Annual Report 2002 116th Accounting Year

SHORT PRESENTATION Ringkjøbing Landbobank A/S

Dear shareholders,

Torvet 1, DK-6950 Ringkøbing Phone +45 9732 1166 Fax+ 45 9732 1818 www.Iandbobanken.dk

2002 was another prosperous year for Ringkjøbing Landbobank. The bank's continued growth in business activities and its merger with Tarm Bank are a highlight of Ringkjøbing Landbobank's report, which show a 35% increase in pre-tax profit from DKK 155 million last year to DKK 209 million. The growth in profit is due solely to the highly positive growth in the number of customers and the continued increase in volume, as the bank's interest margin was somewhat lower in 2002 than in 2001. The bank's ordinary operations thus continue to expand with the substantial growth in the number of customers and the continued increase in business volume, while provisions for bad and doubtful debts are showing a downward trend. The bank gained 4,000 new shareholders in 2002 - 3,500 shareholders from Tarm Bank and 500 new shareholders who considered the bank's shares a worthwhile investment. We are, of course, very satisfied with this, and the bank is now owned by 12,700 shareholders. In 2002, the price of the bank's shares rose by 26% to 760 at the end of the year. In 2002, the bank's board and management acted in accordance with the socalled Nørby Committee's recommendations for good company management. The bank has now implemented most of the Committee's recommendations, but it has chosen other solutions in selected areas where this was judged to be in the bank's best longterm interests. The bank has also formulated an Investor Relations policy which is available on the Internet. Ringkjøbing Landbobank thus has positive expectations for 2003, and we expect a profit on ordinary bank operations at approximately the 2002 level. Thank you for your confidence in 2002. Bent Naur Kristensen John Bull Fisker

Share capital Ringkjøbing Landbobank's share capital is DKK 27,8 million in 1.389.451 shares of DKK 20.

Ownership Ringkjøbing Landbobank is owned by approximately 12.700 shareholders. We report as required by Section 28A of the Danish Companies Act that ATP, Hillerød, have advised that they own more than 5% of the bank's share capital.

Ordinary general meeting The bank's ordinary general meeting for 2002 will be held in ROFI Centret in Ringkøbing on Wednesday 26 February 2003.

Contents page Short presentation 2 5-year financial highlights 3 Report of the board of managers 4 Profit and loss report for 2002 7 Distribution of profits 7 Balance sheet as at end December 8 Notes on the annual report 2002 9 Auditors' certificates 15 The bank's branches Back page

2

5-YEAR FINANCIAL HIGHLIGHTS Main figures ( million DKK) Net income from interest and fees Value adjustments Total costs including write-offs Losses and allocations on debtorss Result before tax Result after tax Capital and reserves Deposits Loans Guarantees

2002

2001

2000

1999

1998

348 35 155 23 209 147

296 11 133 23 155 107

265 11 109 28 140 96

222 -5 99 27 93 64

208 6 97 30 89 59

1.034 3.714 4.567 2.705

794 2.907 3.543 2.238

735 2.572 3.085 1.976

639 2.292 2.653 2.205

587 2.420 2.267 1.222

23,1 16,2 43,5 14,6 14,9 744 760 5,0

21,2 14,6 43,7 15,2 14,8 635 601 4,0

22,0 15,0 40,3 16,1 15,9 544 379 7,4

15,8 10,8 43,7 16,2 15,7 473 364

16,7 11,0 44,6 19,1 19,1 434 318

Key figures Return on beginning equity before tax Return on beginning epuity after tax Costs, % Core capital ratio (Tier1) Solvency ratio (Tier 2) Intrisic value per DKK 20 shere Share price per DKK 20 share Proposed reduction in share capital, %

Annual report - highlights ● ● ● ● ● ●

35% increase in pre-tax profit to DKK 209 million Rate of return on equity before tax is 23.1% The merger with and integration of Tarm Bank proceeded well Continued growth in business activities ? loans up 29%, deposits up 28% Proposal for a share capital reduction of 5.0% Positive expectations for 2003!

3

REPORT OF THE BOARD OF MANAGERS Profit before tax increased by 35% to DKK 209 million The bank's continued growth in business activities and its merger with Tarm Bank are a highlight of Ringkjøbing Landbobank's accounts, which show a 35% increase in pre-tax profits from DKK 155 million last year to DKK 209 million. Results substantially exceed the bank's expectations in connection with the merger with Tarm Bank, which led to an upward adjustment as early as December in the bank's expectations for the profit for the year, from DKK 145 million before value adjustments of securities and dividend on participating interests to a pre-tax profit of between DKK 200 and 210 million. The improved results are attributable to positive value adjustments of securities and a highly satisfactory increase in ordinary banking business - carried by the continued growth in the number of customers and the continued increase in volume at the same time as provisions for bad and doubtful debts are showing a downward trend. Despite the bank's high solvency ratio and a core capital ratio of 14.6, return on equity stands at 23.1%, which the bank's management considers highly satisfactory.

Net income from fees and interest The profit on net income from fees and interest rose by 18% from DKK 296 million to DKK 348 million; 28% of the growth is attributable to the increasing business volume and 72% to the merger with Tarm Bank. The growth in net income is due solely to the highly positive growth in the number of customers and the continued increase in volume, as the bank's interest margin was somewhat lower in 2002 than in 2001.

