Sydbank — Interim / Quarterly Report 2012

Aug 22, 2012

Interim Report $\overline{\phantom{0}}$ First Half 2012

Company Announcement No 14/2012 22 August 2012

Contents

Financial Review
Group Financial Highlights	3
Summary	$\overline{4}$
Financial Review	6
Financial statements
Income Statement	13
Statement of Comprehensive Income	13
Balance Sheet	14
Holdings in Subsidiaries and Associates etc	15
Group Financial Highlights - Quarterly	16
Group Financial Highlights - Half-yearly	17
Capital - Sydbank Group	18
Cash Flow Statement - Sydbank Group	20
Segment Statements - Sydbank Group	21
Notes	22
Statement
Management Statement	31

Supplementary Information 32

Group Financial Highlights

	1H	1H	Index	Q 2		Q2 Full year
	2012	2011	12/11	2012	2011	2011
Income statement (DKKm)
Core income	2,141	1,988	108	1,070	981	4,080
Trading income	168	134	125	59	43	167
Total income	2,309	2,122	109	1,129	1,024	4,247
Costs, core earnings	1,302	1,303	100	652	653	2,463
Core earnings before impairment	1,007	819	123	477	371	1,784
Impairment of loans and advances etc	975	490	199	678	240	1,195
Core earnings	32	329	10	(201)	131	589
Profit/(Loss) on investment portfolios	126	13	969	5	(62)	(15)
Profit/(Loss) before non-recurring items	158	342	46	(196)	69	574
Non-recurring items, net	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	(171)
Profit/(Loss) before contributions to industry solutions via the Deposit Guarantee Fund	158	342	46	(196)	69	403
Contributions to industry solutions via the Deposit Guarantee Fund	5	161	3	(9)	63	102
Profit/(Loss) before tax	153	181	85	(187)	$6\phantom{1}6$	301
Tax	38	45	84	(47)	$\mathbf 1$	113
Profit/(Loss) for the period	115	136	85	(140)	5	188
Balance sheet highlights (DKKbn)
Loans and advances at amortised cost	66.7	71.9	93	66.7	71.9	68.8
Loans and advances at fair value	5.9	12.0	49	5.9	12.0	7.7
Deposits and other debt	65.4	67.4	97	65.4	67.4	66.7
Bonds issued at amortised cost	8.8	7.5	117	8.8	7.5	7.5
Subordinated capital	1.4 9.7	2.3 9.5	61 102	1.4 9.7	2.3 9.5	2.1 9.6
Shareholders' equity Total assets	158.3	145.7	109	158.3	145.7	153.4
Financial ratios per share (DKK per share of DKK 10)
EPS Basic **	1.6	1.9		(1.9)	0.1	2.6
EPS Diluted **	1.6	1.9		(1.9)	0.1	2.6
Share price at end of period	95.0	114.8		95.0	114.8	90.1
Book value	132.6 0.72	128.6 0.89		132.6 0.72	128.6 0.89	131.1
Share price/book value Average number of shares outstanding (in millions)	73.2	73.5		73.1	73.4	0.69 73.2
Dividend per share
Other financial ratios and key figures
Solvency ratio	14.6	15.1		14.6	15.1	16.1
Core capital ratio	14.6	14.1		14.6	14.1	15.2
Pre-tax profit/(loss) as % of average shareholders' equity **	1.6	1.9		(1.9)	0.1	3.1
Post-tax profit/(loss) as % of average shareholders' equity **	1.2 56.4	1.4 61.4		(1.4) 57.8	0.1 63.8	2.0 58.0
Costs (core earnings) as % of total income Interest rate risk	0.3	0.9		0.3	0.9	0.9
Foreign exchange position	4.2	2.7		4.2	2.7	1.6
Foreign exchange risk	0.1	0.0		0.1	0.0	0.1
Loans and advances relative to deposits *	0.9	1.0		0.9	1.0	0.9
Loans and advances relative to shareholders' equity *	6.9	7.5		6.9	7.5	7.2
Growth in loans and advances for the period *	(3.1)	(1.5)		(1.5)	0.6	(5.7)
Excess cover relative to statutory liquidity requirements	151.8	99.5		151.8	99.5	148.7
Total large exposures	42.8	34.6		42.8	34.6	26.3
Accumulated impairment ratio excl PCA	3.1	2.0		3.1	2.0	2.3
Impairment ratio for the period excl PCA **	1.15	0.57		0.80	0.28	1.50
Number of full-time staff at end of period	2,128	2,274	94	2,128	2,274	2,152

Financial ratios are prepared according to "Recommendations & Financial Ratios 2010" published by the Danish Society of Financial Analysts.

* Financial ratios are calculated on the basis of loans and advances at amortised cost.
* Cuarterly ratios and half-year ratios have not been converted to a full-year basis.

Summary

The Sydbank Group has posted a pre-tax profit of DKK 153m. The result is considered acceptable given the new tightened impairment rules and weak growth in the economy. As a consequence of the stricter impairment rules profit before tax is below the expectations at the beginning of the year. Profit before tax equals a return of 3.2% p.a. on average shareholders' equity.

• 8% rise in core income $\bullet$
• 25% rise in trading income $\bullet$
• Unchanged costs (core earnings) $\bullet$
• Increase in impairment charges for loans and advances of DKK 485m to DKK 975m $\bullet$
• $\bullet$ Investment portfolio earnings of DKK 126m
• 7% reduction in bank loans and advances to DKK 66.7bn $\bullet$
• 3% decline in deposits to DKK 65.4bn $\bullet$
• Core capital ratio of 14.6%

Income statement $-1H$ (DKKm)	2012	2011
Core income	2,141	1,988
Trading income	168	134
Total income	2,309	2,122
Costs, core earnings	1,302	1,303
Core earnings before impairment	1,007	819
Impairment of loans and advances etc	975	490
Core earnings	32	329
Profit on investment portfolios	126	13
Profit before contributions to industry solutions via the Deposit Guarantee Fund	158	342
Contributions to industry solutions via the Deposit Guarantee Fund	5	161
Profit before tax	153	181
Tax	38	45
Profit for the period	115	136

In the first half of 2012 the Bank's decentralised organisation was restructured. The former 18 regions have been transformed into 10 larger regions supplemented by an agricultural centre. The restructuring creates an even better basis for providing clients with competent advisory services according to their requirements.

In June Sydbank was the first nationwide bank to introduce the option of buying EUR at ATMs. In Q3 2012 the office hours of the customer service by phone will be extended.

Core income has improved by 8% from 1H 2011 to 1H 2012, mainly as a result of increased profit margins.

Since 2008 the Bank's costs have been unchanged. This development has been maintained in 1H 2012. Compared with 1H 2011 the staff has been reduced by 146 (full-time equivalent), a decline of 6.4%. Coupled with the positive development in the number of clients, this is a reflection of growing productivity.

Core earnings before impairment charges represent DKK 1,007m against DKK 819m for the first six months of 2011. The increase of DKK 188m consists of a rise in core income of DKK 153m, an increase in trading income of DKK 34m and a decrease in costs (core earnings) of DKK 1m.

Core earnings before impairment charges are in line with our forecasts announced in the Interim Report -Q1 2012.

Impairment charges for loans and advances etc represent DKK 975m (1H 2011: DKK 490m), which is strongly influenced by the new tightened impairment rules. There is an ongoing effort to improve credit quality. In the first six months losses of DKK 234m were recorded. This is a decline of DKK 353m compared with 1H 2011.

