letter from the managing board

The year 2007 was a year of market challenges that tested NIBC’s powers of flexibility, innovation and teamwork to the full. The performance of our organisation in this environment is testimony to the talent and dedication of our employees. NIBC delivered sound underlying results in the year 2007, laying firm foundations for the future.

NIBC ended the year with profit after tax from continuing operations of EUR 242 million, up 4% on 2006 levels. We continued our strategy of diversifying our income sources and growing fee income, which resulted in an 11% increase in net fee and commission income.

We remain committed to further growing our fee income as a percentage of our total income, and aim to keep the Tier-I ratio above 10%.

NIBC also maintained its all-important focus on clients. We executed a series of successful transactions despite the difficult market conditions. Our strategy is to forge solid, long-term relationships with our clients, working closely with them to provide integrated tailored solutions to their individual needs.

Although the decision in March not to pursue an initial public offering (IPO) was a disappointment at the time, the energy and effort we devoted to preparing for the listing were well spent. They have resulted in a further alignment of our reporting and IT processes and a further enhancement of our financial and operational systems.

At the same time, the unity of our employees, all of whom demonstrated adaptability throughout the process, has been strong.

In April, NIBC was one of the first banks to recognise the extent of its sub prime-related losses. The instability in the US credit fixed-income markets and continuous credit spread widening led to a loss from discontinued operations of EUR 141 million after tax on our US Asset Backed Securities investment book in the first half of 2007. We took action and have sold our entire sub prime-related portfolio.

Going forward, NIBC will remain an independent merchant bank following the determination not to proceed with the acquisition of NIBC by Kaupthing Bank hf.

We will maintain our focus on entrepreneurial small and medium-sized companies and expand our product range to strengthen our integrated client approach.

NIBC employees have shown their ability to adapt to new developments and continuing market challenges. We would like to express our sincere thanks to all employees for their determination, drive and hard work in 2007. With clients, teams and partners of this calibre, we can look forward to the future with confidence.

On behalf of the Managing Board,

Michael Enthoven

Chairman of the Managing Board, Chief Executive Officer

21 February 2008