Value adjustments Value adjustments of securities and foreign exchange etc. showed a gain of DKK 35 million relative to last year's gain of DKK 11 million. The profit was derived thus: DKK 14 million on interest-bearing claims, DKK 17 million on shares, and DKK 4 million on foreign exchange transactions. The gain on interest-bearing claims was derived primarily from the bank's bond portfolio and to a lesser extent from the fixedrate loans portfolio. The bank's corrected interest rate risk at the end of the year stood at 3.4% of its equity. The gain on shares was derived primarily derived from a smaller portfolio of small-cap shares, and a number of bank shares also contributed positively to the gain. The bank's portfolio of Tarm Bank shares also made a positive contribution of DKK 5.6 million to the results.

Costs Total costs including depreciation on tangible assets amounted to DKK 155 million against the previous year's DKK 130 million, an increase of 17%. After adjustments for the merger with Tarm Bank, the underlying cost increase stands at 0%. The increase in costs is within budget, in which we expected a slowdown in costs during the year, after last year's opening of the bank's new branch in Viborg, the appointment of new employees and the reconstruction and expansion of the main office. The cost ratio was computed at a low 43.5% of total income. For twelve successive years Ringkjøbing Landbobank thus remains Denmark's most efficient bank as measured by this key figure. The cost ratio remains unchanged in relation to the previous year, which the bank considers satisfactory as Tarm Bank's activities were included in the balance sheet in 2002 while no significant synergies from the merger were realised in 2002. We expect the cost ratio for 2003 to remain unchanged or to show a marginal improvement.

Provisions for bad and doubtful debts Provisions for bad and doubtful debts remained at an unchanged DKK 23 million relative to the previous year. Provisions on loans and guarantees were computed at 0.33%, which is a decrease relative to the previous year's 0.40%. The decrease is considered highly satisfactory. The creditworthiness of the bank's loans and guarantees portfolio is good, no individual branches or niche concepts have required special provisions, and losses actually incurred remain at a very low level. The bank's total provisions for bad and doubtful debts (the corrective account) contained DKK 383 million at the end of the year, which corresponds to a provision ratio of 5.0% of total loans and advances, provisions and guarantees. The bank has grown strongly in recent years, and much of the growth has been in niche concepts in the bank's distance banking department. The bank has thus - apart from a high level of diversification in its loan portfolio - achieved a lower average risk on its individual commitments, as the risk profile in the bank's distance banking department is significantly lower than in the local-customer department. Only 2% of the total corrective account relates to the distance banking department, in which, once again, no losses have been incurred this year. The loan portfolio with zeroed interest stands at DKK 26 million, corresponding to 7% of total provisions (the corrective account).

Corrective account and loans with zeroed interest Corrective account 1997 236,600 1998 263,600 1999 290,450 2000 316,750 2001 331,950 2002 382,850 Includes Tarm Bank in 2002.

Zeroed interest 39,846 4,905 18,595 12,843 14,222 26,290

During the six years in which provisions for bad and doubtful debts have grown from DKK 236 million to DKK 383 million, the bank has recorded an annual loss of DKK 9.2 million. Actual losses including Tarm Bank were computed at DKK 11 million in 2002.

Core activities Total net income Total net costs Losses and provisions on customers Profit from ordinary bank operations

4

2002 357 -155 -23 179

2001 304 -133 -23 148

2000 270 -109 -28 133

1999 226 -99 -27 100

1998 217 -97 -30 90

1997 190 -87 -35 68

The highly satisfactory improvement in "ordinary bank operations" is evident after correction of the pre-tax result for value adjustments of securities and financial items, which amounted to DKK 8 million in 2001 and DKK 31 million in 2002. The improvement in "ordinary bank operations" from 2001 to 2002 amounted to 21%; approx. 50% is attributable to Tarm Bank and approx. 50% to other growth. The result of ordinary bank operations over the last five years has increased by DKK 111 million, from DKK 68 million in 1997 to DKK 179 million in 2002. The improvement in result is thus 163%.

Result after tax The result after tax was DKK 147 million after tax of DKK 62 million. The result represents a 16.2% return on corrected capital and reserves at the beginning of the period. The return on capital and reserves is considered highly satisfactory, particularly in light of the fact that the bank's capital and reserves are very high relative to the volume of its business activities. The core capital ratio was 14.6% at the end of the year.

The balance sheet The bank's balance sheet stood at DKK 6,002 million at the end of the year against last year's DKK 4,833 million. Deposits rose by 28% to DKK 3,714 million; excluding Tarm Bank's portfolio, the increase was 12%. Loans rose by 29% to DKK 4,567 million; excluding Tarm Bank's portfolio, the increase was 19%. The guarantee portfolio at the end of the year was DKK 2,705 million against last year's DKK 2,238 million. DKK 647 million of the guarantee portfolio comprised guarantees for foreign loans. The growth in the bank's loans and its portfolio of foreign loans derives from three areas. The total portfolio at the end of 2002 can be broadly classified thus: 36% of all loans from the niche concepts in the distance banking department 14% of all loans from the new branches in Herning, Holstebro and Viborg 50% of all loans from the bank's old branches in West Jutland, including Tarm Bank.

Liquidity Long-term guaranteed drawing rights with foreign banks to cover the bank's excess of loans over deposits have been entered into for the equivalent of DKK 750 million. These drawing rights are not used in normal operations.