Investment portfolio earnings constitute DKK 126m and the subsequent adjustment of contributions to industry solutions via the Deposit Guarantee Fund amounts to DKK 5m. Less a calculated tax charge of DKK 38m, profit for the period stands at DKK 115m.

Profit for the period equals a return on average shareholders' equity of 2.4% p.a. against 2.8% p.a. in 2011. Earnings per share stands at DKK 1.6 compared with DKK 1.9 in 2011.

Since year-end 2011, risk-weighted assets have increased by DKK 3.0bn to DKK 73.7bn.

The Group's core capital ratio and solvency ratio each represent 14.6% compared with 15.2% and 16.1%. respectively, at end-2011. The core capital ratio excluding hybrid core capital stands at 13.0% (31 Dec 2011: 13.4%). The reduction in the solvency ratio is ascribable to the prepayment of supplementary capital.

At 30 June 2012 the individual solvency need represented 9.6% compared with 9.4% at end-2011.

The Group's liquidity measured under the 10% statutory requirement constitutes 25.2% at 30 June 2012.

As a consequence of the new more stringent impairment rules issued by the Danish FSA impairment charges are projected to stand at around DKK 1.4bn in 2012 given the current economic prospects.

In 2013 impairment charges are projected to represent around 1% of bank loans and advances and quarantees. At the end of 1H 2012 total impairment charges amount to DKK 2.643bn, equivalent to to 3.1% of loans and advances and guarantees. 67% of total credit facilities have been granted to clients in rating categories 1-3.

Financial Review

Core income

Core income has risen by 8% to DKK 2,141m.

Core income - 1H (DKKm)	2012	2011
Interest margins etc	1,411	1,333
Mortgage credit	135	87
Payment services	86	75
Remortgaging and loan fees	61	41
Commission and brokerage	158	180
Commission etc investment funds and pooled pension plans	145	122
Asset management	76	78
Custody account fees	35	37
Other income	34	35
Total	2,141	1,988

Despite a 7% decline in bank loans and advances and a 3% decrease in deposits compared with 2011, net interest has gone up by DKK 78m due to the positive effects of the increases in interest margins since August 2011.

Net income from the cooperation with Totalkredit represents DKK 102m (2011: DKK 69m) after a set-off of loss of DKK 10m (2011; DKK 11m). The cooperation with DLR Kredit has generated an income of DKK 30m (2011: DKK 15m). Total mortgage credit income amounts to DKK 135m (2011: DKK 87m). Compared with 2011 remortgaging and loan fees have risen by DKK 20m and total DKK 61m.

The rise in mortgage credit income as well as income from remortgaging and loan fees is ascribable to growing remortgaging activity and increased pricing in 1H 2012.

Due to the uncertain markets the volume of clients' currency and securities trading has gone down since 1H 2011. Commission and brokerage income amounts to DKK 158m and has declined by DKK 22m compared with 2011.

Commission etc concerning investment funds and pooled pension plans totals DKK 145m, equal to a rise of DKK 23m compared with 2011. This development can be ascribed to an influx of new private banking clients as well as growing demand for Sydbank's pooled pension plan products.

The remaining income components have increased by a total of 3% compared with 2011.

Trading income

Trading income has grown by 25% - from DKK 134m in 2011 to DKK 168m in 2012. This favourable trend is primarily caused by increased activity and trading in the institutional market for Danish bonds generated in part by the rising remortgaging activity mentioned above.

Costs and depreciation

The Group's total costs and depreciation recorded DKK 1,310m, equal to a reduction of DKK 154m compared with 1H 2011. The decline is solely ascribable to a decrease in non-recurring charges relating to the Deposit Guarantee Fund.

Costs and depreciation - 1H (DKKm)	2012	2011
Staff costs	726	769
Other administrative expenses	498	500
Depreciation and impairment of property, plant and equipment	47	38
Other operating expenses	39	157
Total costs and depreciation	1,310	1.464
Distributed as follows:
Costs, core earnings	1.302	1.303
Costs, investment portfolio earnings	3	5
Non-recurring costs, industry solutions via the Deposit Guarantee Fund	5	156

Costs (core earnings) represent DKK 1,302m (1H 2011: DKK 1,303m). The cost to the credit institution department of the Guarantee Fund for Depositors and Investors constitutes DKK 34m net in 1H 2012 (1H 2011: DKK 0), equivalent to an annual expense of DKK 68m. For 2012 DKK 25m has been set off, which corresponds to the Group's existing share of the capital of the credit institution department.

At end-1H 2012 the Group's staff numbered 2,128 (full-time equivalent) compared with 2,274 at 30 June 2011.

Core earnings before impairment of loans and advances

Core earnings before impairment of loans and advances represent DKK 1,007m - an increase of DKK 188m or 23% compared with one year ago.

Impairment of loans and advances etc

Impairment charges for loans and advances constitute DKK 975m (2011: DKK 490m). The increase is a consequence of the Danish FSA's new tightened impairment rules, especially as regards loans secured on real property. The rules are more cautious than the previous rules.

In 1H 2012 losses of DKK 234m were recorded (1H 2011: DKK 587m).

The impairment ratio for the period represents 1.38% relative to bank loans and advances at 30 June 2012 and 1.24% relative to bank loans and advances and guarantees. Accumulated impairment and provisions amount to DKK 2,643m as of end-June 2012, a rise of DKK 807m compared with the beginning of the year.

Compared with 30 June 2011 impaired bank loans and advances before impairment charges have risen by DKK 1,546m to DKK 4,350m. DKK 1,243m of the increase is attributable to non-defaulted bank loans and advances and DKK 303m is ascribable to defaulted loans and advances. Individually impaired bank loans and advances after impairment charges rose by DKK 621m during the same period. Impairment charges for individually impaired bank loans and advances represent 55.9% (end-June 2011: 53.8% and year-end 2011: 52.3%).

Individually impaired bank loans and advances (DKKm)	30 Jun 2012	30 Jun 2011
Non-defaulted bank loans and advances	2,927	1,684
Defaulted bank loans and advances	1.423	1,120
Impaired bank loans and advances	4,350	2.804
Impairment charges for bank loans and advances subject to individual impairment	2,434	1,509
Impaired bank loans and advances after impairment charges	1.916	1,295
Impaired bank loans and advances as % of bank loans and advances before impairment charges	6.3	3.8
Impairment charges as % of bank loans and advances before impairment charges	3.5	2.1
Impaired as % of impaired bank loans and advances	55.9	53.8

Core earnings

Core earnings represent DKK 32m compared with DKK 329m in 2011.

Investment portfolio earnings

Less funding charges and less related costs of DKK 3m, investment portfolio earnings constitute DKK 126m (2011: DKK 13m).

Contributions to industry solutions via the Deposit Guarantee Fund

In 1H 2012 a negative readiustment of DKK 5m was made concerning the industry solution in relation to Fjordbank Mors. Contributions totalled DKK 161m during the same period in 2011.

Profit for the period

Pre-tax profit represents DKK 153m. Less a calculated tax charge of DKK 38m, profit for the period stands at DKK 115m compared with DKK 136m in 2011.

Return

Profit for the period equals a return on average shareholders' equity of 2.4% p.a. against 2.8% p.a. in 2011. Earnings per share stands at DKK 1.6 compared with DKK 1.9 in 2011.

