Annual General Meeting 25 March 2011
Welcome at the Annual General Meeting of
BankNordik
Disclaimer

This presentation includes statements regarding future results, which are
subject to risks and uncertainties. Consequently, actual results may differ
significantly from the results indicated or implied in these statements.

No representation or warranty (expressed or implied) is made as to, and no
reliance should be placed on, the fairness, accuracy or completeness of the
information contained herein. Accordingly, none of BankNordik, or any of its
principal shareholders or subsidiary undertakings or any of such person’s
officers or employees or advisors accept any liability whatsoever arising
directly or indirectly from the use of this document
Slide 2
Agenda
1. The Board of Director’s report on the Bank’s activities in the past year
2. Submission of audited annual accounts for adoption and Annual Report 2010
3. Decision on distribution of profit in accordance with the adopted annual
accounts
4. Election of members to the Board of Directors
5. Election of auditor/auditors
6. Proposals from the Board of Directors Proposals from the Board of Directors
a. Winding-up scheme referred to in the Danish Act No. 721 of 25 June 2010
b. Authorization to the Board of Directors to let the Bank acquire own shares
7. Miscellaneous
Slide 3
1. The Board of Director’s report on the Bank’s
activities in the past year
Presented by Klaus Rasmussen,
Chairman of the Board of Directors
Slide 4
2010 – A year of transition
“Our major strategic tasks in 2011 will be
to create profitable growth in lending
while maintaining a low risk level in our
loan portfolio and a cost efficient
operation.”
Presentation of the audited annual accounts
and the Annual Report 2010
Presented by Janus Petersen, CEO
Slide 6
 Annual Report 2010 was made public on
7th March 2011 and has been available at:
 www.BankNordik.fo/IR
 BankNordik’s Head Office in Tórshavn
 Has been sent to the shareholders’ who have
requested it
Slide 7
Strategic milestones reached in 2010
 International expansion achieved by the acquisition of
Danish and Greenlandic branches
 Change of IT platform from local to Nordic IT provider
 Successful exit from Bank Package I
Slide 8
Highlights: Record high profits, large non-recurring items
and large dividend expected in 2012

Profits before tax in 2010









Impairments
Other income (Bakkafrost)
Other Cost (Bank Package I and II)
Non-recurring cost
Value adjustments
DKK 416m
DKK 167m
DKK 380m
DKK 62m
DKK 30m
DKK 20m
Total adjusted profits before tax in 2010
Profits before tax forecast 2011
Net profits in Q4 2010
Proposed dividends 2011
Payment of accumulated dividends postponed to 2012
(+)
(-)
(+)
(+)
(-)
DKK 275m
DKK 100-140m
DKK 43m
DKK 40m
DKK 95m
Slide 9
2010 results deviate from forecast primarily due to
divestment of Bakkafrost and increased impairments

Pre tax profit
 Forecast: DKK 150-190m
 Adjusted: Q1 DKK 470-510m
Q3 DKK 360-400m
 AR 2010 result : DKK 416m

Income from net insurance activities
 Forecast: Increase 25-40%
 Adjusted: Q3 20-30%
 AR 2010 result : 31%

Net interest and fee income
 Forecast: Growth 40-45%
 Adjusted: Q1 25-35%
Q3 20-30%
 AR 2010 result: 29%

Impairments
 Forecast: Same nominal level,
decrease in FO, some impairments in
DK/GL
 Adjusted Q3: DKK 180-200m
 AR 2010 result: DKK 167m

Costs
 Forecast: Increase by 70-75%
 AR 2010 result : Increase by 87%
 Adjusted* 74,8%
*(excl. non-recur. Cost DKK 30m)

Bakkafrost
 Divestment completed
Slide 10
Highlights DKK 1,000
Key figures in
AR 2010





