(Million DKK) | 1st half 2014 | 1st half 2013 |
2013 |
2012 |
2011 |
2010 |
Total core income | 459 | 424 | 844 | 823 | 767 | 758 |
Total costs and depreciations | -142 | -132 | -273 | -265 | -248 | -240 |
Core earnings before impairments | 317 | 292 | 571 | 558 | 519 | 518 |
Impairment charges for loans etc. | -40 | -61 | -120 | -157 | -129 | -138 |
Core earnings | 277 | 231 | 451 | 401 | 390 | 380 |
Result for portfolio | +44 | +15 | +23 | +49 | +1 | +38 |
Expenses for bank packages | 0 | -1 | -2 | -2 | -11 | -80 |
Profit before tax | 321 | 245 | 472 | 448 | 380 | 338 |
The half-year – highlights:
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 317 million in the first half of 2014 against DKK 304 million in 2013, an increase of 4%. Compared with the first half of 2013, the bank noted increasing average loans and deposits in the half-year, but also noted a fall in the interest margin from the first half of 2013 to the first half of 2014.
Fees, commissions and foreign exchange earnings amount to net DKK 122 million in the first half of 2014 against net DKK 113 million in 2013, an increase of 8%. The increase is attributable primarily to greater activity and volumes within asset management and pensions and to greater trading activity, which has strengthened earnings.
The total core income was 8% higher in the first half of the year, with an increase from DKK 424 million in 2013 to DKK 459 million in 2014. The DKK 35 million increase in total core income was affected positively by an extraordinary once-only income of the order of DKK 10 million in connection with the sale of the bank’s shares in Nets Holding A/S. Corrected for the once-only income, the bank considers the increase in core income satisfactory.
Costs and depreciations
Total costs including depreciations on tangible assets were DKK 142 million in the first half of 2014 against DKK 132 million last year, an increase of 7%.
The rate of costs was computed at 30.8, still the lowest in the country. 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 40 million in the first half of 2014. The level of impairment charges fell by 34% relative to the same period of last year and is equivalent in the first half of 2014 to 0.5% p.a. of total average loans, impairment charges, guarantees and provisions.
The bank’s total account for impairment charges and provisions amounted to DKK 908 million at the end of the half-year, equivalent to 5.5% of total loans and guarantees. Actual losses and write-offs on loans etc. continue to be very low, and they were exceeded during the half-year by the items "Interest on the impaired part of loans" and "Receivables previously written off", such that the total account for impairment charges and provisions increased by net DKK 54 million during the first half of the year.
The portfolio of loans with suspended calculation of interest amounts to DKK 98 million, equivalent to 0.6% of the bank’s total loans and guarantees at the end of the half-hear.
Given the low growth in the Danish economy for a number of years, which, however, is expected to improve this year, the bank is satisfied with the credit policy on the basis of which the bank is operated. Based on the business cycle, the bank expects that impairment charges in all of 2014 will show a falling trend relative to 2013.
Core earnings
(Million DKK) | 1st half 2014 | 1st half 2013 |
2013 |
2012 |
2011 |
2010 |
Total core income | 459 | 424 | 844 | 823 | 767 | 758 |
Total costs and depreciations | -142 | -132 | -273 | -265 | -248 | -240 |
Core earnings before impairments | 317 | 292 | 571 | 558 | 519 | 518 |
Impairment charges for loans etc. | -40 | -61 | -120 | -157 | -129 | -138 |
Core earnings | 277 | 231 | 451 | 401 | 390 | 380 |
This half-year’s core earnings of DKK 277 million are the best ever in the bank’s history and constitute a 20% increase relative to last year’s DKK 231 million.
Result for portfolio and market risk
The portfolio income for the first half of 2014 was DKK 44 million including funding costs for the portfolio.
The bank’s holding of shares etc. at the end of the half-year amounted to DKK 213 million, DKK 28 million of which was in listed shares, while DKK 185 million was in sector shares etc. The bond portfolio amounted to DKK 4,351 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 profit of a one percentage point change in the interest level, was 0.8% of the bank’s core capital after deduction at the end of the half-year.
The bank’s total market risk within exposures to interest rate risk, listed shares etc. 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) in the first half of 2014 was as follows:
|
Risk in million DKK |
Risk relative to equity end of 1st half 2014 in % |
Highest risk of loss: | 10.6 | 0.36% |
Lowest risk of loss: | 4.7 | 0.16% |
Average risk of loss | 7.6 | 0.26% |
The bank’s policy remains to keep the market risk at a low level.
Profit after tax
The profit after tax was DKK 245 million for the first half of 2014 against DKK 184 million last year.
The profit after tax is equivalent to a return on equity at the beginning of the period of 18% p.a. after payment of dividend.
Balance sheet
The bank’s balance sheet at the end of the half-year stood at DKK 19,675 million against last year’s DKK 17,800 million.
The bank’s deposits increased by 11% from DKK 12,654 million to DKK 14,054 million. The bank’s loans increased by 14% from DKK 12,570 million to DKK 14,283 million. The growth in the bank’s loans is broadly based on sectors with growth from both the branch network and the bank’s niche concepts, and primarily comes from new customers.
The bank’s portfolio of guarantees at the end of the half-year was DKK 1,438 million against DKK 2,615 million at the end of the first half of 2013. The fall in the portfolio of guarantees is due, among other things, to the fact that a number of guarantees were provided at the end of the first half of 2013 which resulted in actual loans later in 2013.
Liquidity
The bank’s liquidity is good, with loans and deposits at the same level. The excess solvency relative to the statutory liquidity requirement is 169%. The bank’s short-term funding with term to maturity of less than 12 months amounts to DKK 0.7 billion, balanced by DKK 4.8 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.
The bank’s loans portfolio is more than fully financed by the bank’s deposits and equity. In addition, part of the loans portfolio for wind turbines in Germany is refinanced back-to-back with KfW Bankengruppe, and the DKK 1,136 million concerned can thus be disregarded in terms of liquidity. The bank 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.
