Den Danske Bank A/S - Final Results - Part One

RNS No 6138c
DEN DANSKE BANK
27th February 1998


Den Danske Bank

reports after-tax profit of DKr4.2bn - up by Mr552m

Dividend to be raised from Mr16 to Mr18 per share

* Core earnings of Mr3Abn after virtually unchanged
  provisions of Mr614m

* Net interest Income up by Mr.598m, or 8%, to
  DW.8bn. Fees and commissions up by DKA17m, or 
  21%, to morethan DKr2.4bn

* Valuation gain of Mr400m on securities, against just
  under DKrl.5bn in 1996

* Valuation gain of Mr806m on holdings in associated
  and subsidiary undertakings, against Mr889m in 1996

* Net extraordinary expenses of Mr192m, against
  Mr754m. in i996

* Expenses and depreciation up by 12%, or DKr73Itnl, to
  DKr6.9bn, mainly reflecting the consolidation of
  Ostgata Enskilda Bank.  Effective cost increase of 3%

* The Board of Directors is proposing a dividend increase
  from DKr16 to Mr18 per share

Den Danske Bank raised its after-tax profit by DKr552m, or 15%, to DKr4.2 bn in
1997.  According to Knud Sorensen - Chief Executive - this was "satisfactory in
the circumstances".

"It's a handsome set of figures", said Knud Sorensen. 'The borrom line result is
the best that the Bank has ever achieved, and I think our shareholders will
appreciate that as well as the proposal to increase the dividend by DW per
share. But, if one looks at the figures in a little more detail core earnings
were not entirelyas good as we might have wished fbr, and valuation gains could
also have been higher. This was reflected in a fall of DKr570m, or just over
10%, in profit on ordinary operations, to just over DKr4.8bn.

However, this fall was amply offiet by a cut in net extraordinary expenses of
DKr562m and a reduction in the tax charge of DKr560m."

Maturity-related market value adjustments of securities

The reason Knud Sorensen said core earnings should be broken down and examined
in more detail is that the improvement in the largest income item - net interest
income - of DKr598m to just over DKr7.8bn was largely the result of the Group
treasury activities in high-coupon fixed income securities which were
bought at market prices above par value. Negative maturity-related. value
adjustments am posted against these securities as they approach maturity or are
drawn for redemption.

Maturity-related market value adjustments were calculated at a negative DKr95Om
for 1997, against DKr300m for 1996.

The total of net interest income and maturity-related market value adjustments
of securities declined by DKr52m from 1996 to 1997. Similarly, core earnings
edged down by DKr74m to DKr3.4bn if they are adjusted for maturity-related
valuation losses on securities.

It is not satisfactory that core earnings effectively failed to increase,
considering the significant expansion In business volume in 1997, with total
assets up 17% to DKr527bn.

Other major items of core banking income, in addition to net interest income,
are fees and commissions (DKr2,434m against D&2,017m in 1996), foreign exchange
income (DKr419m against DKr283m), share dividends (D&151m against DKr127m) and
other operating income (DKr287m against DKil90m).

DKr686m from insurance operations

Earnings from insurance operations have come to account for a significant part.
nf Den Danske Bank Group's core earnings. Insurance business contributed.
DKr686m to core earnings in 1997, against DKr674m in 1996. This figure is
included in the Group's Profit and Loss Account under the item "Value
adjustments of holdings in associated and subsidiary undertakings etc.", which
was DKr806m in 1997 (DKr889m the year before).

Expenses

Operating expenses and depreciation of tangible assets rose by DKr731m, or 12%,
to DKr6,906m in 1997. DKr397m of the Increase was attributable to the
consolidation of Ostgota Enskilda Bank from April 1, 1997. Moreover, expenses,
as shown in the Profit and Loss Account, increased because Daffices asset
management and property administration operations were transferred from the
non-consolidated insurance subsidiaries to the consolidated banking group in
1997. Also, the investment of DKr116m in PCs for the personal use of the staff
was written off an acquisition. 'Without these factors, expenses would
effectively have risen by about 3%, which is a relatively modest rise
considering the increased activities of the Group, not least outside Denmark.

Provisions - Asm and Faroese banking affair

The charge for bad and doubtful debts fell by DKr23m to DKr61.4m in 1997. The
charge reflected in part the difficult economic and financial conditions in Asia
and an amount set aside against possible compensation relating to the Faroese
banking affair.

