Half-Year Report 2008euroland.com/omx_attachments/2008-07/269763-1-en.pdfEliesar N. Lydersen Dánjal...

Half-Year Report

2008

www.eik.fo

Half-Year Report

2008

2

Registered address Tórshavn

Established 24. august 1832

Registration no 3293

VAT No. 516244

Reg no. 9181

BIC/SWIFT EIKB FO TF

Eik Banki Securities

Share 1)

Stock Exchanges VMF Market on OMX Nordic Exchange Iceland

OMX Nordic Exchange Copenhagen

ISIN code FO0005702340

Bloomberg EIK IR / EIK DC

Share Capital DKK 812,927,400

No. of Shares 8,129,274

Subordinated Debt

Stock Exchange OMX Nordic Exchange Copenhagen

ISIN code DK0030034426

Bloomberg FOROYA 5.385

Amount DKK 150.000.000

1) Eik Banki is a member of MidCap+ set up by the Copenhagen Stock Exchange to promote liquidity in shares

of medium-sized listed companies.

Investor Relations

Finn Danberg, Director, Group CFOTel: +298 348610 · E-mail: [email protected]

Eik Banki P/F

Yviri við Strond 2

P. O. Box 34

FO-110 Tórshavn

Faroe Islands

Tel : +298 348000

Fax : +298 348800

[email protected]

www.eik.fo

2

3

Management

Marner Jacobsen, CEO

[email protected]

Bjarni Olsen

Managing Director

[email protected]

Board of Directors

Frithleif Olsen

Chairman

Odd Arild Bjellvåg

Deputy Chairman

Finnbogi Niclasen

Rólant Vidtfeldt

Mathea Hilduberg

Marian Jacobsen

Petur D.W. Hammer

Tórmund A. Joensen

Rakul Dam

Gert Langgaard

Fía Selma Nielsen

Board of Representatives

Suðuroy

Mikkjal Hammer

Petur D.W. Hammer

Marianna Jacobsen

Páll Michelsen

Finnbjørn Nielsen

Knútur Nygaard

Eysturoy

Olaf Fríðheim

Regin Gregersen

Álvur Hansen

Leif Høj

Alice Højsted

Oluffa Joensen

Sofus D. Johannesen

Frithleif Olsen

Eyðun Rasmussen

Høgni á Reynatrøð

Sandoy

Poul Klementsen

Elisabeth Myllhamar

Jonna Krog Poulsen

Kristoffer Poulsen

Jákup Martin Sørensen

Rólant Vidtfeldt

Vágoy

Gitta av Kák

Heini Nielsen

Sigfríður Dam Olsen

Herluf Sigvaldsson

Tórhallur Simonsen

Sveinur Thomasen

Norðstreymoy

Elna Debess

Marian Jacobsen

Bergur Robert Dam Jensen

Gunnbjørn Joensen

Ragnar Petur Joensen

Karl A. Olsen

Norðoygggjar

Finn Baldvinsson

Jógvan í Beiti

Jórun Gardar

Jonhard Larsen

Eliesar N. Lydersen

Dánjal Jákup Meinertsson

Suðurstreymoy

Odd Arild Bjellvåg

Hans Johannes á Brúgv

Debes Danberg

Hans Andrias Djurhuus

Bent Jacob Højgaard Hansen

Jóhannes Martin Hansen

Poul Gert Hansen

Jákup Egil Jensen

Jóan Pauli Joensen

Líggjas Joensen

Olga Kallsberg

Oddvá Nattestad

Marita Simonsen

Birgir Sondum

Jákup í Stórustovu

Appointed according to § 6.6 in the

Articles of Association

Frithleif Olsen

Kjartan Mohr

External Auditor

Hans Laksá,

State-Authorized Public Accountant

Internal Auditor

Sigmund Frederiksen

Chief Auditor

Half-Year Highlights

Five Year Summary

Comments on Half-Year Report

Half-Year Accounts

Statement by the Management

Auditor’s Report

Accounting Principles

7

9

15

21

29

31

33

Contents

5


2008

7

8

First Half Highlights

• Increase in the basic operation. The result before

dividends, market value adjustments, provisions for

losses and taxes is DKK 157.4 million, which is an

increase of 32.3 per cent

• Well diversified loan portfolio, of which 6.8 per cent

of total loans and guarantees are projectfinancing

of real estate

• Provisions for losses are DKK 53.4 million,

corresponding to 0.3 per cent of total loans and

guarantees

• Market value adjustments of securities and foreign

currencies are DKK -93,9 million. In addition,

market value adjustments of trading portfolio

are DKK 52.2 million, which according to Faroese

accounting principles figure in the basic operation,

as opposed to being deducted from the equity as is

done in other countries

• Result after taxes is DKK -16.1 million

• Solvency is 12.6 per cent

• Liquidity is DKK 4.0 billion. The required minimum

is covered by 99.0 per cent

Outlook 2008

Based on the first quarter result and the outlook for

the year, Eik Banki Group still estimates that the result

before market value adjustment, provision for losses

and taxes will be DKK 335 million.

Possible price triggers

News related to the companies mentioned below may

affect the share price of Eik Banki.