Capital reduction and share buy-back programme
It was decided at the annual general meeting in February 2014 to cancel 60,000 own shares, and the capital reduction was finally implemented in April.
The bank was further authorised at the general meeting to buy up to 110,000 own shares and set them aside for later cancellation. As of 5 August 2014, 45,000 own shares have been set aside for later cancellation under the new share buy-back programme.
Capital
The equity at the beginning of 2014 was DKK 2,901 million. To this must be added the profit for the period, while the dividend paid and the value of the own shares bought must be subtracted, after which the equity at the end of the half-year was DKK 2,971 million.
The bank’s solvency ratio (Tier 2) was computed at 18.2% at the end of the second quarter of 2014, and the Tier 1 capital ratio was also computed at 18.2%.
Solvency cover |
1st half 2014 | 1st half 2013 | 2013 | 2012 | 2011 | 2010 |
Core tier 1 capital ratio (excl. hybrid core capital) (%) |
18.1 | 18.8 | 18.7 | 19.6 | 18.3 | 17.1 |
Tier 1 capital ratio (%) | 18.2 | 19.6 | 19.2 | 20.9 | 19.8 | 18.6 |
Solvency ratio - Tier 2 (%) | 18.2 | 20.7 | 20.0 | 22.4 | 21.4 | 22.4 |
Individual solvency requirement (%) | 8.8 | 8.7 | 8.9 | 8.0 | 8.0 | 8.0 |
Solvency cover | 207% | 238% | 225% | 280% | 268% | 280% |
With effect from 2014, capital ratios are calculated according to the new CRD IV directive. As described in the bank’s 2013 annual report, the bank’s calculation of capital adequacy was affected by the new rules, including the introduction of a phasing out arrangement for inclusion of hybrid core capital and subordinated loan capital. Certain changes have also been implemented for the calculation of risk-weighted items, including the weighting and calculation of exposures in default, and a temporary discount on the risk weighting of exposures to certain SME-commitments has also been introduced.
In addition, new rules on the calculation of capital have been introduced. These rules indicate both that in future, the share buy-back programme must be deducted from the capital on publication of the officially approved programme in contrast to the previous practice, where the deduction from the capital was made in step with the actual purchase of shares, and that the calculated dividend must be deducted from ongoing earnings in contrast to previously, where the expected dividend was not deducted from the capital until the end of the year.
The bank calculates the individual solvency requirement on the basis of the so-called 8+ model. The method of calculation in this model starts with 8%, to which are added any supplements calculated inter alia for customers with financial problems. The 8+ model takes no account of the bank’s earnings and cost base or its robust business model. Despite this, the bank’s individual solvency requirement at the end of the half-year was calculated at 8.8% - equivalent to a fall of 0.1 percentage point relative to the end of 2013.
The Danish Financial Supervisory Authority’s ordinary inspection
The bank has received the Danish Financial Supervisory Authority’s final report on the ordinary inspection conducted in the period February - April 2014. The inspection was completed satisfactorily in the bank’s opinion, and the bank is very pleased with the FSA’s general conclusions on risk assessment, which state the following:
In connection with the inspection, the bank received a number of orders of an administrative nature, which the bank will adopt and adapt to.
Good increase in customer numbers
In 2013 the bank carried out various outreach initiatives towards 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 carried out to create healthy organic growth in the bank, as the biggest challenge in times of low growth in society is to create growth in the bank’s top line.
The outreach initiatives are all continuing in 2014, and the bank also opened a new Private Banking branch in Aarhus in the first half of 2014. In the first half-year, the bank experienced an overwhelming net growth in new customers, the best ever in the bank’s history.
Accounting policies and key figures
The accounting policies are unchanged relative to those in the submitted and audited 2013 annual report.
Upward adjustment of expectations for 2014
The core earnings for the half-year were DKK 277 million against DKK 231 million last year, an increase of 20%. On the basis of the 2014 development, expectations for core earnings for the entire 2014 are adjusted upward from the previously announced range of DKK 410-460 million to the range DKK 460-510 million.
