The core earnings show an increase of 12% to DKK 451 million, which is above the upwardly adjusted interval. The profit before tax improved by 5% to DKK 472 million, equivalent to an 18% return on the bank’s equity, which is considered highly satisfactory.
(million DKK) | 2013 | 2012 | 2011 | 2010 | 2009 |
Total core income | 844 | 823 | 767 | 758 | 753 |
Total costs and depreciations | -273 | -265 | -248 | -240 | -238 |
Core earnings before impairments | 571 | 558 | 519 | 518 | 515 |
Impairment charges for loans etc. | -120 | -157 | -129 | -138 | -159 |
Core earnings | 451 | 401 | 390 | 380 | 356 |
Result for portfolio | +23 | +49 | +1 | +38 | +56 |
Expenses for bank packages | -2 | -2 | -11 | -80 | -107 |
Profit before tax | 472 | 448 | 380 | 338 | 305 |
2013 in headlines:
- The core earnings show an increase of 12% to DKK 451 million, which is above the upwardly adjusted interval
- Increase in profit before tax to DKK 472 million, which is equivalent to an 18% return on equity at the beginning of the year
- The rate of costs was unchanged at 32 - still the lowest in the country
- Substantial increase in customer numbers creates 11% increase in loans and 10% increase in deposits
- Continued good increase in customers in the Private Banking segment
- Return on the bank’s shares positive at 45%
- Submitting of an ordinary dividend of DKK 15 and an extraordinary dividend of DKK 10 because the buy-back programme was not fully utilised - equivalent to a total dividend of DKK 121 million
- Proposed cancellation of 60,000 shares, and establishment of new buy-back programme for up to 110,000 shares - equivalent to DKK 129 million
- Core earnings in 2014 are expected to be in the range DKK 410 - 460 million
Please do not hesitate to contact the bank’s management if you have any questions.
Yours sincerely, | ||
Ringkjøbing Landbobank | ||
John Fisker |
Management Report
Core income
Net interest income was DKK 615 million in 2013, unchanged relative to 2012. Compared to last year, the bank experienced a falling interest margin during 2013, which was neutralised with respect to
earnings by an increase in the average volume of loans from 2012 to 2013. In addition, the level of interest rates in society in 2013 was lower than in 2012, which resulted in a lower return on the bank’s securities portfolio and liquid resources.
Fees, commissions and foreign exchange earnings amounted to net DKK 212 million in 2013 against net DKK 199 million in 2012, an increase of 6%. Greater activity and volumes within asset management and pensions and higher income from guarantee commissions helped to strengthen earnings. On the other hand, compared with 2012, there were no conversions during the year.
The total core income was 3% higher, with an increase from DKK 823 million in 2012 to DKK 844 million in 2013. The bank considers the increase from the 2012 level satisfactory.
Costs and depreciations
Total costs including depreciations on tangible assets were DKK 273 million in 2013 against DKK 265 million last year, an increase of 3%.
The basic development in the bank’s costs of staffing and administration was moderate, with a total rate of increase of less than 1%, which reflects an increase in the bank’s salary costs and a decrease in IT costs. Most of the cost increase was attributable to an additional DKK 5 million for the insurance scheme under the Guarantee Fund for Depositors and Investors.
The rate of costs was unchanged relative to last year’s level and was computed at 32.4%, which continues to be the lowest in Denmark. A low rate of costs is especially important in periods of difficult economic conditions as this provides a high level of robustness in the bank’s results.
Impairment charges for loans
Impairment charges for loans amounted to DKK 120 million against DKK 157 million last year. The level of impairment charges is falling relative to last year and is equivalent to 0.8% of the total average loans, impairment charges, guarantees and provisions. The bank’s customers still appear to be coping better with the weak economic conditions than the average in Denmark.
The bank’s total account for impairment charges and provisions was DKK 853 million at the end of the year, equivalent to 5.1% of total loans and guarantees. Actual losses and write-offs on loans etc. continue to be low, and with deduction of the items “Interest on the impaired part of loans” and “Receivables previously written-off”, the year’s actual net losses were DKK 25 million. The account for impairment charges and provisions is increased by net DKK 95 million during the year.
The portfolio of loans with suspended calculation of interest amounts to DKK 85 million, equivalent to 0.5% of the bank’s total loans and guarantees at the end of the year.
Given the low growth in the Danish economy for a number of years, which is expected to continue this year, the bank is satisfied with the conservative credit policy on the basis of which the bank is
operated. As a natural part of the economic cycle, the bank’s losses are expected to remain at a relatively high level in 2014, but at a lower level than in 2013. It is also still the bank’s judgment that its credit policy, diversified loans portfolio and position in central and western Jutland will have a positive effect on the bank relative to the general level of losses for the banking sector as a whole.
Core earnings
(Million DKK) |
2013 |
2012 |
2011 |
2010 |
2009 |
Total core income | 844 | 823 | 767 | 758 | 753 |
Total costs and depreciations | -273 | -265 | -248 | -240 | -238 |
Core earnings before impairments | 571 | 558 | 519 | 518 | 515 |
Impairment charges for loans etc. | -120 | -157 | -129 | -138 | -159 |
Core earnings | 451 | 401 | 390 | 380 | 356 |
The core earnings were DKK 451 million against DKK 401 million last year, an increase of 12%. The core earnings were thus realised above the upwardly adjusted interval.
Result for the portfolio and market risk
The result for the portfolio for 2013 was positive at DKK 23 million including funding costs.
The bank’s holding of shares etc. amounted to DKK 209 million at the end of the year, with DKK 16 million in listed shares and DKK 193 million in sector shares etc. The bond portfolio is DKK 4,670 million, and the majority of the portfolio consists of AAA-rated Danish mortgage credit bonds and short-term bank bonds issued by rated counterparties.