Valuation gains on shares of DKr1.6bn

Valuation gains on bonds, shares and financial derivatives again contributed to
the Bank's net profit in 1997. There was a particularly significant rise in
stock market prices.

Net market value adjustments of securities, etc., were a gain of DKr400m,
against DKr1,451m in 1996.

The net gain of DKr400m comprises a securities valuation gain of DKr1,287m
(including a gain of DKr1,613m on shares and a loss of DKr404m on bonds) and
a valuation loss on financial derivatives of Dkr887m. These figures should be
viewed in conjunction with an 8% rise in net interest income.

Return on equity of 16.3%

The net profit of DKr4,205m returned 16.3% on beginning-of-year equity (15.8%
in 1996).

Assets and liabilities

Den Danske Bank Grouo assets of DKr527bn at the 1997 year-end do not include
Danica's assets. If the two balance-sheet totals were added together, the Group
would have total assets worth approximately DKr670bn.

The banking group increased lending by DKr58bn, or 25%, to DKr291bn, while
deposits grew by DKr29bn, or 15%, to DKr225bn.

The Parent Bank raised its marker share of total banking-sector lending from 
33.5% in 1996 to 34.3% at the 1997 year-end.  Market share of deposits rose from
30.9% to 31.4%. Marker share of loins and deposits with Danish customers were,
by and large, maintained.

Holdings of bonds and shares rose by DKr18bn, or 16%, to DKr136bn, including 
market value adjustments at the 1997 year-end.

Shareholders' equity was DKr27.5bn at the end of 1997, against DKr25.9bn a year
earlier, after a DKrl.6bn write-off of goodwill on the acquisition of Ostgota. 
Enskilda Bank.

The solvency ratio, which is required by law to be at least 8%, amounted to 
10.2% at the end of 1997, against 9.8% a year earlier.

Outlook

According to the Announcement of Financial Results, the Group expects 1998 core
earnings, after allowing for maturity-related valuation adjustments of 
securities, to be at a similar level to 1997, or slightly lower.

The Bank considers its profitability in the slightly longer run with a certain
measure of optimism.  This is because of the continuing efforts to enhance the
competence of the Group's highly-skilled staff and because of the expected
return on the considerable investments the Bank has made in information
technology.  To this can be added the contribution from insurance operations and
from increased activities in international financial markets, not least in the
Nordic region.  Profitability will moreover benefit from continued
rationalisation throughout the Group.

Election to the Board of Directors

At the Annual General Meeting the Board of Directors will propose the election
to the Board of Sten Schelbye and re-election of Palle Marcus and Birgit
Aagaard-Svendsen, who are retiring by rotation and offer themselves for
re-election.

DEN DANSKE BANK

(Sgd.) Carsten Winkler

The English version of the Annual Report is expected to be available on 
Friday, March 13, 1998.  The Bank's Annual General Meeting will be held at
5.00pm on Tuesday, March 31, 1998, at the Bella Center, 5 Center Boulevard,
Copenhagen 5.

Den Danske Bank Group
Announcement of Financial Results 1997

Den Danske Bank Group Highlights

Summary Profit and Loss Account            1997   1996   1995   1994   1993
 (DKr million)

Net interest income                       7,849  7.251  7,803  8,414  9.135
Dividends from shares,                      151    127     97    110    114
Fee and commission income (net)           2,434  2,017  1,693  1,903  1,452

Net Interest and Income                  10,434  9,395  9,593  10,427 10,701 
Market Value adjustment of securities 1)  1,287  1,473  3.681  -3,429  4,195
Foreign exchange income 1)                  419    283    325     327    537
Market Value Adjustment of derivative
  financial instruments 1)                 -887    -22 -1,709   2,878   -902
Total  market value adjustment and
  foreign exchange income                   819  1,734  2,297    -224  3,830
Other operating income                      287    190    182     179    179   

Profit on financial operations           11,540 11,319 12,072  10,382 14,710
Operating expenses                        6,420  5,741  5,814   5,849  6,018
Depreciation of tangible assets             486    434    514     592    577
Provisions for bad and doubtful debts
  (net)                                     614    637  1,254   1,870  2,837
Value adjustments of holdings in 
  associated and subsidiary undertakings
  etc.                                      806    889  1,544    -363   -867
Profit on ordinary operations             4,826  5,396  6,034   1,708  4,411
Extraordinary items (net)                  -192   -754   -946    -598   -530
Profit before taxation                    4,634  4,642  5,088   1,110  3,881
Taxation                                    429    989  1,457     292  1,478
Net profit for the year                   4,205  3,653  3,631     818  2,403

