OMX Copenhagen Stock Exchange
London Stock Exchange
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Stock Exchange Announcement No 12/07
Group Executive Management
Peberlyk 4
PO Box 1038
DK-6200 Aabenraa
Tel +45 74 36 36 36
Fax +45 74 36 35 36
direktionen@sydbank.dk
www.sydbank.com
SWIFT SYBKDK22
Sydbank A/S
CVR No DK 12626509, Aabenraa
Date Direct tel +45 74 36 20 50
20 June 2007 mogens.asmund@sydbank.dk
Dear Sirs
New Totalkredit cooperation model to give capital relief for Sydbank
The basis for calculating Sydbank's solvency ratio to change as at 30 June
2007.
This will take place because the Bank is going to make use of a possibility in
the cooperation agreement with Totalkredit of adopting a new model for
distributing guarantees. As a result the Bank is not obligated to record - and
provide adequate capital for - a significant amount of Totalkredit guarantees.
Therefore the Bank's capital ratios will strengthen. Other things being equal
the Bank's total capital ratio will be increased by 0.4 percentage points.
According to the guarantee model applied so far, guarantees issued by Sydbank
as regards the Totalkredit loans provided by the Bank represent DKK 6bn at the
end of Q1 2007.
In future Totalkredit will have access to set off any losses on Totalkredit
loans provided by Sydbank against the commission earned by the Bank under the
cooperation.
Sydbank's continued income from the Totalkredit cooperation will be affected
only marginally by the transition from the guarantee model to the set-off
model.
The lapse of the TK guarantees would as at end-March 2007 imply a reduction by
DKK 2bn in the Bank's risk-weighted items. As a consequence the solvency ratio
will be increased by the above-mentioned 0.4 percentage points.
Yours faithfully
Mogens Asmund
Group Executive Vice President