Q₂ 2012

Pre-tax loss for the quarter represents DKK 187m. Compared with Q1 2012 the pre-tax loss shows:

• An unchanged core income level $\bullet$
• A decrease in trading income of DKK 50m $\bullet$
• Unchanged costs (core earnings) $\bullet$
• $\bullet$ An increase in impairment charges for loans and advances of DKK 381m as a result of stricter rules
• Investment portfolio earnings of DKK 5m (Q1 2012: DKK 121m)
• Positive adjustment of DKK 9m in relation to the industry solution as regards Fjordbank Mors (Q1 2012: negative adjustment of DKK 14m)

The loss after tax amounts to DKK 140m.

Profit/(Loss) for the period (DKKm)	2012			2011
	Q 2	Q1	Q4	Q3	Q 2	Q1
Core income	1,070	1,071	1,060	1,032	981	1,007
Trading income	59	109	49	(16)	43	91
Total income	1,129	1,180	1,109	1,016	1,024	1,098
Costs, core earnings	652	650	573	587	653	650
Core earnings before impairment	477	530	536	429	371	448
Impairment of loans and advances etc	678	297	460	245	240	250
Core earnings	(201)	233	76	184	131	198
Profit/(Loss) on investment portfolios	5	121	10	(38)	(62)	75
Profit/(Loss) before non-recurring items	(196)	354	86	146	69	273
Non-recurring items, net			(25)	(146)
Profit/(Loss) before contributions to industry solutions via the Deposit Guarantee Fund	(196)	354	61	0	69	273
Contributions to industry solutions via the Deposit Guarantee Fund	(9)	14	(34)	(25)	63	98
Profit/(Loss) before tax	(187)	340	95	25	6	175
Tax	(47)	85	43	25		44
Profit/(Loss) for the period	(140)	255	52	0	5	131

Subsidiaries

The subsidiary bank, Sydbank (Schweiz) AG, which is being wound up, recorded a loss after tax of DKK 4m (2011: loss of DKK 2m). Ejendomsselskabet recorded a profit after tax of DKK 2m, unchanged compared to 2011.

Balance sheet

The Group's total assets made up DKK 158.3bn at 30 June 2012 against DKK 153.4bn at year-end 2011.

Assets (DKKbn)	30 Jun 2012 31 Dec 2011
Amounts owed by credit institutions etc.	12.1	9.5
Loans and advances at fair value (reverse transactions)	5.9	7.7
Loans and advances at amortised cost (bank loans and advances)	66.7	68.8
Securities and holdings etc	45.0	40.0
Assets related to pooled plans	9.1	8.6
Other assets etc	19.5	18.8
Total	158.3	153.4

The Group's bank loans and advances amount to DKK 66.7bn - a reduction of DKK 2.1bn compared with year-end 2011 and DKK 5.2bn compared with 30 June 2011. Corporate client lending has gone down in a market characterised by low investments and low activity.

Shareholders' equity and liabilities (DKKbn)	30 Jun 2012 31 Dec 2011
Amounts owed to credit institutions etc.	42.8	38.8
Deposits and other debt	65.3	66.7
Deposits in pooled plans	9.1	8.6
Bonds issued	8.8	7.5
Other liabilities etc	20.9	19.8
Provisions	0.3	0.3
Subordinated capital	1.4	2.1
Shareholders' equity	9.7	9.6
Total	158.3	153.4

The Group's deposits make up DKK 65.3bn against DKK 66.7bn at year-end 2011 and DKK 67.4bn at end-June 2011. The development in deposits since the beginning of the year is ascribable to a decline in time deposits.

Capital

At the beginning of Q2 2012 Sydbank prepaid supplementary capital of EUR 100m, after which subordinated capital consists exclusively of hybrid Tier 1 capital of DKK 1.382m.

At end-1H 2012 shareholders' equity constitutes DKK 9,692m - an increase of DKK 97m since year-end 2011. The change comprises additions from profit for the period of DKK 115m as well as disposals deriving from distribution of DKK 7m and net purchases of own shares of DKK 11m.

Risk-weighted assets (DKKbn)	130 Jun 2012	31 Dec 2011
Credit risk	52.4	52.3
Market risk	12.9	10.3
Operational risk	8.4	8.1
Total	73.7	70.7

Since year-end 2011, risk-weighted assets have increased by DKK 3.0bn to DKK 73.7bn. The increase derives partly from a rise in market risk of DKK 2.6bn and partly from a rise in operational risk of DKK 0.3bn. The rise in market risk is primarily ascribable to an increase in the interest rate risk determined by regulatory guidance according to which set-off between the Group's exposures in DKK and hedging in EUR is not allowed. Credit risk remains unchanged.

The development in gross exposures by rating category at 30 June 2011, 31 December 2011 and 30 June 2012 appears below.

Gross exposures by rating category

Gross exposures consist of loans and advances, undrawn credit commitments, interest receivable, quarantees and counterparty risk on derivatives. The graph comprises exposures treated according to IRB. Exposures relating to clients in default are not included in the breakdown. Impairment charges for exposures have not been deducted from the exposures.

The development shows an overall unchanged level as regards rating categories 1-4. Furthermore migration from rating categories 5-8 to rating category 9 has taken place in part as a consequence of the tightened impairment rules.

The Group's core capital ratio and solvency ratio each represent 14.6% compared with 15.2% and 16.1%, respectively, at end-2011. The core capital ratio excluding hybrid core capital stands at 13.0% (31 Dec 2011: 13.4%). The reduction in the solvency ratio is ascribable to the prepayment of supplementary capital.

At end-1H 2012 the adequate capital base, which constitutes the basis for determining the solvency need, represents DKK 7,042m - an increase of DKK 402m since end-2011. The adequate capital base can be broken down as follows:

Adequate capital base (DKKbn)	30 Jun 2012	31 Dec 2011
Credit risk	4,180	4,532
Market risk	862	870
Operational risk	670	646
Other circumstances	1.330	592
Total	7,042	6,640
Solvency need, % of RWA	9.6	9.4

At 30 June 2012 the individual solvency need represented 9.6% compared with 9.4% at end-2011.

The decline in the adequate capital base to cover credit risk must be viewed in conjunction with the impairment charges in 1H 2012.

The increase in the adequate capital base to cover other circumstances can mainly be ascribed to an expected future buffer for systemically important banks (SIFIs).

Interest rate risk

At 30 June 2012 the Group's interest rate risk stands at DKK 35m. The Group's exchange rate risk continues to be very low and its equity position modest.

Liquiditv

The Group's liquidity measured under the 10% statutory requirement constitutes 25.2% at 30 June 2012.

Moody's 12-month curve shows that the Group is able to withstand a situation in which access to capital markets is cut off for a period exceeding 12 months.

DKKbn

In February 2012 the Group issued a 2-yr senior loan of EUR 500m. The decrease in the Group's liquidity after two months can be ascribed to the repayment of existing senior loans of EUR 0.7bn in September 2012.

Rating

At end-May 2012 Moody's lowered Sydbank's ratings as follows: Long-term debt: Baa 1 Short-term debt: $P-2$ $C-$ Bank financial strength:

The Bank's rating outlook is stable.

Outlook for 2012

As a consequence of the new stricter impairment rules issued by the Danish FSA impairment charges are projected to stand at around DKK 1.4bn in 2012 given the current economic prospects. Otherwise the Group's expectations remain unchanged compared with the expectations announced in the Interim Report $-$ Q1 2012.

