Accounts for the year 2009

KEY FIGURES AND FINANCIAL RATIOS 2005-09

	2009	2008	2007	2006	2005
Profit and loss account (kr. million)
Net income from interest	2,760	4,915	4,105	3,368	3,616
Value adjustments	1,751	2,246	1,634	-690	1,210
Income from shares, etc.	126	140	134	115	68
Other income	24	26	59	48	848
Expenses, including depreciation	-706	-590	-751	-606	-840
Profit for the year	3,955	*6,737*	*5,181*	*2,235*	*4,902*
Allocated as follows:
Allocation to net capital	2,412	3,593	2,343	-105	1,948
Payable to the central government	1,543	3,144	2,837	2,340	2,954
	3,955	*6,737*	*5,181*	*2,235*	*4,902*
Balance sheet (kr. million)
Assets
Foreign-exchange-reserve assets	398,804	215,964	172,282	175,446	214,703
Monetary-policy lending	104,220	240,876	216,794	153,735	135,296
Other lending	3,749	129,937	2,573	3,472	4,324
Domestic bonds	33,093	27,308	27,833	28,648	34,329
Other assets	10,285	21,008	5,058	3,571	3,344
Total assets	550,151	*635,093*	*424,540*	*364,872*	*391,996*

Liabilities
Banknotes and coins	60,760	61,283	61,553	59,767	56,217
Monetary-policy deposits	188,294	128,193	209,863	171,984	220,423
Central government	212,435	262,789	89,899	73,789	56,428
Foreign-exchange-reserve debt	4,257	4,293	4,585	3,729	2,391
Deposits under swap facilities	-	115,996	-	-	-
Other liabilities	23,929	4,475	4,170	3,476	4,305
Total creditors	489,675	*577,029*	*370,070*	*312,745*	*339,764*
Total net capital	60,476	*58,064*	*54,470*	*52,127*	*52,232*
Total liabilities	550,151	*635,093*	*424,540*	*364,872*	*391,996*

Financial ratios
Foreign-exchange reserve (kr. million)	394,547	211,671	167,697	171,717	212,312
Net position of banks and mortgage-credit institutes vis-à-vis Danmarks Nationalbank (kr. million)	84,074	-112,683	-6,931	18,249	85,127
Central government's account (kr. million)	212,435	262,789	89,899	73,789	56,428
Growth in banknotes and coins (per cent)	-0.9	-0.4	3.0	6.3	8.0
Change in net capital (per cent)	4.2	6.6	4.5	-0.2	3.9
Average no. of staff (full-time equivalents)	508	497	505	513	521

Board of governors' Report on Danmarks Nationalbank's accounts

About the Accounts

The Accounts for 2009 have been prepared in accordance with the accounting policies applied in the previous year, cf. p. 53.

The Accounts reflect that Danmarks Nationalbank issues banknotes and coins, holds substantial assets comprising the foreign-exchange reserve, and functions as banker to the banks and mortgage-credit institutes and to the central government.

Once again, the Accounts differ substantially from last year's. The changes are to a large extent attributable to financial market devel opments as a result of the international financial crisis. The balance sheet thus decreased by kr. 84.9 billion overall, and the profit and loss account shows considerable changes in the gross and net items of the profit for the year. The profit from financial items was kr. 4,511 million, kr. 2,649 million lower than in 2008, and the total profit for the year was kr. 3,955 million, which is kr. 2,782 million lower than in 2008.

About government guarantees
As a main rule, Danmarks Nationalbank's lending to domestic banks and mortgage-credit institutes is collateralised by securities deposited in safekeeping accounts. In addition, it is comprised by the central govern ment's general guarantee covering depositors and unsecured claims under the Financial Stability Act.

About losses and provisions
No credit losses were registered on Danmarks Nationalbank's commit ments in 2009, and nor was it deemed to be necessary to make pro visions for such losses at year-end.

Profit from financial items
At kr. 2,760 million, net income from interest has decreased by kr. 2,155 million (43.8 per cent) on 2008. Major changes include:

On the positive side

Interest expenditure on the central government's deposit fell by kr. 2,393 million to kr. 1,926 million. The central government's average deposit increased by kr. 89 billion to kr. 197 billion, while the average return fell from 4.0 per cent to 1.0 per cent. Effective 11 May 2009, it was decided to reduce the interest payable on the central govern ment's deposit from the discount rate to the discount rate less 1 percentage point, but not less than 0 per cent.
Interest income from special loans to Roskilde Bank and EBH Bank increased by a total of kr. 102 million, to kr. 468 million.

Development in profit for the year relative to 2008	Chart 5

On the negative side

Income from interest on foreign assets fell by kr. 3,420 million to kr. 3,245 million. Average net claims increased by kr. 149 billion to kr. 307 billion, while the average return fell from 4.2 per cent to 1.1 per cent.
Net interest income from monetary-policy deposits and lending fell by kr. 1,242 million, from interest income of kr. 1,051 million to interest expenses of kr. 190 million. The average net account with financial insti tutions has changed from net lending to the institutions of kr. 22 billion to net deposits from the institutions of kr. 44 billion. Monetary-policy interest rates dropped substantially in 2009, and hence the average return fell from 4.5 per cent to 1.7 per cent for deposits and from 4.5 per cent to 2.1 per cent for loans.

Value adjustments entailed a gain of kr. 1,751 million, representing a decrease of kr. 495 million on 2008. These include value adjustments of gold at a gain of kr. 2,479 million (2008: a gain of kr. 697 million), reflecting a 25-per-cent increase (in DKK) in the price of gold in 2009, as well as market-value and exchange-rate adjustments on foreign-exchange positions at a loss of kr. 968 million (2008: a gain of kr. 1,024 million) and market-value adjustments of domestic securities at a gain of kr. 240 million (2008: a gain of kr. 524 million).