• News from Atlantic Petroleum regarding possible

oil porduction or results from oil explorations

• Changes in the planned merger between SPRON

and Kaupthing


8

Five Year Summary

2004–2008

9

Group

DKK Million 1H 1H 1H 1H 1H

2008 2007 2006 2005 2004

Profit and Loss Account

Interest income 663 352 208 165 133

Interest expenses 384 189 83 49 34

Net interest income 279 163 125 116 99

Fee, commissions and dividend 108 134 59 30 12

Market value adjustments of securities and foreign currencies -146 40 29 25 84

Other operating income 6 4 6 5 7

Profit on financial operations 247 341 219 176 202

Staff costs, administrative expenses

and other operating expenses 196 136 107 86 65

Total depreciation, write-downs and provisions for losses 66 2 -12 19 78

Income from associated and subsidiary undertakings 0 34 24 0 -1

Profit before taxes -15 237 148 71 58

Taxes 1 31 26 15 -5

Net profit -16 206 122 56 63

Five-year SummaryProfit and Loss Account

1010

Five-year SummaryBalance Sheet

Group

DKK Million 1H 1H 1H 1H 1H

2008 2007 2007 2006 2005 2004

Balance Sheet

Assets

Cash in hand, claims on central banks and

credit institutions 2,194 3,130 2,817 806 263 214

Loans and advances 16,117 15,616 9,328 7,488 5,308 3,730

Securities 2,079 1,869 1,671 1,064 888 951

Tangible assets 136 139 132 130 125 121

Other assets 966 914 390 470 252 137

Total assets 21,492 21,668 14,338 9,958 6,836 5,153

Liabilities

Debt to credit institutions 5,302 5,412 5,752 3,335 1,451 374

Deposits 13,141 13,263 6,386 5,116 4,328 3,890

Other liabilities 512 441 338 241 173 72

Subordinated debt 449 448 448 150 0 0

Equity 2,088 2,104 1,414 1,116 884 817

Total liabilities 21,492 21,668 14,338 9,958 6,836 5,153

Off-balance-sheet items

Total guarantees, etc. 1,207 1,091 1,012 758 149 151

Other commitments 115 111 205 2 2 0

Total off-balance-sheet items 1,322 1,202 1,217 760 151 151

11

Group 1H 1H 1H 1H 1H

2008 2007 2006 2005 2004

Ratios

Solvency and capital ratios

Solvency ratio 1) & 2) 12.6% 12.2% 11.2% 14.4% 17.9%

Core capital ratio 1) & 3) 10.0% 9.2% 9.9% 14.4% 18.7%

Earning ratios

Return on equity before tax 1) ROE -0.7% 18.1% 14.5% 8.3% 7.4%

Return on equity after tax 1) ROE -0.8% 15.7% 12.0% 6.6% 8.0%

Return on Assets after tax ROA -0.1% 1.4% 1.2% 0.8% 1.2%

Return on Risk Weithted Assets after tax RORWA -0.1% 1.9% 1.5% 1.1% 1.6%

Income/cost ratio 1) 0.94 2.72 2.55 1.68 1.41

Shares

Average number of shares (1,000) 8,129 7,113 6,953 6,793 6,793

Number of shares end period (1,000) 8,129 7,113 7,113 6,793 6,793

Share price end period 1) 268.00 690.00 285.00 154.10 122.75

Share price high 320.00 729.95 296.50 154.00 132.50

Share price low 252.00 634.00 283.75 154.00 122.75

Average share price 286.00 681.98 290.13 154.00 127.63

Earnings after tax per share 1) & 4) EPS -1.98 28.95 17.53 8.25 9.26

Book Value per Share 1) BVPS 256.83 198.56 156.93 130.14 120.25

Explanation of ratios

1) Prepared in according to the regulations issued by the Danish Financial Supervisory Authority.

2) The solvency ratio is the comparison of capital base to weighted assets, where capital base is equity less certain

adjustments, and weighted assets are the assets of Eik weighted for loss risk.

3) Core capital ratio is the comparison of core capital after deductions to weighted assets, where core capital after

deduction is equity less certain adjustments and weighted assets are assets of Eik weighted for loss risk.

4) Average number of shares in the period.

Five-year SummaryRatios

1212

Group 1H 1H 1H 1H 1H

2008 2007 2006 2005 2004

Market risk ratios

Interest rate risk 1) & 5) 5.0% 3.7% 0.5% 3,5% 2,6%

Foreign exchange risk 1) & 6) 17.2% 18.0% 20.3% 4,9% 13,8%

Risk-weighted assest / Total assets 0.7% 0.7% 0.8% 0.8% 0.8%

Liquidity ratios

Loans, advances and provisions in proportion to deposits 1) 125.0% 149.1% 151.2% 131,2% 106,6%

Excess liquidity cover relative to statutory requirement 1) 99.0% 112.9% 87.3% 81,8% 97,2%

Credit risk ratios

Large loans as per centage of capital base 1) & 7) 156.6% 182.0% 113.9% 43.6% 99.6%

Part of outstanding loans at reduced interest 1) NPL 0.3% 0.8% 1.9% 3.0% -

Provisions per centage 1) LLR 1.7% 1.8% 2.9% 6.4% 9.7%

LLR/NPL 516% 223% 154% 213% -

Write-offs and provisions during the period 1) 0.3% -0.1% -0.3% 0.2% 1.7%

Total loans in proportion to equity 1) 7.7 6.6 6.7 6.0 4.6

Increase of loans 1) 3.2% 12.8% 14.3% 5.1% -3.9%

Other ratios

Increase in deposits 1) -0.9% 4.4% 14.1% 3.2% 2.7%

Increase in balance 1) -0.8% 21.2% 15.5% 5.3% -0.8%

5) Interest rate risk is based on the premise that the effective interest rate fluctuates 1% and that the fluctuations in DKK are

calculated in comparison to core capital less certain adjustments.

6) Foreign exchange risk is the higher amount of assets or liabilities in currency and is calculated in per cent to core capital

less certain adjustments.

7) Outstanding balances greater than 10% after deductions for secure requirements in per cent to capital base.


13

Eik Banki P/F 1H 1H 1H 1H 1H

2008 2007 2006 2005 2004

Ratios 1)

Solvency and capital

Solvency ratio 2) 21.2% 16.0% 14.8% 18.0% 17.9%2) 21.2% 16.0% 14.8% 18.0% 17.9%% 16.0% 14.8% 18.0% 17.9%

Core capital ratio 3) 17.2% 12.0% 13.1% 18.0% 18.7%3) 17.2% 12.0% 13.1% 18.0% 18.7% 17.2% 12.0% 13.1% 18.0% 18.7%

Earnings ratios

Return on equity before tax -1.5% 16.8% 13.1% 7.8% 7.4%

Return on equity after tax -0.8% 15.7% 12.0% 6.6% 8.0%

Income/cost ratio 0.80 3.35 3.41 1.85 1.41

Market risk

Interest rate risk 8) 1.7% 2.8% 1.5% 3.0% 2.6%8) 1.7% 2.8% 1.5% 3.0% 2.6% 1.7% 2.8% 1.5% 3.0% 2.6%

Foreign currencies risk 9) 9.3% 9.8% 12.9% 4.8% 13.8%9) 9.3% 9.8% 12.9% 4.8% 13.8% 9.3% 9.8% 12.9% 4.8% 13.8%

Liquidity ratios

Loans, advances and provisions in proportion to deposits 141.4% 106.9% 110.7% 110.3% 106.6%

Excess liquidity cover relative to statutory requirement 80.3% 80.3% 62.7% 54.8% 97.2%

Credit risk

Large loans as per centage of capital base 10) 112.1% 138.3% 79.9% 47.8% 99.6%10) 112.1% 138.3% 79.9% 47.8% 99.6% 112.1% 138.3% 79.9% 47.8% 99.6%

Part of outstanding loans at reduced interest 11) NPL 0.4% 1.2% 2.7% 3.7% -

Provisions per centage LLR 2.6% 2.4% 3.8% 7.6% 9.7%

Write-offs and provisions during the period 0.3% -0.2% -0.4% 0.2% 1.7%

Total loans in proportion to equity 3.9 4.3 4.4 4.6 4.6

Increase in loans 3.5% 16.7% 10.9% 4.4% -3.9%% 16.7% 10.9% 4.4% -3.9%

Other ratios

Increase in deposits -2.7% 3.0% 12.1% 3.5% 2.7%

Increase in balance -5.1% 22.5% 15.0% 19.8% -0.8%

8) Interest rate risk is based on the premise that the effective interest rate fluctuates one per centage point and the

corresponding change in DKK is calculated in per cent of core capital after deductions.