The bank's capital in 2002 Capital and reserves amounted to DKK 1,034 million on 31.12.2002. The notes include a statement with further details of movements in capital and reserves during 2002. Capital and reserves stood at DKK 794 million at the end of 2001. Capital and reserves at the beginning of 2002 were revalued partly because of the merger with Tarm Bank and partly as a result of changes in accounting policies for unlisted shares, and thus amount to DKK 907 million. A capital reduction of 50,000 shares was also implemented in June 2002, reducing capital and reserves by DKK 33.5 million. Under the changed accounting policies, the bank's capital and reserves were also adjusted at the end of the year by a revaluation of unlisted shares. The bank's result before tax was DKK 147 million, after which the bank's capital and reserves at the end of the year were DKK 1,034 million. The solvency ratio (Tier 2) was 14.9%, and the core capital ratio (Tier 1) was 14.6%. The bank's shares were listed on the Copenhagen Stock Exchange at the beginning of the year at 601. The share price rose by 26% during 2002 to 760 at the end of the year. The price has risen in 2003 to 870 (as of 3 February 2003), and the market value on the stock exchange is DKK 1.2 billion.

Capital reduction in 2003 The zero dividend policy and the bank's capital adequacy were evaluated in connection with presentation of the accounts, and in our judgment a zero dividend will also be an advantage for the bank's shareholders this year. It was also decided to recommend to the bank's general meeting that the share capital be written down by 69,451 shares, corresponding to 5.0% of issued shares. At the current quotation for the bank's shares, capital and reserves will be reduced by approx. DKK 60 million in connection with a later implementation of the capital reduction.

Integration of Tarm Bank The bank has focused on the integration of Tarm Bank since the decision to merge with Tarm Bank was made. This process is proceeding well and according to plan, the computer systems have been converted, and the organisations have now also merged. The bank expects that the intended merger synergies will be realised in 2003 in the form of cost savings and an expansion in sales and number of customers.

Employee shares The bank's employees were offered shares in 2000, 2001 and 2002, and they will also be offered shares with a five year vesting period in 2003 as part of an employee savings scheme. The bank's employees have subscribed for 3,830 shares to be sold in the first quarter of 2003.

Expectations and plans Results substantially exceed the bank's expectations in connection with the merger with Tarm Bank, which led to an upward adjustment as early as December in the bank's expectations for the profit for the year, from DKK 145 million before value adjustments and dividend on participating interests to a pre-tax profit of between DKK 200 and 210 million. Ringkjøbing Landbobank has a market share of 50% in that part of West Jutland in which the bank's old branches are located. The bank's policy is to retain and develop this section of its customer base with attractive and competitive products. The bank also markets itself in Herning, Holstebro and Viborg, where the newest branches are located. Ringkjøbing Landbobank is increasingly seen as the best local alternative to the big banks, leading to a marked influx of customers and to the expectation that our platform in these cities will continue to develop in the years to come. The bank's distance service department and niche concepts will also be marketed this year. We thus expect our concepts for the financing of wind turbines and general practitioners and our securities and dissaving accounts and number of affluent personal customers to continue to develop positively in the year ahead. Against this background - and despite strong competition - net income from interest and fees is expected to continue to increase in the coming year. Developments in costs, including depreciation on tangible assets, are expected to be moderate in 5

2003. In 2003, the need for provisions for the bank's loans and guarantees portfolio is expected to lie at about the 2002 level. Ringkjøbing Landbobank thus has positive expectations of developments for 2003. We expect to stabilise profit at its current high level, with a profit on ordinary bank operations within a range about the 2002 result for ordinary bank operations.

Corporate Governance Corporate governance in Ringkjøbing Landbobank concerns the goals which govern the bank's management and the general principles governing the interplay between the bank's management and shareholders as well as the bank's customers, employees and the local areas in which the bank has branches.

Goals Ringkjøbing Landbobank's goal is to play a vital role in West Jutland. In terms of both capital and its consultancy services, the bank must meet the expectations of a full-service bank held by the area's private and business customers. Ringkjøbing Landbobank's goal is to achieve operating results among the best third within the Danish financial sector via rational operation and a sensible credit policy. The bank's goal is also to grow faster than the average for the financial sector in Denmark. Ringkjøbing Landbobank's final goal is to be a good workplace for its employees. We intend our growth strategy to create an exciting and challenging workplace which will attract and retain competent employees.

The Nørby Committee's report In 2001, the so-called "Nørby Committee" issued a report and a large number of recommendations to listed companies. Ringkjøbing Landbobank's board and management look positively on the Committee's work and have acted in accordance with its recommendations. The bank has now implemented most of the Committee's recommendations. The bank has, however, chosen other solutions in selected areas where this was judged to be in the bank's best long-term interests. The Committee's seven main areas are discussed below with selected comments.

The role of shareholders and interaction with management The shareholders are the bank's owners, and the bank's goal is to achieve the best possible long-term return for its shareholders. New limitations on voting rights will not be introduced into the bank's articles of association. The board sees no reason to amend the original rules concerning voting, which date from the bank's foundation, as long as the bank's performance is above the average within the Danish financial sector.