The net profit from financial items is not affected by interest and exchange-rate adjustments in connection with the provision of liquidity in euro and US dollars to the Danish financial system under swap facilities with the European Central Bank (ECB) and the Federal Reserve. The reason is that the interest payable to the central banks is offset by corresponding interest income from the institutions that borrowed the foreign exchange from Danmarks Nationalbank and that exchange-rate adjustments on such foreign-exchange lending is offset by opposite exchange-rate adjustments in connection with the settlement of the swap facilities with the central banks.

FACTORS CONTRIBUTING TO DANMARKS NATIONALBANK'S PROFIT FROM FINANCIAL ITEMS		Table 7
Kr. billion	Profit 2009	Profit 2008
Core income
Seigniorage	1.1	2.7
Calculated return on net capital	1.0	2.5
Foreign-exchange reserve and financing thereof	-1.9	-0.8
Interest from special loans, etc.	0.5	0.4
Exchange-rate adjustment	-0.5	0.4
Euro	-0.4	0.1
Dollars	-0.1	0.2
Other currencies	0.0	0.1
Gold-price adjustment (in dollars)	2.7	0.3
Total core income	2.9	5.5
Income from additional risk
Interest-rate risk, carry income, etc.	0.8	-0.6
Interest-rate risk, interest-rate-driven value adjustments	0.8	2.3
Income from additional risk, total	1.6	1.7
Total profit from financial items	4.5	7.2
Note: Seigniorage is calculated on the basis of banknotes and coins in circulation, less decentralised banknote holdings. In this Table, Danmarks Nationalbank's gold stock is included as a dollar asset. Rounded figures.

Factors contributing to the profit from financial items (financial income)
As a supplement to the presentation of the financial items of the accounts, Table 7 shows a breakdown by the key factors contributing to the financial income. It should be emphasised that the breakdown in Table 7 is theoretical and not immediately comparable with the ac counts.

Danmarks Nationalbank's tasks include issuing banknotes and coins, conducting monetary and exchange-rate policy, holding a stock of gold and acting as banker to the banks and mortgage-credit institutes and the central government. These tasks relating to its role as monetary authority provide Danmarks Nationalbank with core income.

Besides its role as monetary authority, Danmarks Nationalbank also has a role as a financial institution, i.e. it seeks to achieve a reasonable risk/return ratio on its portfolios within the framework of its role as monetary authority. The contribution from this role is reflected in the income from additional risk.

Core income has been calculated at kr. 2.9 billion in 2009, kr. 2.6 billion lower than in 2008. Income in 2009 mainly stemmed from gold-price adjustments. Core income also includes contributions from seigniorage, the calculated return on net capital, financing of the foreign-exchange reserve, interest from special loans and exchange-rate adjustment.

The gain from interest-free credit on banknotes and coins in circulation is known as seigniorage. The calculation assumes that Danmarks Nationalbank invests the funds at the short-term monetary-policy interest rate in Denmark. The contribution from seigniorage and net capital fell to kr. 2.1 billion in 2009, kr. 3.1 billion down on 2008. The fall is attributable to lower monetary-policy interest rates.

The foreign-exchange reserve is a precondition for Denmark's fixed-exchange-rate policy. The foreign-exchange reserve is predominantly invested in euro. A small share is invested in dollars. The foreign-exchange reserve also includes gold, which has not generated any carry income. The foreign-exchange reserve is offset by liabilities, primarily the net position vis-à-vis banks and mortgage-credit institutes and the central government's deposit at Danmarks Nationalbank, both of which carry interest. Since the short-term interest rate for the investment currencies was lower than the equivalent Danish interest rate, Danmarks Nationalbank incurs interest expenses by holding the foreign-exchange reserve. The spread between Danmarks National bank's monetary-policy interest rates and the actual interest rate for the investment currencies was generally wide in 2009. At the same time, the foreign-exchange reserve increased by kr. 182.8 billion to kr. 394.5 billion in 2009. Effective 11 May 2009, it was decided to reduce the interest payable on the central government's deposit from the discount rate to the discount rate less 1 percentage point, but not less than 0 per cent. The expenses of holding the foreign-exchange reserve were calculated at kr. 1.9 billion in 2009 compared with kr. 0.8 billion in 2008.

Interest from special loans relates to lending to Roskilde Bank and others and amounted to kr. 0.5 billion in 2009, up from kr. 0.4 billion in 2008.

In addition to current expenses in connection with the foreign-exchange reserve, significant adjustments may be seen as a result of fluctuations in exchange rates and the price of gold. For example, when the krone strengthens vis-à-vis another currency, Danmarks National bank incurs a loss because the krone value of the foreign-exchange reserve decreases. Conversely, weakening of the krone entails a gain. In 2009, the krone strengthened by approximately 0.1 per cent vis-à-vis the euro, entailing a loss of approximately kr. 0.4 billion.

Income from additional risk reflects the fact that Danmarks National bank, by investing in Danish and foreign bonds with longer maturities and making deposits with foreign banks, expects to achieve a higher return than by simply placing funds at short-term interest rates. Con sequently, earnings are also affected by the development in interest rates – in Denmark and abroad. The profit contribution from additional risk has been calculated at kr. 1.6 billion for 2009. The gain is mainly attributable to Danmarks Nationalbank having achieved a higher return on its bond portfolio than the short-term money-market interest rate as long-term interest rates were higher than short-term interest rates. Because long-term bond yields rose, Danmarks Nationalbank posted negative market-value adjustments on a part of its bond portfolio. Conversely, Danmarks Nationalbank achieved market-value gains related to the narrowing of yield spread for bonds subject to credit risk, etc., including its portfolio of Danish mortgage bonds.

Other items
Income from shares, etc. decreased by kr. 14 million to kr. 126 million.