9) Foreign currencies risk is the higher amount of assets or liabilities in currency and is calculated in per cent of core capital

after deductions.

10) Outstanding accounts greater than 10% after deductions for secure claims in per cent of capital base.

11) Loans at reduced interest and loans where the interest is not recognised as revenue (NPL).


1414

Comments on Half-Year Report

2008

15

16

Comments and Outlook

Eik Banki Solid Operation and Healthy Loan Portfolio

Eik Banki has a well diversified loan portfolio. 6.8 per

cent of total loans and guarantees are projectfinancing

of real estate.

Provisions for losses first-half are 0.3 per cent of total

loans and guarantees. The basic operation is solid,

but market value adjustments mark the half-year

accounts.

Eik Banki’s basic operation first-half 2008 is better

than first-half the year before. If we deduct dividends

from net interest and fees income, we note a DKK

151.6 million increase in net interest and fees income,

corresponding to 65.4 per cent. The result before

dividends, market value adjustments, provisions for

losses and taxes is DKK 157.4 million against DKK

119.0 million first-half 2007.

The result first-half 2008 after taxes is DKK -16.1

million against DKK 205.9 million first-half 2007.

The decline can be ascribed to three main causes, i.e.

negative market value adjustments of DKK 146.1

million, provisions for losses of DKK 53.4 million and

finally, a decrease of dividends of DKK 42.1 million

compared to first-half 2007.

Healthy Loan Portfolio

Eik Banki operates in the Faroe Islands and Denmark,

and has a well diversified loan portfolio.

6.8 per cent of total loans are projectfinancing of

real estate. Furthermore, around 20.3 per cent of

the loans have been advanced to profitable leasing

properties, typically leased to bona fide lessees in long

term leasing agreeements, and corporate properties,

where the poroperty is part of the basic operation

of the business. The Management is of the opinion

that the amount of loans to corporate and leasing

properties as well as project financing of real estate is

at a sound level.

The Bank’s lending policy is cautious, which is

apparent in the fact that Group provisions for

losses first-half this year were DKK 53.4 million.

This corresponds to 0.3 per cent of total loans and

guarantees of DKK 17.6 billion.

First-half 2007, there was an appropriation of DKK

9.5 million. The fact that the provisions for losses are

relatively limited is owing to Eik Banki diversified loan

portfolio and cautious lending policy.

Market Value Adjustments

In the last twelve months, shareprices as well as

bondprices have declined; bondprices especially in

the second quarter of 2008. The decline is particular

to the financial shares and this has had a substantial

effect on Eik Banki.

Eik Banki’s largest share stock is that of the Icelandic

Savingsbank SPRON, which has decreased by 63.5 per

cent in the last six months and the Atlantic Petroleum

holding has decreased by 20.8 per cent in the same

period. However, the purchase prices of both shares

were substantially lower than the price at year-begin

2008.

Furthermore, Eik Banki’s trading portfolio of Eik Banki

shares has decreased by 48.0 per cent in the last six

months.

According to the IFRS accounting principles, which

are prevalent in most countries, market value

adjustments of own shares would not affect the half-

year result, as it would have been deducted directly

from the equity. The IFRS accounting principles will,

however, not be valid in the Faroe Islands before 1

January 2009, and in accordance with the current

16

17


accounting principles in the Faroe Islands, these

market value adjustments will figure in profit and

loss. This has burdened the half-year result with

DKK 52.2 million and should be kept in mind when

comparing Eik Banki’s half-year result with those of

Danish and other foreign banks.

The result before taxes is a DKK 15.4 million deficit

compared to a DKK 237.4 million profit first-half

2007. Taxes first-half 2008 are DKK 0.7 million

against DKK 31.5 million first-half 2007.

If the change in the Eik share price were not included,

the result would have been a DKK 36.8 million profit

before taxes.

The result of the subsidiary Eik Bank Danmark was

DKK 49.8 million after taxes against DKK 50.6 million

first-half 2007.

The activities of Kaupthing Bank’s Faroese operation

and the Danish division of SkandiaBanken were not

included in the first-half report 2007. This condition

should be kept in mind when comparing the accounts.

Increase in Income

Net interest income first-half this year is DKK 279.4

million compared to DKK 162.9 million first-half

last year. This is a DKK 116.5 million increase

corresponding to 71.5 per cent. The increase is

derived from the results of both the Faroese as well

as the Danish activities within the group.

Income from fee and commissions increased by DKK

16.7 million corresponding to 25.7 per cent, from DKK

64.9 million first-half of 2007 to DKK 81.6 million

first-half 2008.

Net interest and fees income amounted to DKK 387.8

million first-half 2008 compared to DKK 296.7 million

for the same period last year - an increase of DKK

91.1 million or 30.7 per cent including dividends. The

first-half result 2007 was affected by a significant

increase in dividend from shares etc. which were DKK

68.9 million compared to DKK 26.8 million this year.

Thus the reduction in dividend conceals an increase

in net interest and fee income of DKK 133.1 million

corresponding to 58.4 per cent.

Market Value Adjustment on Securities and

Foreign Currencies

Market value adjustment on securities and foreign

currencies showed a net loss of DKK 146.1 million

compared to a profit of DKK 40.0 million for the

same period last year. The trend on the international

financial market has been particularly unfavorable

so far this year having lead to negative market value

adjustments in Atlantic Petroleum and SPRON, which

by the end of the period had fallen by 20.8 per cent

and 63.5 per cent, respectively, compared to year

begin.

Eik Banki is the market maker of the Eik share, and

thereby has a trading portfolio of own shares. The

adjustment from the trading portfolio affects the

result by a DKK 52.2 million loss. If Eik Banki were

using IFRS accounting principles, the market value

adjustment would not have affected first half year

result.