The role and significance of the bank's partners Ringkjøbing Landbobank is an integral part of West Jutland, the bank's old core area, in which the bank has a very high market share. The bank's goal is to retain and develop this part of its customer portfolio with sound and competitive products. New branches have been established in the last few years outside the old core area. The bank's goal is to expand strongly and become a solid local bank in these communities. The bank's products are also offered via a distance banking service domiciled in Ringkøbing, whose goal is to service selected customer groups throughout Denmark with a high level of expertise and competitive products. The bank's employees are well-educated and motivated ? a critical prerequisite for the bank's continued success and growth. Ringkjøbing Landbobank is a good place to work, where the atmosphere is informal and unpretentious. Rationalisation, reorganisation of tasks and in-service development of our employees' professional expertise are ongoing processes. It is therefore a vital factor for the bank's employees that they want to participate in the exciting developments which are currently in progress.

Openness and transparency Ringkjøbing Landbobank formulated an Investor Relations policy in autumn 2002 and has significantly extended its website. The level of information which is provided complies with the recommendations of the Copenhagen Stock Exchange, and quarterly, half-yearly and annual reports are now also issued in English.

The tasks and responsibilities of the board of directors The board's tasks and its delegation to management and ongoing reporting are described in the procedures and miscellaneous instructions under Section 14 of the Danish Financial Business Act.

Composition of the board of directors The board's composition and method of working follow the main principles in the recommendations. It was not, however, considered appropriate to introduce a maximum term for members of the board.

Managerial remuneration The bank's employees have been offered shares during the past three years and this offer will be continued in 2003. An incentive agreement has been entered into with senior staff, and an incentive and loyalty agreement has been entered into with management. The agreements are described in the bank's report. All costs are entered in the profit and loss report and provisions have been made for all contingent liabilities.

Risk management Effective risk management systems have been established in all significant areas of the bank. These systems are regularly evaluated both internally and by the bank's internal and external auditors and the Danish Financial Supervisory Authority. Ringkjøbing Landbobank's most significant category of risk is the credit risk associated with loans, which comprise by far the greatest part of the bank's assets and also generate a correspondingly large part of its earnings. Historically the bank has always had a healthy credit policy, and this is also our goal for the future. Loan gearing relative to capital and reserves is between a factor of four and five, and the bank's declared goal is to achieve results with a lower credit gearing than that of other members of the comparable group within the sector.

6

PROFIT AND LOSS REPORT FOR 2001 2002 (1.000 DKK)

2001 (1.000 DKK)

Net income from interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

392.806 116.417 _________________ 276.389 _________________

359.892 129.512 _________________ 230.380 _________________

Dividend on holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charges and commissions receivable, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charges and commissions payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.015 81.097 14.960 _________________

11.644 67.401 13.437 _________________

Net income from interest and charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347.541 _________________ 35.072 5.726 151.482 3.988 0 23.470 _________________

295.988 _________________ 10.528 4.973 122.347 10.416 0 23.239 _________________

Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

209.399 _________________ 62.028 _________________

155.487 _________________ 48.333 _________________

Profit for the financial year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

147.371 _________________

107.154 _________________

Profit for the financial year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brought forward from prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

147.371 0 _________________

107.154 0 _________________

Total amount available for distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appropriation to own funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

147.371 _________________ 0 300 147.071 _________________

107.154 _________________ 0 200 106.954 _________________

Total distribution of the amount available . . . . . . . . . . . . . . . . . . . . . . . . . . . .

147.071 _________________

107.154 _________________

Interest receivable, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest payable, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Price adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Staff costs, etc. and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation of intangible and tangible assets . . . . . . . . . . . . . . . . . . . . . . . . . Other ordinary charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation and provisions for loss on bad debts . . . . . . . . . . . . . . . . . . . . . . Profit on ordinary activities before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

DISTRIBUTION OF PROFITS

7

BALANCE SHEET AS AT END DECEMBER 2002 (1.000 DKK)

2001 (1.000 DKK) Adjusted to changed accounting policies

Cash in hand and claims at call on central banks, etc. . . . . . . . . . . . . . . . . . . . Claims on credit institutions and on central banks, etc. . . . . . . . . . . . . . . . . . . Loans and advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bonds, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shares, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Holdings in associated undertakings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Own holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Periodic-defined items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57.782 378.504 4.567.167 633.898 195.451 350 54.118 45.117 69.263 104 _________________

57.848 503.888 3.543.202 446.715 120.867 0 37.843 27.552 70.598 104 _________________

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.001.754 _________________

4.808.617 _________________

ASSETS:

LIABILITIES: Debt to credit institutions and central banks . . . . . . . . . . . . . . . . . . . . . . . . . . . Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Periodic-defined items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions for commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Own funds Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital for own holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Revaluation reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit or loss brought forward from prior years . . . . . . . . . . . . . . . . . . . . . Carried forward from profit/loss for the year . . . . . . . . . . . . . . . . . . . . . . . Total own funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.063.906 3.713.777 175.224 1.979 12.619

973.946 2.907.117 128.888 15 5.117

27.789 45.117 38.002 776.270 147.071 _________________

25.000 27.552 24.372 634.028 106.954 _________________

1.034.249 _________________ 6.001.754 _________________

793.534 _________________ 4.808.617 _________________

Off-balance-sheet itmes: Guarantees, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total off-balance-sheet items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.705.095 52.663 2.757.758

2.238.371 52.024 2.290.395

Derivative financial instruments are to be found in the Notes.