Net interest and fee
income incl. insurance
grows by 30% driven by
acquisitions
Costs almost doubled
driven by acquisitions and
IT conversion
Impairments were
significantly higher primarily
in Q3 related to lower
values of collateral
Net profit trebled because
of divestment of Bakkafrost
Loans and advances grew
by 25%, while deposits
grew by 61%
2010
2009
Index
Net interest and fee income
589.019
455.049
129
Interest and fee income and
from insurance, net
643.679
496.928
130
20.037
23.915
84
Other operating income
379.409
(10.756)
Staff cost and adm. expenses
408.088
210.778
194
Impairment charges
167.114
128.162
130
Net profit
339.435
111.047
306
Loans and advances
8.674.663
6.937.560
125
Bonds at fair value
3.497.466
1.252.056
279
Intangible assets
439.723
39.312
1119
Assets held for sale
160.794
175.908
91
14.258.767
10.267.021
139
245.249
1.498.499
16
Deposits and other debt
8.843.972
5.496.550
161
Issued bonds
2.199.843
999.843
220
Total shareholders´ equity
2.042.566
1.663.122
123
Market value adjustments
Total assets
Due to credit institutions etc
Slide 11
Highlights
Key figures
in Q4 2010





Interest and fee
income incl. insurance
decreased due to
funding costs and nonperforming loans
Costs higher due to
extraordinary items
Impairments –
corrections and
Amagerbanken
Net profit turned
positive again due to
lower impairments
Loans and advances
stable, while deposits
fell
Q4 2010
Q3 2010
Index
Net interest & fee income
147.113
154.488
95
Interest and fee income and
insurance, net
164.549
170.807
96
DKK 1,000
Market value adj.
(5.381)
(224)
2.402
Other operating income
(1.387)
(119)
1.166
Staff cost & adm. exp.
111.124
102.091
109
Impairments
(17.794)
150.330
(12)
Net profit
43.484
(75.853)
(57)
Loans and advances
8.674.663
8.549.425
101
Bonds at fair value
3.497.466
3.463.534
101
Intangible assets
439.723
432.857
102
Assets held for sale
160.794
134.265
120
14.258.767
15.716.802
91
245.249
787.392
31
Deposits and other debt
8.843.972
9.254.447
96
Issued bonds
2.199.843
2.699.843
81
Total shareholders´ equity
2.042.566
1.979.319
103
Total assets
Due to credit institutions etc
Slide 12
Increased NII driven by interest margin and
acquisitions
pct
6



Acquired branches compensate for reduced
income on the Faroe Islands
A steady growth in interest margin in the last
5 years
In Q4 2010 NII decreased due to higher
funding costs (DKK 5m) and corrections
related to non-performing loans (DKK 30m)
DKKm
NII
500
400
300
200
100
404
239
291
238
0
2006*
2007*
Faroe Island
Greenland
*Previous GAAP
2008
2009
DKKbn
9
8
42
7
79
6
5
4
3
346
2
1
0
2010
Denmark
Loans and advances
4
2
0
2006
2007
2008
Interest margin
2009
DKKm
140
120
100
80
60
40
20
0
90
2010
140
102 100 108 101
118 117
105
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2009 2009 2009 2010 2010 2010 2010
Net interest income
Slide 13
Fees and insurance income on a higher level in
2010 than in 2009 due to acquisitions
DKKm
40
 Higher level of fees
in Q4 2010
explained by a yearend correction of
DKK 10m
 Higher level of
insurance income in
2010 explained by
first full year
consolidation of
Icelandic insurance
activities
32
27
30
20
16
20
11
10
9
15
12
10
0
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2009 2009 2009 2010 2010 2010 2010
Net fee income
DKKm
20
15
10
16
12
11
13
17
12
9
6
6
5
0
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2009 2009 2009 2010 2010 2010 2010
Net income from insurance
Slide 14
Operating
segments,
banking



