The core earnings for the first three quarters of the year were DKK 398 million against DKK 332 million in 2013, an increase of 20%. The profit before tax was DKK 454 million, representing a return of 22% p.a. on equity, which is considered highly satisfactory.
(Million DKK) |
1st-3rd 2014 |
1st-3rd 2013 |
2013 |
2012 |
2011 |
2010 |
Total core income | 670 | 624 | 844 | 823 | 767 | 758 |
Total costs and depreciations | -209 | -197 | -273 | -265 | -248 | -240 |
Core earnings before impairments | 461 | 427 | 571 | 558 | 519 | 518 |
Impairment charges for loans etc. | -63 | -95 | -120 | -157 | -129 | -138 |
Core earnings | 398 | 332 | 451 | 401 | 390 | 380 |
Result for portfolio | +56 | +11 | +23 | +49 | +1 | +38 |
Expenses for bank packages | 0 | -2 | -2 | -2 | -11 | -80 |
Profit before tax | 454 | 341 | 472 | 448 | 380 | 338 |
Three quarters – highlights:
- 33% improvement in profit before tax to DKK 454 million, equivalent to a 22% return on equity p.a. after payment of dividend
- Increase in core earnings from DKK 332 million in 2013 to DKK 398 million in 2014 - a 20% increase
- 15% increase in the bank’s loans and 11% increase in deposits
- Highly satisfactory number of new customers in both the branch network and niche concepts resulting in the best ever net increase in customers
- Expectations of core earnings for the entire year are clarified around the top of the upwardly adjusted interval of DKK 460-510 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 475 million in the first three quarters of 2014 against DKK 459 million in 2013, an increase of 3%. Compared with the first to third quarters of 2013, the bank noted increasing average loans and deposits in the three quarters, but also noted a fall in the interest margin from the first three quarters of 2013 to the first three quarters of 2014.
Fees, commissions and foreign exchange earnings amount to net DKK 170 million in the first three quarters of 2014 against net DKK 154 million in 2013, an increase of 11%. 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 7% higher in the first three quarters of the year, with an increase from DKK 624 million in 2013 to DKK 670 million in 2014. The DKK 46 million increase in total core income was affected positively by an extraordinary once-only income of the order of DKK 10 million in the first quarter 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 depreciation on tangible assets were DKK 209 million in the first three quarters of 2014 against DKK 197 million last year, an increase of 6%.
The rate of costs was computed at 31.1, 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 63 million in the first to third quarters of 2014. The level of impairment charges fell by 33% relative to the same period last year and is equivalent in the first three quarters 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 938 million at the end of the quarter, equivalent to 5.4% of total loans and guarantees. Actual losses and write-offs on loans etc. continue to be very low, and they were exceeded during the period by the items “Interest on the impaired part of loans” and “Receivables previously written offs”, such that the total account for impairment charges and provisions increased by net DKK 85 million during the first three quarters of the year.
The portfolio of loans with suspended calculation of interest amounts to DKK 92 million, equivalent to 0.5% of the bank’s total loans and guarantees at the end of the third quarter of 2014.
Core earnings
(Million DKK) |
1st-3rd 2014 |
1st-3rd 2013 |
2013 |
2012 |
2011 |
2010 |
Total core income | 670 | 624 | 844 | 823 | 767 | 758 |
Total costs and depreciations | -209 | -197 | -273 | -265 | -248 | -240 |
Core earnings before impairments | 461 | 427 | 571 | 558 | 519 | 518 |
Impairment charges for loans etc. | -63 | -95 | -120 | -157 | -129 | -138 |
Core earnings | 398 | 332 | 451 | 401 | 390 | 380 |
The first three quarters’ core earnings of DKK 398 million are the best ever for the first to third quarters in the bank’s history and constitute a 20% increase relative to last year’s DKK 332 million.
Result for portfolio and market risk
The portfolio income for the first to third quarters of 2014 was positive by DKK 56 million including funding costs for the portfolio.