Other income decreased by kr. 2 million to kr. 24 million. Kr. 9 million of the fall is attributable to lower income from sale of coins and medals, while gains on property sales boosted income by kr. 7 million.

Expenses, including depreciation increased by kr. 117 million to kr. 706 million. Kr. 100 million of the increase relates to a special payment to Danmarks Nationalbank's Pension Fund subject to winding-up to cover Danmarks Nationalbank's pension commitment, and kr. 34 million concerns roof renovation, while other expenses and depreciation fell by kr. 7 million. Staff expenses increased by kr. 14 million (4.1 per cent).

Distribution of the profit for the year
For some years, distribution of the profit for the year has been based on the principle that a reasonable guideline for the level of consolidation of Danmarks Nationalbank would be that the General Reserves are maintained at a constant real level. In other words, the increase in the General Reserves should generally match the development in prices. On this basis it has been decided, cf. section 19 of the Danmarks Nationalbank Act, to distribute the profit for 2009, kr. 3,955 million, as follows:

An amount corresponding to the value adjustments during the year, kr. 1,751 million, is allocated to the Value Adjustment Reserve, which subsequently amounts to kr. 8,798 million.
30 per cent of the profit excluding value adjustments, equivalent to kr. 661 million, is allocated to the General Reserves, which subsequently amount to kr. 51,377 million.
The remaining amount, i.e. 70 per cent of the profit excluding value adjustments, equivalent to kr. 1,543 million, is payable to the central government.

Balance sheet
The balance-sheet total fell from kr. 635.1 billion to kr. 550.2 billion. The decrease of kr. 84.9 billion can be broken down by the following main items:

On the assets side, foreign-exchange-reserve assets increased by kr. 182.8 billion, domestic bonds by kr. 5.8 billion and claims re banks' and mortgage-credit institutes' TARGET accounts at the ECB by kr. 5.2 billion. Lending to banks and mortgage-credit institutes fell by kr. 245.3 billion and special loans, etc. to Roskilde Bank and EBH Bank by kr. 22.2 billion following the discontinuation of these exposures. Finally, the market value of forward foreign-exchange contracts fell by kr. 11.1 billion.
On the liabilities side, deposits from central banks¹ fell by kr. 116.0 billion and the central government's deposit by kr. 50.3 billion. Deposits by banks and mortgage-credit institutes increased by kr. 65.2 billion, counterpart of Special Drawing Rights allocated by the IMF by kr. 11.0 billion and net capital by the share of the profit for the year, kr. 2.4 billion.

The increase in the foreign-exchange reserve from kr. 211.7 billion to kr. 394.5 billion is composed of increases of kr. 2.5 billion in gold, kr. 168.1 billion in foreign assets and kr. 12.3 billion in claims on the IMF on the assets side, while, on the liabilities side, foreign liabilities remained un changed.

The banks' and mortgage-credit institutes' net position vis-à-vis Danmarks Nationalbank changed considerably during the year. Monetary-policy deposits from these institutions increased from kr. 128.2 billion in 2008 to kr. 188.3 billion, while monetary-policy lending to the institu tions fell from kr. 240.9 billion to kr. 104.2 billion. Overall, the net position thus changed by kr. 196.8 billion, from net lending to the insti tutions of kr. 112.7 billion in 2008 to net deposits from the institutions of kr. 84.1 billion in 2009.

Banknotes in circulation fell by kr. 0.6 billion (-1.1 per cent) to kr. 55.0 billion, and coins in circulation increased by kr. 0.1 billion (1.3 per cent) to kr. 5.7 billion.

The net capital rose from kr. 58.1 billion to kr. 60.5 billion as a result of profit allocations totalling kr. 2.4 billion.

Roskilde Bank
In August 2009, Danmarks Nationalbank transferred its shareholding and subordinated loan capital in Roskilde Bank to the Financial Stability Company. In this connection, the government-guaranteed loan to Roskilde Bank was redeemed. Danmarks Nationalbank has not incurred any losses on its exposure to Roskilde Bank.

Statement by the board of governors

The Board of Governors have today considered and approved the Annual Accounts of Danmarks Nationalbank for 2009.

The Annual Accounts have been prepared in accordance with the Dan marks Nationalbank Act.

In our opinion, the Accounts give a true and fair view of Danmarks Nationalbank's assets, liabilities and financial position at 31 December 2009, and of the result of Danmarks Nationalbank's activities for the financial year 1 January-31 December 2009.

Copenhagen, 23 February 2010

Board of Governors

Nils Bernstein
Chairman

Torben Nielsen

Jens Thomsen

AUDIT REPORTS

To the Board of Directors

Internal Auditor's Report
I have audited the Accounts of Danmarks Nationalbank for the financial year 1 January-31 December 2009, comprising the Board of Governors' Report on Danmarks Nationalbank's Accounts, Statement by Board of Governors, Accounting Policies, Profit and Loss Account, Balance Sheet and Notes. The Annual Accounts have been prepared in accordance with the Danmarks Nationalbank Act.

Danmarks Nationalbank's Committee of Directors and Board of Directors' responsibility for the Accounts
The Committee of Directors and Board of Directors are responsible for the preparation and fair presentation of Accounts that are free from material misstatement, in accordance with the Danmarks Nationalbank Act.

Auditor's responsibility
My responsibility is to express an opinion on the Accounts based on my audit.

Basis of opinion
I have conducted the audit in accordance with Danish Accounting Standards. Those standards require that I plan and perform the audit to obtain reasonable assurance that the Accounts are free of material misstatement.

The audit included an assessment of the Board of Directors and Committee of Directors' established procedures and internal controls that are relevant to Danmarks Nationalbank's preparation and fair presentation of the Accounts, including an assessment of the risk of material misstatement. The audit also included evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Committee of Directors and the Board of Directors, as well as evaluating the overall presentation of the Accounts.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

The audit has not resulted in any qualification.