CHANGES IN CAPITAL AND RESERVES

Beginning of 2002 Adjustments, beginning of year, shanged accounting policies Adjusted at the beginning of 2002 Exchange of A/S Tarm Bank shares RLB skares from A/S Tarm Bank’s depot Value of issued shares Estimated profit for A/S Tarm Bank 1/1-8/8 Amortisation of goodwill for the year Total Share capital reduction Revaluation of financial fixed assets for the year Changes in own equity portfolio Profit for the year End of 2002

8

Share capital

Reserve for own shares

Revaluation reserve

Profit brought forward

Total

25.000

27.552

0

740.982

793.534

25.000 3.789

27.552

24.372 24.372

-509 740.473 -3.789 -5.137 138.472 -10.000 -38.822 821.198 -32.500

23.863 817.397 0 0 138.472 -10.000 -38.822 907.047 -33.500 13.630 0 147.071 1.034.249

5.137

28.789 -1.000

32.689

24.372 13.630

12.428 27.789

45.117

38.002

-12.428 147.071 923.341

NOTES ON THE ANNUAL REPORT 2002 Solvency ratio The institution's solvency ratio calculated pursuant to Executive order on Solvency Ratio Rules for Credit Institutions and Specialized Credit Institutions issued by the Danish Financial Supervisory Authority.

(1.000 DKK)

Core capital after deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liable capital and short term supplementary capital after deductions . . . . . . . . Weighted non-trading book assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Weighted items with market risks etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total weighted items. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Core capital after deduction in pct. of weighted items, total . . . . . . . . . . . . . . . Solvency ratio purs. to s. 21(1) of the CBSB Act . . . . . . . . . . . . . . . . . . . . . . . .

944.458 961.333 6.045.039 420.048 _________________ 6.473.087 _________________ 14.591 14.851

Off-balance-sheet items Guarantees, etc. Financial guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.922.796 782.299 _________________

Total guarantees, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.705.095 _________________

Other commitments Irrevocable loan commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50.000 2.663 _________________

Total other commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52.663 _________________

Derivative financial instruments By residual maturity up to 3 months Foreign-exchange contracts Forward transactions/Futures, purchase . . . . . . . . . . Forward transactions/Futures, sale . . . . . . . . . . . . . . Options, purchase . . . . . . . . . . . . . . . . . . . . . . . . . . Options, sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nominal value

Net market value

457.013 539.727 5.107 5.107

-3.538 4.975 8 -11

Interest-rate contracts Forward transactions/Futures, purchase . . . . . . . . . . Forward transactions/Futures, sale . . . . . . . . . . . . . .

40.532 18.561

411 2

Share contracts Forward transactions/Futures, purchase . . . . . . . . . . Forward transactions/Futures, sale . . . . . . . . . . . . . . Options, purchase . . . . . . . . . . . . . . . . . . . . . . . . . . Options, sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 2 34 34

0 0 0 0

Over 3 months and up to 1 year Foreign-exchange contracts Forward transactions/Futures, purchase . . . . . . . . . . Forward transactions/Futures, sale . . . . . . . . . . . . . .

52.778 64.881

607 -235

Share contracts Options, purchase . . . . . . . . . . . . . . . . . . . . . . . . . . Options, sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 2

0 0

Interest - rate - contracts Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

140.833

-2.968

Share contracts Options, purchase . . . . . . . . . . . . . . . . . . . . . . . . . . Options, sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8 8

0 0

Over 5 years Interest - rate - contracts Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

87.592

-2.318

Share contracts Options, purchase . . . . . . . . . . . . . . . . . . . . . . . . . . Options, sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

600

-11.700

Over 1 year and up to 5 years Forward transactions/Futures, purchase . . . . . . . . . .

9

Nominal value

Net market value

Total Foreign-exchange contracts Forward transactions/Futures, purchase . . . . . . . . . . Forward transactions/Futures, sale . . . . . . . . . . . . . . Options, purchase . . . . . . . . . . . . . . . . . . . . . . . . . . Options, sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

509.791 604.608 5.107 5.107

-2.931 4.740 8 -11

Interest-rate contracts Forward transactions/Futures, purchase . . . . . . . . . . Forward transactions/Futures, sale . . . . . . . . . . . . . . Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40.532 18.561 228.425

4.319 3.571 -5.286

Share contracts Forward transactions/Futures, purchase . . . . . . . . . . Forward transactions/Futures, sale . . . . . . . . . . . . . . Options, purchase . . . . . . . . . . . . . . . . . . . . . . . . . . Options, sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 2 44 644

Net market value, total . . . . . . . . . . . . . . . . . . . . . . . . Derivative financial instruments

0 0 0 -11.700 _________________ -14.767 _________________

Positive market value

Negative market value

Foreign-exchange contracts Forward transactions/Futures, purchase . . . . . . . . . . Forward transactions/Futures, sale . . . . . . . . . . . . . . Options, purchase . . . . . . . . . . . . . . . . . . . . . . . . . . Options, sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.314 6.437 8

5.245 1.697

Interest-rate contracts Forward transactions/Futures, purchase . . . . . . . . . . Forward transactions/Futures, sale . . . . . . . . . . . . . . Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

413 2

Share contracts Forward transactions/Futures, purchase . . . . . . . . . . Forward transactions/Futures, sale . . . . . . . . . . . . . . Options, purchase . . . . . . . . . . . . . . . . . . . . . . . . . . Options, sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Market value, total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11 2 5.286

___________________ 9.174 ___________________

11.700 _________________ 23.941 _________________

All contracts of derivative financial instruments are non-guanteed contracts

Derivative financial instruments

Average market value Positive Negative

Foreign-exchange contracts Forward transactions/Futures, purchase . . . . . . . . . . Forward transactions/futures, sale . . . . . . . . . . . . . . . Options, purchase . . . . . . . . . . . . . . . . . . . . . . . . . . Options, sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.177 4.640 25