Eik Banki owns 3,3 percent of the Eik shares in the

trading portfolio.

Furthermore, Nordea Bank is the market maker on

OMX Nordic Exchange Copenhagen.

Increased Operating Expenses

Operating expenses increased by DKK 60.6 million

corresponding to 44.6 per cent, from DKK 135.8

million to DKK 196.5 million.

18


The increase is mainly derived from an increase in

the number of full time employees by 89.8 within

the Group and from the fact that other operating

expenses have increased as well. At the end of June

2008 there were 356,9 full time equivalents within

the Group.

Depreciations on tangible and intangible assets are

slightly higher in 2008. Total depreciations amounted

to DKK 12.6 million compared to DKK 11.5 million for

the same period last year.

The economic situation in Faroe Islands and in

Denmark continues to remain favorable and combined

with our credit policy the need for provisions for

losses is limited. Provision for losses were DKK 53.4

million against an appropriation of DKK 9.5 million

first-half 2007. From these, DKK 28.5 million stem

from Eik Banki and DKK 24.9 million from Eik Bank

Danmark. The provisions for losses correspond to 0.3

per cent of total loans and guarantees.

Balance

The Group balance has increased substantially

compared to the same period last year, caused

especially by the acquisiton of the Danish branch of

SkandiaBanken and the activities of the Kaupthing

Bank branch in the Faroe Islands in 2007.

The Group balance sheet stands at DKK 21.5 billion

compared to 14.3 billion first-half 2007. This is a DKK

7.2 billion increase corresponding to 49.9 per cent.

By year-end 2007, the Group balance was DKK 21.7

billion.

Loans have increased by DKK 6.8 billion from DKK

9.3 billion to DKK 16.1 billion. The increase includes

Eik Banki with a DKK 2.1 billion increase and Eik Bank

Danmark with a DKK 4.7 billion increase. As of year

begin the loans have increased by DKK 501.3 million,

to an increase of 3.1 per cent.

The diverse activities are evident in the make up of

the Eik Group loans, as shown in Figure 2 and 3. The

distribution of loans in figure 2 is based on the purpose

of the loan. The total Group loans at the end of June

2008 were 55 per cent commercial loans, 43 per cent

were retail loans and 2 per cent were loans to the

Figure 2

Group Loan by Sector and Industry30 June 2008

Fisheries 4%

Fish Farming 2%

Manufactoring 6%

Constructions 7%

Trade and Repair 8%

Service 16%

Retail43%

Public2%

Faroe Islands 48%

Figure 3

Group loan per Country30 June 2008

Other Countries 4%Iceland 1%

Germany 1%Sweden 1%

Denmark 45%

< 1 million63%

Figure 4

Group deposits by size30 June 2008

> 5 million22%

1-5 million15%

Eik Grunnurin (Føroyar) 52%

Mynd 5

Partaeigarar býttir á lond31. desember 2007

Egin partabrøv (Føroyar) 2%

Føroyar 20%

Danmark 11%

Norðurlond 7%

Onnur lond 1%Ikki navnaskrásett 7%

Figure 1

Development in share price 2008

20

40

60

80

100

120

30 June1 June1 May1 April1 March1 February31 December

Eik Banki

Atlantic Petroleum

SPRON

Transport and Telecommunication 2% Other Commercial Loans 10%

18

19


public sector. At year-end 2007, these figures were 53

per cent, 45 per cent and 2 per cent, respectively.

Projectfinancing of real estate represents 6.8 per cent

of the total loan portfolio. In addition, 20.3 per cent of

total loans have been advanced to profitable leasing

properties, typically leased to bona fide lessees in long

term leasing agreements, and corporate properties,

where the property is part of the basic operation

of the business. The Management is of the opinion

that the amount of loans to corporate and leasing

properties as well as project financing of real estate is

at a sound level.

87.73 per cent of total loans were mortgages secured

on real property. In each case, a credit assessment

has been made, and the borrower must fulfill the

required margin. The majority of the loans are

provided at a variable interest rate, and therefore, no

loans are given unless the borrowers are capable of

honouring their obligations, despite a possible rise in

the interest rate level. Furhtermore, if necessary the

customer is obliged to hedge the risk by a fixed or

capped interest.

The loans in the public cector are primarily loans to

Faroese municipalities.

The overall strategy of the Eik Group is to spread

its activities geographically in order to minimise

geographical concentration and spreading risk. This is

apparent in the geographical distribution of loans. At

half-year 2008, the geographical distribution of loans

was 48 per cent in the Faroe Islands, 45 per cent in

Denmark and 7 per cent in other countries. At year-

end 2007, the distribution was 49 per cent, 46 per

cent and 5 per cent, respectively.

Simultaneously, there has been an increase in

deposits from DKK 6.4 billion to DKK 13.1 billion.

This is a DKK 6.7 billion increase from which DKK 0.1

billion stems from Eik Banki and DKK 6.6 billion stem

from Eik Bank Danmark. At the beginning of 2008,

deposits amounted to DKK 13.3 billion.

Figure 2


Fisheries 4%

Fish Farming 2%

Manufactoring 6%

Constructions 7%

Trade and Repair 8%

Service 16%

Retail43%

Public2%

Faroe Islands 48%

Figure 3



Germany 1%Sweden 1%

Denmark 45%

< 1 million63%

Figure 4


> 5 million22%

1-5 million15%


Mynd 5



Føroyar 20%

Danmark 11%

Norðurlond 7%


Figure 1


20

40

60

80

100

120


Eik Banki

Atlantic Petroleum

SPRON


20

Figure 4 shows the distribution of deposits based on

size. A large part of the deposits is less than DKK 1.0

million, spread out on a large number of customers.

The main reason for this is that the majority of Eik

Bank Danmark’s depositors are retail customers with

a lower average deposit than larger commercial and

institutional customers.

Debts to financial institutions are DKK 5.3 billion

compared to DKK 5.8 billion first-half of 2007. This is

a decrease of DKK 0.5 billion.

30 June 2008, claims on credit institutions and

central banks etc. were DKK 1.2 billion against DKK

2.7 billion 30 June 2007.

Equity, including the half-year result 2008, is DKK 2.1

billion compared to DKK 1.4 billion at the end of the

half-year 2007.

The Group solvency ratio is 12.6 per cent compared to

12.2 per cent first-half 2007. Eik Banki P/F’s solvency

is 21.2 per cent compared to 16.0 per cent first-half

of 2007. The legal minimum requirement is 8

per cent.