The total interest rate risk, computed as the impact on the result of a one percentage point change in the interest level, was 0.6% of the bank’s tier 1 capital after deduction at the end of the year.
The bank’s total market risk within exposures to interest rate risk, listed shares and foreign currency remains at a low level. The bank’s risk of losses calculated on the basis of a Value-at-risk model (computed with a 10-day horizon and 99% probability) was as follows in 2013:
Risk in DKK million |
Risk relative to equity end of year in % |
|
Highest risk of loss: Lowest risk of loss: Average risk of loss: |
26.0 2.5 14.9 |
0.90% 0.09% 0.51% |
The bank’s policy remains to keep the market risk at a low level.
Result after tax
The profit before tax was DKK 472 million. The profit after tax of DKK 114 million was DKK 358 million against last year’s DKK 328 million. The profit before and after tax is equivalent to a return on equity at the beginning of the year after payment of dividend of 18% and 14% respectively.
Balance sheet
The bank’s balance sheet total at the end of the year was DKK 19,583 million against last year’s DKK 17,682 million.
Deposits increased by 10% from DKK 12,867 million at the end of 2012 to DKK 14,114 million at the end of 2013.
The bank’s loans increased by 11% from DKK 12,424 million to DKK 13,849 million at the end of the year. Just over half of the growth in the bank’s loans derives from wind turbine financing, while the remainder derives from a broad range of industries with growth from both other niches and the branch network. The bank thus in 2013 met its goal of realising growth in loans via the organic growth
strategy.
From the end of the third quarter 2013 to the end of the fourth quarter 2013, loans increased by DKK 861 million, an increase of 7%. The increase mainly concerns the establishment of wind turbine loans which were booked as guarantees in the preceding quarters of 2013. There was thus a corresponding reduction in guarantees totalling DKK 743 million from the end of the third quarter 2013 to the end of the fourth quarter.
The bank’s portfolio of guarantees at the end of the year was DKK 1,902 million against DKK 1,667 million in 2012.
Liquidity
The bank’s liquidity is good, and the excess liquidity relative to the statutory requirement is 166%. The bank’s short-term funding with term to maturity of less than 12 months amounts to only DKK 755 million, corresponding to DKK 5.0 billion in short-term money market placings, primarily in Danish banks and liquid securities. The bank is thus not dependent on the short-term money market.
During 2013, the bank entered into long-term funding agreements with its partners to the equivalent value of a total of DKK 1.1 billion with an average term of 5.1 years.
The bank’s deposits were DKK 265 million greater than loans at the end of the year, and the loans portfolio is thus more than fully financed by the bank’s deposits and equity. In addition, part of the German loans portfolio for wind turbines was refinanced back-to-back with KfW Bankengruppe, and DKK 969 million can thus be disregarded in terms of liquidity.
The bank thus requires no financing for the coming year to meet the minimum requirement that it must always be able to manage for up to 12 months without access to the financial markets.
Dividend and share buy-back programme
The bank’s board of directors will submit to the general meeting that an ordinary dividend of DKK 15 per share, equivalent to DKK 73 million, be paid for the 2013 financial year. A dividend of DKK 14 per share was paid in the 2012 financial year.
It is also submitted that an extraordinary dividend of DKK 10 per share be paid as the share buy-back programme for up to 130,000 shares, which, at the price at the end of January 2013 would be able to reduce the equity by up to DKK 105 million, was not fully used in 2013. 60,000 shares were bought back in 2013 at a cost of DKK 59 million. It is thus proposed that the remaining DKK 46 million be distributed as an extraordinary dividend.
The recommendation to the general meeting will be that these 60,000 shares be cancelled in connection with a capital reduction, thus reducing the number of shares in the bank from 4,840,000 to 4,780,000.
It will also be proposed to the general meeting that a share new buy-back programme be established under which up to 110,000 shares can be bought for cancellation at a future general meeting. At the current price, this authorisation will reduce the equity by DKK 129 million.
Capital
The equity at the beginning of 2013 was DKK 2,676 million. To this must be added the profit for the year, and the dividend paid and the value of the own shares bought must be subtracted, after which the equity at the end of the year was DKK 2,901 million, an increase of 8%.
The bank’s solvency ratio (Tier 2) was computed at 20.0% at the end of 2013 and the tier 1 capital ratio was computed at 19.2%.
Solvency cover | 2013 | 2012 | 2011 | 2010 | 2009 |
Core tier 1 capital ratio (excl. hybrid core capital) (%) |
18,7 | 19,6 | 18,3 | 17,1 | 15,1 |
Tier 1 capital ratio (%) | 19,2 | 20,9 | 19,8 | 18,6 | 16,6 |
Solvency ratio - Tier 2 (%) | 20,0 | 22,4 | 21,4 | 22,4 | 20,2 |
Individual solvency requirement (%) | 8,9 | 8,0 | 8,0 | 8,0 | 8,0 |
Solvency cover | 225% | 280% | 268% | 280% | 253% |
The above capitalisation means that Ringkjøbing Landbobank remains one of Denmark’s best capitalised banks.
With effect from 2013, the method of calculation of the individual solvency requirement was changed to the so-called 8+ model, where the calculation of the individual solvency requirement is based on 8% plus any supplements calculated inter alia for customers with financial problems.
In contrast to the previously used method, the 8+ model takes no account of the bank’s earnings and cost base and its robust business model. Despite this, the bank’s individual solvency requirement at the end of 2013 was calculated at only 8.9%.
A calculation of the consequences of implementing the CRD IV rules with effect from the beginning of 2014 was made on the basis of the bank’s capital ratios at the end of 2013. The calculation shows a modest effect on the bank’s core tier 1 capital ratio (excluding hybrid core capital) and a reduction in the tier 1 capital ratio and the solvency ratio of the order of 1.5 - 2.0 percentage points.