In 2013 impairment charges are projected to represent around 1% of bank loans and advances and guarantees. At the end of 1H 2012 total impairment charges amount to DKK 2.643bn, equivalent to 3.1% of loans and advances and guarantees. 67% of total credit facilities have been granted to clients in rating categories 1-3.

Income Statement

			Sydbank Group		Sydbank A/S
		1H	1H	1H	1H
DKKm	Note	2012	2011	2012	2011
Interest income	$\overline{c}$	2,074	2,069	2,074	2,063
Interest expense	3	507	561	508	561
Net interest income		1,567	1,508	1,566	1,502
Dividends on shares		20	18	20	18
Fee and commission income	4	716	680	713	664
Fee and commission expense		104	107	103	106
Net interest and fee income		2,199	2,099	2,196	2,078
Market value adjustments	5	227	39	226	35
Other operating income		9	11	9	11
Staff costs and administrative expenses Depreciation and impairment of property, plant and	6	1,224	1,269	1,222	1,247
equipment		47	38	47	36
Other operating expenses		39	157	39	156
Impairment of loans and advances etc	8	975	495	972	495
Profit/(Loss) on holdings in associates and
subsidiaries	$\boldsymbol{9}$	$\ensuremath{\mathsf{3}}$	(9)	2	(9)
Profit on assets temporarily acquired		0	0	0	$\overline{0}$
Profit before tax		153	181	153	181
Tax	10	38	45	38	45
Profit for the period		115	136	115	136
EPS Basic (DKK) *				1.6	1.9
EPS Diluted (DKK) *				1.6	1.9
Dividend per share (DKK)
Based on average number of shares outstanding, see

page 18.

Statement of Comprehensive Income

Profit for the period	115	136	115	136
Other comprehensive income
Translation of foreign entities		9	2	9
Hedge of net investment in foreign entities	(2)	(9)	(2)	(9)
Property revaluation
Other comprehensive income after tax
Comprehensive income after tax	115	136	115	136

Balance Sheet

			Sydbank Group		Sydbank A/S
		30 Jun	31 Dec	30 Jun	31 Dec
DKKm	Note	2012	2011	2012	2011
Assets
Cash and balances on demand
at central banks		815	939	802	921
Amounts owed by credit institutions and central banks	11	11,310	8,526	11,248	8,808
Loans and advances at fair value		5,944	7,658	5,944	7,658
Loans and advances at amortised cost		66,694	68,847	66,820	68,169
Bonds at fair value		43,195	38,622	43,195	38,621
Shares etc		1,621	1,281	1,621	1,281
Holdings in associates etc		188	192	188	192
Holdings in subsidiaries etc			$\blacksquare$	245	229
Assets related to pooled plans		9,100	8,553	9,100	8,553
Intangible assets		11	12	11	12
Total land and buildings		1,005	1,015	817	826
investment property
owner-occupied property		1,005	1,015	817	826
Other property, plant and equipment		79	85	79	85
Current tax assets		7	13	7	14
Deferred tax assets		5	5	5	5
Assets held for sale		3	1	3	1
Other assets	12	18,299	17,641	18,279	17,614
Prepayments		59	51	58	50
Total assets		158,335	153,441	158,422	153,039
Shareholders' equity and liabilities
Amounts owed to credit institutions and central banks	13	42,767	38,767	42,995	39,132
Deposits and other debt	14	65,361	66,724	65,256	66,010
Deposits in pooled plans		9,104	8,557	9,104	8,557
Bonds issued at amortised cost		8,791	7,500	8,791	7,500
Current tax liabilities		11		10
Other liabilities	15	20,949	19,911	20,932	19,878
Deferred income		3	6	3	6
Total liabilities		146,986	141,465	147,091	141,083
Provisions	16	275	256	257	236
Subordinated capital	17	1,382	2,125	1,382	2,125
Shareholders' equity:
Share capital		742	742	742	742
Revaluation reserves		95	95	95	95
Other reserves:
Reserves according to articles of association		425	425	425	425
Other reserves		26	26	26	26
Retained earnings		8,404	8,300	8,404	8,300
Proposed dividend etc			7		7
Total shareholders' equity		9,692	9,595	9,692	9,595
Total shareholders' equity and liabilities		158,335	153,441	158,422	153,039

Holdings in Subsidiaries and Associates etc

						Sydbank Group
DKKm	Activity	Ownership share (%)	Shareholders' equity (DKKm)	Total assets	Total liabilities Income Result
Consolidated subsidiaries
Sydbank (Schweiz) AG in Liquidation, St. Gallen, Switzerland Ejendomsselskabet af 1. juni 1986 A/S,	Banking	100	226				(30)
Aabenraa	Real property	100	3				(13)
Associates
Foreningen Bankdata, Fredericia	IT	31	562	652	90	703	$\mathbf 0$
Core Property Management A/S, Copenhagen	Real property	20	24	27	3	23	8
Other enterprises in which the Group owns more than 10% of the share capital
PRAS A/S, Copenhagen	Investment and finance Investment	11	1,797	1,797	0	15	15
SI Hedge Virksomhedslån, Aabenraa Scandinavian Private Equity Partners A/S,	and finance Investment	23	178	189	11	(8)	(10)
Copenhagen	and finance Investment	17	12	13	1	9	5
BI Holding A/S, Copenhagen	and finance	12	334	368	34	84	5

Financial information according to the companies' most recently published annual reports.