Main and key figures
1st half 2014 |
1st half 2013 |
Full year 2013 |
|
Main figures for the bank (million DKK) | |||
Total core income | 459 | 424 | 844 |
Total costs and depreciations | -142 | -132 | -273 |
Core earnings before impairments | 317 | 292 | 571 |
Impairment charges for loans etc. | -40 | -61 | -120 |
Core earnings | 277 | 231 | 451 |
Result for portfolio | +44 | +15 | +23 |
Expenses for bank packages | 0 | -1 | -2 |
Profit before tax | 321 | 245 | 472 |
Profit after tax | 245 | 184 | 358 |
Shareholders’ equity | 2,971 | 2,754 | 2,901 |
Deposits | 14,054 | 12,654 | 14,114 |
Loans | 14,283 | 12,570 | 13,849 |
Balance sheet total | 19,675 | 17,800 | 19,583 |
Guarantees | 1,438 | 2,615 | 1,902 |
Key figures for the bank (per cent) | |||
Return on equity before tax, beginning of year, p.a. | 23.1 | 18.8 | 18.1 |
Return on equity after tax, beginning of year, p.a. | 17.6 | 14.1 | 13.7 |
Rate of costs | 30.8 | 31.2 | 32.4 |
Core tier 1 capital ratio | 18.1 | 18.8 | 18.7 |
Tier 1 capital ratio | 18.2 | 19.6 | 19.2 |
Solvency ratio - Tier 2 | 18.2 | 20.7 | 20.0 |
Individual solvency requirement | 8.8 | 8.7 | 8.9 |
Key figures per 5 DKK share (DKK) | |||
Core earnings | 58 | 48 | 94 |
Profit before tax | 67 | 51 | 99 |
Profit after tax | 51 | 38 | 75 |
Net asset value | 622 | 569 | 607 |
Price, end of period | 1,170 | 951 | 1,099 |
Dividend | - | - | 25 |
Profit and loss account
Note |
1.1-30.6 2014 DKK 1,000 |
1.1-30.6 2013 DKK 1,000 |
1.1-31.12 2013 DKK 1,000 |
|
1 | Interest receivable | 394,712 | 389,837 | 776,268 |
2 | Interest payable | 71,936 | 75,927 | 146,037 |
Net income from interest | 322,776 | 313,910 | 630,231 | |
3 | Dividend on capital shares etc. | 7,686 | 1,769 | 12,610 |
4 | Income from fees and commissions | 129,858 | 121,340 | 229,813 |
4 | Fees and commissions paid | 15,325 | 15,590 | 31,123 |
Net income from interest and fees | 444,995 | 421,429 | 841,531 | |
5 | Value adjustments | +55,799 | +16,963 | +23,074 |
Other operating income | 2,249 | 1,103 | 2,730 | |
6,7 | Staff and administration costs | 129,839 | 123,758 | 254,909 |
Amortisations, depreciations and write-downs on intangible and tangible assets |
3,961 | 1,473 | 4,270 | |
Other operating costs | ||||
Miscellaneous other operating costs | 154 | 22 | 28 | |
Costs Deposit Guarantee Fund | 7,587 | 8,472 | 16,091 | |
8 | Impairment charges for loans and other debtors etc. | -40,393 | -61,139 | -120,175 |
Result of capital shares in associated companies | 0 | 0 | -3 | |
Profit before tax | 321,109 | 244,631 | 471,859 | |
9 | Tax | 76,500 | 60,500 | 114,199 |
Profit after tax | 244,609 | 184,131 | 357,660 | |
Other comprehensive income | 0 | 0 | 0 | |
Total comprehensive income | 244,609 | 184,131 | 357,660 |
Core earnings
1.1-30.6 2014 DKK 1,000 |
1.1-30.6 2013 DKK 1,000 |
1.1-31.12 2013 DKK 1,000 |
||
Net income from interest | 316,530 | 303,520 | 614,719 | |
Net income from fees and provisions excl. commission | 95,886 | 90,919 | 171,765 | |
Income from sector shares | 18,335 | 6,481 | 14,403 | |
Foreign exchange income | 7,547 | 7,296 | 13,293 | |
Other operating income | 2,249 | 1,103 | 2,730 | |
Total core income excl. trade income | 440,547 | 409,319 | 816,910 | |
Trade income | 18,647 | 14,831 | 26,925 | |
Total core income | 459,194 | 424,150 | 843,835 | |
Staff and administration costs | 129,839 | 123,758 | 254,909 | |
Amortisations, depreciations and write-downs on intangible and tangible assets |
3,961 | 1,473 | 4,270 | |
Other operating costs | 7,608 | 6,921 | 13,827 | |
Total costs etc. | 141,408 | 132,152 | 273,006 | |
Core earnings before impairments | 317,786 | 291,998 | 570,829 | |
Impairment charges for loans and other debtors etc. | -40,393 | -61,139 | -120,175 | |
Core earnings | 277,393 | 230,859 | 450,654 | |
Result for portfolio | +43,849 | +15,344 | +23,497 | |
Expenses for bank packages | -133 | -1,572 | -2,292 | |
Profit before tax | 321,109 | 244,631 | 471,859 | |
Tax | 76,500 | 60,500 | 114,199 | |
Profit after tax | 244,609 | 184,131 | 357,660 |
Balance sheet
Note |
End June 2014 DKK 1,000 |
End June 2013 DKK 1,000 |
End Dec. 2013 DKK 1,000 |
|
Assets | ||||
Cash in hand and claims at call on central banks | 277,529 | 78,348 | 63,064 | |
10 | Claims on credit institutions and central banks | 227,903 | 825,183 | 416,913 |
Claims at notice on central banks | 0 | 0 | 0 | |
Money market operations and bilateral loans - term to maturity under 1 year |
105,022 | 620,464 | 214,032 | |
Bilateral loans - term to maturity over 1 year | 122,881 | 204,719 | 202,881 | |
11,12,13 | Loans and other debtors at amortised cost price | 14,283,008 | 12,569,569 | 13,849,285 |
Loans and other debtors at amortised cost price | 13,147,142 | 11,772,322 | 12,880,717 | |
Wind turbine loans with direct funding | 1,135,866 | 797,247 | 968,568 | |
14 | Bonds at current value | 4,350,832 | 3,670,755 | 4,669,732 |
15 | Shares etc. | 212,851 | 235,705 | 208,697 |
Capital shares in associated companies | 540 | 543 | 540 | |