Good increase in customer numbers
Throughout 2013, the bank carried out various outreach initiatives towards both existing and new customers, including by investing in further disseminating the bank’s Private Banking platform at national level and by carrying out outreach activities in the branch network in Central and West Jutland.
The activities were performed to create healthy growth in the bank as the biggest challenge in a time of low growth in the society is to create growth in the bank’s top line.
The outreach activities in question contributed inter alia to the bank’s recording the best ever net increase in customers during 2013, with growth in both the branch network and within the niche concepts. The outreach initiatives are planned to continue in 2014 at both regional and national levels.
Accounting policies and key figures
The accounting policies applied are unchanged relative to the audited annual report presented for 2012.
Expected result and plans for 2014
The bank’s core earnings in 2013 were DKK 451 million, which is above the upwardly adjusted range.
Ringkjøbing Landbobank’s market share is about 50% in that part of West Jutland where the bank’s old branches are located. The bank also has well-established branches in Herning, Holstebro and Viborg which are continuing to operate positively. The bank’s plan is to retain and develop this portion of the customer portfolio with sound and competitive products and with focus on the employees’ expertise and work in advising customers of the options in a changing financial world. In 2014, the bank expects a continuing positive inflow of customers to its branches in central and western Jutland because of its long-term outreach marketing of the bank and consolidation in the sector.
The activities in the bank’s Distance Customer Department and its niche concepts are also expected to continue to develop positively as a whole in the coming year. Focus will be placed on serving the bank’s current customers and further developing the portfolio within wind turbine financing and medical practitioners.
Ringkjøbing Landbobank is establishing a new Private Banking branch in Aarhus in the first quarter of 2014. The branch is being established following the success achieved by the Private Banking branches in Ringkøbing, Herning and Holte over the last three years.
Given the possibilities which the bank currently sees in the market and the establishment of a Private Banking branch in Aarhus in the first quarter of 2014, the bank expects increased costs in the 2014 financial year of approx. 6%. The bank’s impairment charges are still expected to remain at a relatively high level in 2014, but at a lower level than in 2013.
As a whole, core earnings in 2014 are expected to be in the range DKK 410 - 460 million. To this must be added the result for the bank’s result for portfolio.
Main and key figures
2013 | 2012 | 2011 | 2010 | 2009 | |
Main figures for the bank (million DKK) | |||||
Total core income | 844 | 823 | 767 | 758 | 753 |
Total costs and depreciations | -273 | -265 | -248 | -240 | -238 |
Core earnings before impairments | 571 | 558 | 519 | 518 | 515 |
Impairment charges for loans etc. | -120 | -157 | -129 | -138 | -159 |
Core earnings | 451 | 401 | 390 | 380 | 356 |
Result for portfolio | +23 | +49 | +1 | +38 | +56 |
Expenses for bank packages | -2 | -2 | -11 | -80 | -107 |
Profit before tax | 472 | 448 | 380 | 338 | 305 |
Profit after tax | 358 | 328 | 286 | 257 | 232 |
Shareholders’ equity | 2,901 | 2,676 | 2,483 | 2,312 | 2,056 |
Deposits | 14,114 | 12,867 | 12,755 | 11,662 | 11,187 |
Loans | 13,849 | 12,424 | 12,747 | 13,151 | 13,047 |
Balance sheet total | 19,583 | 17,682 | 17,549 | 18,247 | 17,928 |
Guarantees | 1,902 | 1,667 | 1,052 | 1,042 | 1,486 |
Key figures for the bank (per cent) | |||||
Return on equity before tax, beginning of year | 18.1 | 18.5 | 16.9 | 16.5 | 17.1 |
Return on equity after tax, beginning of year | 13.7 | 13.6 | 12.7 | 12.5 | 13.0 |
Rate of costs | 32.4 | 32.2 | 32.4 | 31.6 | 31.6 |
Tier 1 capital ratio | 19.2 | 20.9 | 19.8 | 18.6 | 16.6 |
Solvency ratio - Tier 2 | 20.0 | 22.4 | 21.4 | 22.4 | 20.2 |
Solvency requirement | 8.9 | 8.0 | 8.0 | 8.0 | 8.0 |
Key figures per 5 DKK share (DKK) | |||||
Core earnings | 94 | 83 | 79 | 75 | 71 |
Profit before tax | 99 | 93 | 77 | 67 | 60 |
Profit after tax | 75 | 68 | 58 | 51 | 46 |
Net asset value | 607 | 553 | 503 | 459 | 408 |
Price, end of period | 1,099 | 770 | 579 | 725 | 609 |
Dividend | 25 | 14 | 13 | 12 | 0 |
Profit and loss account
Note |
1.1 - 31.12 2013 DKK 1,000 |
1.1 - 31.12 2012 DKK 1,000 |
|
1 | Interest receivable | 776,268 | 834,021 |
2 | Interest payable | 146,037 | 200,764 |
Net income from interest | 630,231 | 633,257 | |
3 | Dividend on capital shares etc. | 12,610 | 1,463 |
4 | Income from fees and commissions | 229,813 | 210,516 |
4 | Fees and commissions paid | 31,123 | 24,029 |