Growth
potential in
Denmark
Staff costs and
adm. expenses
in Denmark
high compared
to income
Impairments in
Faroe Islands
increased
primarily due to
re-valuation of
collateral in Q3
2010
Operating segments DKK mil.
FO 2010
DK 2010
GL 2010
Interest income
501
124
56
Interest expense
155
46
14
Net interest income
346
79
42
49
29
14
Total income
405
109
57
Staff costs and administrative expenses
220
101
38
11
3
1
Impairment charges on loans and adv. etc.
181
-16
2
Profit before tax
-28
21
16
Loans and advances
6295
1562
816
Deposits
5663
2799
482
Total liabilities and equity
10446
3070
816
C/I ratio (%)
107%
81%
72%
63%
96%
69%
Net fee income
Dep. and. imp. of property, plant and
equipment
C/I ratio (excl. value adjustments and
Imp. on loans and advances etc.) (%)
Slide 15
Operating segments - insurance
Operating segments DKK 1,000
 Successful business
model on the Faroe
Islands
 Improving results
from Icelandic
activities
FO 2010
ICL 2010
3647
8386
Premium income, net of reinsurance
82184
159625
Claims, net of reinsurance
47149
140535
Staff costs and administrative expenses
18283
28279
304
8161
20344
9396
173678
350564
48%
81%
48%
103%
Net interest income
Dep. and. imp. of property, plant and
equipment
Profit before tax
Total liabilities and equity
Cost/Income ratio (%)
Cost/Income ratio (excl. value adjustments and
impairments on loans and advances etc.) (%)
Slide 16
Cost structure changed significantly
Staff costs and administrative expenses
2010
2009
Change
Salaries
182.903
101.790
80%
Pensions
17.547
9.125
92%
Social security expenses
22.818
8.223
177%
223.269
119.138
87%
IT
67.531
42.876
58%
Marketing etc
24.688
8.431
193%
Education etc
5.262
5.924
-11%
Advisory services
10.621
8.615
23%
Other expenses
95.751
30.962
209%
Total administrative expenses
203.853
96.808
111%
Total staff costs
223.269
119.138
87%
Employee exp. incl. under the item "Claims, net of reinsurance"
-19.034
-5.167
Total administrative expenses
203.853
96.808
111%
Total staff costs and administrative expenses
408.088
210.778
94%
Staff costs:
Total staff costs
Administrative expenses:
 Staff doubled in
acquisitions causing
increased costs
 DKK 30m in one off
costs (change in IT
provider, name
change,
acquisitions)
 Renewed focus on
optimizing cost
structure
Slide 17
Loans and advances