The liquidity is DKK 4.0 billion compared to DKK 2.9

billion for the same period last year. The required

minimum is DKK 2.0 billion. This exceeds the required

minimum by 99.0 per cent.

Other Events

Syndicated Loan

In the second quarter of 2008, Eik Banki has assumed

a syndicated loan of EUR 140 million, corresponding

to ca DKK 1 billion. The loan was arranged by Danske

Bank A/S in London, the German Bayerische Landes-

bank (BayernLB) og Raiffeisen Zentralbank Osterreich

AF (RZB) in Austria. Along with 11 other banks, these

banks have provided Eik Banki with the loan.

The loan has been assumed as a means to refinancing

a syndicated loan of EUR 70 million that Eik Banki

assumed three years ago, and will also strengthen the

liquidity of the bank.

BEC

Since the sixties, P/F Elektron has been the IT

providor of Eik Banki and the other Faroese financial

institutions. It is, however, a fact that scale

economies are in the development and operation of

IT-solutions. In the eighties, therefore, the Faroese

financial institutions and P/F Elektron made an

agreement of cooperation with the public sector

regarding the tax-system, national register and the

employment service. The cooperation has, however,

not been extended, as the public sector later

established its own IT centre.

Constantly strengthened requirements on bank

operations in recent years have made it difficult to

develop other IT solutions than those needed to meet

these requirements. Current requirements are e.g.

MiFid and Basel II. At the same time, Faroese financial

institutions have expanded their activities, partly by

Figure 2


Fisheries 4%

Fish Farming 2%

Manufactoring 6%

Constructions 7%

Trade and Repair 8%

Service 16%

Retail43%

Public2%

Faroe Islands 48%

Figure 3



Germany 1%Sweden 1%

Denmark 45%

< 1 million63%

Figure 4


> 5 million22%

1-5 million15%


Mynd 5



Føroyar 20%

Danmark 11%

Norðurlond 7%


Figure 1


20

40

60

80

100

120


Eik Banki

Atlantic Petroleum

SPRON


20

21


expanding the securities trade in the Faroe Islands

and partly by increasing the overseas activities.

Currently, the Eik Banki Group has three different IT

providers, as Eik Bank Danmark and the internetbank

that Eik Bank Danmark acquired from SkandiaBanken

AB use SDC and BEC, respectively, as their IT

providers.

Consequently, Eik Banki along with the other Faroese

financial institutions has signed a letter of intent of

cooperation with BEC as the primary IT provider,

making BEC the primary IT provider for the Eik Banki

Group. The agreement entails that P/F Elektron will

enter into longterm cooperation with BEC, providing

BEC with IT solutions as well as BEC is obligated to

supply the Eik Banki Group in the Nordic countries,

should the Eik Banki Group set up business in some

of the other nordic countries. BEC will bear the costs

of the change from Elektron and SDC to BEC, while

the change will occupy 15 -20 full-time equivalents

in-house in the Eik Banki Group.

With the change to BEC, Eik Banki gains access to

more banksystems and thereby a cheaper operation.

The change is expected to cut costs by approximately

DKK 10 million a year. Furthermore, using the same

systems throughout the Group will create synergy

effects by improving working procedures.

In the coming months, a plan of project initiation will

be made, and in September 2008, the agreement

is expected to be finalised, and the change from

Elektron and SDC to BEC is expected to be final in

2009.

Events after the End of the Interim Report

SPRON

30 April 2008, SPRON announced that Kaupthing

Bank and SPRON had initiated negotions of a merger

between the two companies.

1 July 2008, the parties announced that the Board

of Directors of the two companies respectively had

approved a merger schedule.

According to the schedule, Kaupthing will take over

the SPRON shares at a price corresponding to the

price at the close of trading on 30 June + a 15 per

cent premium, corresponding to ISK 3.83 per share,

and which will be paid in Exista and Kaupthing shares

at 60 per cent and 40 per cent, respectively.

The merger is subject to the approval of the Icelandic

Financial Supervisory Authority, the competition

authorities, and the shareholders of SPRON.

4 July 2008, Danmark Nationalbank (The Danish

Central Bank) raised the interest rate level.

Consequently, for the third time this year, Eik Banki

raised the interest rate effective from 15 July 2008.

It is not unlikely that the financial market unrest

may cause even higher financial expences and higher

interest rate levels in 2008.

No other events of significance to the half-year report

2008 have occurred after 30 June 2008.

Eik Banki Group has not been involved in any

significant law suits or arbitration procedures that

are expected to have a negative impact on the result,

and has no knowledge of any such matters being

underway.

Eik Banki Group has no knowledge of possible trends,

uncertainties, demands, obligations or events,

other than those herein described, that could be

expected to have a negative impact on Eik Banki’s

prospects.

22

Outlook for 2008

The Faroese and Danish economies are still strong

and fundamentally healthy despite the increases in

oil price and interest rate level and the less favorable

world economic outlook during the course of the last

year. However, these circumstances combined with

currently low unemployment could result in a lower

growth rate in 2008 and 2009.

So far, the global financial situation has not had a

substantial effect on the Nordic countries. However,

the level of uncertainty has increased.

Eik Banki Group maintains the previously announced

expectation of DKK 335 million before market value

adjustments, provisions for losses, writedowns and

taxes.

Decisions by the Board of Directors

No decisions by the Board of Directors in the second-

quarter are of the nature that needs to be included in

the half-year report.

Auditing

The half-year report has been reviewed by the internal

auditing department, but has not been audited.


There have been no changes in the accounting

principles.