Net income from interest and fees | 841,531 | 821,207 | |
5 | Value adjustments | +23,074 | +46,957 |
Other operating income | 2,730 | 3,303 | |
6,7 | Staff and administration costs | 254,909 | 252,796 |
Amortisations, depreciations and write-downs on intangible and tangible assets |
4,270 | 3,233 | |
Other operating costs | |||
Miscellaneous other operating costs | 28 | 133 | |
Costs Deposit Guarantee Fund | 16,091 | 10,281 | |
8 | Impairment charges for loans and other debtors etc. | -120,175 | -156,844 |
Result of capital shares in associated companies | -3 | +5 | |
Profit before tax | 471,859 | 448,185 | |
9 | Tax | 114,199 | 120,188 |
Profit after tax | 357,660 | 327,997 | |
Other comprehensive income | 0 | 0 | |
Total comprehensive income | 357,660 | 327,997 |
Proposed distribution of profit
Profit after tax | 357,660 | 327,997 | |
Total amount available for distribution | 357,660 | 327,997 | |
Dividend at annual general meeting | |||
Ordinary dividend | 72,600 | 69,160 | |
Extraordinary dividend | 48,400 | 0 | |
Total dividend | 121,000 | 69,160 | |
Charitable purposes | 500 | 500 | |
Transferred to reserve for net revaluation under the intrinsic value method | -3 | +5 | |
Appropriation to own funds | 236,163 | 258,332 | |
Total distribution of the amount available | 357,660 | 327,997 |
Core earnings
1.1 - 31.12 2013 DKK 1,000 |
1.1 - 31.12 2012 DKK 1,000 |
|
Net income from interest | 614,719 | 614,617 |
Net income from fees and provisions excl. commission | 171,765 | 162,371 |
Income from sector shares | 14,403 | 5,939 |
Foreign exchange income | 13,293 | 12,591 |
Other operating income | 2,730 | 3,303 |
Total core income excl. trade income | 816,910 | 798,821 |
Trade income | 26,925 | 24,116 |
Total core income | 843,835 | 822,937 |
Staff and administration costs | 254,909 | 252,796 |
Amortisations, depreciations and write-downs on intangible and tangible assets |
4,270 | 3,233 |
Other operating costs | 13,827 | 8,705 |
Total costs etc. | 273,006 | 264,734 |
Core earnings before impairments | 570,829 | 558,203 |
Impairment charges for loans and other debtors etc. | -120,175 | -156,844 |
Core earnings | 450,654 | 401,359 |
Result for portfolio | +23,497 | +48,535 |
Expenses for bank packages | -2,292 | -1,709 |
Profit before tax | 471,859 | 448,185 |
Tax | 114,199 | 120,188 |
Profit after tax | 357,660 | 327,997 |
Balance sheet
Note |
End Dec. 2013 DKK 1,000 |
End Dec. 2012 DKK 1,000 |
|
Assets | |||
Cash in hand and claims at call on central banks | 63,064 | 483,188 | |
10 | Claims on credit institutions and central banks | 416,913 | 373,300 |
Claims at notice on central banks | 0 | 176,002 | |
Money market operations and bilateral loans - term to maturity under 1 year |
214,032 | 92,578 | |
Bilateral loans - term to maturity over 1 year | 202,881 | 104,720 | |
11,12,13 | Loans and other debtors at amortised cost price | 13,849,285 | 12,424,139 |
Loans and other debtors at amortised cost price | 12,880,717 | 11,594,880 | |
Wind turbine loans with direct funding | 968,568 | 829,259 | |
14 | Bonds at current value | 4,669,732 | 3,783,258 |
15 | Shares etc. | 208,697 | 212,710 |
Capital shares in associated companies | 540 | 543 | |
Land and buildings total | 73,871 | 75,830 | |
Investment properties | 8,015 | 8,165 | |
Domicile properties | 65,856 | 67,665 | |
Other tangible assets | 4,385 | 3,981 | |
Actual tax assets | 24,501 | 40,370 | |
Temporary assets | 1,000 | 1,400 | |
Other assets | 263,856 | 276,182 | |
Periodic-defined items | 6,977 | 6,645 | |
Total assets | 19,582,821 | 17,681,546 |
Balance sheet
Note |
End Dec. 2013 DKK 1,000 |
End Dec. 2012 DKK 1,000 |
|
Liabilities and equity | |||
16 | Debt to credit institutions and central banks | 1,754,884 | 1,198,071 |
Money market operations and bilateral credits - term to maturity under 1 year |
656,258 | 294,208 | |
Bilateral credits - term to maturity over 1 year | 130,058 | 74,604 | |
Bilateral credits from KfW Bankengruppe | 968,568 | 829,259 | |
17 | Deposits and other debts | 14,113,816 | 12,866,748 |
18 | Issued bonds at amortised cost price | 249,814 | 340,809 |
Other liabilities | 173,806 | 190,830 | |
Periodic-defined items | 917 | 205 | |
Total debt | 16,293,237 | 14,596,663 | |
Provisions for deferred tax | 13,188 | 15,151 | |
12 | Provisions for losses on guarantees | 4,256 | 10,958 |
Total provisions for liabilities | 17,444 | 26,109 | |
Subordinated loan capital | 200,193 | 199,607 | |
Hybrid core capital | 170,847 | 183,027 | |
19 | Total subordinated debt | 371,040 | 382,634 |
20 | Share capital | 24,200 | 24,700 |
Reserve for net revaluation under the intrinsic value method | 189 | 192 | |
Profit carried forward | 2,755,211 | 2,581,588 | |
Proposed dividend etc. | 121,500 | 69,660 | |
Total shareholders’ equity | 2,901,100 | 2,676,140 | |
Total liabilities and equity | 19,582,821 | 17,681,546 | |
21 |
Own capital share | ||
22 | Contingent liabilities etc. | ||