Group Financial Highlights - Quarterly

	Q2	Q1	Q 4	Q 3	Q2	Q1
	2012	2012	2011	2011	2011	2011
Income statement (DKKm)
Core income	1,070					1,007
	59	1,071 109	1,060 49	1,032	981 43
Trading income				(16)		91
Total income	1,129	1,180	1,109	1,016	1,024	1,098
Costs, core earnings	652	650	573	587	653	650
Core earnings before impairment	477	530	536	429	371	448
Impairment of loans and advances etc	678	297	460	245	240	250
Core earnings	(201)	233	76	184	131	198
Profit/(Loss) on investment portfolios	5	121	10	(38)	(62)	75
Profit/(Loss) before non-recurring items	(196)	354	86	146	69	273
Non-recurring items, net			(25)	(146)
Profit/(Loss) before contributions to industry solutions
via the Deposit Guarantee Fund	(196)	354	61	0	69	273
Contributions to industry solutions via the Deposit Guarantee Fund	(9)	14	(34)	(25)	63	98
Profit/(Loss) before tax	(187)	340	95	25	6	175
Tax	(47)	85	43	25	1	44
Profit/(Loss) for the period	(140)	255	52	0	5	131
Balance sheet highlights (DKKbn)
Loans and advances at amortised cost	66.7	67.7	68.8	70.0	71.9	71.4
Loans and advances at fair value	5.9	5.8	7.7	6.4	12.0	9.3
Deposits and other debt	65.4	64.2	66.7	65.0	67.4	64.6
Bonds issued at amortised cost	8.8	9.5	7.5	7.5	7.5	11.2
Subordinated capital	1.4	2.1	2.1	2.3	2.3	2.3
Shareholders' equity	9.7	9.8	9.6	9.5	9.5	9.6
Total assets	158.3	147.6	153.4	143.9	145.7	140.6
Financial ratios per share (DKK per share of DKK 10)
EPS Basic **	(1.9)	3.5	0.7	0.0	0.1	1.8
EPS Diluted **	(1.9)	3.5	0.7	0.0	0.1	1.8
Share price at end of period	95.0	101.5	90.1	99.0	114.8	132.8
Book value	132.6	134.5	131.1	130.5	128.6	130.5
Share price/book value	0.72	0.75	0.69	0.76	0.89	1.02
Average number of shares outstanding (in millions)	73.1	73.2	73.2	73.1	73.4	73.4
Dividend per share
Other financial ratios and key figures
Solvency ratio	14.6	15.4	16.1	15.7	15.1	15.4
Core capital ratio	14.6	15.2	15.2	14.7	14.1	14.4
Pre-tax profit as % of average shareholders' equity **	(1.9)	3.5	1.0	0.3	0.1	1.8
Post-tax profit as % of average shareholders' equity **	(1.4)	2.6	0.5	0.0	0.1	$1.4$
Costs (core earnings) as % of total income	57.8	55.1	51.7	57.8	63.8	59.2
Interest rate risk	0.3	1.8	1.0	0.7	0.9	1.1
Foreign exchange position	4.2	5.7	1.6	1.8	2.7	4.5
Foreign exchange risk	0.1	0.2	0.1	0.1	0.0	0.0
Loans and advances relative to deposits *	0.9	0.9	0.9	1.0	1.0	1.0
Loans and advances relative to shareholders' equity *	6.9	6.9	7.2	7.3	7.5	7.5
Growth in loans and advances for the period *	(1.5)	(1.6)	(1.7)	(2.6)	0.6	(2.2)
Excess cover relative to statutory liquidity requirements	151.8	184.7	148.7	115.3	99.5	110.3
Total large exposures	42.8	28.6	26.3	24.2	34.6	23.9
Accumulated impairment ratio excl PCA	3.1	2.5	2.3	2.1	2.0	2.2
Impairment ratio for the period excl PCA ** Number of full-time staff at end of period	0.80 2,128	0.35 2,132	0.60 2,152	0.31 2,270	0.28 2,274	0.30 2,285
Financial ratios are prepared according to "Recommendations & Financial Ratios 2010" published by the Danish Society of Financial Analysts.

* Financial ratios are calculated on the basis of loans and advances at amortised cost.
* Quarterly ratios have not been converted to a full-year basis.

Group Financial Highlights - Half-yearly

	1H 2012	1H 2011	1H 2010	1H 2009	1H 2008
Income statement (DKKm)
Core income	2,141	1,988	2,088	1,984	1,964
Trading income	168	134	298	298	153
Total income	2,309	2,122	2,386	2,282	2,117
Costs, core earnings	1,302	1,303	1,281	1,288	1,276
Core earnings before impairment	1,007	819	1,105	994	841
Impairment of loans and advances etc	975	490	633	565	(13)
Core earnings	32	329	472	429	854
Profit/(Loss) on investment portfolios	126	13	124	211	(192)
Profit before non-recurring items	158	342	596	640	662
Non-recurring items, net					196
Profit before contributions to industry solutions via the
Deposit Guarantee Fund	158	342	596	640	858
Contributions to industry solutions via the Deposit Guarantee Fund	5	161	261	214
Profit before tax	153	181	335	426	858
Tax	38	45	84	107	190
Profit for the period	115	136	251	319	668
Balance sheet highlights (DKKbn) Loans and advances at amortised cost	66.7	71.9	74.1	75.6	82.5
Loans and advances at fair value	5.9	12.0	6.6	12.9	11.5
Deposits and other debt	65.4	67.4	64.9	71.6	67.6
Bonds issued at amortised cost	8.8	7.5	8.6	10.1	10.1
Subordinated capital	$1.4$	2.3	3.1	3.5	4.2
Shareholders' equity	9.7	9.5	9.4	7.5	7.1
Total assets	158.3	145.7	154.4	160.1	149.8
Financial ratios per share (DKK per share of DKK 10)
EPS Basic **	1.6	1.9	3.4	5.0	10.5
EPS Diluted **	1.6	1.9	3.4	5.0	10.5
Share price at end of period	95.0	114.8	124.8	122.3	180.5
Book value	132.6	128.6	127.5	116.2	112.0
Share price/book value	0.72	0.89	0.98	1.05	1.61
Average number of shares outstanding (in millions)	73.2	73.5	73.7	63.6	63.5
Dividend per share
Other financial ratios and key figures
Solvency ratio	14.6	15.1	15.7	13.8	14.8
Core capital ratio	14.6	14.1	13.5	11.4	10.7
Pre-tax profit as % of average shareholders' equity **	1.6	1.9	3.6	5.8	12.4
Post-tax profit as % of average shareholders' equity **	1.2	1.4	2.7	4.4	9.7
Costs (core earnings) as % of total income Interest rate risk	56.4 0.3	61.4 0.9	53.7 0.2	56.4 2.2	60.3 3.0
Foreign exchange position	4.2	2.7	1.5	3.4	12.9
Foreign exchange risk	0.1	0.0	0.0	0.1	0.0
Loans and advances relative to deposits *	0.9	1.0	1.0	1.0	1.1
Loans and advances relative to shareholders' equity *	6.9	7.5	7.9	10.1	11.6
Growth in loans and advances for the period *	(3.1)	(1.5)	(0.6)	(8.3)	10.8
Excess cover relative to statutory liquidity requirements	151.8	99.5	96.8	106.8	69.7
Total large exposures	42.8	34.6	0.0	34.6	39.5
Accumulated impairment ratio excl PCA	3.1	2.0	2.1	1.3	0.9
Impairment ratio for the period excl PCA **	1.15	0.57	0.77	0.63	(0.01)
Number of full-time staff at end of period Financial ratios are prepared according to "Recommendations & Financial Ratios 2010" published by the Danish Society of Financial Analysts.	2,128	2,274	2,323	2,414	2,457

* Financial ratios are calculated on the basis of loans and advances at amortised cost.
* Half-year ratios have not been converted to a full-year basis.

Capital - Sydbank Group

DKKm	Share	Reva- luation capital reserves	acc to articles of association*	Reserve for Reserves net revalu- ation acc to equity method	Retained earnings dividend etc	Proposed	Total
Shareholders' equity at 1 Jan 2012	742	95	425	26	8,300	7	9,595
Profit for the period					115		115
Other comprehensive income Translation of foreign entities Hedge of net investment in foreign					2		2
entities					(2)		(2)
Total other comprehensive income					$\overline{\phantom{a}}$
Comprehensive income for the period			$\overline{\phantom{0}}$	$\overline{\phantom{a}}$	115	$\overline{\phantom{a}}$	115
Transactions with owners Purchase of own shares					(574)		(574)
Sale of own shares					563		563
Adopted dividend etc						(7)	(7)
Dividend, own shares				$\overline{a}$			0
Total transactions with owners					(11)	(7)	(18)
Shareholders' equity at 30 Jun 2012	742	95	425	26	8,404	$\overline{\phantom{a}}$	9,692
Shareholders' equity at 1 Jan 2011	742	110	423	26	8,169	84	9,554
Profit for the period					131		131
Other comprehensive income Translation of foreign entities Hedge of net investment in foreign entities					9 (9)		9 (9)
Total other comprehensive income
Comprehensive income for the period					136		136
Transactions with owners Purchase of own shares Sale of own shares					(1,617) 1,553		(1,617) 1,553
Adopted dividend etc						(84)	(84)
Dividend, own shares					4		4
Total transactions with owners					(60)	(84)	(144)
Shareholders' equity at 30 Jun 2011	742	110	423	26	8,245	$\overline{\phantom{a}}$	9,546
The Sydbank share					1H Full year 2012 2011		1H 2011
Share capital (DKK) Shares issued (number) Shares outstanding at end of period (number)				742,499,990 74,249,999 73,087,573	742,499,990 74,249,999 73,192,644		742,499,990 74,249,999 73,105,347
Average number of shares outstanding (number)				73 152 199	73 246 496		73 450 563

* Reserves according to articles of association are identical to restricted savings bank reserve in accordance with Article 4 of the Articles of Association.