Land and buildings total | 72,541 | 75,554 | 73,871 | |
Investment properties | 8,015 | 8,165 | 8,015 | |
Domicile properties | 64,526 | 67,389 | 65,856 | |
Other tangible assets | 4,337 | 4,464 | 4,385 | |
Actual tax assets | 0 | 0 | 24,501 | |
Temporary assets | 1,000 | 5,047 | 1,000 | |
Other assets | 238,873 | 327,969 | 263,856 | |
Periodic-defined items | 5,997 | 7,072 | 6,977 | |
Total assets | 19,675,411 | 17,800,209 | 19,582,821 |
Balance sheet
Note |
End June 2014 DKK 1,000 |
End June 2013 DKK 1,000 |
End Dec. 2013 DKK 1,000 |
|
Liabilities and equity | ||||
16 | Debt to credit institutions and central banks | 1,795,623 | 1,404,166 | 1,754,884 |
Money market operations and bilateral credits - term to maturity under 1 year |
527,282 | 602,919 | 656,258 | |
Bilateral credits - term to maturity over 1 year | 132,475 | 4,000 | 130,058 | |
Bilateral credits from KfW Bankengruppe | 1,135,866 | 797,247 | 968,568 | |
17 | Deposits and other debts | 14,054,243 | 12,653,915 | 14,113,816 |
18 | Issued bonds at amortised cost price | 244,132 | 318,099 | 249,814 |
Actual tax liabilities | 27,810 | 184 | 0 | |
Other liabilities | 195,820 | 270,740 | 173,806 | |
Periodic-defined items | 150 | 151 | 917 | |
Total debt | 16,317,778 | 14,647,255 | 16,293,237 | |
Provisions for deferred tax | 13,188 | 15,151 | 13,188 | |
12 | Provisions for losses on guarantees | 4,884 | 11,448 | 4,256 |
Total provisions for liabilities | 18,072 | 26,599 | 17,444 | |
Subordinated loan capital | 200,081 | 199,588 | 200,193 | |
Hybrid core capital | 168,286 | 172,845 | 170,847 | |
19 | Total subordinated debt | 368,367 | 372,433 | 371,040 |
20 | Share capital | 23,900 | 24,200 | 24,200 |
Reserve for net revaluation under the intrinsic value method | 189 | 192 | 189 | |
Profit carried forward | 2,947,105 | 2,729,530 | 2,755,211 | |
Proposed dividend etc. | - | - | 121,500 | |
Total shareholders’ equity | 2,971,194 | 2,753,922 | 2,901,100 | |
Total liabilities and equity | 19,675,411 | 17,800,209 | 19,582,821 | |
21 |
Own capital shares | |||
22 | Contingent liabilities etc. | |||
23 | Assets furnished as security | |||
24 | Capital adequacy computation | |||
25 | The supervisory diamond | |||
26 | Miscellaneous comments |
Statement of shareholders’ equity
DKK 1,000 |
Share capital |
Reserve for net revaluation under the intrinsic value method | Profit carried forward |
Proposed dividend etc. |
Total share-holders’ equity |
On 30 June 2014: Shareholders’ equity at the end of the previous financial year |
24,200 | 189 | 2,755,211 | 121,500 | 2,901,100 |
Reduction of share capital | -300 | 300 | 0 | ||
Dividend etc. paid | -121,500 | -121,500 | |||
Dividend received on own shares | 2,022 | 2,022 | |||
Shareholders’ equity after allocation of dividend etc. | 23,900 | 189 | 2,757,533 | 0 | 2,781,622 |
Purchase and sale of own shares | -55,037 | -55,037 | |||
Total comprehensive income | 244,609 | 244,609 | |||
Shareholders’ equity on the balance sheet date | 23,900 | 189 | 2,947,105 | 0 | 2,971,194 |
On 30 June 2013: 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 | -38,116 | -38,116 | |||
Total comprehensive income | 184,131 | 184,131 | |||
Shareholders’ equity on the balance sheet date | 24,200 | 192 | 2,729,530 | 0 | 2,753,922 |
On 31 December 2013: 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 |
Notes
Note |
1.1-30.6 2014 DKK 1,000 |
1.1-30.6 2013 DKK 1,000 |
1.1-31.12 2013 DKK 1,000 |
|
1 | Interest receivable | |||
Claims on credit institutions and central banks | 10,002 | 11,272 | 23,425 | |
Loans and other debtors | 367,607 | 361,697 | 719,154 | |
Loans - interest concerning the impaired part of loans | -22,166 | -21,481 | -43,913 | |
Bonds | 45,583 | 42,206 | 86,007 | |
Total derivatives financial instruments, | -6,694 | -3,857 | -8,617 | |
of which | ||||
Currency contracts | 512 | -2,726 | -4,104 | |
Interest-rate contracts | -7,206 | -1,131 | -4,513 | |
Other interest receivable | 380 | 0 | 212 | |
Total interest receivable | 394,712 | 389,837 | 776,268 | |
2 | Interest payable | |||
Credit institutions and central banks | 13,229 | 11,835 | 23,385 | |
Deposits and other debts | 48,672 | 53,238 | 101,280 | |
Issued bonds | 3,785 | 4,593 | 8,015 | |
Subordinated debt | 6,241 | 6,246 | 13,221 | |
Other interest payable | 9 | 15 | 136 | |
Total interest payable | 71,936 | 75,927 | 146,037 | |
3 | Dividend from shares etc. | |||
Shares | 7,686 | 1,769 | 12,610 | |
Total dividend from shares etc. | 7,686 | 1,769 | 12,610 | |
4 | Gross income from fees and commissions | |||
Securities trading | 23,346 | 17,645 | 33,646 | |
Asset management | 51,485 | 46,556 | 84,785 | |
Payment handling | 11,187 | 10,134 | 21,524 | |
Loan fees | 2,307 | 3,492 | 6,273 | |
Guarantee commissions | 27,297 | 28,717 | 61,527 | |
Other fees and commissions | 14,236 | 14,796 | 22,058 | |
Total gross income from fees and commissions | 129,858 | 121,340 | 229,813 | |
Net income from fees and commissions | ||||
