Realkredit Danmark receives IRB approval

The Danish Financial Supervisory Authority (FSA) has permitted the Realkredit Danmark Group to apply the advanced internal ratings-based (IRB) approach to calculate credit risk under the new capital requirements directive (CRD). The approval will take effect on January 1, 2008.

The approval will considerably reduce the Realkredit Danmark Group’s minimum capital requirement (Pillar I). Applying the IRB approach to the Realkredit Danmark Group’s financial results for the first nine months of 2007 would reduce risk-weighted assets (Pillar I) by 85%, on full implementation in 2010, of which 10 percentage points would be recognised in 2008 under the transitional provisions of CRD.

The capital target of the Group will be based on the minimum capital requirement under Pillar I and further capital requirements under Pillar II, including stress tests and rating ambitions. The Annual Report for 2007 will explain the effect of the new requirements on the Group’s capital management and financial targets.

The CRD sets out the requirements for calculating risk-weighted assets. The Advanced IRB approach is the most advanced option among the three approaches offered by the directive. This approach may be put into use as of 2008.


Yours faithfully,

The Executive Board


Any additional questions should be addressed to Sven Holm, Chairman of the Executive Board, tel. +45 45 13 20 81.