Financial Calender 2008

21 February Annual Report 2007

11 April General Meeting

24 April First Quarter Report

24 July Half-Year Report

24 October Nine Month Report

22

Half-Year Accounts

2008

23

Eik Banki P/F Group

1H 2008 1H 2007 Note DKK 1,000 1H 2008 1H 20071H 2008 1H 2007 Note DKK 1,000 1H 2008 1H 20072008 1H 2007 Note DKK 1,000 1H 2008 1H 20071H 2007 Note DKK 1,000 1H 2008 1H 20072007 Note DKK 1,000 1H 2008 1H 20071H 2008 1H 20072008 1H 20071H 20072007

Profit and Loss Account

411,711 283,449 3 Interest income 663,398 351,618

247,967 173,961 4 Interest expense 383,998 188,689

163,744 109,488 Net interest income 279,400 162,929

24,548 66,253 Dividends from shares and other holdings 26,822 68,890

52,079 31,884 Fee and commission income 85,943 65,831

1,060 469 Fee and commission expense 4,372 922

239,311 207,156 Net interest and fee income 387,793 296,728

-169,452 16,921 5 Market value adjustments of securities and foreign currencies -146,149 40,022

4,248 4,172 Other operating income 5,539 4,172

74,107 228,249 Profit on financial operations 247,183 340,922

115,651 98,090 6 Staff costs and administrative expenses 196,467 135,834

11,366 10,795 Depreciation and write-down of intangible and tangible assets 12,615 11,536

0 0 Other operating expenses 132 10

28,492 -15,209 Net depreciation and provisions for loss on bad debts 53,416 -9,520

50,357 85,775 7 Income from associated and subsidiary undertakings 70 34,339

-31,045 220,348 Profit before taxes -15,377 237,401

-14,942 14,426 Taxes -726 31,479

-16,103 205,922 Net profit for the period -16,103 205,922

Half-Year Accounts Profit and Loss Account

2424

Eik Banki P/F Group


Balance sheet

Assets

531,723 122,299 Cash-in-hand and demand deposits with central banks 1,020,077 122,299

1,942,798 4,752,539 8 Claims on credit institutions and central banks 1,173,578 2,694,960

8,207,618 6,060,754 9 Loans and advances 16,117,470 9,328,273

1,019,537 881,135 Bonds 1,405,686 950,578

387,924 407,664 Shares 519,298 520,603

73,786 191,971 Holdings in associated undertakings 73,786 191,971

1,071,619 414,091 Holdings in subsidiary undertakings 8,526 7,354

200,485 210,703 Intangible assets 413,794 210,873

132,865 128,655 Tangible assets 136,097 132,112

72,115 0 Own shares 72,115 0

165,261 115,917 Other assets 543,708 172,617

7,238 5,840 Prepayments 7,953 6,730

13,812,969 13,291,568 Total assets 21,492,088 14,338,370

Liabilities

5,148,976 5,408,471 10 Debt to credit institutions and central banks 5,301,587 5,751,807

5,976,751 5,826,833 11 Deposits 13,141,258 6,385,992

148,022 186,143 Other liabilities 497,115 330,145

0 0 Prepayments 151 180

2,300 8,447 Provisions for liabilities and charges 15,057 8,572

449,041 447,815 Subordinated debt 449,041 447,815

1 Equity

812,927 711,311 Share capital 812,927 711,311

600,427 117,751 Share premium account 600,427 117,751

72,115 0 Reserves for own shares 72,115 0

219,040 162,742 Other reserves 135,176 94,121

399,473 216,133 Brought forward from prior years 483,337 284,754

-16,103 205,922 Carried forward from profit -16,103 205,922

2,087,879 1,413,859 Total equity 2,087,879 1,413,859

13,812,969 13,291,568 Total liabilities 21,492,088 14,338,370

Off-balance-sheet items

1,015,309 944,661 Guarantees, etc. 1,206,837 1,012,093

102,178 203,566 Other commitments 114,871 204,819

1,117,487 1,148,227 Total off-balance-sheet items 1,321,708 1,216,912

Half-Year Accounts Balance Sheet

25

Eik Banki P/F Group

1H 2008 1H 2007 DKK 1.000 1H 2008 1H 2007

Cash flow statement

Cash flows from operating activities

-16,103 205,922 Net profit in the period -16,103 205,922

11,367 10,795 Depreciations and write-downs 12,615 11,536

28,492 -15,209 Provisions for loss on bad debts 53,416 -9,520

119,094 -102,696 Market value adjustments of securities 146,079 -74,361

142,850 98,812 Cash flows from opreating activites 196,007 133,577

1,978,961 541,068 Changes in net position to credit institutions and central banks 848,646 1,196,344

-2,025,438 52,992 Net changes in loan and deposit -87,347 -560,465

24,884 -285,128 Net changes in securities -17,423 -212,099

-167,123 74,277 Net changes in other assets and liabilities -271,002 196,507

-188,716 383,209 Cash flows from selected financial assets and liabilities 472,874 620,287

Cash flows from investment activities

-5,359 -27,514 Changes in intangible and tangible assets -219,521 -28,954

-655,000 0 Investments in associated companies and subsidiaries 0 0

-660,359 -27,514 Cash flows from investment activities -219,521 -28,954

Cash flows from financing activities

690,123 91.649 Inflow to equity 690,123 91,649


691,349 389.464 Cash flows from financing activities 691,349 389,464

-14,876 843.971 Total changes in cash flows 1,140,709 1,114,374

2,231,545 1,387,574 Cash and cash equivalents beginning period 2,871,456 1,757,082

2,216,669 2,231,545 Cash and cash equivalents end period 4,012,165 2,871,456

Cash and cash equivalents beginning period 1)

122,299 38,680 Cash-in-hand and demand deposits with central banks, etc. 122,299 38,680

428,772 446,855 Claims on demands on credit institutions 872,502 767,286

799,339 179,884 Claims at notice on central banks 799,339 179,884

881,135 722,155 Bonds etc. 1,077,316 771,232

2,231,545 1,387,574 Cash and cash equivalents beginning period 2,871,456 1,757,082

Cash and cash equivalents end period 1)

531,723 122,299 Cash-in-hand and demand deposits with central banks, etc. 1,020,077 122,299

365,662 428,772 Claims on demands on credit institutions 1,020,717 872,502

299,747 799,339 Claims at notice with central banks 449,676 799,339

1,019,537 881,135 Bonds etc. 1,521,695 1,077,316

2,216,669 2,231,545 Cash and cash equivalents end period 4,012,165 2,871,456

1) As the cash is made up of claims on demands only, it is not possible to balance all the accounts directly to the

respective items on the balance sheet.