The Bank has only one class of shares as all shares carry the same rights.

Capital - Sydbank Group

	30 Jun	31 Dec	30 Jun
DKKm	2012	2011	2011
Solvency
Solvency ratio	14.6	16.1	15.1
Core capital ratio	14.6	15.2	14.1
Capital base after deductions
Shareholders' equity	9,692	9,595	9,546
Revaluation reserves	(95)	(95)	(109)
Proposed dividend		(7)
Intangible assets and capitalised tax assets	(16)	(17)	(24)
Core capital (excl hybrid core capital)	9,581	9,476	9,413
Hybrid core capital	1,382	1,382	1,385
50% of holdings in subsidiaries and associates		(4)
50% of holdings $> 10%$	(138)	(148)	(158)
Excess deductions	(43)
Core capital (incl hybrid core capital) after deductions	10,782	10,706	10,640
Subordinated loan capital		743	946
Revaluation reserves	95	95	109
Capital base before deductions	10,877	11,544	11,695
50% of holdings in subsidiaries and associates		(4)
50% of holdings $>10\%$	(138)	(148)	(158)
Holdings in associates			(112)
Set-off of excess deductions	43
Capital base after deductions	10,782	11,392	11,425
Credit risk	52,391	52,303	56,121
Market risk	12,970	10,288	11,306
Operational risk	8,373	8,068	8,071
Risk-weighted assets	73,734	70,659	75,498
Capital requirement under Pillar I	5,899	5,653	6,040

Cash Flow Statement - Sydbank Group

	1H	Full year	1H
DKKm	2012	2011	2011
Operating activities
Pre-tax profit for the period	153	301	181
Taxes paid	(21)	(60)	(46)
Adjustment for non-cash operating items	1,038	1,380	515
Cash flows from working capital	(3,810)	5,129	6,459
Cash flows from operating activities	(2,640)	6,750	7,109
Investing activities
Purchase and sale of holdings in associates	7	35	9
Purchase and sale of property, plant and equipment	(31)	(83)	(22)
Cash flows from investing activities	(24)	(48)	(13)
Financing activities
Purchase and sale of own holdings	(10)	(47)	(60)
Dividend etc	(7)	(84)	(84)
Raising of subordinated capital	(743)	(204)
Issue of bonds	1,290	(3, 742)	(3,720)
Cash flows from financing activities	530	(4,077)	(3,862)
Cash flows for the period	(2, 134)	2,625	3,234
Cash equivalent positions at 1 Jan	5,320	2,695	2,695
Cash flows for the period	(2, 134)	2,625	3,234
Total cash equivalent positions at end of period	3,186	5,320	5,929

Segment Statements - Sydbank Group

		Asset	Sydbank
DKKm		Banking management		Markets Treasury	Other	Total
Business segments - 1H 2012
Core income	2,021	77	43			2,141
Trading income		$\overline{\phantom{a}}$	168		$\blacksquare$	168
Total income	2,021	77	211	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	2,309
Costs, core earnings	1,165	29	78		30	1,302
Impairment of loans and advances etc	975	$\overline{\phantom{a}}$				975
Core earnings	(119)	48	133		(30)	32
Profit on investment portfolios		$\overline{\phantom{a}}$	$\blacksquare$	123	3	126
Profit/(Loss) before non-recurring items	(119)	48	133	123	(27)	158
Non-recurring items, net
Profit/(Loss) before contributions to industry solutions via the Deposit Guarantee Fund Contributions to industry solutions via the Deposit	(119)	48	133	123	(27)	158
Guarantee Fund					5	5
Profit/(Loss) before tax	(119)	48	133	123	(32)	153
		Asset	Sydbank
DKKm	Banking	management		Markets Treasury	Other	Total
Business segments - 1H 2011
Core income	1,857	78	53			1,988
Trading income			134			134
Total income	1,857	78	187		$\overline{\phantom{a}}$	2,122
Costs, core earnings	1,153	32	90		28	1,303
Impairment of loans and advances etc	491		(1)			490
Core earnings	213	46	98		(28)	329
Profit on investment portfolios		$\overline{\phantom{m}}$	$\overline{\phantom{a}}$	4	9	13
Profit/(Loss) before non-recurring items	213	46	98	$\overline{\mathbf{4}}$	(19)	342
Non-recurring items, net			$\overline{a}$	$\overline{\phantom{a}}$
Profit/(Loss) before contributions to industry solutions via the Deposit Guarantee Fund Contributions to industry solutions via the Deposit	213	46	98	4	(19)	342
Guarantee Fund					161	161

Notes

Note 1

Accounting policies

The Interim Report has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the EU and in compliance with additional Danish disclosure requirements for interim reports. As a result of the use of IAS 34, the presentation is less complete compared with the presentation of an annual report and the measurement principles are in compliance with IFRS.

The Group has changed the components of the performance measures applied in its internal financial management.

Previously income was split into core income excluding trading income and trading income on the basis of products and activities.

The new performance measures, core income and trading income, are mainly based on client affiliation and as a consequence trading income only comprises income from clients affiliated with Sydbank Markets as well as income from flows, market-making and related position-taking.

Core income comprises income from clients serviced by the Group's broad branch network and investment centres, including commission, investment fund commission, custody account fees and asset management.

The Bank's segment statements are divided into the following: Banking, Asset Management, Sydbank Markets, Treasury and Other.

Asset Management primarily comprises the Bank's advisory-related income from clients and investment funds.

Sydbank Markets comprises trading income as well as a share of the income from clients with decentralised affiliation, calculated on the basis of the market price thereof. The share represents the payment by Banking for Sydbank Markets facilities, including advisory services and administration.

Treasury continues to comprise the Group's return on positions handled by Treasury, including liquidity allocation.

Overall these internal performance measures give a nuanced picture of Group income.

Comparative figures have been restated accordingly.

Apart from the above the accounting policies are consistent with those adopted in the 2011 Annual Report, to which reference is made.

The 2011 Annual Report provides a comprehensive description of the accounting policies applied.

The measurement of certain assets and liabilities requires managerial estimates as to how future events will affect the value of such assets and liabilities. The significant estimates made by the management in the use of the Group's accounting policies and the inherent considerable uncertainty of such estimates used in the preparation of the condensed interim report are identical to those used in the preparation of the annual report as at 31 December 2011.

The Group's significant risks and the external elements which may affect the Group are described in greater detail in the 2011 Annual Report.