1) After adjustments for pooled pension   ---------------------------------- 
   fund deposits

Summary Balance Sheet at Dec. 31 (DKr bn)

Assets:                                    
Cash in hand and due from credit
  institutions, etc                        58.6   69.3   55.8     53.5   80.2
Loans and advances                        290.7  232.5  194.4    171.2  179.7
Bonds and shares, etc                     136.2  117.6  110.3     90.2   77.6
Holdings in associated and subsidiary
  undertakings, etc                         9.3    8.7    8.2      1.8    3.4
Other assets                               32.0   23.7   21.3     18.5   15.2
Total Assets                              526.8  451.8  390.0    338.2  356.1

Liabilities:
Due to credit institutions                138.5  130.6  114.8    108.1  122.8
Deposits                                  225.2  195.9  172.4    153.6  162.7
Issued bonds,etc                           78.6   54.0   44.2     28.9   23.0
Other liabilities                          38.6   32.0   24.2     17.1   16.4
Subordinated debt                          18.4   13.4   11.3     10.2   11.2
Shareholders' equity                       27.5   25.9   23.1     20.3   20.0
Total liabilities                         526.8  451.8  390.0    338.2  356.1

Off-balance-sheet items:
Guarantees, etc.                           51.0    41.2    26.8    26.6   22.5
Other commitments                       2,159.7 2,013.3 1,198.5 1,097.4  949.1
Total off-balance-sheet items           2,210.7 2,054.5 1,225.3 1,124.0  971.6

Ratios and Key Figures:
Profit on ordinary operations
  per share, DKr                           91.2   102.0   114.0    32.3   83.3
Net profit for the year as % of 
  shareholders equity at Jan 1             16.3    15.8    17.8     4.1   13.1
Solvency ratio, %                          10.2     9.8    10.0    11.4   12.6
Dividend per share, DKr                      18      16      16      12     12
Share price at Dec 31, DKr                  914     473     383     331    387
Book value per share, DKr                   520     489     436     384    379
Number of full-time employees
  at December 31:                         
  - Den Danske Bank and consolidated
    subsidiaries                          11,365 11,111  11,514  12,033 12,457
  - Non-consolidated subsidiaries 
    (insurance companies)                  1,442  1,642   1,621      -     -
--------------------------------------------------------------------------------

Den Danske Bank Group comprises a total of 39 consolidated subsidiaries and 35
non-consolidated insurance and other subsidiaries.

*) Ostgota Enskilda Bank AB and Nordania Leasing Bankatieselskab will be 
converted into branches of DenDanske Bank in 1998, when the necessary approvals
have been given.

**) In accordnace with Danish banking legislation, the insurance subsidiaries 
are not consolidated into the Group.

Changes in group structure in 1997

In 1997, Den Danske Bank acquired the Swedish Bank, Ostgota Enskilda Bank AB.
Ostgota Enskilda Bank Group was consolidated into Den Danske Bank Group with
effect from April 1, 1997.

At the beginning of 1997, Den Danske Bank entered into an agreement with
Maersk Data A/S about the establishment of a jointly-owned data processing
company, DMdata a/s.  The company, which is an associated cojpany, started
operations in March 1997 and handles DenDanske Bank Group's central data
processing operations.

At the end of 1997,DenDanske Bank established its subsidiary, KortFinans A/S,
which issues MasterCards and manages card scheme..

Danske Forsikring,Skade, Forsikringsaktiegelskab (formerly
Forsikringsaktieselskabet nske Phonix A/S was transferred from DenDanske Bank to
Danica Forsikring Skadeforsikringsaktieselskab in 1997.  All Den Danske Bank
Group's insurance operations are now gathered in Danica.

Announcement of Financial Results for the Group

The Board of Directors of Den Danske Bank has today reviewed the Accounts and
decided to submit them for approval at the Annual General Meeting.

Group financial review

Den Danske Bank Group's profit for 1997 was satisfactory in the circumstances
Net profit amounted to DKr4,205m, against DKr3,653m the year before the Board
of Directors is proposing an increase in the dividend to DKr18 per share from
DKr16 in 1996. Subject to the approval of the Annual General Meeting, DKr3,252m
will be allocated to shareholders' equity, bringing equity capital to
DKr27.5bn.