Half-Year Accounts Cash flow statement

2626

Note DKK 1,000 Share Share Own Other Profit Total

capital premium shares reserves carried

account

Notes

1 Equity

Group

Change in capital

1 January 2008 812,927 600,427 86,012 121,279 483,337 2,103,982

Own shares year begin -86,012 86,012 0

Own shares end period 72,115 -72,115 0

Net profit for the period -16,103 -16,103

30 June 2008 812,927 600,427 72,115 135,176 467,234 2,087,879

1 January 2007 712,137 117,751 0 94,121 284,754 1,208,763

Guaranteed capital -826 -826

Net profit for the period 205,922 205,922

30 June 2007 711,311 117,751 0 94,121 490,676 1,413,859

Eik Banki P/F

Change in capital

1 January 2008 812,927 600,427 85,508 205,647 399,473 2,103,982

Own shares year begin -85,508 85,508 0

Own shares end period 72,115 -72,115 0

Net profit for the period -16,103 -16,103

30 June 2008 812,927 600,427 72,115 219,040 383,370 2,087,879

1 January 2007 712,137 117,751 0 162,742 216,133 1,208,763

Guaranteed capital -826 -826

Net profit for the period 205,922 205,922

30 June 2007 711,311 117,751 0 162,742 422,055 1,413,859

Half-Year Accounts Notes

27

Eik Banki P/F Group


2 Solvency

1,811,693 989,308 Core capital less statutory deductions 1,599,680 988,816

2,228,874 1,324,799 Capital base 2,016,999 1,307,359

Weighted assets not included in trading portfolio including off

9,573,017 7,593,731 balance-sheet items 14,698,396 9,733,960

938,365 681,087 Weighted items with market risk 1,332,510 976,678

10,511,382 8.274,818 Total risk weighted assets 16,030,906 10,710,638

21.2% 16.0% Solvency ratio purs. to FIL § 124, 1 12.6% 12.2%

17.2% 12.0% Core capital ratio 10.0% 9.2%

3 Interest income

75,916 75,612 Claims on credit institutions and central banks 60,416 32,387

289,164 189,632 Loans and advances 549,438 294,622

25,700 17,299 Bonds 33,700 23,405

20,931 906 Derivative financial instruments 19,844 1,204

Of this:

20,931 906 Currency contracts 20,931 1,209

0 0 Interest contracts -1,087 -5

0 0 Share contracts 0 0

411,711 283,449 Total interest income 663,398 351,618

4 Interest expense

131,254 96,964 Credit institutions and central banks 128,490 104,561

103,155 69,158 Deposits 241,925 76,289


0 0 Other interest expenses 25 0

247,967 173,961 Total interest expense 383,998 188,689


2828

Eik Banki P/F Group


5 Market value adjustments of securities and foreign currencies

-118,025 -12,043 Bonds (+/-) -122,547 -10.919

-42,844 47,206 Shares (+/-) -31,746 65.359

0 0 Loans with fixed interest 156 0

-8,583 -18,242 Currency (+/-) -10,339 -17.514

0 0 Derivative financial instruments 18,327 3.096

-169,452 16,921 Total market value adjustments -146,149 40.022

6 Staff costs and administrative expenses

Salaries and remuneration of Board of Directors,

Managing Directors and Board of Representatives

1,912 2,961 Managing Directors 2,087 3,136

817 690 Board of Directors 817 690

0 28 Board of Representatives 0 28

2,729 3,679 Total 2,904 3,854

Staff costs

49,344 44,879 Wages and salaries 87,848 71,068

5,182 3,908 Pensions 7,763 5,165

4,950 3,350 Social security costs 7,093 4,811

59,476 52,137 Total 102,704 81,044

53,446 42,274 Other administrative expenses 90,859 50,936

115,651 98,090 Total staff costs and administrative expenses 196,467 135,834

250.34 217.67 Number of employees, full time equivalent 356.94 267.17

7 Income from associated and subsidiary undertakings

70 34,935 Associated undertakings 70 34,935

50,287 50,840 Subsidiary undertakings 0 -596

50,357 85,775 Total income from associated and subsidiary undertakings 70 34,339


29


Eik Banki P/F Group


8 Claims on credit institutions and central banks

299,747 799,338 Claims at notice on central banks 787,503 799,339

1,643,051 3,953,201 Claims on credit institutions 386,075 1,895,621

1,942,798 4,752,539 Total claims on credit institutions and central banks 1,173,578 2,694,960

Claims on credit institutions and central banks

365,662 407,174 Claims at call 436,931 649,581

1,477,136 4,245,365 Up to 3 months 635,461 2,045,379

0 0 Over 3 months and up to one year 101,186 0

0 0 Over one year and up to 5 years 0 0

100,000 100,000 Over 5 years 0 0

1,942,798 4,752,539 Total claims on credit institutions and central banks 1,173,578 2,694,960

1,268,133 2,369,170 Thereof from Eik Bank Danmark A/S 0 0

9 Loans and advances

106,547 103,076 At call 210,829 172,847

259,591 295,443 Up to 3 months 1,325,042 1,092,923

849,799 700,537 Over 3 months and up to one year 2,481,027 1,944,327

2,186,985 1,414,938 Over one year and up to 5 years 3,535,784 1,962,981

4,804,696 3,546,760 Over 5 years 8,564,788 4,155,195

8,207,618 6,060,754 Total loans and advances 16,117,470 9,328,273

10 Debt to credit institutions and central banks

379,921 110,658 Debt payable on demand 372,460 119,602

1,941,201 2,569,566 Up to 3 months 2,103,306 2,849,716

778,769 1,462,017 Over 3 months and up to one year 778,769 1,507,405

2,049,085 1,266,230 Over one year and up to 5 years 2,047,052 1,275,084

0 0 Over 5 years 0 0

5,148,976 5,408,471 Total debt to credit institutions and central banks 5,301,587 5,751,807

288,047 69,185 Thereof to Eik Bank Danmark A/S 0 0

11 Deposits

2,395,470 2,667,691 Deposits on demand 7,577,067 2,750,681

2,073,789 1,982,786 Deposits at notice 2,847,077 2,367,041

1,091,095 844,321 Time deposits 1,139,865 883,987

416,397 332,035 Special categories of deposits 1,577,249 384,283

5,976,751 5,826,833 Total deposits 13,141,258 6,385,992

Deposits

2,395,470 2,667,691 On demand 7,577,067 2,750,681

2,248,766 1,865,687 Up to 3 months 2,837,700 2,287,233

985,024 984,416 Over 3 months and up to one year 1,267,311 995,871

115,476 160,759 Over one year and up to 5 years 428,672 168,746

232,015 148,280 Over 5 years 1,030,508 183,461

5,976,751 5,826,833 Total deposits 13,141,258 6,385,992

3030

31

Eik Banki P/F

Tórshavn, 24 July 2008

Managing Directors

Marner Jacobsen, CEO Bjarni Olsen, Managing Director

Board of Directors

Frithleif Olsen, Chairman Odd A. Bjellvåg, Deputy ChairmanOdd A. Bjellvåg, Deputy Chairman, Deputy Chairman

Finnbogi Niclasen Rólant Vidtfeldt Mathea Hilduberg

Marian Jacobsen Petur Hammer

Tórmund A. Joensen Rakul Dam Gert Langgaard Fía Selma Nielsen

Half-Year Accounts Statement by the Management

The Board of Directors and the Managing Directors

have today approved the consolidated and half-year

financial statement of Eik Banki P/F.