The bank’s holding of shares etc. at the end of the third quarter of 2014 amounted to DKK 202 million, DKK 39 million of which was in listed shares, while DKK 163 million was in sector shares etc. The bond portfolio amounted to DKK 4,422 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 0.7% of the bank’s Tier 1 capital after deduction at the end of the quarter.
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 the first three quarters of 2014:
|
Risk in million DKK |
Risk relative to equity end of 3rd quarter 2014 in % |
Highest risk of loss: | 11.2 | 0.37% |
Lowest risk of loss: | 3.1 | 0.10% |
Average risk of loss | 7.2 | 0.24% |
The bank’s policy remains to keep the market risk at a low level.
Profit after tax
The profit after tax was DKK 346 million for the first to third quarters of 2014 against DKK 257 million last year. The profit after tax is equivalent to a return on equity at the beginning of the period of 17% p.a. after payment of dividend.
Balance sheet
The bank’s balance sheet at the end of the third quarter of 2014 stood at DKK 20,330 million against last year’s DKK 18,603 million.
The bank’s deposits increased by 11% from DKK 12,826 million to DKK 14,231 million. The bank’s loans increased by 15% from DKK 12,988 million to DKK 14,966 million. Loans at the end of the third quarter of 2014 include DKK 325 million reverse transactions received during the quarter, and excluding the reverse transactions, the bank’s loans thus increased by 13% relative to the end of the third quarter of 2013.
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 comes primarily from new customers.
The bank’s portfolio of guarantees at the end of the quarter was DKK 1,536 million against DKK 2,645 million at the end of the third quarter 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 third quarter of 2013 which resulted in actual loans later in 2013.
Liquidity
The bank’s liquidity is good, with loans excluding reverse transactions and deposits nearly at the same level. The excess solvency relative to the statutory liquidity requirement is 175%. The bank’s short-term funding with term to maturity of less than 12 months amounts to DKK 1.1 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 1,097 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.
The share buy-back programme
At the annual general meeting in February 2014, the bank was authorised to buy up to 110,000 own shares and set them aside for later cancellation. As of 21 October 2014, 75,000 own shares have been set aside for later cancellation under the 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 quarter was DKK 3,040 million.
The bank’s solvency ratio (Tier 2) was computed at 18.6% at the end of the third quarter of 2014, and the Tier 1 capital ratio was also computed at 18.6%.
Solvency cover |
3rd qtr. 2014 |
3rd qtr. 2013 |
2013 |
2012 |
2011 |
2010 |
Core tier 1 capital ratio (excl. hybrid core capital) (%) |
18.4 | 18.8 | 18.7 | 19.6 | 18.3 | 17.1 |
Tier 1 capital ratio (%) | 18.6 | 19.4 | 19.2 | 20.9 | 19.8 | 18.6 |
Solvency ratio - Tier 2 (%) | 18.6 | 20.2 | 20.0 | 22.4 | 21.4 | 22.4 |
Individual solvency requirement (%) | 8.7 | 8.8 | 8.9 | 8.0 | 8.0 | 8.0 |
Solvency cover | 214% | 230% | 225% | 280% | 268% | 280% |
With effect from 2014, capital ratios are calculated according to the new CRD IV rules. As described in the bank’s 2013 annual report, the bank’s calculation of capital cover 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 programmes 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 yield must be deducted from ongoing earnings in contrast to previously, where the expected yield 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 third quarter of 2014 was calculated at 8.7% - equivalent to a fall of 0.2 of a percentage point relative to the end of 2013.
The bank participated in a major sector transaction concerning DLR shares in the fourth quarter. The intention of the transaction is to strengthen DLR’s distribution and competitiveness partly by easing the solvency strain on banks with this need, and partly by strengthening the owners by participation of banks which still want a strong mortgage credit institute for the agricultural sector and other businesses. In this connection, the bank acquired shares for the equivalent of DKK 75 million. A five-year call option was also issued to the selling banks. Viewed as a whole, the transaction is attractive.
