Outlook for 2010

Our 2010 outlook is based on the assumption of modest positive growth in the Danish economy.

We forecast

unchanged to moderate growth in the Group’s bank loans and advances
core income excl trading income to remain unchanged or to rise slightly
trading income to remain unchanged or to decline slightly
largely unchanged level of costs
no non-recurring items in 2010.

Core earnings

Based on the above premises, the Group projects core earnings in the region of DKK 1.9-2.1bn before impairment of loans and advances – unchanged compared to 2009.

Impairment

The prospects for many industries continue to seem bleak, which will trigger a continued large demand for impairment charges as regards the Bank’s corporate clients. In contrast it is expected that in general the financial situation of retail clients will be satisfactory also in 2010. Overall the Group’s impairment charges are projected to display an unchanged or declining trend in 2010.

Investment portfolio earnings

Investment portfolio earnings will depend on financial market developments. At the beginning of 2010 the Bank’s position-taking is characterised by positions in Danish floating-rate mortgage bonds involving limited interest rate risk.

The Private Contingency Association

It is anticipated that the contribution to the Private Contingency Association in the form of guarantee commission will total DKK 210m. To this must be added Sydbank’s share of the Private Contingency Association’s payment to cover any further losses in the Financial Stability Company of up to DKK 156m concerning the first guarantee of DKK 10bn which will be finally calculated during Q4 2010.