Securities trading | 18,647 | 14,831 | 26,925 | |
Asset management | 48,466 | 43,778 | 79,755 | |
Payment handling | 10,351 | 9,117 | 19,347 | |
Loan fees | 1,490 | 2,471 | 4,204 | |
Guarantee commissions | 27,297 | 28,717 | 61,527 | |
Other fees and commissions | 8,282 | 6,836 | 6,932 | |
Total net income from fees and commissions | 114,533 | 105,750 | 198,690 | |
Foreign exchange income | 7,547 | 7,296 | 13,293 | |
Total net income from fees, commissions and foreign exchange income | 122,080 | 113,046 | 211,983 |
Notes
Note |
1.1-30.6 2014 DKK 1,000 |
1.1-30.6 2013 DKK 1,000 |
1.1-31.12 2013 DKK 1,000 |
|
5 | Value adjustments | |||
Loans and other debtors, current value adjustment | 4,325 | -2,334 | -974 | |
Bonds | 30,020 | 5,280 | 1,653 | |
Shares etc. | 16,911 | 8,567 | 9,479 | |
Investment properties | 0 | 0 | 150 | |
Foreign exchange income | 7,547 | 7,296 | 13,293 | |
Total derivatives financial instruments, | -7,596 | -5,564 | -7,846 | |
of which | ||||
Interest-rate contracts | -8,078 | -5,588 | -8,289 | |
Share contracts | 482 | 24 | 443 | |
Issued bonds | 2,043 | 1,061 | 2,491 | |
Other liabilities | 2,549 | 2,657 | 4,828 | |
Total value adjustments | 55,799 | 16,963 | 23,074 | |
6 |
Staff and administration costs | |||
Payments to general management, board of directors and shareholders’ committee |
||||
General management | 2,048 | 2,020 | 3,973 | |
Board of directors | 696 | 647 | 1,294 | |
Shareholders’ committee | 0 | 0 | 366 | |
Total | 2,744 | 2,667 | 5,633 | |
Staff costs | ||||
Salaries | 60,675 | 56,723 | 117,365 | |
Pensions | 6,337 | 5,921 | 12,066 | |
Social security expenses | 459 | 431 | 900 | |
Costs depending on number of staff | 7,753 | 6,838 | 16,195 | |
Total | 75,224 | 69,913 | 146,526 | |
Other administration costs | 51,871 | 51,178 | 102,750 | |
Total staff and administration costs | 129,839 | 123,758 | 254,909 | |
7 | Number of full-time employees | |||
Average number of employees during the period converted into full-time employees |
259 | 247 | 251 | |
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 | 54,328 | 69,714 | 95,058 | |
Actual realised net losses | 8,231 | 12,906 | 69,030 | |
Interest concerning the impaired part of loans | -22,166 | -21,481 | -43,913 | |
Total impairment charges on loans and other debtors etc. | 40,393 | 61,139 | 120,175 |
Notes
Note |
1.1-30.6 2014 DKK 1,000 |
1.1-30.6 2013 DKK 1,000 |
1.1-31.12 2013 DKK 1,000 |
|
9 | Tax | |||
Tax calculated on the period’s profit | 76,500 | 60,500 | 114,967 | |
Adjustment of deferred tax | 0 | 0 | -1,660 | |
Adjustment of deferred tax due to change in tax rate | 0 | 0 | -303 | |
Adjustment of tax calculated for previous years | 0 | 0 | 1,195 | |
Total tax | 76,500 | 60,500 | 114,199 | |
Effective tax rate (%): | ||||
The current tax rate of the bank | 24.5 | 25.0 | 25.0 | |
Permanent deviations | -0.7 | -0.3 | -1.0 | |
Adjustment of deferred tax due to change in tax rate | 0.0 | 0.0 | -0.1 | |
Adjustment of tax calculated for previous years | 0.0 | 0.0 | 0.3 | |
Total effective tax rate | 23.8 | 24.7 | 24.2 | |
Note |
End June 2014 DKK 1,000 |
End June 2013 DKK 1,000 |
End Dec. 2013 DKK 1,000 |
|
10 | Claims on credit institutions and central banks | |||
Claims at call | 105,022 | 519,030 | 114,032 | |
Up to and including 3 months | 0 | 0 | 100,000 | |
More than 3 months and up to and including 1 year | 0 | 101,434 | 0 | |
More than 1 year and up to and including 5 years | 122,881 | 204,219 | 202,881 | |
More than 5 years | 0 | 500 | 0 | |
Total claims on credit institutions and central banks | 227,903 | 825,183 | 416,913 | |
11 | Loans and other debtors at amortised cost price | |||
At call | 1,265,632 | 1,116,484 | 1,311,786 | |
Up to and including 3 months | 546,204 | 566,336 | 674,795 | |
More than 3 months and up to and including 1 year | 1,932,896 | 1,459,594 | 1,542,624 | |
More than 1 year and up to and including 5 years | 4,939,311 | 4,666,358 | 4,601,579 | |
More than 5 years | 5,598,965 | 4,760,797 | 5,718,501 | |
Total loans and other debtors at amortised cost price | 14,283,008 | 12,569,569 | 13,849,285 |
Notes
Note |
End June 2014 DKK 1,000 |
End June 2013 DKK 1,000 |
End Dec. 2013 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 | 736,513 | 632,529 | 632,529 | |
Impairment charges/value adjustments during the period | 109,905 | 185,598 | 255,157 | |
Reverse entry - impairment charges made in previous financial years |
-96,082 | -98,710 | -90,895 | |
Booked losses covered by impairment charges | -8,376 | -13,995 | -60,278 | |
Cumulative individual impairment charges for loans and other debtors on the balance sheet date | 741,960 | 705,422 | 736,513 | |
Collective impairment charges | ||||
Cumulative collective impairment charges for loans and other debtors at the end of the previous financial year | 112,652 | 114,876 | 114,876 | |
Impairment charges/value adjustments during the period | 48,253 | -3,671 | -2,224 | |