23 | Assets furnished as security | ||
24 | Capital adequacy computation | ||
25 | The supervisory diamond | ||
26 | Miscellaneous comments |
Statement of shareholders’ equity
2013 DKK 1,000 |
Share capital | Reserve for net revaluation under the intrinsic value method |
Profit carried forward |
Proposed dividend etc. |
Total share-holders’ equity |
Shareholders’ equity at the end of the previous financial year |
24,700 | 192 | 2,581,588 | 69,660 | 2,676,140 |
Reduction of share capital | -500 | 500 | 0 | ||
Dividend etc. paid | -69,660 | -69,660 | |||
Dividend received on own shares | 1,427 | 1,427 | |||
Shareholders’ equity after allocation of dividend etc. | 24,200 | 192 | 2,583,515 | 0 | 2,607,907 |
Purchase and sale of own shares | -64,467 | -64,467 | |||
Total comprehensive income | -3 | 236,163 | 121,500 | 357,660 | |
Shareholders’ equity on the balance sheet date | 24,200 | 189 | 2,755,211 | 121,500 | 2,901,100 |
2012 DKK 1,000 |
Share capital | Reserve for net revaluation under the intrinsic value method |
Profit carried forward |
Proposed dividend etc. |
Total share-holders’ equity |
Shareholders’ equity at the end of the previous financial year |
25,200 | 187 | 2,391,713 | 66,020 | 2,483,120 |
Reduction of share capital | -500 | 500 | 0 | ||
Dividend etc. paid | -66,020 | -66,020 | |||
Dividend received on own shares | 1,326 | 1,326 | |||
Shareholders’ equity after allocation of dividend etc. | 24,700 | 187 | 2,393,539 | 0 | 2,418,426 |
Purchase and sale of own shares | -70,283 | -70,283 | |||
Total comprehensive income | 5 | 258,332 | 69,660 | 327,997 | |
Shareholders’ equity on the balance sheet date | 24,700 | 192 | 2,581,588 | 69,660 | 2,676,140 |
Notes
Note |
1.1 - 31.12 2013 DKK 1,000 |
1.1 - 31.12 2012 DKK 1,000 |
|
1 | Interest receivable | ||
Claims on credit institutions and central banks | 23,425 | 10,943 | |
Loans and other debtors | 719,154 | 769,656 | |
Loans - interest concerning the impaired part of loans | -43,913 | -41,685 | |
Bonds | 86,007 | 86,941 | |
Total derivatives financial instruments, | -8,617 | 8,016 | |
of which | |||
Currency contracts | -4,104 | 4,880 | |
Interest-rate contracts | -4,513 | 3,136 | |
Other interest receivable | 212 | 150 | |
Total interest receivable | 776,268 | 834,021 | |
2 | Interest payable | ||
Credit institutions and central banks | 23,385 | 27,163 | |
Deposits and other debts | 101,280 | 146,108 | |
Issued bonds | 8,015 | 11,496 | |
Subordinated debt | 13,221 | 15,828 | |
Other interest payable | 136 | 169 | |
Total interest payable | 146,037 | 200,764 | |
3 | Dividend from shares etc. | ||
Shares | 12,610 | 1,463 | |
Total dividend from shares etc. | 12,610 | 1,463 | |
4 | Gross income from fees and commissions | ||
Securities trading | 33,646 | 28,279 | |
Asset management | 84,785 | 75,271 | |
Payment handling | 21,524 | 20,898 | |
Loan fees | 6,273 | 14,578 | |
Guarantee commissions | 61,527 | 41,371 | |
Other fees and commissions | 22,058 | 30,119 | |
Total gross income from fees and commissions | 229,813 | 210,516 | |
Net income from fees and commissions | |||
Securities trading | 26,925 | 24,116 | |
Asset management | 79,755 | 70,982 | |
Payment handling | 19,347 | 18,436 | |
Loan fees | 4,204 | 12,064 | |
Guarantee commissions | 61,527 | 41,371 | |
Other fees and commissions | 6,932 | 19,518 | |
Total net income from fees and commissions | 198,690 | 186,487 | |
Foreign exchange income | 13,293 | 12,591 | |
Total net income from fees, commissions and foreign exchange income | 211,983 | 199,078 |
Notes
Note |
1.1 - 31.12 2013 DKK 1,000 |
1.1 - 31.12 2012 DKK 1,000 |
|
5 | Value adjustments | ||
Loans and other debtors, current value adjustment | -974 | 6,433 | |
Bonds | 1,653 | 78,318 | |
Shares etc. | 9,479 | -25,862 | |
Investment properties | 150 | -415 | |
Foreign exchange income | 13,293 | 12,591 | |
Total derivatives financial instruments, | -7,846 | -26,497 | |
of which | |||
Interest-rate contracts | -7,846 | -26,497 | |
Issued bonds | 2,491 | 1,041 | |
Other liabilities | 4,828 | 1,348 | |
Total value adjustments | 23,074 | 46,957 | |
6 | Staff and administration costs | ||
Payments to general management, board of directors and shareholders’ committee |
|||
General management | 3,973 | 5,187 | |
Board of directors | 1,294 | 1,161 | |
Shareholders’ committee | 366 | 318 | |
Total | 5,633 | 6,666 | |
Staff costs | |||
Salaries | 117,365 | 111,848 | |
Pensions | 12,066 | 11,478 | |
Social security expenses | 900 | 917 | |
Costs depending on number of staff | 16,195 | 14,978 | |
Total | 146,526 | 139,221 | |
Other administration costs | 102,750 | 106,909 | |
Total staff and administration costs | 254,909 | 252,796 | |
7 | Number of full-time employees | ||
Average number of employees during the financial year converted into full-time employees | 251 | 244 | |
8 | Impairment charges on loans and other debtors etc. | ||