Opinion
In my opinion, the Accounts give a true and fair view of Danmarks Nationalbank's assets, liabilities and financial position at 31 December 2009, and of the result of Danmarks Nationalbank's activities for the financial year 1 January-31 December 2009, in accordance with the Danmarks Nationalbank Act.

Copenhagen, 23 February 2010

Jan Birkedal,

Chief Audit Executive

AUDIT REPORTS

To the Board of Directors

Independent Auditors' Report
As auditors appointed by the Minister for Economic and Business Affairs we have audited the Accounts of Danmarks Nationalbank for the financial year 1 January-31 December 2009, comprising the Board of Governors' Report on Danmarks Nationalbank's Accounts, Statement by the Board of Governors, Accounting Policies, Profit and Loss Account, Balance Sheet and Notes. The Annual Accounts have been prepared in accordance with the Danmarks Nationalbank Act.

Danmarks Nationalbank's Committee of Directors and Board of Directors' responsibility for the Accounts
The Committee of Directors and Board of Directors are responsible for the preparation and fair presentation of these Accounts in accordance with the Danmarks Nationalbank Act. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of Accounts that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors' responsibility and basis of opinion
It is our responsibility to express an opinion on the Accounts based on our audit. We have conducted the audit in accordance with Danish Accounting Standards. Those standards require that we comply with ethical codes and that we plan and perform the audit to obtain reasonable assurance that the Accounts are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Accounts. The procedures selected depend on the auditor's judgement, including the assessment of the risk of material misstatement in the Accounts, irrespective of whether such material misstatement is due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to Danmarks Nationalbank's preparation and fair presentation of the Accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Danmarks Nationalbank's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Committee of Directors and Board of Directors, as well as evaluating the overall presentation of the Accounts.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

The audit has not resulted in any qualification.

Copenhagen, 23 February 2010

Mona Blønd,
State-Authorised Public Accountant

Hans Frederik Carøe,
State-Authorised Public Accountant

Signatures

These Accounts, audited in the manner prescribed by the by-laws of Danmarks Nationalbank, are hereby adopted by the Board of Directors at the meeting on 16 March 2010.

As at 1 March 2010 the Board of Directors comprises

Søren Bjerre-Nielsen, formand Helle Bechgaard, næstformand

Peter Bjerregaard     Niels Boserup     Per Christensen    Pia Christmas-Møller

Kristian Thulesen Dahl    Michael Dithmer     Niels Fog     Peter Gæmelke

Camilla Hersom      Hans Jensen     Niels Due Jensen    Jette W. Knudsen

Henrik Sass Larsen     Kjeld Larsen     Michael Lunn    Michael Møller

Kirsten Nielsen       Bente Sorgenfrey     Lars Rebien Sørensen

Villy Søvndal Helle Thorning-Schmidt Margrethe Vestager

Accounting policies

General
Danmarks Nationalbank's Accounts for the year 2009 are presented in accordance with the Danmarks Nationalbank Act. In all significant re spects these accounting policies are in accordance with the sound policies for European central banks in the euro area. The main differences relate to unrealised gains on foreign exchange and secur ities, which are recognised in the profit and loss account in Danmarks Nationalbank's Accounts.

The basic accounting assumptions are economic reality. The effects of transactions and events are recognised when they occur and stated and presented in the accounts for the year which they concern. The Accounts include all material and relevant circumstances, revaluations are shown irrespective of their impact on profits and net capital, and calculation and valuation methods are applied consistently within each category of conditions. When initially recognised, assets and liabilities are stated at cost price. Subsequently, assets and liabilities are valued as described under each accounting item.

Apart from this, the principles for presentation and classification of the individual items in the Accounts remain unchanged from year to year.

The accounting policies applied are unchanged from the previous year.

Conversion of transactions in foreign currency
Transactions in foreign currency are converted to Danish kroner at the exchange rate applying on the transaction date. On the balance-sheet date, all financial assets and liabilities in foreign currency are converted at the exchange rate applying on that date. Both realised and unrealised gains and losses are recognised in the profit and loss account.

Profit and loss account

Interest
Besides income on interest-bearing assets and liabilities, interest income and expenses comprise premiums and discounts on T-bills and certi ficates of deposit, as well as premiums on forward securities and for ward exchange contracts.

Value adjustments, etc.
Value adjustments comprise market-value adjustments and exchange-rate adjustments on financial assets and liabilities, shares, other equity investments and gold. Both realised and unrealised gains and losses are recognised in the profit and loss account.

Income from shares, etc.
Income from shares, etc. comprises income from equity investments in listed and unlisted companies, including associated companies. Income from shares is recognised in the year when the dividend is announced.

Other income
Other income comprises income from Danmarks Nationalbank's sale of coin sets and medals, as well as other income not relating to Danmarks Nationalbank's primary activities or that is not annually recurring.

Expenses
Staff expenses comprise salaries and remuneration, including pension contributions and support, etc., training costs and other staff expenses. Other expenses comprise materials for production of banknotes and coins, etc., current expenses for Danmarks Nationalbank's properties, IT expenses and other expenses.

Balance sheet

Gold
Gold is stated at the market value on the balance-sheet date.

Financial assets and liabilities
Financial assets and liabilities are stated at the market value on the balance-sheet date.

Repurchase agreements and securities lending, etc.
Securities sold in connection with simultaneous repurchase agreements, and securities made available for lending, are included in Danmarks Nationalbank's respective holdings.

Shares, etc.
Capital investments and equivalent investments and equity investments in associated companies (in which the ownership interest or voting rights are 20 per cent or more) are stated at an estimated market value on the balance-sheet date, not exceeding the acquisition value, how ever.