The Group significantly expanded its business vvolume in 1997.  Total assets 
grew to DKr527bn at the year-end from DKr452bn a year earier. Profit on
financial opeerations showed aminor improvement to DKr11,540m in 1997 from
DKr11,319m in 1996.

Operating expenses and depreciation of tangible assets increased by 112% to a
total of DKr6,906m, mainly reflecting the acquisition of Ostgoza Enshilda Bank
and non-recurring information technology costs. After provisions of DKr614m,
against DKr637m in 1996, the Group recorded a profit on ordinary operations of
DKr4,826m, down by DKr570m from the previous year.

Core earnings

Core earniogs, including earnings from insurance operations, improved
from DKr3,730m in 1996 to DKr4,306m in 1997.

Core earnings were influenced  by an improvement in net inteerest income.  This
improvement was largely the result of the Group's treasury activities in
high-coupon fixed income securities which were bought at market prices above
par value.  Negative maturity-related value adjustments are posted against
these securities as they approach maturity or are drawn for redemption.  

Maturity-related market value adjustments of securities were calculated at
DKr950m for 1997 and DKr300m for 1996.  The total of net interest income and
-related valuation losses declined from 1996 to 1997.

It is not satisfactory that earnings from this segment of primary operations
failed to increase in 1997, considering the significant in the Group's business
volume.

Fee and commission income showed a satisfactory increase.

Earnings from insurance operations were DKr686m, against Dkr674m the year
before.

The rise in operating expenses and depreciation had been anticipated, in part
because of the higher business volume of the Group.

The charge for bad and doubtful debrs was DKr614m in 1997, compared with DKr637,
in 1996, reflecting the difficult economic conditions in Asia and an amount set
aside against possible compensation relating to the Faroese banking affair.

Value adjustment of the Group's securities and holdings in associated and
subsidiary undertakings amounted to DKr520m in 1997, against DKr1,666m the year
before. Value adjustments, excluding maturity-related valuation losses on
securites, fell from DKr1,966m in 1996 to DKr1,470m in 1997. Capital gains on
the securities portfolio were mainly generated by highere share prices.

After allowing for maturity-related market value adjustments of securities.
Group core earnings amounted to DKr3,356m (table 3), against DKr3,430m the year
before, which is not satisfactory.

Adjusted core earnings as a percentage of shareholders' equity at the beginning
of the year fell from 14.9% in 1996 to 13.0% in 1997, and the income/cost ratio 
fell from DKr1.66 in 1996 to DKr1.57 in 1997.

Shareholders' equity was DKr27.5bn at the end of the year after allocation of
profits and a DKr1.6bn write-off of goodwill on the acquisition of Ostgota
Enskilda Bank.

Earnings from primary oeprations, as reflected in adjusted core earnings, were
consistent with the forecast set out in the 1997 interim report. Net interest
income, etc., turned out more facvourable than expected but should, as mentioned
be viewed in conjunction with maturity-related valuation losses on bonds, etc.

Group Results

Net interest and fee income, etc.

The Group's net interest and fee income rose from DKr9,395m in 1996 to
DKr10,434m in 1997 (table 4). As menioned, net interest income was positively
affected by interest income from high-coupon bonds and financial derivaties,
which should be viewed in conjunction with negative maturity-related securities
valuation adjustments of DKr950m in 1997, against DKr300m in 1996. Moreover,
Ostgota Enskilda Bank, which was included in Group accounts from April 1, 1997,
contributed DKr303, to net interest income in 1997.

Den Danske Bank Group raised its deposit and loan volumes in 1997.

Interest margins on both domestic and international deposits and loans
contracted again. Net interest income from the higher business volume could not
fully offset thinner margins.

Fee and commission income rose from DKr2,017m in 1996 to DKr2,434m in 1997,
largely as a result of continued strong activity in securities markets.

Value adjustments of securities.

Higher prices of securities, primarily equities, generated a total valuation
gain on securities and derivative financial instruments of DKr400m, against
DKr1,451m the year before. Gains attributable to pooled pension fund deposits
accounted for DKr1,403m of total market value adjustments, compared with
DKr747m for the previous year.

Shares, etc., contributed DKr1,613m to market value adjustments - excluding
gains attributable to pooled pension fund deposits - against DKr909m in 1996.