Net changes in impairment charges on loans and other debtors and provisions for losses on guarantees | 95,058 | 108,506 | |
Actual realised net losses | 69,030 | 90,023 | |
Interest concerning the impaired part of loans | -43,913 | -41,685 | |
Total impairment charges on loans and other debtors etc. | 120,175 | 156,844 |
Notes
Note |
End Dec. 2013 DKK 1,000 |
End Dec. 2012 DKK 1,000 | |
9 | Tax | ||
Tax calculated on the year’s profit | 114,967 | 109,075 | |
Adjustment of deferred tax | -1,660 | 10,362 | |
Adjustment of deferred tax due to change in tax rate | -303 | 0 | |
Adjustment of tax calculated for previous years | 1,195 | 751 | |
Total tax | 114,199 | 120,188 | |
Effective tax rate (%): | |||
The current tax rate of the bank | 25.0 | 25.0 | |
Permanent deviations | -1.0 | 1.6 | |
Adjustment of deferred tax due to change in tax rate | -0.1 | 0.0 | |
Adjustment of tax calculated for previous years | 0.3 | 0.2 | |
Total effective tax rate | 24.2 | 26.8 | |
Note |
End Dec. 2013 DKK 1,000 |
End Dec. 2012 DKK 1,000 | |
10 | Claims on credit institutions and central banks | ||
Claims at call | 114,032 | 41,144 | |
Up to and including 3 months | 100,000 | 226,002 | |
More than 3 months and up to and including 1 year | 0 | 1,434 | |
More than 1 year and up to and including 5 years | 202,881 | 104,220 | |
More than 5 years | 0 | 500 | |
Total claims on credit institutions and central banks | 416,913 | 373,300 | |
11 | Loans and other debtors at amortised cost price | ||
At call | 1,311,786 | 2,027,476 | |
Up to and including 3 months | 674,795 | 597,833 | |
More than 3 months and up to and including 1 year | 1,542,624 | 1,354,204 | |
More than 1 year and up to and including 5 years | 4,601,579 | 4,300,538 | |
More than 5 years | 5,718,501 | 4,144,088 | |
Total loans and other debtors at amortised cost price | 13,849,285 | 12,424,139 |
Notes
Note |
End Dec. 2013 DKK 1,000 |
End Dec. 2012 DKK 1,000 | |
12 | Impairment charges for loans and other debtors and provisions for losses on guarantees | ||
Individual impairment charges | |||
Cumulative individual impairment charges for loans and other debtors at the end of the previous financial year | 632,529 | 577,352 | |
Impairment charges/value adjustments during the year | 255,157 | 243,459 | |
Reverse entry - impairment charges made in previous financial years |
-90,895 | -124,433 | |
Booked losses covered by impairment charges | -60,278 | -63,849 | |
Cumulative individual impairment charges for loans and other debtors on the balance sheet date | 736,513 | 632,529 | |
Collective impairment charges | |||
Cumulative collective impairment charges for loans and other debtors at the end of the previous financial year | 114,876 | 67,466 | |
Impairment charges/value adjustments during the year | -2,224 | 47,410 | |
Cumulative collective impairment charges for loans and other debtors on the balance sheet date | 112,652 | 114,876 | |
Total cumulative impairment charges for loans and other debtors on the balance sheet date | 849,165 | 747,405 | |
Provisions for losses on guarantees | |||
Cumulative individual provisions for losses on guarantees at the end of the previous financial year | 10,958 | 5,038 | |
Provisions/value adjustments during the year | 3,282 | 10,009 | |
Reverse entry - provisions made in previous financial years | -9,245 | -3,835 | |
Booked losses covered by provisions | -739 | -254 | |
Cumulative individual provisions for losses on guarantees on the balance sheet date | 4,256 | 10,958 | |
Total cumulative impairment charges for loans and other debtors and provisions for losses on guarantees on the balance sheet date | 853,421 | 758,363 | |
13 | Suspended calculation of interest | ||
Loans and other debtors with suspended calculation of interest on the balance sheet date |
85,258 | 113,312 |
Notes
Note |
End Dec. 2013 DKK 1,000 |
End Dec. 2012 DKK 1,000 | |
14 | Bonds at current value | ||
Listed on the stock exchange | 4,669,732 | 3,783,258 | |
Total bonds at current value | 4,669,732 | 3,783,258 | |
15 | Shares etc. | ||
Listed on NASDAQ OMX Copenhagen | 15,700 | 29,104 | |
Unlisted shares at current value | 1,372 | 1,505 | |
Sector shares at current value | 191,625 | 182,101 | |
Total shares etc. | 208,697 | 212,710 | |
16 | Debt to credit institutions and central banks | ||
Debt payable on demand | 298,236 | 214,603 | |
Up to and including 3 months | 315,311 | 30,726 | |
More than 3 months and up to and including 1 year | 137,287 | 169,143 | |
More than 1 year and up to and including 5 years | 560,112 | 516,937 | |
More than 5 years | 443,938 | 266,662 | |
Total debt to credit institutions and central banks | 1,754,884 | 1,198,071 | |
The bank has undrawn long-term committed revolving credit facilities equivalent to | 0 | 74,604 | |
17 | Deposits and other debts | ||
On demand | 8,325,047 | 7,536,906 | |
Deposits and other debts at notice: | |||
Up to and including 3 months | 1,205,176 | 1,487,572 | |
More than 3 months and up to and including 1 year | 1,426,171 | 908,664 | |
