Nykredit Realkredit Group - Annual Report 2011

PRELIMINARY ANNOUNCEMENT OF FINANCIAL STATEMENTS FOR 2011
 

The Nykredit Realkredit Group recorded a profit before tax of DKK 1,338m against DKK 3,090m in 2010

2011 compared with 2010

• Core earnings after impairment losses up by 9% to DKK 1,621m
• Investment portfolio income of DKK 179m against DKK 2,060m in 2010

Core earnings

• Income from bank and mortgage lending was unchanged at DKK 7.9bn
  • Lending grew by DKK 35bn to DKK 1,123bn (up 3%)
  • But mortgage refinancing activity declined (down 22%)
• Total core income subsided by 9% to DKK 9,010m
  • Reduced income from customer-driven securities trading and negative value adjustments,
    but mounting core income from securities
• Loan impairment losses were down by 33% to DKK 1,414m
• Operating costs excluding special value adjustments increased by 3.8%.

Investment portfolio income

• Decline primarily owing to rising yield spreads of high-rated bonds, derived from the euro crisis
• Negative value adjustment (DKK 375m) of subordinated debt instruments, primarily in Amagerbanken, Fjordbank Mors and Max Bank.

Peter Engberg Jensen, Group Chief Executive, has the following comments on the results:

– We have recorded a robust profit in a year in which activities and costs were affected by the crisis in international markets. In spite of that, Nykredit's total lending increased by 3% to DKK 1,123bn. Reduced loan impairment losses resulted in a 9% uplift in core earnings after impairment losses to just over DKK 1.6bn. In 2011 resolutions were made on combined mortgaging, a new organisational structure, cost reductions, a new mortgage lending price structure, and the set-up of Nykredit Direkte® to ensure stability in our lending and other business activities in the coming years.

Contacts
Peter Engberg Jensen, Group Chief Executive, or Nels Petersen, Head of Corporate Communications, tel +45 44 55 14 70 or +45 20 22 22 72.