Other securities and financial derivatives showed a total valuation loss of
DKr1,213m. The valuation loss on bonds was DKr404m, whereas mortgages and fixed
rate loans produced a gain on Dkr78m. There was a valuation loss of DKr887m onn
financial derivaties. Maturity-related valuation losses accounted for DKr950m of
total securities valuation losses. Because of the difficult economic and
financial conditions in Asia, the Group has adopted a prudent valuation of bonds
issued by Asian borrowers, which resulted in negative value adjustments to these
bonds.

The year before, market value adjustments generated a gain of DKr424m on bonds
and, in the case of mortgages and fixed rate loans, a gain of Dkr140m, while a
valuation loss of DKr22m was posted against financial derivatives.

Foreign exchange income, excluding that attributable to pooled pension fund
deposits, was DKr419m in 1997, against DKR283m in 1996.





Operating expenses, etc.

Operating expenses and depreciation of tangiable assets rose by DKr731m, from
DKr6,175m in 1996 to DKr6,906m in 1997.  This rise had been anticipated because
of a number of exceptional factors, including increased activities in the Nordic
region.  DKr397m of the total increase in expenses of DKr731m was attributable
to Ostgota Enskilda Bank group, which was included in Den Danske Bank Group's
accounts for the first time in 1997.  Moreover, expenses and depreciation, as
shown in the Profit and Loss Account, increased because Danica's asset
management and property administration operations were transferred from the
non-consolidated insurance companies to the consolidated banking group in 1997. 
Also, expenses relating to the investment in staff personal computers of DKr116m
were written off on acquisition, and training costs of DKr16m related to PC
training programmes for staff members were charged to expenses in the Profit and
Loss Accounts.

Without these exceptional factors, expenses would have risen by 3%.

Group stafing levels - in full-time staff terms - were 12,807 at the end of
1997, against 12,753 a year earlier, including staff in the insurance
subsidiaries, which are not consolidated in Group accounts.  Ostgota Enskilda
Bank accounted for 555 of the staff number at the 1997 year-end.

Provisions

The charge for bad and doubtful debts amounted to DKr614m in 1997, compared with
DKr637m in 1996, reflecting, inter alia, the difficult economic and financial
conditions in Asia and an amount set aside against possible compensation
relating to the Farose banking affair.

The Group sustained total loan losses of DKr834m, which had almost entirely been
provided for in previous years.  In 1996, loan losses were DKr666m.  Corporate
customers of domestic branches accounted for DKr278m of the total loan losses
in 1997, while personal customers accounted for DKr215m.  Group losses sustained
on exposure in foreign branches and exposure to credit institutions were
DKr131m. The subsidiaries recorded loan losses of DKr210m.

At the end of 1997, the accumulated provisions - after losses on lendings,
credit institutions and guarantees - amounted to DKr10,965m, against DKr10,440m
a year earlier.

Non-accrual loans - i.e. loans on which interest accrual has been suspended
because interest is deemed irrecoverable or the debtors have suspended payments
or gone bankrupt - totalled DKr3,302m, against DKr2,950m at the end of 1996.

Value adjustments of holdings in associated and subsidiary undertakings

There was a positive value adjustment to Group holdings in associated and
subsidiary undertakings of DKr806m, compared with DKr889m the year before.
These value adjustments mainly comprised profits from insurance business, with
earnings from insurance operations of DKr686m in 1997, against DKr674m in 1996,
and another DKr97m in income from securities valuation adjustments and
extraordinary items in non-life insurance companies in 1997, against DKr25m
in 1996.

Extraordinary items

The Danish Supreme Court has passed judgement on the question referred to in
previous Annual Reports as to whether the capital value of pension payments made
under one-year grants by Copenhagen HandelsBank - one of the three banks that
merged to become Den Danske Bank - should be provided as a liability.  The
Danish Financial Supervisory Authority raised this question with Copenhagen
HandelsBank in 1989.  In its judgement of June 26, 1997, the Supreme Court ruled
that the pension commitments must be covered by a funded scheme, into which the
estimated future costs must be paid pursuant to the rules of the Company Pens
ion Funds Act.  In response to the Supreme Court ruling, Den Danske Bank has
established a funded scheme with Danica and a total of DKr425m has been paid
into the scheme.  At the 1996 year-end, the Bank had provided a total of DKr450m
against these commitments. The excess provision of DKr25m has been booked as
income under extraordinary items.