Interest-rate contracts Forward transactions/Futures, purchase . . . . . . . . . . Forward transactions/Futures, sale . . . . . . . . . . . . . . Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

192 2

109 3 1.321

32 4

4 32

Share contracts Forward transactions/Futures, purchase . . . . . . . . . . Forward transactions/Futures, sale . . . . . . . . . . . . . . Options, purchase . . . . . . . . . . . . . . . . . . . . . . . . . . Options, sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Avarage market value, total . . . . . . . . . . . . . . . . . . . . . Unsettled spot transactions

5.358 1.356 26

___________________ 7.072 ___________________

8.644 _________________ 16.853 _________________

Market value Positive Negative

Foreign-exchange transactions, purchase Foreign-exchange transactions, sale Interest-rate transactions, purchase Interest-rate transactions, sale Share transactions, purchase Share transactions, sale

Nominal value 4.717 4.728 15.916 31.352 10.737 16.298 _________

0 2 20 8 103 1.368 _________

2 7 1 33 1.191 168 _________

Net market value -2 -5 19 -25 -1.088 1.200 _________

Total

83.748 _________

1.501 _________

1.402 _________

99 _________

10

Credit risks Loans and advances and guarantees distributed on sectors and lines of business Public authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business Agriculture, Hunting and Forestry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fishing industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Manufacturing business, Primary business, Electricity-, Gas-, Water- and Heating plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Building and Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wholesale and retail trade, Catering- and Hotel Trade . . . . . . . . . . . . . . . . . . . Carrying trade, Storage- and communication Service . . . . . . . . . . . . . . . . . . . . Credit- and Financial intermediation and Insurance business . . . . . . . . . . . . . . Real-estate administration, Real-estate agent, Service business . . . . . . . . . . . . . Other business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Private persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

In pct. end year 0,46 15,34 1,39 7,04 1,97 6,88 1,79 7,02 5,59 6,00 _________________ 53,02 46,52 _________________ 100,00 _________________

Overlying assets Other business' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.864

Credit risk on derivative financial instruments Positive market value (by counterpart risk) after netting Counterpart riskweight 0 pct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Counterpart riskweight 20 pct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Counterpart riskweight 100 pct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0 2.768 2.466

Accrued provisions Provisions made at year end for loans, advances and guarantees . . . . . . . . . . . Provisions made at year end for claims on credit institutions and other claims involving a credit risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total accrued provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

382.850 0 _________________ 382.850 _________________

Accrued provisions on loans and advances in per cent of loans and advances at year end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total claims with suspended calculation of interest at year-end . . . . . . . . . . . .

5,0 26.290

Market risks Foreign-exchange risk Assets in foreign currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities in foreign currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign exchange indicator 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign exchange indicator 1 in pct. of core capital after deductions . . . . . . . .

208.850 113.909 2.865 0,3 pct.

Interest-rate risks Total interest-rate risk on liablities, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest-rate risk by the foreign currencies of the bank with the largest interest-rate risk DKK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GBP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The following fixed-rate assets are in terms of interest rate risk covered: Loans and advances - booked value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The cover has taken place as follows: Interest-rate swap - synthetic principal amount . . . . . . . . . . . . . . . . . . . . . . . . . Market value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

32.053

31.876 239 -43 -19 147.000 147.000 -5.926

11

Terms by residual muturity Claims on credit institutions and central banks Claims at call . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Up to 3 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over 3 months and up to one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over one year and up to 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36.672 326.832 15.000 0 0 _________________

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

378.504 _________________

Loans and advances At call . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Up to 3 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over 3 months and up to one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over one year and up to 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430.902 566.502 495.655 1.224.999 1.849.109 _________________

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.567.167 _________________

Debt to credit institutions and central banks Debt payable on demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Up to 3 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over 3 months and up to one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

274.190 678.580 111.136 _________________

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.063.906 _________________

Deposits On demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deposits at notice: Up to 3 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over 3 months and up to one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over one year and up to 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Over 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

774.678 327.530 81.250 452.906 _________________

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.713.777 _________________

2.077.413

Re. income statement Interest receivable/premium on Claims on credit institutions and central banks . . . . . . . . . . . . . . . . . . . . . . . . . Loans and advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total other financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of this Foreign-exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest-rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

-1.200 -1.370 1.835 _________________

Total interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

392.806 _________________

Interest payable to Credit institutions and central banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21.465 94.198 754 _________________

Total interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

116.417 _________________

Dividend on Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total dividend on shares and other holdings . . . . . . . . . . . . . . . . . . . . . . . . . .

18.289 343.669 31.583 -2.570

5.015 _________________ 5.015 _________________

Price adjustment of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fixed-interest loans and advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total other financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of this Foreign-exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest-rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12 -3.117 -6.107 _________________

Total price adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35.072 _________________

12

16.473 23.173 372 4.266 -9.212

Staff costs and administrative expenses Salaries and remuneration of Board of Directors, Board of Managers and Board of Representatives Board of Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Board of Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.496 552 169 _________________

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.217 _________________

Staff costs Wages and salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Social security expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

70.716 6.135 7.446 _________________

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

83.757 _________________ 63.508 _________________

Total staff costs, etc. and administrative expenses . . . . . . . . . . . . . . . . . . . . . . .

