’s existing customer base. The bank
engages in classic banking activities, including deposits and lending.
Moreover, the bank specialises in serving and advising high net worth
individuals within private banking and wealth management. Saxo Privatbank also
has a unique trading platform.

The acquisition will significantly increase Alm. Brand Bank’s business volume.
Saxo Privatbank’s 17,500 customers, composed of 15,000 private customers and
2,500 small and medium-sized businesses, will be transferred to Alm. Brand
Bank, which today serves approximately 50,000 customers across Denmark.

The activities acquired comprise total loans and advances of DKK 1.8 billion,
total loans under Totalkredit facilities of DKK 5.2 billion and deposits of DKK
3.2 billion. The acquisition further comprises assets under management and
custody accounts of DKK 20 billion.

Accordingly, the acquisition will increase Alm. Brand Bank’s total lending to
private customers to DKK 3.7 billion in private loans and advances and DKK 13.9
billion in loans under Totalkredit facilities, while lending to commercial
customers will increase to DKK 0.8 billion in aggregate. Alm. Brand Bank’s
assets under management and custody account balances will total DKK 60 billion
following the acquisition.

The customer portfolio and activities are acquired with ancillary obligations.
Moreover, properties and other investment assets, including seven branches and
two administrative offices, are taken over. Finally, the acquisition comprises
the bank’s service and advisory set-up, including 110 employees.

In connection with the acquisition, Alm. Brand will also enter into a strategic
partnership with Saxo Bank A/S consisting of a white label solution with Saxo
Bank’s trading platform.

Strategic rationale – growth and synergies

Alm. Brand Bank will be taking over a well-run bank with an attractive customer
portfolio, thereby significantly strengthening its market position. At the same
time, Alm. Brand Bank sees a strong potential in serving existing and
prospective investment customers on a unique trading platform, which will
significantly strengthen Alm. Brand Bank’s private banking concept.

The Alm. Brand Group expects to achieve substantial synergies from the
acquisition. Like Alm. Brand Bank, Saxo Privatbank A/S has a healthy customer
base and needs critical mass in order to improve its operating performance. The
synergies include, among other things, lower costs as a result of shared
administration, a common future data centre and other group synergies across
the Alm. Brand Group’s business areas and staff functions.

Alm. Brand Bank already has a broad presence throughout Denmark. The group
expects to combine the employees in one single branch in the cities where both
banks have a presence.

The total synergies and hence contributions from the acquired activities are
expected to amount to some DKK 75 million annually. These synergies will
materialise from 2019 onwards. In addition, synergies are expected to
materialise longer term in the form of up-selling across the group’s other
business areas – insurance and pension.

Expected time line for closing of the transaction

The acquisition of the activities of Saxo Privatbank A/S was made on 5 February
2018 with expected takeover on 1 April 2018. The acquisition is subject to
approval by the Danish Financial Supervisory Authority and the Danish
Competition and Consumer Authority.

Contact

Please direct any questions regarding this announcement to:

Søren Boe Mortensen, CEO, tel. +45 35 47 79 07, Kim Bai Wadstrøm, Director of
Alm. Brand Bank, tel. +45 35 47 79 07, or Susanne Biltoft, Communications
Director, tel. +45 35 47 76 61.

Advisers

Bruun Hjejle acted as legal advisers in connection with the acquisition.

About Saxo Privatbank A/S

Financial information on the acquired activities of Saxo Privatbank A/S

                              2017             2016

---

Net interest and fee income DKK193 million DKK207 million

Costs DKK-175 million DKK-197 million

Writedowns DKK2 million DKK-72million

Operating profit DKK20 million DKK-62 million

For additional information on Saxo Privatbank, see the company’s website,
https://www.privatbank.saxo/bank/

About Alm. Brand

For additional information about the Alm Brand Group and Alm. Brand Bank, see
the group’s website, almbrand.dk