Cumulative collective impairment charges for loans and other debtors on the balance sheet date | 160,905 | 111,205 | 112,652 | |
Total cumulative impairment charges for loans and other debtors on the balance sheet date | 902,865 | 816,627 | 849,165 | |
Provisions for losses on guarantees | ||||
Cumulative individual provisions for losses on guarantees at the end of the previous financial year | 4,256 | 10,958 | 10,958 | |
Provisions/value adjustments during the period | 1,158 | 1,439 | 3,282 | |
Reverse entry - provisions made in previous financial years | -494 | -670 | -9,245 | |
Booked losses covered by provisions | -36 | -279 | -739 | |
Cumulative individual provisions for losses on guarantees on the balance sheet date | 4,884 | 11,448 | 4,256 | |
Total cumulative impairment charges for loans and other debtors and provisions for losses on guarantees on the balance sheet date | 907,749 | 828,075 | 853,421 | |
13 | Suspended calculation of interest | |||
Loans and other debtors with suspended calculation of interest on the balance sheet date |
97,950 | 97,060 | 85,258 |
Notes
Note |
End June 2014 DKK 1,000 |
End June 2013 DKK 1,000 |
End Dec. 2013 DKK 1,000 |
|
14 | Bonds at current value | |||
Listed on the stock exchange | 4,350,832 | 3,670,755 | 4,669,732 | |
Total bonds at current value | 4,350,832 | 3,670,755 | 4,669,732 | |
15 | Shares etc. | |||
Listed on NASDAQ OMX Copenhagen | 28,142 | 36,302 | 15,700 | |
Unlisted shares at current value | 1,372 | 3,005 | 1,372 | |
Sector shares at current value | 183,337 | 196,398 | 191,625 | |
Total shares etc. | 212,851 | 235,705 | 208,697 | |
16 | Debt to credit institutions and central banks | |||
Debt payable on demand | 276,109 | 262,273 | 298,236 | |
Up to and including 3 months | 283,775 | 298,723 | 315,311 | |
More than 3 months and up to and including 1 year | 76,191 | 154,010 | 137,287 | |
More than 1 year and up to and including 5 years | 618,492 | 425,958 | 560,112 | |
More than 5 years | 541,056 | 263,202 | 443,938 | |
Total debt to credit institutions and central banks | 1,795,623 | 1,404,166 | 1,754,884 | |
17 | Deposits and other debts | |||
On demand | 8,541,033 | 7,700,289 | 8,325,047 | |
Deposits and other debts at notice: | ||||
Up to and including 3 months | 1,557,161 | 940,436 | 1,205,176 | |
More than 3 months and up to and including 1 year | 785,388 | 1,353,166 | 1,426,171 | |
More than 1 year and up to and including 5 years | 1,498,396 | 1,382,561 | 1,501,668 | |
More than 5 years | 1,672,265 | 1,277,463 | 1,655,754 | |
Total deposits and other debts | 14,054,243 | 12,653,915 | 14,113,816 | |
Distributed as follows: | ||||
On demand | 8,139,917 | 7,206,282 | 7,933,649 | |
At notice | 346,999 | 270,346 | 337,480 | |
Time deposits | 2,234,978 | 2,588,889 | 2,549,938 | |
Long term deposit agreements | 1,882,823 | 1,334,523 | 1,883,569 | |
Special types of deposits | 1,449,526 | 1,253,875 | 1,409,180 | |
14,054,243 | 12,653,915 | 14,113,816 |
Notes
Note |
End June 2014 DKK 1,000 |
End June 2013 DKK 1,000 |
End Dec. 2013 DKK 1,000 |
|
18 | Issued bonds at amortised cost price | |||
Up to and including 3 months | 0 | 209,970 | 3,727 | |
More than 3 months and up to and including 1 year | 95,018 | 3,727 | 0 | |
More than 1 year and up to and including 5 years | 149,114 | 104,402 | 246,087 | |
Total issued bonds at amortised cost price | 244,132 | 318,099 | 249,814 | |
Distributed as follows: Issues in Danish kroner: Nom. 220 million DKK |
0 | 220,000 | 0 | |
Own holding | 0 | -10,030 | 0 | |
Issues in Norwegian kroner: | ||||
Nom. 100 million NOK | 88,720 | 94,600 | 88,540 | |
Regulation at amortised cost price and adjustment to current value of issues |
3,725 | 7,229 | 5,768 | |
Issues in euro: | ||||
Nom. 20 million EUR | 149,114 | 0 | 149,206 | |
Other issues | 2,573 | 6,300 | 6,300 | |
244,132 | 318,099 | 249,814 | ||
19 | Subordinated debt | |||
Subordinated loan capital: | ||||
Floating rate loan, principal EUR 27 million, expiry 30 June 2021 |
200,081 | 201,388 | 201,428 | |
Hybrid core capital: | ||||
4.795% bond loan, nom, DKK 200 million, perpetual |
200,000 | 200,000 | 200,000 | |
Own holding | -35,500 | -35,500 | -35,500 | |
Regulation at amortised cost price and adjustment to current value of subordinated loan capital and hybrid core capital | 3,786 | 6,545 | 5,112 | |
Total subordinated debt | 368,367 | 372,433 | 371,040 | |
20 | Share capital | |||
Number of shares at DKK 5 each: | ||||
Beginning of period | 4,840,000 | 4,940,000 | 4,940,000 | |
Changes during the period | -60,000 | -100,000 | -100,000 | |
End of period | 4,780,000 | 4,840,000 | 4,840,000 | |
Of which reserved for subsequent cancellation | 45,000 | 35,000 | 60,000 | |
Total share capital | 23,900 | 24,200 | 24,200 |
Notes
Note |
End June 2014 DKK 1,000 |
End June 2013 DKK 1,000 |
End Dec. 2013 DKK 1,000 |
|
21 | Own capital shares | |||
Own capital shares included in the balance sheet at | 0 | 0 | 0 | |
The market value is | 57,614 | 34,993 | 68,747 | |