151.482 _________________

Profit/loss on holdings in associated and affiliated enterprises Profit/loss on holdings in associated enterprises, etc. . . . . . . . . . . . . . . . . . . . .

_________________

Tax Tax calculated on the years’s profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustment of tax calculated for previous years . . . . . . . . . . . . . . . . . . . . . . . . Tax on accumulated provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57.308 2.919 -737 2.538 _________________

Total tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

62.028 _________________

Effective tax rate of the bank The current tax rate of the bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-liable income and non-deducitble expenses etc. . . . . . . . . . . . . . . . . . . . Adjustment of deferred tax changes of previous years . . . . . . . . . . . . . . . . . . . . Tax on accumulated provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30,0 -1,2 -0,4 1,2 _________________

Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29,6 _________________

Specification of taxassets Tangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions for liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other deferred taxassets/liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.196 7.873 -4.397 _________________

Total taxassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.672 _________________

Board of managers, Board of Directors and Board of Representatives The amount of loans, mortgage, sureties or guarantees and appurtenant collaterals issued to members of the institution's Board of Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Board of Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Security pledged: Board of Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

279 9.875 16.626 229 5.290

Audit fee Total fee to the firm of accountants, elected by the General Meeting, that perform the statutory audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Of this concerning other contributions that audit . . . . . . . . . . . . . . . . . . . . . . .

737 121

Number of employees Average number of employees during the financial year converted into full-time employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

216,3

Re. Assets Incentive programme The bank's employees were offered shares in 2000, 2001 and 2002 which currently have a remaining vesting period of 5, 4 and 5 years. The employees will also be offered shares with a five year vesting period in 2003 as part of an employee savings scheme, which was introduced two years ago. Expected costs in 2003 for this scheme have been recognised in the accounts. The bank has made an agreement with its management team on an incentive programme which will extend over the next three years. The bank's costs for this programme were recognised earlier. The bank has made an agreement with its board of management on an incentive and loyalty programme which can be exercised in 4-6 years. The strike price was fixed on the basis of the price on the date in December 2000 on which the programme was established, adjusted for any later dividends. The bank's contingent liabilities have been provided for in the accounts and may also be hedged by 30,000 own shares. The programme remunerates long-term price rises on the bank's shares and ties the board of management more closely to the bank. The individual option has no value if a member of the board of management resigns as the option then becomes inoperative. 13

Claims on credit institutions and central banks Claims at notice on central banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Claims on credit institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total claims on credit institutions and central banks . . . . . . . . . . . . . . . . . . . . .

326.832 51.672 _________________ 378.504 _________________

Bonds Quoted on the Stock Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

633.898 0 _________________

Total bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

633.898 _________________

of this own bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Against Danmarks Nationalbank we have pledged bonds with a total market value of DKK 50.350.000 as security for clearing etc. Shares, etc. Quoted on the Stock Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Quoted on other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

85.322 4.004 92.663 13.462 _________________

Total shares, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

195.451 _________________

Financial current assets Financial current assets valued at market value . . . . . . . . . . . . . . . . . . . . . . . . Difference between the purchase price of financial current assets and the higher market value on balance sheet date . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial current assets not valued at market value . . . . . . . . . . . . . . . . . . . . . Difference between the purchase price of financial current assets not valued at market value and the higher market value on balance sheet date . . . . . . . . . Financial fixed assets

723.225 9.968 3.863 -130

Holdings in associated undertakings 125 350 0 0 475

Other holdings 32.522 6.896 24.859 0 64.277

beginning of year . . . . . ................... of year . . . . . . . . . . . . . end of year . . . . . . . . . .

-125 0 0 -125

24.372 0 13.613 37.985

Portfolio booked, end . . . . . . . . . . . . . . . . . . . . . . . . . of this creditinstitutions are . . . . . . . . . . . . . . . . . . . . . Portfolio booked, beginning . . . . . . . . . . . . . . . . . . . . . of this creditinstitutions are . . . . . . . . . . . . . . . . . . . . .

350 0 0 0

102.262 77.867 63.790 47.908

Land and holdings 42.898 20.615 375

Machinery, equipment, etc. 16.629 1,437 2.157 1.323 18.900

Goodwill 0 38.822 0 0 38.822

Other intangible assets 2.400 0 0 0 2.400

16.628 1.437 2.157 1.323 18.899

0 0 38.822 0 38.822

2.400 0 0 0 2.400

57.777

1 57.778

0

0

37.842 61.025

1

Total purchase price, beginning . . . . . . . . . . . . . . . . . . Changes in relation to merger . . . . . . . . . . . . . . . . . . . Inflow of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Outflow of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . Total purchase price, end . . . . . . . . . . . . . . . . . . . . . . Revaluations and deprecation Changes in relation to merger Revaluations and deprecation Revaluations and deprecation

Tangible assets and intangible assets

Acquisition value, beginning . . . . . . . . . . . . . . . . . . . . Changes in relation to merger . . . . . . . . . . . . . . . . . . . Additions of the year . . . . . . . . . . . . . . . . . . . . . . . . . . Disposals of the year . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition value of assets held, end . . . . . . . . . . . . . . Depreciation and writedown, beginning . . . . . . . . . . . Changes in relation to merger . . . . . . . . . . . . . . . . . . . Depreciation and writedown of the year . . . . . . . . . . . Depreciation and writedown reversed . . . . . . . . . . . . . Depreciation and writedown of assets held, end . . . . . Book value, end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total tangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . Total intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . Book value, beginning . . . . . . . . . . . . . . . . . . . . . . . . . Latest rateable value . . . . . . . . . . . . . . . . . . . . . . . . . . Immediate depreciation of machinery, equipments etc. during the reporting year . . . . . . . . . . . . . . . . . . . . . . .

