Ringkjøbing Landbobank’s announcement of the annual accounts for 2013

        Print
| Source: Ringkjøbing Landbobank A/S
multilang-release

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
  • Return on equity at the beginning of the year before and after tax are computed after allocation of dividend etc., net.
  • Key figures per DKK 5 share are calculated on the basis of respectively 2013: 4,780,000 shares, 2012: 4,840,000 shares, 2011: 4,940,000 shares, 2010: 5,040,000 shares and 2009: 5,040,000 shares.
Impairment charges for loans etc.
  • Impairment charges for loans etc. are listed excl. expenses for bank packages.
 
Current value
  • The current value of the proposed share buy-back programme listed on page 1 and 5 is calculated from the closing price of the Ringkjøbing Landbobank share on 27 January 2014 at 1,171.

 

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.