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 2014. In the first three quarters of the 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.
Clarification of the expectations for earnings in 2014
The core earnings for the first to third quarters of 2014 were DKK 398 million against DKK 332 million last year, an increase of 20%. Given the development in 2014, expectations of core earnings for the entire year are clarified around the top of the upwardly adjusted interval of DKK 460-510 million.
Main and key figures
1st-3rd qtr. 2014 | 1st-3rd qtr. 2013 |
Full year 2013 |
|
Main figures for the bank (million DKK) | |||
Total core income | 670 | 624 | 844 |
Total costs and depreciations | -209 | -197 | -273 |
Core earnings before impairments | 461 | 427 | 571 |
Impairment charges for loans etc. | -63 | -95 | -120 |
Core earnings | 398 | 332 | 451 |
Result for portfolio | +56 | +11 | +23 |
Expenses for bank packages | 0 | -2 | -2 |
Profit before tax | 454 | 341 | 472 |
Profit after tax | 346 | 257 | 358 |
Shareholders’ equity | 3,040 | 2,806 | 2,901 |
Deposits | 14,231 | 12,826 | 14,114 |
Loans | 14,966 | 12,988 | 13,849 |
Balance sheet total | 20,330 | 18,603 | 19,583 |
Guarantees | 1,536 | 2,645 | 1,902 |
Key figures for the bank (per cent) | |||
Return on equity before tax, beginning of year, p.a. | 21.8 | 17.4 | 18.1 |
Return on equity after tax, beginning of year, p.a. | 16.6 | 13.2 | 13.7 |
Rate of costs | 31.1 | 31.6 | 32.4 |
Core tier 1 capital ratio | 18.4 | 18.8 | 18.7 |
Tier 1 capital ratio | 18.6 | 19.4 | 19.2 |
Solvency ratio - Tier 2 | 18.6 | 20.2 | 20.0 |
Individual solvency requirement | 8.7 | 8.8 | 8.9 |
Key figures per 5 DKK share (DKK) | |||
Core earnings | 83 | 69 | 94 |
Profit before tax | 95 | 70 | 99 |
Profit after tax | 72 | 53 | 75 |
Net asset value | 636 | 580 | 607 |
Price, end of period | 1,143 | 1,058 | 1,099 |
Dividend | - | - | 25 |
Profit and loss account
Note |
1.1-30.9 2014 DKK 1,000 |
1.1-30.9 2013 DKK 1,000 |
1.1-31.12 2013 DKK 1,000 |
|
1 | Interest receivable | 593,040 | 583,242 | 776,268 |
2 | Interest payable | 106,188 | 111,040 | 146,037 |
Net income from interest | 486,852 | 472,202 | 630,231 | |
3 | Dividend on capital shares etc. | 7,897 | 1,919 | 12,610 |
4 | Income from fees and commissions | 183,060 | 167,279 | 229,813 |
4 | Fees and commissions paid | 23,281 | 23,172 | 31,123 |
Net income from interest and fees | 654,528 | 618,228 | 841,531 | |
5 | Value adjustments | +69,341 | +14,757 | +23,074 |
Other operating income | 2,827 | 2,142 | 2,730 | |
6,7 | Staff and administration costs | 192,140 | 184,754 | 254,909 |
Amortisations, depreciations and write-downs on intangible and tangible assets |
5,204 | 2,287 | 4,270 | |
Other operating costs | ||||
Miscellaneous other operating costs | 167 | 22 | 28 | |
Costs Deposit Guarantee Fund | 11,314 | 12,159 | 16,091 | |
8 | Impairment charges for loans and other debtors etc. | -63,383 | -94,758 | -120,175 |
Result of capital shares in associated companies | 0 | 0 | -3 | |
Profit before tax | 454,488 | 341,147 | 471,859 | |
9 | Tax | 108,325 | 83,800 | 114,199 |