63.888 5.056 3.660 1.055 6.111

0

Balances with associated holdings Depots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

776 116 _________________ 116

Re: Liabilities Debt to credit institutions and central banks Debt to central banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Debt to credit institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total debt to credit institutions and central banks . . . . . . . . . . . . . . . . . . . . . . .

20.650 1.043.256 _________________ 1.063.906 _________________

The bank has at the end of year 2000 undrawn long-term committed lines for DKK 550 mio. which is not included in the key figure for surplus cover compared to legal liquidity requirements.

Deposits On demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Special categories of deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.039.120 248.035 966.683 459.939 _________________

Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.713.777 _________________

Provisions for liabilities Provisions for retirement pension and similar liabilities . . . . . . . . . . . . . . . . . . Provisions for deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other provisions for liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.619 0 0 _________________

Total provisions for liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.619 _________________

Share capital The share capital is distributed on 1.250.000 shares of DKK 20. MANAGEMENT STATEMENT The Board of Directors and the Board of Management have today considered and approved the Annual Report of Ringkjøbing Landbobank A/S for the year 2002. The Annual Report has been prepared in accordance with the provisions of the Danish Banking Act, the Executive Order on bank accounts and the disclosure requirements of the Copenhagen Stock Exchange including the Danish accounting standards, except accounting standard no. 18, as Ringkjøbing Landbobank has chosen to use the more prudent accounting policy to write off goodwill immediately, which is applicable under the Executive Order of the Danish Financial Supervisory Authority. In our opinion, the accounting policies applied are appropriate, and the Annual Report gives a true and fair view of the company's assets, liabilities, financial position and profit for the year. We recommend that the Annual Report be adopted by the Annual General Meeting. Ringkøbing, the 5st February, 2003 BOARD OF MANAGERS: Bent Naur Kristensen John Bull Fisker Ringkøbing, the 5th February, 2003. BOARD OF DIRECTORS: Jens Lykke Kjeldsen Jørgen H. Pedersen Keld Hansen Gravers L. Kjærgaard Gert Asmussen Villy Rosendahl Christensen Anne Marie Husted Hansen Mogens Andersen Vibeke Ballegaard INTERNAL AUDIT: I have participated in the audit of the Annual Report of Ringkjøbing Landbobank for the year 2002. The audit has been conducted under the provisions of the Executive Order of the Danish Financial Supervisory Authority on the performance of the audit in financial enterprises. The audit comprised the functions to which I am subject according to the agreement made with the external auditors with respect to the division of audit functions for the year 2002. My audit has not resulted in any qualifications. Ringkøbing, the 5th February, 2003. Lars Hindø Chief Auditor EXTERNAL AUDIT To the shareholders of Ringkjøbing Landbobank A/S We have audited the Annual Report of Ringkjøbing Landbobank A/S for the financial year 1 January-31 December 2002. This Annual Report is the responsibility of the Company's Board of Directors and Board of Management. Our responsibility is to express an opinion on the Annual Report based on our audit. Basis of opinion We conducted our audit in accordance with Danish auditing standards. These standards require that we plan and perform our audit to obtain reasonable assurance that the Annual Report is free from material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Annual Report. An audit also includes assessing the accounting policies applied and significant estimates made by the Board of Directors and the Board of Management, as well as evaluating the overall Annual Report presentation. We believe that our audit provides a reasonable basis for our opinion. Our audit did not give rise to any qualifications. Opinion In our opinion, the Annual Report gives a true a fair view of the company's assets, liabilities and financial position as at 31 December 2002, and the results of the company's operations and cash flows in the financial year 1 January-31 December 2002 are in accordance with Danish accounting regulations. Ringkøbing, the 5th February, 2003. KPMG C. Jespersen Kristian Winkler Hansen Henry Heiberg State-Autorised State-Autorised Public Accountant Public Accountant

PricewaterhouseCoopers Kurt Villadsen State-Autorised Public Accountant 15

HEAD OFFICE AND FOREIGN DEPARTMENT: TORVET 1 DK-6950 RINGKØBING WWW.LANDBOBANKEN.DK SWIFT ADDRESS: RING DK22 TELEFAX: +45 97 32 18 18 PHONE: +45 97 32 11 66 E-MAIL: [email protected] GENERAL MANAGER: BENT NAUR KRISTENSEN GENERAL MANAGER: JOHN BULL FISKER MANAGER OF SECURITIES AND CASH MANAGEMENT: STEN ERLANDSEN FOREIGN MANAGER: JØRGEN HØJGAARD FINANCIAL MANAGER: JØRGEN JOSEPHSEN 18 BRANCHES: DRIVE IN BANK, RINGKØBING BOBLEN, UNGDOMSBANKEN ???????????????? GRØNBJERG HEMMET HERNING HOLSTEBRO HVIDE SANDE LEM LYNE SPJALD TARM THORSMINDE TIM ULFBORG VIBORG VILDBJERG ØRNHØJ ÅDUM