Geographical diversification achieved
Danish and Greenlandic activities compensate for a
decrease in Faroese lending level
Loans and advances
DKKbn
10
9%
8
18%
8,9
8,8
8,5
8,7
Q1 2010
Q2 2010
Q3 2010
Q4 2010
6,9
6
4
2
73%
0
Q4 2009
Faroe Island
Denmark
Greenland
Loans and advances
Slide 18
Sound risk diversification
Loan and advances on sector
 No sector larger than 9%
6%
8%
6%
3%
50%
9%
5%
6%
Public
Tr anspor t etc
Tr ade, hotels etc
Pr oper ty adm.
Retail
7%
Fisher ies
Building and constr uction
Manufactur ing
Other
Slide 19
Large liquidity in 2010 due to end of Bank
Package I
DKKbn
10
0,8
0,5
8
1,6
2,8
6
DKKbn
10
8,8
Q1 2010
Q2 2010
9,3
8,8
Q3 2010
Q4 2010
8
6
4
8,9
5,5
4
6,3
5,7
2
2
0
0
Loans and advances
Faroe Island
Deposits
Denmark
Greenland
Q4 2009
Deposits
Liquidity
Loans, advances and impairments in relation to deposits, %
Excess cover relative to statutory liquidity requirements, %
2010
103
293
2009
131
276
Slide 20
The Supervisory Diamond
Sum of large exposures < 125%
BN 22.8%
Funding-ratio < 1.25
BN 0.71
Loan growth < 20%
BN 25%
Property exposure < 25%
BN 11%
Excess liquidity > 50%
BN 292,9%
Slide 21
Strategic focus areas 2010-2013
 Focus on selected customer segments, pension and
insurance
 Training and recruitment of employees
 Optimizing business processes and organization
 Optimizing liquidity and capital structure
 Risk management and customer credit rating
Slide 22
Outlook 2011
 Focus on C/I ratio and efficiency – cost reduction
materializing in the coming tree years
 Cost reduction 0-5% in 2011
 Pre-tax profit before value adjustment DKK 100-140m
 Net interest, fee and insurance income is expected to
decrease in the range of 0-5% because of pressure on
the interest margin
 Impairments DKK 50-100m
Slide 23
2 and 3. Submission of audited annual accounts for
adoption and Annual Report 2010 and decision on
distribution of profit in accordance with the adopted
annual accounts
Slide 24
 The Board of Directors proposes that the General
Meeting adopt the annual accounts as presented in the
Annual Report 2010 and approve the allocation of the
DKK 339,435,000 net profit as follows: DKK 40,000,000
are paid out as dividend to the shareholders, DKK
294,176,000 are allocated to “Retained earnings” and
DKK 5,258,000 to “Minority interests”.
Slide 25
4. Election of members to the Board of
Directors
Slide 26
 Klaus Rasmussen (re-election)
 Jens Erik Christensen (re-election)
 Education: MSc in Economics and MSc in Business
Management and Auditing.
 Former occupation: State-authorized public
accountant. Former owner of and partner in Stateauthorized public accountant company
 Education: MSc in Actuarial Science
 Former occupation: CEO of Codan A/S and member of
the Executive Committee of Royal & SunAlliance.
 Principal occupation: Self-employed with activities as a
professional Board member as well as business
development through the investment company Sapere
Aude A/S.
 Current Board positions held:
Principal occupation: Self-employed with
activities as a professional Board member
Current Board positions held:
Chairman of the Board of: P/F Effo, P/F
Vónin, P/F VON and Refa Frøystad Group.
Board member of: P/F Effo Finans and
Qalut Vónin A/S
 Chairman of the Board of: Danish Merchant
Capital A/S, Your Pension Management
Luxembourg SA, Your Pension Savings
Association, Luxembourg
 Board member of: SAS AB, Andersen & Martini
A/S, Amrop A/S, Nordic Corporate Investments A/S
 Date of first election to the Board: 2008
 Date of first election to the Board: 2007
 Keld Søndergaard Holm (re-election)
 Nils Suni Sørensen (re-election)
 Education: MSc in Economics and HD(F)
 Former occupation: Consultant at Nykredit –
Business Research and Communication, Associate
professor and external examiner at Copenhagen
Business School
Principal occupation: Manager of Adverti
Current Board positions held:
Education: BSc in Economics and Business Administration,
MBA from Lancaster University
 Former occupation: CEO of Faroe Seafood
 Principal occupation: Managing Director of Faroe
Petroleum, Faroe Islands; Managing director of Greenland Oil
Company A/S
 Current Board positions held:
Board member of: Public Affairs Group, Deputy
chairman, The Copenhagen Institute for Future Studies and Member
of precidium of the academy for future studies
Date of first election to the Board: 2008
Board member of: Faroe Petroleum Faroe Islands, Financing Fund from
1992, Faroe Petroleum plc. UK, Greenland Oil Company A/S
Date of first election to the Board: 2010
Slide 27
5. Election of auditor/auditors
Slide 28
 The Board of Directors proposes re-election of NOTA,
Løggilt grannskoðanarfelag P/F and PwC Denmark as
external auditors.
Slide 29
6. Proposals from the Board of Directors
Slide 30
a. Winding-up scheme referred to in the Danish
Act No. 721 of 25 June 2010

In 2011 the General Meetings of all Danish and Faroese banks are required
to decide on the possible future use of the Danish State’s winding-up
scheme administered by Finansiel Stabilitet A/S.

In case a distressed bank does not comply with the Financial Business Act’s
capital adequacy requirement and the bank has been given a deadline by
the Danish FSA to comply with this requirement, the distressed bank may
choose to be wound up under the Finansiel Stabilitet A/S. Finansiel
Stabilitet A/S will then set up a subsidiary company to take over all assets of
the distressed bank.

BankNordik's Board of Directors proposes that, in line with the majority of
Danish banks, that the General Meeting state that it does not want at
present to consider to be wound up by Finansiel Stabilitet A/S under the Act
on Financial Stability - in other words that the General Meeting decide not to
decide on whether they will use the scheme or not.
Slide 31
b. Authorization to the Board of Directors to let the
Bank acquire own shares
 The Board of Directors requests that the General Meeting renews,
until the next ordinary general meeting, the following authority to
allow the Bank to acquire its own shares:
“The General Meeting authorises the Board of Directors – until the
next Annual General Meeting – to permit the Bank – by way of
ownership or pledge - to acquire own shares up to a total nominal
value corresponding to 10% of the Bank’s share capital in
accordance with Article 48 in the Companies Act. When the Bank
acquires own shares by way of ownership, the share price shall not
deviate from the market price by more than 10%.”
Slide 32
7. Miscellaneous
Slide 33
Thank you for attending BankNordik’s
Annual General Meeting 2011