UPDATE 2-EDB says wins 5-year DnB NOR job worth $605 mln

* Most of the deal represents new revenue

* Costs will rise in early 2009 because of the deal

* Reiterates Nordic market outlook

* Analysts expect pressure on margins, no covenant breach

* Stock up over 7 pct, outperforming local bourse

(Adds company, analyst comments; background)

By Joachim Dagenborg

OSLO, March 24 (Reuters) - Norwegian computer services group EDB Business Partner (EDBASA.OL) said on Tuesday it had won a renewed and extended five-year deal worth 3.8 billion crowns ($605 million) from Norway's biggest banking group, DnB NOR.

EDB said 2.8 billion crowns from the deal would be new operating revenue due to the extension of the contract.

"This is a very important agreement for EDB," Chief Executive Endre Rangnes said in a statement.

Shares in EDB Business Partner traded up 7.3 percent at 11.70 crowns at 1511 GMT, against the trend of a falling Oslo bourse .OSEBX.

Nordea Markets analyst Andre Adolfsen said the DnB NOR contract meant EDB's profit margins "will still be under pressure" but added he did not believe the company would breach debt covenants related to earnings.

EDB Business Partner said its costs would rise somewhat in early 2009 due to the deal, largely because the company has established a separate unit to handle the deliveries, but said that it would lead to more efficient use of resources.

The agreement includes IT services for the entire DnB NOR (DNBNOR.OL) group, including subsidiaries, EDB said.

"The decision to enter into one contract for the entire group will give us significant reductions in costs, and this will be beneficial for our customers," DnB NOR's head of IT Cathrine Klouman said in the statement.

EDB said the cost savings would take into effect from 2010. The contract will run from April 1, 2009, to March 31, 2014.

On Monday, Nordic information technology services company TietoEnator (TIE1V.HE) said its 2009 sales and operating profit would fall, sending its shares lower.

TietoEnator said it expects the IT services market to decline and tough market conditions to persist in 2009.

EDB spokesman Geir Remman said EDB had no new outlook to communicate since its fourth-quarter report in February when it said the Nordic IT service market could fall 2 percent in 2009. ($1=6.281 Norwegian Crown) (Additional reporting by Aasa Christine Stoltz and Richard Solem; editing by Will Waterman and Simon Jessop)