More than 1 year and up to and including 5 years | 1,501,668 | 1,414,739 | |
More than 5 years | 1,655,754 | 1,518,867 | |
Total deposits and other debts | 14,113,816 | 12,866,748 | |
Distributed as follows: | |||
On demand | 7,933,649 | 6,557,380 | |
At notice | 337,480 | 175,268 | |
Time deposits | 2,549,938 | 2,921,952 | |
Long term deposit agreements | 1,883,569 | 1,906,942 | |
Special types of deposits | 1,409,180 | 1,305,206 | |
14,113,816 | 12,866,748 |
Notes
Note |
End Dec. 2013 DKK 1,000 |
End Dec. 2012 DKK 1,000 | |
18 | Issued bonds at amortised cost price | ||
Up to and including 3 months | 3,727 | 4,583 | |
More than 3 months and up to and including 1 year | 0 | 220,000 | |
More than 1 year and up to and including 5 years | 246,087 | 116,226 | |
Total issued bonds at amortised cost price | 249,814 | 340,809 | |
Distributed as follows: Issues in Danish kroner: Nom. 220 million DKK |
0 | 220,000 | |
Issues in Norwegian kroner: | |||
Nom. 100 million NOK | 88,540 | 101,670 | |
Regulation at amortised cost price and adjustment to current value of issues |
5,768 | 8,256 | |
Issues in euro: | |||
Nom. 20 million EUR | 149,206 | 0 | |
Other issues | 6,300 | 10,883 | |
249,814 | 340,809 | ||
19 | Subordinated debt | ||
Subordinated loan capital: | |||
Floating rate loan, principal EUR 27 million, expiry 30.6.2021 |
201,428 | 201,431 | |
Hybrid core capital: | |||
4.795% bond loan, nom. DKK 200 million, indefinite term |
200,000 | 200,000 | |
Own holding of subordinated loan capital | -35,500 | -28,000 | |
Regulation at amortised cost price and adjustment to current value of subordinated loan capital and hybrid core capital | 5,112 | 9,203 | |
Total subordinated debt | 371,040 | 382,634 | |
20 | Share capital | ||
Number of shares at DKK 5 each: | |||
Beginning of period | 4,940,000 | 5,040,000 | |
Cancellation during the year | -100,000 | -100,000 | |
End of period | 4,840,000 | 4,940,000 | |
Reserved for subsequent cancellation | 60,000 | 90,000 | |
Total share capital | 24,200 | 24,700 |
Notes
Note |
End Dec. 2013 DKK 1,000 |
End Dec. 2012 DKK 1,000 | |
21 | Own capital shares | ||
Own capital shares included in the balance sheet at | 0 | 0 | |
The market value is | 68,747 | 73,978 | |
Number of own shares: | |||
Beginning of year | 96,075 | 100,855 | |
Purchases during the year | 318,806 | 335,686 | |
Sales during the year | -252,327 | -240,466 | |
Cancellation during the year | -100,000 | -100,000 | |
End of year | 62,554 | 96,075 | |
Nominal value of holding of own shares, end of year | 313 | 480 | |
Own shares’ proportion of share capital, end of year (%) | 1.3 | 1.9 | |
22 | Contingent liabilities etc. | ||
Contingent liabilities | |||
Finance guarantees | 949,047 | 693,774 | |
Guarantees for foreign loans | 0 | 5,595 | |
Guarantees against losses on mortgage credit loans | 55,841 | 51,951 | |
Guarantees against losses Totalkredit | 112,284 | 122,797 | |
Registration and conversion guarantees | 55,605 | 70,999 | |
Sector guarantees | 48,175 | 46,816 | |
Other contingent liabilities | 680,982 | 675,168 | |
Total contingent liabilities | 1,901,934 | 1,667,100 | |
23 | Assets furnished as security | ||
First mortgage loans were provided for German wind turbine projects. The loans are funded directly by KfW Bankengruppe, to which security in the associated loans has been provided. Each reduction of the first mortgage loans is deducted directly from the funding at the KfW Bankengruppe. | 968,568 | 829,259 | |
As security for clearing, the bank has pledged securities from its total holding to the Central Bank of Denmark to a total market price of | 321,192 | 250,623 | |
Provision of security under CSA agreements | 75,372 | 86,101 |
Notes
Note |
End Dec. 2013 DKK 1,000 |
End Dec. 2012 DKK 1,000 | |
24 | Capital adequacy computation | ||
Computed pursuant to the Executive order on Capital Adequacy issued by the Danish Financial Supervisory Authority. |
|||
Weighted items with credit and counterpart risks | 12,235,761 | 10,601,717 | |
Market risk | 1,110,690 | 1,219,598 | |
Operational risk | 1,522,813 | 1,483,500 | |
Total risk weighted items | 14,869,264 | 13,304,815 | |
Shareholders’ equity | 2,901,100 | 2,676,140 | |
Proposed dividend etc. | -121,500 | -69,660 | |
Reserve for net revaluation | -189 | -192 | |
Core tier 1 capital (excl. hybrid core capital) | 2,779,411 | 2,606,288 | |
Hybrid core capital | 164,500 | 172,000 | |
Deduction for equity investments etc. above 10% | -19,963 | 0 | |
Deduction for the sum of equity investments etc. above 10% | -63,503 | 0 | |
Tier 1 capital | 2,860,445 | 2,778,288 | |
Subordinated loan capital | 201,428 | 201,431 | |
Reserve for net revaluation | 189 | 192 | |
Deduction for equity investments etc. above 10% | -19,963 | 0 | |
Deduction for the sum of equity investments etc. above 10% | -63,503 | 0 | |
Capital base after deductions | 2,978,596 | 2,979,911 | |