In addition, a write-down of DKr75m on the Group's properties and an amount of
DKr72m relating to early retirement, etc., have been charged to extraordinary
expenses.

DKr106m of the previous year's IT provision of DKr250m has been expended on
adapting Group computer systems to the oncoming European single-currency regime
and the Year 2000, etc.

Extraordinary items were a net expense of DKr192m in 1997, against DKr754m
in 1996.

Taxation

The total tax charge for the Group was DKr429m in 1997. The year before, taxes
amounted in total to DKr989m. The 1997 tax charge related mainly to the
foreign units.

One reason for the significantly lower tax charge for 2997 compared to 1996 is
the joint taxation with life insurance subsidiaries. In 1997, these
subsidiaries made large technical provisions for the benefit of policyholders,
partly because of capital gains on shares. The provisions are tax-deductible
in the year when they are taken, while capital gains on shares are taxed on
realisation, at the earliest. However, in years of falling share prices, the
Group may incur a tax charge.

As mentioned earlier, the 1997 net profit after tax of Den Danske Bank Group
was DKr4,205m.

Group assets and liabilities, solvency, etc.

The total assets of the Consolidated Den Danske Bank Group rose by DKr75bn to
DKr527bn at the end of 1997. In addition, the insurance group had assets
totalling DKr141bn, against DKr125bn a year earlier.

Lending and deposit volumes increased with loans and advances up 25% and
deposits up 15% from the end of 1996 to the end of 1997. Volume rose
particularly on foreign markers, reflecting, inter alia, the acquisition of
Ostgota Enskilda Bank.

The Group's total loans and advances rose from DKr233bn-at the 1996 year-end
to DKr291bn at the 1997 year-end. Danske Kredit accounted for DKr11bn and
Ostgota Enskilda Bank for DKr11bn of this increase. Lending by the other
international units increased from DKr71bn to DKr9Obn. Of this last
increase, DKr7bn was attributable to rising sterling and dollar exchange
rates. Domestic lending by the core banking business grew only slightly.

Deposits advanced to DKr225bn from DKr196bn a year earlier. Bonds issued to
cover mortgage finance loans amounted to DKr51bn at the end of 1997,
against DKr38bn a year earlier.

The Group maintained its market share of both loans and deposits in 1997.

Den Danske Bank Group's holdings of bonds and shares amounted to DKr136bn at
the end of 1997. The Group's total interest rate sensitivity was DKr791m at the
year-end, against DKr842m a year earlier. Interest rate sensitivity - as
measured according to the guidelines laid down by the Danish Financial
Supervisory Authority - represents the capital loss that the Group would incur
on its short- and long-term fixed rate krone and foreign currency assets
and liabilities, including mortgages and off-balance-sheet instruments, in the
event of a one percentage point increase in interest rates.

Off-balance-sheet items were DKr2,211 at the 1997 year-end, compared with
DKr2,054bn a year earlier. In both years, foreign exchange forwards accounted
for by far the major part of these items. The Bank maintained its position as
a market leader in financial derivatives trading.

The shareholders' equity of Den Danske Bank Group rose from DKr25,879m at the
end of 1996 to DKr27,539m at the end of 1997 although goodwill of DKrl.6bn on
the acquisition of Ostgota Enskilda Bank was written off against equity
capital. Subordinated debt grew from DKr13,380m at the end of 1996 to
DKr18,390m at the end of 1997.

In 1997, Den Danske Bank raised US$300m nominal value of subordinated debt in
the form of supplementary capital by an issue of 12-year floating rate notes and
another U55500m nominal value by an issue of 13-year noes. The Bank prepaid
US$350m of supplementary capital.

The Group's solvency ratio, which is required by law to be at leaast 8%,
amounted to 10.2% at the end of 1997, against 9.8% a year earlier. In accordance
with banking regulations, the insurance subsidiaries are not consolidated in the
Group accounts. Therefore, the solvency margin of these subsidlaries is deducted
from the Banks capital base for the purpose of calculating the solvency ratio.
This reduced the Group's solvency ratio at end-1997 by 1.2 percentage points.

Core (tier 1) capital accounted for 7.2 percentage points of the solvency
ratio.

The Board of Directors is proposing a dividend of DKr18 per share for the 1997
accounting year, against DKr16 per share in 1996.

