Capital and Solvency

Return on equity
The return on equity was 9.8%, against 15.9% in the first quarter of 2007. Earnings for the period per share fell from DKr5.6 to DKr3.7.

Shareholders’ equity
Shareholders’ equity was DKr101.1bn at the end of March 2008, against DKr104.4bn at the end of 2007. The change reflected primarily the dividend payment in March 2008 and the recognition of the profit for the period.

At March 31, 2008, the share capital totalled DKr6,988,042,760 and shares numbered 698,804,276. The number of shares outstanding at the end of March 2008 was 684,508,678. The average number of shares outstanding in the first quarter was 685,448,755.
 

Solvency
With effect from 2008, the Group has implemented the new Capital Requirements Directive (CRD). The advanced internal ratings-based method (IRB) is used to calculate risk-weighted assets for the credit risk on around 80% of the loan portfolio. The remainder is treated according to the standardised approach because the portfolio segment is either subject to a permanent exemption or covered by plans for later transition to the IRB approach. Risk Management 2007 describes the transition to the CRD in more detail.

At March 31, 2008, the solvency ratio stood at 13.6%, of which 9.5 percentage points derived from the Group’s core (tier 1) capital. At the beginning of the first quarter, the solvency ratio was 12.6%, and the core (tier 1) capital ratio was 8.7%.

The Group’s capital base thus considerably exceeds the minimum statutory capital requirements.