Tangible fixed assets
Tangible fixed assets comprise Danmarks Nationalbank's properties, technical building facilities (lifts, electrical installations, etc.), technical production facilities (for banknote and coin production), as well as IT equipment, office equipment and cars.

Tangible fixed assets are stated on the balance sheet at acquisition prices less accumulated depreciation and write-down.

Assets with an acquisition value of less than kr. 100,000 per unit are recognised as expenditure in the year of acquisition.

Depreciation on a linear per-annum basis takes place over the expected useful lives of the assets.

The useful lives are assessed as follows:

Bank properties	100 years
Other properties	25-50 years
Building improvements	25 years
Technical building facilities	10-25 years
Technical production facilities	5-10 years
Other machinery and equipment	3-5 years

Other assets
Other assets include, inter alia, interest receivable, positive net market value of financial derivatives by instrument type, and prepaid expenses.

Financial derivatives such as forward securities and forward exchange contracts, interest-rate and currency swaps and futures are stated at market value on the balance-sheet date.

Banknotes and coins in circulation
Banknotes and coins in circulation are stated at their nominal value.

Other liabilities
Other liabilities comprise, inter alia, payables, negative net market value of financial derivatives by instrument type, and uncovered pension commitments and other provisions for guarantees provided.

Financial derivatives such as forward securities and forward exchange contracts, interest-rate and currency swaps and futures are stated at market value on the balance-sheet date.

Contingent liabilities
Other liabilities concerning guarantees provided are stated at the estimated value of the payment obligation.

Pension commitments
For defined contribution pension plans, the current premium payments to the pension companies are carried as expenditure in the profit and loss account, and the pension commitment hereafter passes to the pension companies.

For defined benefit pension plans and declarations of support, pro visions are made in the Accounts of Danmarks Nationalbank for un covered pension undertakings compiled according to actuarial principles.

ResultatopgØrelse for Året 2009

Note		2009	2008
		'000 kr.	'000 kr.
1	Net income from interest:
	Interest on foreign assets	3,263,275	6,704,952
2	Interest on domestic loans	4,078,059	11,089,491
	Interest on domestic bonds	1,239,806	1,199,095
	Commission and other income	132	237
	Interest income, etc.	8,581,272	*18,993,775*

	Interest on foreign liabilities	18,225	40,214
	Interest payable to central banks under swap facilities	525,264	467,157
3	Interest on domestic deposits	5,277,334	13,571,656
	Expenditure on interest, etc.	5,820,823	*14,079,027*
	Net income from interest, total	2,760,449	*4,914,748*

4	Value adjustments, etc.:
	Value adjustment of gold	2,478,607	697,410
5	Value adjustment of foreign assets	-968,222	1,024,215
6	Value adjustment of domestic securities	240,359	524,189
	Value adjustments, etc., total	1,750,744	*2,245,814*
	Profit from financial items	4,511,193	*7,160,562*

7	Income from shares, etc.	125,646	*140,037*
8	Other income	24,481	*25,814*

	Expenses:
9	Staff expenses	353,846	339,680
	One-off payment to Danmarks Nationalbank's
	Pension Fund subject to winding-up	100,000	-
10	Other expenses	222,445	217,450
	Total expenses	676,291	*557,130*

11	Depreciation and write-down of tangible fixed assets	30,051	*32,276*
	Profit for the year	3,954,977	*6,737,007*

	Distribution of the profit for the year:
	Profit for the year	3,954,977	6,737,007
	Allocation to/from Value Adjustment Reserve	-1,750,744	-2,245,814
		2,204,233	*4,491,193*

	allocated as follows:
	Allocation to the General Reserves, 30 per cent	661,270	1,347,358
	Payable to the central government, 70 per cent	1,542,963	3,143,835
		2,204,233	*4,491,193*

BALANCE SHEET AT 31 DECEMBER 2009

Note		2009	2008
		'000 kr.	'000 kr.
	Assets
12	Guld	12,259,761	9,781,159
13	Foreign assets	370,861,369	202,776,620
14	Claims on the IMF, etc.	15,682,621	3,405,904
	Claims re banks' and mortgage-credit institutes' Target accounts at the ECB	6,886,260	1,709,171
	Monetary-policy lending	104,220,000	240,876,000
15	Other lending	3,749,490	129,936,677
16	Domestic bonds	33,093,490	27,307,792
17	Shares, etc	805,051	747,970
18	Tangible fixed assets	661,299	645,806
19	Equity investment and subordinated loan capital in Roskilde Bank A/S	-	3,723,008
20	Other assets	1,907,892	14,160,287
	Accruals	24,041	22,776
	Total assets	550,151,053	635,093,170

	Liabilities
21	Banknotes	55,014,549	55,612,243
21	Coins	5,745,801	5,671,134
	Monetary-policy deposits
22	Net current accounts	22,138,405	9,661,296
	Certificates of deposit	166,156,000	118,532,000
23	Other deposits	9,517,671	2,512,813
24	Central government	212,435,011	262,788,752
25	Foreign liabilities	4,256,993	4,292,824
26	Deposits under swap facilities	-	115,995,914
27	Counterpart of Special Drawing Rights allocated by the IMF	12,418,718	1,459,799
28	Other liabilities	1,992,291	502,795
	Total creditors	489,675,439	577,029,570

	General Capital Fund	50,000	50,000
	Statutory Reserves	250,000	250,000
	Value Adjustment Reserve	8,798,489	7,047,745
	General Reserves	51,377,125	50,715,855
29	Total net capital	60,475,614	58,063,600
	Total liabilities	550,151,053	635,093,170

30	Apportionment of foreign-exchange-reserve assets
31	Financial derivatives for conversion of foreign-exchange exposure
32	Other financial derivatives
33	Contingent liabilities
34	Pension commitments

NOTES TO THE ACCOUNTS FOR 2009

Note

2009

2008

'000 kr.