The financial statements for the period 1 January

- 30 June 2008, which is prepared by us, is set up in

accordance with the Faroese Banking Act and with

the executive order and guidelines of the Danish

Financial Supervisory Authority on presentations of

consolidated financial statements and in accordance

with the guidelines for companies listed on OMX the

Nordic Exchange.

It is our opinion that the financial statements give

a true and fair view of the company’s assets and

liabilities, financial position as of 30 June 2008 and

profit/loss for the period 1 January - 30 June 2008.

Auditor’s Report

33

34

Eik Banki P/F

Tórshavn, 24 July 2008

Sigmund Frederiksen, Chief Auditor

Internal Auditor’s Review Report

To the Shareholders of Eik Banki P/F

According to agreement with the Company’s Board

of Directors, we have reviewed the condensed

consolidated accompanying Interim Balance Sheet

of Eik Banki P/F as of 30 June 2008, and the related

condensed consolidated Interim Statement of

Income, Cash Flows and Notes for the six months

ending 30 June 2008. This condensed consolidated

Interim Financial Statement has been prepared in

accordance with the Faroese Banking Act and with

the executive order and guidelines of the Danish

Financial Supervisory Authority on presentation

of financial statements by banks as applied in the

Faroes and in accordance with the financial reporting

requirements of the OMX Nordic Exchange.

The condensed consolidated Interim Financial

Statement is the responsibility of the Company´s

management. Our responsibility is to issue a report

on the condensed consolidated Interim Financial

Statement based on our review.

Basis of Opinion

We conducted our review in accordance with

generally accepted review standards as applied in the

Faroe Islands. This standard requires that we plan

and perform the review to obtain limited assurance

as to whether the preliminary financial information

is free of material misstatements. A review is limited

primarily to inquiries of company personnel and

analytical procedures applied to financial data and

thus provides less assurance than an audit. We have

not performed an audit and, accordingly, we do not

express an audit opinion.

Opinion

Based on our review, nothing has come to our

attention that causes us to believe that the condensed

consolidated accompanying Interim Financial

Statements do not give a true and fair view of the

financial position of the Bank as of 30 June 2008, and

of the results of its operations and its cash flows for

the period ending 30 June 2008 in accordance with

the Faroese Banking Act and with the executive order

and guidelines of the Danish Financial Supervisory

Authority on presentation of financial statements

by banks as applied in the Faroes and in accordance

with the financial reporting requirements of the OMX

Nordic Exchanges.

Auditor’s Report

34


35

36

GeneralThe consolidated and half-year accounts are prepared

in conformity with the Financial Business Act and

regulations and directives from the Danish Financial

Supervisory Authority (Finanstilsynet).

The accounting principles are unchanged since previ-

ous year. However, the listing on OMX the Nordic

Exchange entails increased disclosure requirements.

The accounting principles follow the requirements of

OMX the Nordic Exchange.

Consolidated Accounts

The consolidated accounts include Eik Banki P/F,

P/F Inni and Eik Bank Danmark A/S, which are 100%

owned by Eik Banki P/F.

The consolidated accounts are prepared by con-

solidating items of the same nature and eliminating

intra-group income and expenses, and outstanding

loan balances.

Income Recognition

Interest income, interest expenses, recurring provi-

sions as well as all other significant income and

expenses were accrued to the accounting period.

Fees, charges and commissions, etc. were booked as

received. Dividends on shares are booked as income

when the General Meeting has approved the annual

report. Interest on loans, which are identified as bad

or doubtful, are not entered as income.

Internal Transactions

Transactions with subsidiary and associated com-

panies are in principle executed in accordance with

market conditions.

Foreign Currencies Translation

Assets and liabilities denominated in foreign curren-

cies are translated according to the official rates of

exchange prevailing end of period. Income and expense

related to foreign exchange are converted according to

the rates of exchange prevailing at the transaction date.

Loans, Guarantees and Claims on other

Financial Institutions

Loans, guarantees and claims on other financial insti-

tutions are continually reviewed to determine loss

risk. Consequently, bad debts and provisions for bad

debts are booked at the profit and loss account under

“Depreciation and provisions for loss on bad debts”.

Loans with fixed interest where interest risk is

covered by derivatives are not subject to market value

adjustments.

Securities

Listed securities are booked at market values

at end of period. Non-listed securities are booked at

purchase price or at expected market price.

Equity in Subsidiary and Associated Undertakings

Equity in subsidiary and associated undertakings is

entered at equity value.

Intangible Assets

Software is booked at purchase price, less a

deduction for depreciation. Software is depreciated

according to the straight-line method over a period of

5 years.

Goodwill is booked at purchase price, less a deduction

for depreciation. Goodwill is depreciated according

to the straight-line method over a period of 10 - 20

years.


36

37

Tangible Assets

Land and buildings are booked at purchase price,

less deductions for depreciation and write downs.

Depreciation is taken according to the straight-

line method over the estimated useful life with

a maximum of 50 years. Land is not, however,

depreciated.

Repossessed properties are booked according to their

estimated market value.

Furnishings and equipment are booked at purchase

price, less deductions for depreciation and write

downs. Depreciation is taken according to the

straight-line method over a period of 5 - 8 years.

Furnishings and supplies valued at less than DKK

20,000 are expensed in the purchase year.

Financial Instruments

Currency futures contracts are booked at market

value end period.

Interest rate swaps used in order to secure fixed-

interest loans, are not subject to market value

adjustments. Interest on swaps is accrued to the

accounting period and booked as interest income.

Taxes

Calculated tax on the profit for the period was stated

in the interim accounts and included both actual tax

and deferred tax. Deferred tax resulting from the

timing differences between the interim accounts and

the tax accounting by the Faroese tax administration

is expensed and stated under „Provisions for liabilities

and charges”. Tax surplus, which in all probability will

be used in future, is entered as income and stated

under „Other assets”.


Half-Year Report 2008euroland.com/omx_attachments/2008-07/269763-1-en.pdfEliesar N. Lydersen Dánjal...

Documents

Transcript of Half-Year Report 2008euroland.com/omx_attachments/2008-07/269763-1-en.pdfEliesar N. Lydersen Dánjal...