Number of own shares: | ||||
Beginning of year | 62,554 | 96,075 | 96,075 | |
Purchases during the period | 141,713 | 177,781 | 318,806 | |
Sales during the period | -95,024 | -137,060 | -252,327 | |
Cancellation during the period | -60,000 | -100,000 | -100,000 | |
End of period | 49,243 | 36,796 | 62,554 | |
Of which reserved for subsequent cancellation | 45,000 | 35,000 | 60,000 | |
Nominal value of holding of own shares, end of period |
246 | 184 | 313 | |
Own shares’ proportion of share capital, end of period (%) |
1.0 | 0.8 | 1.3 | |
22 | Contingent liabilities etc. | |||
Contingent liabilities | ||||
Finance guarantees | 966,522 | 1,630,347 | 949,047 | |
Guarantees against losses on mortgage credit loans | 54,275 | 49,197 | 55,841 | |
Guarantee against losses Totalkredit | 121,876 | 108,469 | 112,284 | |
Registration and conversion guarantees | 48,625 | 98,826 | 55,605 | |
Sector guarantees | 48,175 | 46,816 | 48,175 | |
Other contingent liabilities | 198,941 | 681,661 | 680,982 | |
Total contingent liabilities | 1,438,414 | 2,615,316 | 1,901,934 | |
23 | Assets furnished as security | |||
First mortgage loans are provided for German wind turbine projects. The loans are funded directly by KfW Bankengruppe, to which security in the as-sociated loans has been provided. Each repayment of the first mortgage loans is deducted directly from the funding from the KfW Bankengruppe. | 1,135,866 | 797,247 | 968,568 | |
As security for clearing, the bank has pledged securities from its holding to the Central Bank of Denmark to a total market price of | 80,821 | 310,783 | 321,192 | |
Collateral under CSA agreements | 64,165 | 66,424 | 75,372 |
Notes
Note |
End June 2014 DKK 1,000 |
End June 2013 DKK 1,000 |
End Dec. 2013 DKK 1,000 |
|
24 | Capital adequacy computation | |||
Computed pursuant to the Executive order on Capital Adequacy issued by the Danish FSA. |
||||
Weighted items with credit and counterpart risk | 12,239,250 | 11,857,848 | 12,235,761 | |
Market risk | 1,310,061 | 1,304,381 | 1,110,690 | |
Operational risk | 1,567,369 | 1,522,813 | 1,522,813 | |
Total risk weighted items | 15,116,680 | 14,685,042 | 14,869,264 | |
Shareholders’ equity | 2,971,194 | 2,753,922 | 2,901,100 | |
Proposed dividend etc. | 0 | 0 | -121,500 | |
Deduction for the sum of equity investments etc. > 10% | -94.888 | 0 | 0 | |
Deductions for accruals related to calculated dividend and the residual frame of the share buy-back programme | -140,130 | 0 | 0 | |
Reserve for net revaluation | 0 | -192 | -189 | |
Core tier 1 capital (excl. hybrid core capital) | 2,736,176 | 2,753,730 | 2,779,411 | |
Hybrid core capital | 131,600 | 164,500 | 164,500 | |
Deduction for equity investments etc. > 10% | 0 | -23,092 | -19,963 | |
Deduction for the sum of equity investments etc. > 10% | -115.909 | -20,098 | -63,503 | |
Tier 1 capital | 2,751.867 | 2,875,040 | 2,860,445 | |
Subordinated loan capital | 161,100 | 201,388 | 201,428 | |
Reserve for net revaluation | 0 | 192 | 189 | |
Deduction for equity investments etc. > 10% | 0 | -23,092 | -19,963 | |
Deduction for the sum of equity investments etc. > 10% | -155.618 | -20,098 | -63,503 | |
Capital base after deductions | 2,757.349 | 3,033,430 | 2,978,596 | |
Core tier 1 capital ratio (excl. hybrid core capital) (%) | 18.1 | 18.8 | 18.7 | |
Tier 1 capital ratio (%) | 18.2 | 19.6 | 19.2 | |
Solvency ratio - Tier 2 (%) | 18.2 | 20.7 | 20.0 | |
Capital base requirements under Section 124 (2,1) of the Danish FSA | 1,209.334 | 1,174,803 | 1,189,541 | |
25 |
The supervisory diamond (Danish Financial Supervisory Authority limits) |
|||
Stable funding (funding ratio) (< 1) | 0.7 | 0.7 | 0.7 | |
Excess liquidity (> 50%) | 168.6% | 144.8% | 166.2% | |
Total large exposures (< 125%) | 29.8% | 35.1% | 35.0% | |
Growth in loans (< 20%) | 3.1% | 1.2% | 11.5% | |
Real estate exposure (< 25%) | 12.3% | 11.0% | 11.4% | |
26 | Miscellaneous comments on: | |||
Main and key figures for the bank
|
Main figures summary
1st half 2014 |
1st half 2013 |
Full year 2013 |
|
Profit and loss account summary (million DKK) | |||
Net income from interest | 323 | 314 | 630 |
Dividend on capital shares etc. | 8 | 2 | 12 |
Net income from fees and commissions | 114 | 106 | 199 |
Net income from interest and fees | 445 | 422 | 841 |
Value adjustments | +56 | +17 | +23 |
Other operating income | 2 | 1 | 3 |
Staff and administration costs | 130 | 124 | 255 |
Amortisations, depreciations and write-downs on intangible and tangible assets | 4 | 2 | 4 |
Other operating costs | 8 | 8 | 16 |
Impairment charges for loans and other debtors etc. | -40 | -61 | -120 |
Profit before tax | 321 | 245 | 472 |
Tax | 76 | 61 | 114 |
Profit after tax | 245 | 184 | 358 |
Main figures from the balance sheet (million DKK) | |||
Loans and other debtors | 14,283 | 12,570 | 13,849 |
Deposits and other debts | 14,054 | 12,654 | 14,114 |
Subordinated debt | 368 | 372 | 371 |
Shareholders’ equity | 2,971 | 2,754 | 2,901 |