Allocation of Profits

Den Danske Bank's share of the net result for the year was an after-tax net
profit of DKr4,201m, against DKr3,650m the year before.

The following allocation is proposed:

DKr 953m to be paid ar. dividend (DKr18 per share)

DKr 3,248m to be carried forward to next year

DKr 4,201m

Allowing for the proposed allocation, the shareholders' equity of the Bank was
DKr27,525m at the end of the year.

Results and activities of subsidiaries

Subsidiaries account for a large proportion of Den Danske Bank Group's
activities. In 1997, the Bank established KortFinans, which issues MasterCards
and manages card schemes. Moreover, it was decided in 1997 to transfer the data
processing development activities of the insurance group to the subsidiary
Danske Dam on July 1, 1997.

Insurance operations - non-cosolidated subsidiaries

The activities and results of the insurance subsidiaries showed generally
satisfactory progress in 1997.

Danica Forsikring, which, after alterations to the Group structure, has become
the parent company of a group comprising all Den Danske Bank's Insurance
operations, had a profit of DKr717m in 1997, against DKr695m in 1996, and total
assets of DKr141bn at the end of 1997.

Danica's non-life business produced a profit of DKr220m and life business a
profit of DKr497m. Non-life insurer Danske Forsikring, Skade recordcd a profit
of DKr66m for 1997, against DKr4m the year before. This company was transferred
to the Danica group in 1997 at net asset valuation.

Danica's sales of life and pension products showed a favourable trend and, at
the same timc, there were fewer terminations of insurance policies than had
been expected. Sales of non-life policies, on the other hand, were affected by
intense competition. Overall, Danica recorded satisfActory growth in premium
income.

Consolidated subsidiaries

Danske Kredit, the Group's mortgage finance arm, continue to make progress and
raised its market share of mortgage finance.  Danske Kredit achieved a profit of
DKr201m; its total assets rose to DKr55bn, and shareholders' equity was
DKr2,769m after capital increases in 1997 totalling DKr600m.

Den Danske Bank International, Luxembourg, turned in a profit of DKr138m. Total
assets were DKr38bn and shareholders' equity was DKr939m.

Ostgota Enskilda Bank group, Sweden, made satisfactory progress in 1997 and
opened four new provincial banking offices over the year.  The group recorded a
profit of SKr138m for the whole of 1997, as calculated according to Swedish
accounting standards.  Ostgota Enskilda Bank was included in Den Danske Bank
Group's accounts from the date of acquisition, April 1, 1997 i.e. for nine
months.  After adjustments in accordance with Danish accounting standards,
including a write-down of office premises and foreclsoed properties, the
financial result of Ostgota Enskilda Bank group, as reflected in Den Danske Bank
Group's Profit and Loss Account, was a loss of DKr8m.  Ostgota Enskilda Bank
grou's total assets were DKr15bn at the end of 1997.

Nordania Leasing obtained a satisfactory number of new leases in a very
competitive market.  The company's profit for 1997 was DKr108m, and total assets
stood at Dkr6bn.

Danica Bank, which has targeted its services at the customers of the Danica
companies, again recorded satisfactory growth in its customer base and loan
volume.  The bank had total assets worth DKr1,043m at the end of 1997 and
generated a profit of DKr2m in 1997.

Danske Capital Management recorded a profit of DKr68m.  Total assets were
DKr814m at the 1997 year-end and shareholders' equity stood at DKr126m.  Assets
under management were DKr170bn at the year-end.

HandelsFinans made a profit of DKr24m and total assets were DKr686m at the end
of the year.

Forenede Factors generated a profit of DKr11m.  Total assets amounted to DKr356m
at the year-end.

Danske Data recorded strong activity in 1997 and achieved a profit of DKr140m.

Material post-Balance Sheets events.

In June 1995, the Danish parliment decided to set up a commission of inquiry to
investigate "the Faroese banking affair".  One element in the inquiry was the
agreement which Den Danske Bank had made in March 1993 with Finansieringsfonden
af 1992 to exchange part of its share holding in Foroya Banki for shares in
Sjovinnubankin with the aim of providing a basis for restructuring the Faroese
business sector.  The two banks later merged.  In the politcal debate, criticism
has since been levelled at the exchange of shares because both banks
subsequently sustained heavy losses, which caused a need for further capital
injections from Finansieringsfonden af 1992.