Net income from interest
The development in net income from interest has been substantially influenced by the large changes in and shifts between the various types of interest-bearing deposits and lending during the year, and by changes in the level of interest rates for the individual types.

Net income from interest fell from kr. 4,915 million to kr. 2,760 million.

Net income from interest on foreign assets fell by kr. 3,420 million to kr. 3,245 million. Average net assets increased by kr. 149 billion to kr. 307 billion, but average returns fell from 4.2 per cent to 1.1 per cent.

Net interest income from banks and mortgage-credit institutes (interest on monetary-policy lending less interest on current accounts and certificates of deposit) fell by kr. 1,242 million, from interest income of kr. 1,051 million to interest expenses of kr. 190 million. Average net accounts have shifted from net lending to these institutions of kr. 22 billion to net deposits from the institutions of kr. 44 billion. Monetary-policy interest rates dropped substantially in 2009, and hence the average return fell from 4.5 per cent to 1.7 per cent for deposits and from 4.5 per cent to 2.1 per cent for loans.

Interest expenditure to the central government fell by kr. 2,393 million to kr. 1,926 million. The central government's average deposit increased by kr. 89 billion, while the average return fell from 4.0 per cent to 1.0 per cent.

Interest income from special loans to Roskilde Bank and EBH Bank increased by a total of kr. 102 million, to kr. 468 million.Interest on domestic bonds rose by kr. 41 million to kr. 1,240 million due to larger holdings.

Interest in connection with the supply of liquidity in euro and US dollars to the Danish financial system under swap facilities with central banks has not affected Danmarks Nationalbank's bank's net interest, as the interest expenses to these central banks, kr. 525 million, are offset by equivalent interest income from the institutions.

Interest on domestic loans

Interest on monetary-policy lending (collateralised loans)

3,084,400

10,251,509

Interest on foreign-exchange loans to banks

525,264

467,157

Interest on lending to others

468,395

370,825

4,078,059

11,089,491

Interest on domestic deposits

Interest on current accounts

177,761

446,651

Interest on certificates of deposit

3,097,126

8,753,789

Interest on the central government's deposits

1,925,761

4,318,513

Interest to other depositors, etc.

76,686

52,703

5,277,334

13,571,656

Value adjustments
Total value adjustments for the year show a gain of kr. 1,751 million compared with a gain of kr. 2.246 million in 2008, equivalent to a decline of kr. 495 million.

Value adjustment of gold entailed a gain of kr. 2,479 million, reflecting a 25-per-cent increase in the price of gold calculated in Danish kroner.

Value adjustments of foreign assets resulted in a loss of kr. 968 million, comprising a market-value loss of kr. 687 million and an exchange-rate loss of kr. 281 million.

Value adjustment of domestic securities (bonds) resulted in a gain of kr. 240 million.

Value adjustment of foreign assets

Market-price adjustment

-687,403

1,030,617

Exchange-rate adjustment

-280,819

-6,402

-968,222

1,024,215

Value adjustment of domestic securities

Value adjustment of domestic bonds

240,359

524,189

240,359

524,189

Income from shares, etc.

PBS Holding

78,025

35,466

VP Securities

29,064

Bank for International Settlements (BIS)

18,557

17,547

Danish Ship Finance A/S

57,960

125,646

140.037

Other income

Sale of coins and medals

15,070

24,134

Gains on property

7,028

Other income

2,383

1,680

24,481

25.814

Staff expenses

Salaries and remuneration

273,996

259,664

Pension contributions and support

55,015

57,135

Training

10,219

9,395

Other staff expenses

14,616

13,486

353,846

339,680

Of which remuneration of the management

Governors, salaries

8,240

7,875

Governors, pension contributions and actuarial regulation of defined benefit pension commitments

4,339

2,902

Committee of Directors and Board of Directors

807

751

13,386

11,528

No bonus schemes exist at Danmarks Nationalbank. In 2009 the average number of employees was 508 on a full-time basis (2008: 497).

Other expenses

Materials for banknote production

25,272

30,574

Materials for coin production

13,202

37,659

Real property, current expenses

93,159

65,423

IT expenses

39,959

47,842

Other expenses

50,853

35,952

222,445

217,450

Depreciation and write-down of tangible fixed assets

Properties

14,096

13,002

Operating equipment

15,955

19,274

30,051

32,276

Gold

The value of the gold stock was kr. 12.3 billion at year-end, compared with kr. 9.8 billion at the end of 2008. The reason for the increase is that the price of gold, calculated in kroner, rose by 25 per cent in 2009. The gold stock was unchanged at 66,550 kg.

Foreign assets

Foreign bonds

183,036,120

63,734,196

Claims on central banks

25,475,296

28,953,244

Claims on foreign commercial banks

42,183,857

30,814,142

Repo transactions against collateral in foreign bonds

120,165,342

79,274,384

Other foreign assets

754

654

370,861,369

202,776,620

Investments have primarily been made in government and government-guaranteed bonds, deposits with central banks and commercial banks or lending against government and government-guaranteed bonds as collateral. Funds are usually only placed with counterparties or in securities with high credit ratings. The exchange-rate risk has been converted so that it is primarily in euro.

Claims on the IMF, etc.

Denmark's IMF quota

13,321,465

13,407,712

The IMF's drawing right

10,430,831

11,698,099

Reserve position with the IMF

2,890,634

1,709,613

Holdings of Special Drawing Rights

12,329,774

1,696,291

15,220,408

3,405,904

Bilateral loans

462,213

15,220,408

3,405,904

During the year, the IMF exercised drawing rights corresponding to SDR 147 million at Danmarks Nationalbank. As part of the international cooperation to increase global liquidity, the IMF in 2009 allocated Danmarks Nationalbank SDR 1,353 million (kr. 11.0 billion). Subsequently, accumulated SDR allocations amount to SDR 1,531 million (kr. 12.4 billion). The new allocation has increased the liabilities item "Counterpart of Special Drawing Rights allocated by the IMF" correspondingly.