		Sydbank Group	Sydbank A/S
	1H	1H	1H	1H
DKKm	2012	2011	2012	2011
Note 2
Interest income
Reverse transactions with credit institutions and central banks	6	10	6	10
Amounts owed by credit institutions and central banks	29	42	30	44
Reverse loans and advances	15	42	15	42
Loans and advances and other amounts owed	1,628	1,552	1,627	1,544
Bonds	409	398	409	398
Derivatives	(16)	23	(16)	23
Other interest income	3	2	3	$\overline{c}$
Total	2,074	2,069	2,074	2,063
Note 3
Interest expense
Repo transactions with credit institutions and central banks	33	57	33	57
Credit institutions and central banks	66	88	66	88
Repo deposits	0	$\Omega$	$\Omega$	0
Deposits and other debt	264	284	265	284
Bonds issued	121	102	121	102
Subordinated capital	22	29	22	29
Other interest expense	1	1	1	$\mathbf 1$
Total	507	561	508	561
Note 4
Fee and commission income
Securities trading and custody accounts	376	393	375	379
Payment services	113	107	113	107
Loan fees	61	40	61	40
Guarantee commission	58	56	58	56
Other fees and commission	108	84	106	82
Total	716	680	713	664
Note 5
Market value adjustments Other loans and advances and amounts owed at fair value	0	1	0	1
Bonds	209	(63)	209	(63)
Shares etc	31	(77)	31	(77)
Investment property
Foreign exchange	88	91	87	87
Total derivatives	(102)	87	(102)	87
Assets related to pooled plans	194	(176)	194	(176)
Deposits in pooled plans	(194)	176	(194)	176
Other assets/liabilities	1	0	1	0
Total	227	39	226	35

	Sydbank Group			Sydbank A/S
	1H	1H	1H	1H
DKKm	2012	2011	2012	2011
Note 6
Staff costs and administrative expenses
Salaries and emoluments to:
Executive Management	8	$\overline{7}$	8	7
Board of Directors	$\overline{c}$	$\overline{c}$	2	$\overline{c}$
Shareholders' Committee	$\blacksquare$	$\blacktriangleleft$	$\overline{\mathbf{1}}$	$\mathbf{1}$
Total	11	10	11	10
Staff costs:
Wages and salaries Pensions	584	620	582	608
	62	67	61	66
Social security contributions	6	6	2	5
Payroll tax etc	63	66	66	66
Total	715	759	711	745
Other administrative expenses:
IT	263	254	263	249
Rent etc	69	75	73	79
Marketing and entertainment expenses	39	40	39	39
Other expenses	127	131	125	125
Total	498	500	500	492
Total	1,224	1,269	1,222	1,247
Note 7
Staff
Average number of staff (full-time equivalent)	2,177	2,322	2,162	2,295

		Sydbank Group		Sydbank A/S
	1H	1H	1H	1H
DKKm	2012	2011	2012	2011
Note 8
Impairment of loans and advances recognised in the income statement
Impairment and provisions	890	355	887	355
Write-offs	125	165	125	165
Recovered from debt previously written off	40	25	40	25
Impairment of loans and advances etc	975	495	972	495
Impairment and provisions at end of period
Individual impairment and provisions	2,475	1,537	2,469	1,537
Collective impairment and provisions	168	170	168	170
Impairment and provisions at end of period	2,643	1,707	2,637	1,707
Individual impairment of loans and advances and provisions for guarantees
Impairment and provisions at 1 Jan	1,669	1,597	1,666	1,597
Exchange rate adjustment	0	0	0	0
Impairment and provisions during the period	915	362	912	362
Write-offs covered by impairment and provisions	109	422	109	422
Impairment and provisions at end of period	2,475	1,537	2,469	1,537
Individual impairment of loans and advances	2,434	1,512	2,434	1,512
Individual provisions for guarantees	41	25	35	25
Impairment and provisions at end of period	2,475	1,537	2,469	1,537
Collective impairment of loans and advances and provisions for guarantees
Impairment and provisions at 1 Jan	167	166	167	166
Impairment and provisions during the period	1	4	1	4
Impairment and provisions at end of period	168	170	168	170
Sum of loans and advances and amounts owed
subject to collective impairment and provisions	21,117	11,651	21,117	11,651
Collective impairment and provisions Loans and advances and amounts owed after collective	168	170	168	170
impairment and provisions	21,285	11,821	20,949	11,481
Individual impairment of loans and advances subject to objective evidence of impairment
Balance before impairment of individually assessed loans and
advances Impairment of individually assessed loans and advances	4,350 2,434	2,804 1,509	4,350 2,434	2,804 1,512
Balance after impairment of individually assessed loans and
advances	1,916	1,295	1,916	1,292
Interest added concerning individually and collectively impaired
loans and advances represents	666	491	666	491

		Sydbank Group	Sydbank A/S
	1H	1H	1H	1Н
DKKm	2012	2011	2012	2011
Note 9
Profit/(Loss) on holdings in associates and subsidiaries Profit/(Loss) on holdings in associates etc	3		3
Profit/(Loss) on holdings in subsidiaries etc		(9)	(1)	(9) 0
Total	3	(9)	$\overline{c}$	(9)
Note 10
Effective tax rate
Current tax rate of Sydbank	25.0	25.0	25.0	25.0
Permanent differences
Adjustment of prior year tax charges
Effective tax rate	25.0	25.0	25.0	25.0
		Sydbank Group		Sydbank A/S
	30 Jun	31 Dec	30 Jun	31 Dec
DKKm	2012	2011	2012	2011
Note 11
Amounts owed by credit institutions and central banks
Amounts owed at notice by central banks	693	2,992	693.0	2,992
Amounts owed by credit institutions	7,230	1,994	7,168	2,276
Reverse transactions	3,387	3,540	3,387	3,540
Total	11,310	8,526	11,248	8,808
Note 12
Other assets
Positive market value of derivatives etc	14,685	13,875	14,685	13,875
Sundry debtors	316	272	296	245
Interest and commission receivable	446	582	446	582
Cash collateral provided, CSA agreements	2,842	2,912	2,842	2,912
Other assets	10	0	10	$\overline{0}$
Total	18,299	17,641	18,279	17,614
Note 13
Amounts owed to credit institutions and central banks
Amounts owed to central banks	1,954	3,164	1,954	3,164
Amounts owed to credit institutions	18,146	15,212	18,374	15,577
Repo transactions	22,667	20,391	22,667	20,391
Total	42,767	38,767	42,995	39,132

Notes

	Sydbank Group		Sydbank A/S
	30 Jun	31 Dec	30 Jun	31 Dec
DKKm	2012	2011	2012	2011
Note 14
Deposits and other debt
On demand	45,555	40,499	45,450	39,785
At notice	428	442	428	442
Time deposits	13,830	20,360	13,830	20,360
Special categories of deposits	5,292	5,423	5,292	5,423
Repo transactions	256		256
Total	65,361	66,724	65,256	66,010
Note 15
Other liabilities
Negative market value of derivatives etc	15,212	14,110	15,212	14,110
Sundry creditors	637	1,421	620	1,389
Negative portfolio, reverse transactions	4,144	3,847	4,144	3,847
Interest and commission etc	200	103	200	103
Cash collateral received, CSA agreements	756	429	756	429
Other liabilities	0	$\mathbf 1$	0	$\mathsf 0$
Total	20,949	19,911	20,932	19,878
Note 16
Provisions
Provisions for pensions and similar obligations	3	3	3	З
Provisions for deferred tax	202	202	202	202
Provisions for guarantees	41	25	35	23
Other provisions *	29	26	17	8
Total	275	256	257	236
Other provisions mainly concern provisions for operalls contracts

* Other provisions mainly concern provisions for onerous contracts and legal actions.