Core tier 1 capital ratio (excl. hybrid core capital) (%) | 18.7 | 19.6 | |
Tier 1 capital ratio (%) | 19.2 | 20.9 | |
Solvency ratio - Tier 2 (%) | 20.0 | 22.4 | |
Capital base requirements under Section 124 (2,1) of the Danish Financial Business Act | 1,189,541 | 1,064,385 | |
25 |
The supervisory diamond (Danish Financial Supervisory Authority limits) |
||
Stable funding (funding ratio) (< 1) | 0.7 | 0.7 | |
Excess liquidity (> 50%) | 166.2% | 185.5% | |
Total large exposures (< 125%) | 35.0% | 27.2% | |
Growth in loans (< 20%) | 11.5% | -2.5% | |
Real estate exposure (< 25%) | 11.4% | 12.2% | |
26
|
Miscellaneous comments on: Main and key figures for the bank
Current value
|
Quarterly overview
(Million DKK) |
4rd qtr. 2013 |
3rd qtr. 2013 |
2nd qtr. 2013 |
1st qtr. 2013 |
4th qtr. 2012 | 3rd qtr. 2012 |
2nd qtr. 2012 |
1st qtr. 2012 |
4th qtr. 2011 | 3rd qtr. 2011 |
2nd qtr. 2011 |
1st qtr. 2011 |
Net income from interest | 156 | 155 | 151 | 153 | 146 | 153 | 156 | 160 | 163 | 154 | 150 | 140 |
Net income from fees and provisions excl. commission | 48 | 33 | 55 | 36 | 51 | 30 | 48 | 33 | 34 | 22 | 36 | 23 |
Income from sector shares etc. | 5 | 3 | 4 | 2 | 5 | -1 | 2 | 0 | -1 | 1 | 3 | 1 |
Foreign exchange income | 3 | 3 | 2 | 5 | 4 | 3 | 2 | 4 | 5 | 3 | 4 | 6 |
Other operating income | 1 | 1 | 1 | 0 | 0 | 1 | 1 | 1 | 2 | 1 | 1 | 1 |
Total core income excl. trade income | 213 | 195 | 213 | 196 | 206 | 186 | 209 | 198 | 203 | 181 | 194 | 171 |
Trade income | 7 | 5 | 9 | 6 | 8 | 5 | 5 | 6 | 3 | 6 | 4 | 6 |
Total core income | 220 | 200 | 222 | 202 | 214 | 191 | 214 | 204 | 206 | 187 | 198 | 177 |
Staff and administration costs | 70 | 61 | 66 | 58 | 69 | 59 | 64 | 61 | 64 | 59 | 62 | 59 |
Amortisation, depreciation and write-downs on intangible and tangible assets | 2 | 1 | 0 | 1 | 0 | 1 | 1 | 1 | 2 | 1 | 1 | 1 |
Other operating costs | 4 | 3 | 3 | 4 | 3 | 0 | 4 | 2 | 0 | 0 | 0 | 0 |
Total costs etc. | 76 | 65 | 69 | 63 | 72 | 60 | 69 | 64 | 66 | 60 | 63 | 60 |
Core earnings before impairments | 144 | 135 | 153 | 139 | 142 | 131 | 145 | 140 | 140 | 127 | 135 | 117 |
Impairment charges for loans and other debtors etc. | -25 | -34 | -40 | -21 | -33 | -45 | -55 | -24 | -41 | -34 | -35 | -19 |
Core earnings | 119 | 101 | 113 | 118 | 109 | 86 | 90 | 116 | 99 | 93 | 100 | 98 |
Result for portfolio | +12 | -4 | +9 | +6 | -9 | +25 | +6 | +27 | -7 | +8 | -6 | +6 |
Expenses for bank packages | 0 | -1 | 0 | -1 | 0 | 0 | 0 | -2 | +4 | +4 | -5 | -14 |
Profit before tax | 131 | 96 | 122 | 123 | 100 | 111 | 96 | 141 | 96 | 105 | 89 | 90 |
Tax | 30 | 23 | 30 | 31 | 33 | 28 | 24 | 35 | 23 | 27 | 22 | 22 |
Profit after tax | 101 | 73 | 92 | 92 | 67 | 83 | 72 | 106 | 73 | 78 | 67 | 68 |
Danish Financial Supervisory Authority key figures
for Danish banks
2013 | 2012 | 2011 | 2010 | 2009 | ||
Solvency: | ||||||
Solvency ratio - Tier 2 | % | 20.0 | 22.4 | 21.4 | 22.4 | 20.2 |
Tier 1 capital ratio | % | 19.2 | 20.9 | 19.8 | 18.6 | 16.6 |
Solvency requirement | % | 8.9 | 8.0 | 8.0 | 8.0 | 8.0 |
Earnings: | ||||||
Return on equity before tax | % | 16.9 | 17.4 | 15.9 | 15.5 | 15.9 |
Return on equity after tax | % | 12.8 | 12.7 | 11.9 | 11.8 | 12.1 |
Income/cost ratio | DKK | 2.19 | 2.06 | 1.98 | 1.74 | 1.61 |
Market risk: | ||||||
Interest rate risk | % | 0.6 | 0.6 | 0.7 | 0.1 | 0.6 |
Foreign exchange position | % | 1.6 | 0.6 | 0.9 | 0.5 | 3.4 |
Foreign exchange risk | % | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Liquidity risk: | ||||||
Excess cover relative to statutory liquidity requirement |
% | 166.2 | 185.5 | 140.5 | 231.8 | 205.6 |
Loans and impairments thereon relative to deposits | % | 104.1 | 102.4 | 105.0 | 117.6 | 120.8 |
Credit risk: | ||||||
Loans relative to shareholders’ equity | 4.8 | 4.6 | 5.1 | 5.7 | 6.3 | |
Growth in loans for the year | % | 11.5 | -2.5 | -3.1 | 0.8 | -6.1 |
Total large exposures | % | 35.0 | 27.2 | 11.8 | 0.0 | 0.0 |
Cumulative impairment percentage | % | 5.1 | 5.1 | 4.5 | 3.8 | 3.1 |
Impairment percentage for the year | % | 0.72 | 1.06 | 0.89 | 0.94 | 1.16 |
Proportion of debtors at reduced interest | % | 0.5 | 0.8 | 0.4 | 0.4 | 0.4 |
Share return: | ||||||
Result for the year after tax per share * / *** | DKK | 1,462.8 | 1,314.6 | 1,135.2 | 1,019.3 | 921.0 |
Book value per share * / ** | DKK | 12,145 | 11,049 | 10,055 | 9,193 | 8,172 |
Dividend per share * | DKK | 500 | 280 | 260 | 240 | 0 |
Share price relative to profit for the year per share * / *** | 15.0 | 11.7 | 10.2 | 14.2 | 13.2 | |
Share price relative to book value per share * / ** | 1.81 | 1.39 | 1.15 | 1.58 | 1.49 | |
* Calculated on the basis of a denomination of DKK 100 per share. ** Calculated on the basis of number of shares outstanding at the end of the year. *** Calculated on the basis of the average number of shares. The average number of shares is calculated as a simple average of the shares at the beginning of the year and at the end of the year. |