In addition, Danmarks Nationalbank reduced its net holdings by SDR 40 million over the year as a result of IMF transactions.
Under the SDR cooperation, Danmarks Nationalbank may purchase SDR to increase its holdings to up to three times the accumulated allotment of SDR 1,531 million, i.e. to SDR 4,594 billion. The current holdings are SDR 1,521 million, so that the maximum further purchase is SDR 3,073 million, corresponding to kr. 25.0 billion.

In 2009, Danmarks Nationalbank concluded a bilateral loan agreement with the IMF, under which the IMF can borrow SDRs up to a value of EUR 1,950 million (kr. 14.5 billion). SDR 57 million (kr. 462 million) had been drawn on this facility at 31 December 2009.

In 1997, Danmarks Nationalbank made credit commitments of up to SDR 367 million (kr. 3.0 billion) under the IMF's New Arrangements to Borrow. No funds had been drawn on this facility at 31 December 2009.

Overall, claims on the IMF thus increased by SDR 1,517 million net in 2009. With the exchange-rate adjustments for the year, this increased the claim by kr. 12.3 billion to kr. 15.7 billion.

Accounts with the IMF are stated in SDRs. The SDR exchange rate is calculated on the basis of a basket of currencies, the value of which is determined as a weighted sum of the exchange rates of four currencies: 0.632 US dollar, 0.41 euro, 18.4 Japanese yen and 0.090 pound sterling.

Other lending

Banks and mortgage-credit institutes¹

3,718,061

4,322,027

Banks, foreign exchange²

108,070,069

Receivable from Roskilde Bank

17,517,316

Other loans

31,208

27,265

3,749,269

129,936,677

¹ Including lending to decentralised banknote holdings.
² Concerning swap facilities with central banks.

Domestic bonds

Danish government bonds

2,476,954

3,411,568

Mortgage-credit bonds, etc.

29,305,760

22,245,060

Ship Finance bonds

1,310,776

1,651,164

33,093,490

27,307,792

Shares, etc.

Capital investments and equivalent investments

512,489

455,408

Equity investments in associated companies

292,562

292,562

805,051

747,970

Danmarks Nationalbank's portfolio of shares, etc. at 31 December 2009 has an estimated market value of no less than kr. 2.6 billion.

Capital investments and equivalent investments comprise capital subscription to the European Central Bank (ECB) and shares in the Bank for International Settlements (BIS), SWIFT, PBS Holding, SAS and Exhibition Centre Herning.

Equity investments in associated companies comprise:

	Equity investment/ voting rights	Share of equity	Share of result
VP Securities A/S	24.2 / 24.2 per cent	kr. 38.5 million	kr. 19.2 million
Danish Ship Finance A/S	18.9 / 20.8 per cent	kr. 129.5 million	kr. 46.9 million

Tangible fixed assets

Properties

605,780

599,536

Machinery and equipment

55,519

46,270

661,299

645,806

At the most recent official assessment, Danmarks National bank's properties were valued at kr. 1,741 million.

Equity investment and subordinated loan capital in Roskilde Bank A/S
In August 2009, Danmarks Nationalbank transferred its shareholding and subordinated loan capital in Roskilde Bank to the Financial Stability Company.

Other assets

Market value of unsettled foreign-exchange transactions

11,859,856

Market value of other financial derivatives

54,502

Accrual of interest rates

1,856,885

2,215,387

Other

51,007

30,542

1,907,892

14,160,287

Banknotes and coins
Banknotes decreased by kr. 0,6 billion to kr. 55.0 billion, while coins increased by kr. 0.1 billion to kr. 5.7 billion. Banknotes include kr. 362 million in Faroese banknotes.

Net current accounts

Deposits in current accounts and settlement accounts

136,601,478

109,791,259

Drawing on current accounts

114,463,073

100,129,963

22,138,405

9,661,296

At 31 December 2009 Danmarks Nationalbank acts on a full secured basis as guarantor to VP Securities A/S for kr. 61.4 billion (2008: kr. 39.5 billion) and to the Danish Bankers Association (Sumclearing) for kr. 67.3 billion (2008: kr. 65.8 billion) in connection with the banks and mortgage-credit institutes' payment settlements with 4 January 2010 as the value date.

Other deposits

Banks and mortgage-credit institutes

6,892,296

1,716,182

Other deposits

2.625,375

796,631

9,517,671

2,512,813

This item includes the banks' and mortgage-credit institutes' deposits in current accounts in euro totalling kr. 6.9 billion.

Central government

The central government's share of the profit for the year of kr. 1,543 million is included in this amount.

Foreign liabilities

These liabilities comprise deposits in kroner at Danmarks Nationalbank by supranational institutions and other central banks. The European Commission's deposit comprises kr. 4,237 million of this amount.

Deposits under swap facilities

These amounts relate to deposits in kroner at Danmarks Nationalbank in connection with swap facilities with central banks aimed at providing liquidity in euro and US dollars to the Danish financial system.

Counterpart of Special Drawings Rights allocated by the IMF

This item was increased by kr. 11.0 billion following allocation of SDRs during the year.