Notes

	Sydbank Group	Sydbank A/S
30 Jun	31 Dec	30 Jun	31 Dec
2012	2011	2012	2011

Note 17

Subordinated capital

Interest rate	Note		Nominal (m)	Maturity
Repaid loans					$\overline{\phantom{a}}$	743	$\qquad \qquad \blacksquare$	743
Total supplementary capital					-	743	-	743
1.83 (floating)		Bond loan		EUR 100 Perpetual	739	739	739	739
6.36 (fixed)	2)	Bond loan		DKK 85 Perpetual	85	85	85	85
2.18 (floating)	3)	Bond loan		EUR 75 Perpetual	558	558	558	558
Total hybrid core capital					1,382	1.382	1,382	1,382
Total					1.382	2.125	1.382	2,125

$\overline{1}$ Optional redemption on 25 April 2017 after which the interest rate will be fixed at 2.10% above 3-month EURIBOR.

$2)$

Optional redemption on 14 May 2017 after which the interest rate will be fixed at 1.75% above 3-month CIBOR.
Optional redemption on 24 November 2014 but holds no incentive for redemption in the form of an interest rate ste $3)$ similar.

Note 18

Contingent liabilities and other obligating agreements

Contingent liabilities
Financial guarantees	3,039	2.937	2.951	2.780
Mortgage finance guarantees	2.533	1.514	2.533	1,514
Registration and remortgaging guarantees	2,697	2,639	2,697	2,639
Other contingent liabilities	1,297	1,181	1,297	1,181
Total	9.566	8.271	9.478	8,114
Other obligating agreements
Irrevocable credit commitments	1.658	490	1.658	490
Other liabilities	86	68	126	111
Total	1.744	558	1.784	601

Notes

Note $18 -$ continued

In February 2008 a group of minority shareholders ("Foreningen af Minoritetsaktionærer i bankTrelleborg") filed a class action against Fonden for bankTrelleborg, Sydbank and the Danish FSA. The lawsuit concerns the legality of the compulsory redemption in accordance with section 144 of the Danish Financial Business Act as well as the pricing of the shares in connection with the compulsory redemption. In December 2010 the Eastern High Court ruled that the compulsory redemption was not legal as the conditions (70% requirement according to section 144 of the Danish Financial Business Act) had not been met. However the Eastern High Court did not find that the minority shareholders had suffered a loss exceeding the consideration they had already received in connection with the compulsory redemption. This judgment was upheld by the Supreme Court on 27 January 2012.

Moreover, in 2009 the group of minority shareholders - by three named shareholders - filed an action against bankTrelleborg, now Sydbank, regarding an inadequate prospectus in connection with the conversion of sparTrelleborg to bankTrelleborg in June 2007. The Eastern High Court ruled in favour of Sydbank on 2 May 2012. The case has been appealed to the Supreme Court.

On 21 January 2011 two new class action claims were filed with the City Court of Copenhagen against Sydbank A/S concerning the acquisition of bankTrelleborg. Both claims concern a potential prospectus liability regarding bankTrelleborg, now Sydbank A/S, in connection with the conversion of sparTrelleborg to bankTrelleborg in Q2 2007, ie before the bank was acquired by Sydbank. One class action was accepted by the Eastern High Court while the other was dismissed. Both decisions have been appealed.

In addition, the Group is party to a number of legal actions. These actions are under continuous review and the necessary provisions made are based on an assessment of the risk of loss. Pending legal actions are not expected to have any significant impact on the financial position of the Group.

Note 19

Repo and reverse transactions

In connection with repo transactions, which involve selling securities to be repurchased at a later date, the securities remain on the balance sheet, and consideration received is recognised as a debt. Repo transaction securities are treated as assets provided as collateral for liabilities. At 30 June 2012, the fair value of such securities stood at DKK 22,872m.

In connection with reverse transactions, which involve purchasing securities to be resold at a later date, the Group is entitled to sell or deposit them as collateral for other loans. The securities are not recognised in the balance sheet and consideration paid is recognised as a receivable. At 30 June 2012, the fair value of such securities stood at DKK 12,977m.

Assets received as collateral in connection with reverse transactions may be sold to a third party. In such cases a negative portfolio may arise as a result of the accounting rules. This is recognised under "Other liabilities".

Note 20

Collateral

As of 30 June 2012 the Group had deposited as collateral securities at a market value of DKK 2,636m with Danish and foreign exchanges and clearing centres etc in connection with margin calls and securities settlements etc.

Note 21

Related parties

Sydbank is the bank of a number of related parties. Transactions with related parties are settled on an arm's length basis.

No unusual transactions took place with related parties in 1H 2012. Reference is made to the Group's 2011 Annual Report for a detailed description of related party transactions.

Note 22

Reporting events occurring after the balance sheet date

After the expiry of the half year, no matters of significant impact on the financial position of the Sydbank Group have occurred

Notes

			Sydbank Group
	1Һ	1H	Index	Full year
DKKm	2012 ∠∪ ∣∠	∩∩1 -	12/11	2011

Note 23

Large shareholders

Silchester International Investors LLP owns more than 10% and Nykredit A/S owns more than 5% of Sydbank's share capital.

Note 24

Core income
Interest margins etc	1.411	1,333	106	2.799
Mortgage credit	135	87	155	188
Payment services	86	75	115	156
Remortgaging and loan fees	61	41	149	86
Commission and brokerage	158	180	88	353
Commission etc investment funds and pooled pension plans	145	122	119	235
Asset management	76	78	97	143
Custody account fees	35	37	95	70
Other income	34	35	97	50
Total	2.141	1.988	108	4,080

Management Statement

Today we have reviewed and approved the Interim Report - First Half 2012 of Sydbank A/S.

The Interim Report – First Half 2012 has been prepared in accordance with IAS 34 as adopted by the EU. Furthermore, the Interim Report has been prepared in compliance with additional Danish disclosure requirements for interim reports of listed financial companies. The Interim Report has not been audited or reviewed.

In our opinion the accounting policies applied are appropriate and the Interim Report gives a true and fair view of the Group's assets, shareholders' equity and liabilities and financial position at 30 June 2012 and of the results of the Group's operations and consolidated cash flows for the accounting period 1 January-30 June 2012 as well as a description of the most significant risks and elements of uncertainty which may affect the Group.

Aabenraa, 22 August 2012

Executive Management

Karen Frøsig (CEO)	Preben L. Hansen
Board of Directors
Anders Thoustrup (Chairman)	Hanni Toosbuy Kasprzak (Vice-Chairman)	Svend Erik Busk
Claus Christensen	Peder Damgaard	Harry Max Friedrichsen
Erik Bank Lauridsen	Steen Tophøj	Jan Uldahl-Jensen

Margrethe Weber

Supplementary Information

Financial calendar

In 2012 the Group's preliminary announcement of financial statements will be released as follows:

• Interim Report - $Q1-Q3$ 2012 30 October 2012

Sydbank contacts

Karen Frøsig, CEO Tel: +45 74 37 20 00

Mogens Sandbæk, CFO Tel: +45 74 37 24 00

Niels Møllegaard, Group Executive Vice President Tel: +45 74 37 20 50

Address

Sydbank A/S Peberlyk 4 DK-6200 Aabenraa Tel: +45 74 37 37 37 CVR No DK 12626509

Relevant links

sydbank.dk sydbank.com

For further information reference is made to Sydbank's 2011 Annual Report at sydbank.com.