Balance sheet total | 19,675 | 17,800 | 19,583 |
Quarterly overview
(Million DKK) |
2nd qtr. 2014 |
1st qtr. 2014 |
4rd qtr. 2013 |
3rd qtr. 2013 |
2nd qtr. 2013 |
1st qtr. 2013 |
4th qtr. 2012 | 3rd qtr. 2012 |
2nd qtr. 2012 |
1st qtr. 2012 |
Net income from interest | 159 | 158 | 156 | 155 | 151 | 153 | 146 | 153 | 156 | 160 |
Net income from fees and provisions excl. commission |
51 | 45 | 48 | 33 | 55 | 36 | 51 | 30 | 48 | 33 |
Income from sector shares | 2 | 16 | 5 | 3 | 4 | 2 | 5 | -1 | 2 | 0 |
Foreign exchange income | 4 | 3 | 3 | 3 | 2 | 5 | 4 | 3 | 2 | 4 |
Other operating income | 1 | 1 | 1 | 1 | 1 | 0 | 0 | 1 | 1 | 1 |
Total core income excl. trade income |
217 | 223 | 213 | 195 | 213 | 196 | 206 | 186 | 209 | 198 |
Trade income | 8 | 11 | 7 | 5 | 9 | 6 | 8 | 5 | 5 | 6 |
Total core income | 225 | 234 | 220 | 200 | 222 | 202 | 214 | 191 | 214 | 204 |
Staff and administration costs | 68 | 62 | 70 | 61 | 66 | 58 | 69 | 59 | 64 | 61 |
Amortisations, depreciations and write-downs on intangible and tangible assets |
3 | 1 | 2 | 1 | 0 | 1 | 0 | 1 | 1 | 1 |
Other operating costs | 4 | 4 | 4 | 3 | 3 | 4 | 3 | 0 | 4 | 2 |
Total costs etc. | 75 | 67 | 76 | 65 | 69 | 63 | 72 | 60 | 69 | 64 |
Core earnings before impairments | 150 | 167 | 144 | 135 | 153 | 139 | 142 | 131 | 145 | 140 |
Impairment charges for loans and other debtors etc. | -25 | -15 | -25 | -34 | -40 | -21 | -33 | -45 | -55 | -24 |
Core earnings | 125 | 152 | 119 | 101 | 113 | 118 | 109 | 86 | 90 | 116 |
Result for portfolio | +20 | +24 | +12 | -4 | +9 | +6 | -9 | +25 | +6 | +27 |
Expenses for bank packages | 0 | 0 | 0 | -1 | 0 | -1 | 0 | 0 | 0 | -2 |
Profit before tax | 145 | 176 | 131 | 96 | 122 | 123 | 100 | 111 | 96 | 141 |
Tax | 36 | 40 | 30 | 23 | 30 | 31 | 33 | 28 | 24 | 35 |
Profit after tax | 109 | 136 | 101 | 73 | 92 | 92 | 67 | 83 | 72 | 106 |
Danish Financial Supervisory Authority
key figures for Danish banks
1st half 2014 |
1st half 2013 |
Full year 2013 |
||
Solvency: | ||||
Solvency ratio - Tier 2 | % | 18.2 | 20.7 | 20.0 |
Tier 1 capital ratio | % | 18.2 | 19.6 | 19.2 |
Individual solvency requirement | % | 8.8 | 8.7 | 8.9 |
Earnings: | ||||
Return on equity before tax | % | 10.9 | 9.0 | 16.9 |
Return on equity after tax | % | 8.3 | 6.8 | 12.8 |
Income/cost ratio | DKK | 2.77 | 2.26 | 2.19 |
Market risk: | ||||
Interest rate risk | % | 0.8 | 1.3 | 0.6 |
Foreign exchange position | % | 0.8 | 1.2 | 1.6 |
Foreign exchange risk | % | 0.0 | 0.0 | 0.0 |
Liquidity risk: | ||||
Excess cover relative to statutory liquidity requirement |
% | 168.6 | 144.8 | 166.2 |
Loans and impairments thereon relative to deposits | % | 108.1 | 105.8 | 104.1 |
Credit risk: | ||||
Loans relative to shareholders’ equity | 4.8 | 4.6 | 4.8 | |
Growth in loans for the period | % | 3.1 | 1.2 | 11.5 |
Total large exposures | % | 29.8 | 35.1 | 35.0 |
Cumulative impairment percentage | % | 5.5 | 5.2 | 5.1 |
Impairment percentage for the period | % | 0.24 | 0.38 | 0.72 |
Proportion of debtors at reduced interest | % | 0.6 | 0.6 | 0.5 |
Share return: | ||||
Profit for the period after tax per share * / *** | DKK | 1,017.1 | 753.1 | 1,462.8 |
Book value per share * / ** | DKK | 12,561 | 11,467 | 12,145 |
Share price relative to profit for the period per share * / *** | DKK | 23.0 | 25.3 | 15.0 |
Share price relative to book value per share * / ** | 1.86 | 1.66 | 1.81 | |
* 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 period. *** 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 period and at the end of the period. |
Management’s statement
The board of directors and the general management have today considered and approved the interim report for Ringkjøbing Landbobank A/S for the period 1 January - 30 June 2014.
The interim report was prepared in accordance with the provisions of the Danish Act on Financial Activities and further Danish requirements on listed financial companies concerning disclosure. We consider the accounting policies to be appropriate and the accounting estimates made to be responsible, such that the interim report provides a true and fair view of the bank’s assets, liabilities and financial position as of 30 June 2014 and of the bank’s activities for the period 1 January - 30 June 2014. We also believe that the management report contains a true and fair account of the bank’s activities and financial position as well as a description of the most important risks and uncertainties which can affect the bank.
The interim report is not audited or reviewed, but the external auditors have checked that the conditions for ongoing inclusion of the earnings for the period in the core capital have been met.
Ringkøbing, 6 August 2014
General Management: John Fisker CEO |
||
Board of Directors: |
||
Jens Lykke Kjeldsen Chairman |
Martin Krogh Pedersen Deputy chairman |
|
Gert Asmussen |
Inge Sandgrav Bak |
|
Gravers Kjærgaard |
Jørgen Lund Pedersen |
|
Bo Bennedsgaard Employee board member |
Gitte E. S. Vigsø Employee board member |