Other liabilities

Market value of unsettled foreign-exchange transactions

1,675,370

Market value of other financial derivatives

141,343

151,550

Other debt

78,377

244,050

Other

97,201

107,195

1,992,291

502,795

Note

29

	General Capital Fund and Statutory Fund	Value Adjustment Fund	General Reserves	Total
	Kr. '000	Kr. '000	Kr. '000	Kr. '000
Net capital
Net capital at 1 January 2009	300,000	7,047,745	50,715,855	58,063,600
Carried forward from the profit for the year	-	1,750,744	661,270	2,412,014
Net capital at 31 December 2009	300,000	8,798,489	51,377,125	60,475,514

Apportionment of foreign-exchange-reserve assets

Kr. million

2009	Total	EUR	USD	GBP	Other
Foreign-exchange-reserve assets
Gold	12,260	-	12,260	-	-
Foreign bonds	183,036	150,941	21,317	6,623	4,155
Claims on central banks	25,475	22,783	2,631	1	61
Claims on foreign commercial banks	42,184	23,870	16,154	508	1,652
Repo transactions	120,165	120,165	-	-	-
Claims on the IMF	15,683	-	-	-	15,683
	398,804	317,759	52,362	7,132	21,551

2008	Total	EUR	USD	GBP	Other
Foreign-exchange-reserve assets
Gold	9.781	-	9.781	-	-
Foreign bonds	63.734	39.385	11.016	5.463	7.870
Claims on central banks	28.953	28.326	112	67	448
Claims on foreign commercial banks	30.814	18.656	9.989	765	1.404
Repo transactions	79.276	79.276	-	-	-
Claims on the IMF	3.406	-	-	-	3.406
	215.964	165.643	30.898	6.295	13.128

31	Financial derivatives for conversion of foreign-exchange exposure
	Principals at market value
	Kr. million
	2009	Total	EUR	USD	GBP	Other
	Forward exchange contracts:
	Purchase	60,014	60,014	-	-	-
	Sale	-61,695	-	-47,790	-	-13,905
	Unsettled spot currency trades:
	Purchase	9,175	3,646	908	4,621	-
	Sale	-9,169	-4,621	-233	-4,325	-
		-1,675	59,039	-47,105	296	-13,905

	2008	Total	EUR	USD	DKK	Other
	Forward exchange contracts:
	Purchase	134,848	18,698	-	116,150	-
	Sale	-122,986	-	-106,307	-	-16,679
	Unsettled spot currency trades:
	Purchase	246	246	-	-	-
	Sale	-248	-	-248	-	-
		11,860	18,944	-106,555	116,150	-16,679

	Of which relating to currency swap facilities with central banks in connection with provision of foreign exchange to Danish banks.

	Forward exchange contracts:
	Purchase	115,996	-	-	115,996	-
	Sale	-108,070	-28,797	79,273	-	-
		7,926	-28,797	-79,273	115,996	-


32	Other financial derivatives
	Principals at market value
	Kr. million
	2008	Total	EUR	USD	DKK	Other
	Currency and interest-rate swaps:
	Purchase	583	-	-	583	-
	Sale	-718	-718	-	-	-
	Forward contracts, securities:
	Purchase	54,909	54,909	-	-	-
	Sale	-43,049	-43,049	-	-	-
	Unsettled spot trades, securities:
	Purchase	4,261	-	4,068	52	141
	Sale	-27	-	-	-27	-
	Futures, securities:
	Purchase	223	359	148	-	75
	Sale	-846	-	-129	-717	-

	2008	Total	DKK	EUR	USD	Other
	Currency and interest-rate swaps:
	Purchase	993	-	-	993	-
	Sale	-1,145	-1,145	-	-	-
	Forward contracts, securities:
	Purchase	34,042	34,042	-	-	-
	Sale	-26,566	-26,566	-	-	-
	Unsettled spot trades, securities:
	Purchase	-	-	-	-	-
	Sale	-	-	-	-	-
	Futures, securities:
	Purchase	359	359	-	-	-
	Sale	-814	-37	-777	-	-

Note

2009

2008

Kr. '000

Contingent liabilities

VP Securities A/S, share of Guarantee Capital

29,356

27,412

VP Securities A/S, guarantee for errors by other account-holding institutions

13,363

12,997

Other guarantees

1,100

1,100

43,819

41,509

In addition, Danmarks Nationalbank has established inter vention agreements with the ECB. As regards commitments to the IMF, see Note 14.

Pension commitments

Present and former employees of Danmarks Nationalbank have either a defined contribution or a defined benefit pension plan.

For defined contribution pension plans Danmarks National bank carries the ongoing premium payments to the pension companies as expenditure. Once the pension contributions for these plans have been paid to the pension companies, Dan marks Nationalbank has no further pension commitments to these employees.

With regard to defined benefit pension plans, Danmarks Nationalbank is obliged to ensure the policyholder a defined pension benefit. For these plans, Danmarks Nationalbank bears the risk concerning the future development in interest rates, wages, inflation, mortality, etc. Danmarks Nationalbank is thus obliged to make the contributions necessary to ensure the fulfilment of the pension undertakings.

Pension commitments for the defined benefit pension plans are calculated as the capital value of the future benefits payable under the plan. The pension undertakings are based primarily on the salary on retirement. The capital value is calculated on the basis of assumptions concerning the future development in e.g. wage levels, interest rates, inflation and mortality.

In principle, the defined benefit pension plans are covered in Danmarks Nationalbank's Pension Fund subject to winding-up.

Key figures for the accounts of the Pension Fund:

2009
kr. million

2008
kr. million

Pension commitments and other liabilities

3,432

3,369

Fair market value of the assets of the Pension Fund

3,885

3,541

Net capital of the Pension Fund

453

172

Solvency requirement of the Pension Fund

137

135

Other defined benefit pension plans are covered in a pension company. Provision is made in the Accounts for a plan concerning the Board of Governors.

Pension commitments for defined benefit pension plans and declarations of support covered in a pension company amount to kr. 51.3 million at 31 December 2009, while the provision on Danmarks Nationalbank's balance sheet amounts to kr. 25.4 million.

¹In connection with currency swap facilities concluded in order to provide short-term liquidity in euro and US dollars to domestic banks. No currency swaps had been concluded under these facilities at 31 December 2009.

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