The commission published its report in mid-January 1998.  The publication and
the following debate in the Danish parliment gave rise to criticism, inter alia,
of the conduct of Den Danske Bank.  The criticism centred on the circumstances
of the exchange of shares.

In the opinion of the Bank, there are no just grounds for criticism and,
consequently, no legal grounds for claims for compensation against Den Danske
Bank as a result of the exchange of shares or as a result of circumstances or
conditions referred to in the report.

Nonetheless, the Bank has proposed that a statement should be prepared of the
losses sustained by the two banks after the exchange of shares, and Den Danske
Bank has declared itself ready to compensate the other party to the exchange for
any proportionately larger loss on customers in Foroya Banki compared to
Sjovinnubankin.  An amount set aside against possible compensation has been
charged to provisions for bad and doubtful debts.

In January 1998, it was decided to convert th subsidiaries Ostgota Enskilda Bank
and Nordania Leasing into branches of Den Danske Bank.  Ostgota Enskilda Bank
and Nordania Leasing will continue their business activities under their own
names, but as untis of Den Danske Bank.  The conversions are expected to be
implemented in the first half of 1998, when they have been duly approved.

To strengthen its Nordic investment banking business further, Den Danske Bank
bought a 51% interest in the Norwegian brokerage company Saga Securities on
February 22, 1998.  At the same time, the Bank acquired options to buy the
remaining 49% of the shares in the company within the next two years.  The
shareholders' equity of Saga Securities amounted to NKr40m at the end of 1997.
The price of the share holding was agreed at NKr76.5m, or about DKr70m.
Goodwill on the acquisition was approximately DKr51m.

Outlook for 1998

The Danish economy is moving into its fifth consecutive year of relatively
strong growth, and the Swedish economy is gathering new momentum.  Growth in
other European economics is expected to be more or less unchanged although the
impact of the financial crisis in Asia is not yet known.

Danish companies and households will still be able to finance higher investments
and consumption partly out of their own earnings.  Therefore, Den Danske Bank
believes that lending in Denmark will rise only modererately.  At the same time,
competition in world financial markets will sharpen, putting continued pressure
on interest margins.

So the total of the Group's net interest income and maturity-related market
value adjustments of securities is not expected to increase from 1997 despite an
expansion in business volume.  Fee and commission income is likely to be
unchanged from 1997.

The Group expects earnings from insurance operations in 1998 to remain, by and
large, at their 1997 level.

In 1998, the Group expects to incur higher costs as it continues to introduce
new information technology and further increases its activities in the Nordic
and other international financial markets.  Consequently, the expenses of Den
Danske Bank group will rise somewhat in 1998 although the group will remain in
tight control of costs and expects to continue to reduce staff levels.

The charge for bad and doubtful debts is expected to remain at a modest level.
The financial results for 1998 will also be influenced by movements in bond and
share prices during the year, which do not seem likely to be ad favourable as in
previous years.

Consequently, the Group expects 1998 core earnings, after allowing for
maturity-related securities valuation adjustments, to be at a similar level to
1997, or slightly lower.

The Bank considers its profitability in the slightly longer run with a certain
measure of optimism.  This is because of the continuing efforts to enhance the
competence of the Group's highly-skilled staff and because of the expected
return on the considerable investments the Bank has made in information
technology.  To this can be added the contribution from insurance operations and
from increased activities in international finance markets, not least in the
Nordic region.  Profitability will moreover benefit from continued
rationalisation throughout the Group.

Accounting policies

The Accounts have been prepared in compliance with the Danish Banking Atc, the
Executive Order on Bank Accounts, the Copenhagen Stock Exchange guidelines for
issuers of listed securities, and Danish accounting standards, except where
otherwise provided by banking regulations.


The accounting policies are the same as those applied to the 1996 Annual
Accounts of Den Danske Bank Group.  Ostgota Enskilda Bank group was included in
the Consolidated Accounts as from April 1, 1997, in accordance with accounting
policies applied by Den Danske Bank Group.  Comparative figures for 1996 have
not been restated.

Annual General Meeting

The Bank's Annual General Meeting will be held at 5:00pm on Tuesday, March 31,
1998, at the Bella Center, 5 Center Boulevard, Copenhagen S.

The Board of Directors proposes the election to the Board of Sten Scheibye and
re-election of Palle Marcus and Birgit Aagaard-Scendsen, who are retiring by
rotation and offer themselves for re-election.

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