Profit after tax | 346,163 | 257,347 | 357,660 | |
Other comprehensive income | 0 | 0 | 0 | |
Total comprehensive income | 346,163 | 257,347 | 357,660 |
Core earnings
1.1-30.9 2014 DKK 1,000 |
1.1-30.9 2013 DKK 1,000 |
1.1-31.12 2013 DKK 1,000 |
||
Net income from interest | 474,556 | 459,076 | 614,719 | |
Net income from fees and provisions excl. commission | 133,490 | 124,176 | 171,765 | |
Income from sector shares | 22,189 | 9,158 | 14,403 | |
Foreign exchange income | 10,675 | 9,935 | 13,293 | |
Other operating income | 2,827 | 2,142 | 2,730 | |
Total core income excl. trade income | 643,737 | 604,487 | 816,910 | |
Trade income | 26,289 | 19,931 | 26,925 | |
Total core income | 670,026 | 624,418 | 843,835 | |
Staff and administration costs | 192,140 | 184,753 | 254,909 | |
Amortisations, depreciations and write-downs on intangible and tangible assets |
5,204 | 2,287 | 4,270 | |
Other operating costs | 11,349 | 10,371 | 13,827 | |
Total costs etc. | 208,693 | 197,411 | 273,006 | |
Core earnings before impairments | 461,333 | 427,007 | 570,829 | |
Impairment charges for loans and other debtors etc. | -63,383 | -94,758 | -120,175 | |
Core earnings | 397,950 | 332,249 | 450,654 | |
Result for portfolio | +56,670 | +10,708 | +23,497 | |
Expenses for bank packages | -132 | -1,810 | -2,292 | |
Profit before tax | 454,488 | 341,147 | 471,859 | |
Tax | 108,325 | 83,800 | 114,199 | |
Profit after tax | 346,163 | 257,347 | 357,660 |
Balance sheet
Note |
End Sept. 2014 DKK 1,000 |
End Sept. 2013 DKK 1,000 |
End Dec. 2013 DKK 1,000 |
|
Assets | ||||
Cash in hand and claims at call on central banks | 63,751 | 123,838 | 63,064 | |
10 | Claims on credit institutions and central banks | 356,679 | 474,481 | 416,913 |
Claims at notice on central banks | 0 | 0 | 0 | |
Money market operations and bilateral loans - term to maturity under 1 year |
233,798 | 269,761 | 214,032 | |
Bilateral loans - term to maturity over 1 year | 122,881 | 204,720 | 202,881 | |
11,12,13 | Loans and other debtors at amortised cost price | 14,965,754 | 12,987,812 | 13,849,285 |
Loans and other debtors at amortised cost price | 13,543,543 | 12,136,919 | 12,880,717 | |
Wind turbine loans with direct funding | 1,097,407 | 850,893 | 968,568 | |
Reverse transactions | 324,804 | 0 | 0 | |
14 | Bonds at current value | 4,422,010 | 4,346,048 | 4,669,732 |
15 | Shares etc. | 201,839 | 234,210 | 208,697 |
Capital shares in associated companies | 540 | 543 | 540 | |
Land and buildings total | 72,156 | 75,415 | 73,871 | |
Investment properties | 8,015 | 8,165 | 8,015 | |
Domicile properties | 64,141 | 67,250 | 65,856 | |
Other tangible assets | 4,015 | 4,272 | 4,385 | |
Actual tax assets | 0 | 0 | 24,501 | |
Temporary assets | 1,000 | 2,100 | 1,000 | |
Other assets | 236,190 | 346,820 | 263,856 | |
Periodic-defined items | 5,692 | 7,125 | 6,977 | |
Total assets | 20,329,626 | 18,602,664 | 19,582,821 |
Balance sheet
Note |
End Sept. 2014 DKK 1,000 |
End Sept. 2013 DKK 1,000 |
End Dec. 2013 DKK 1,000 |
|
Liabilities and equity | ||||
16 | Debt to credit institutions and central banks | 2,167,662 | 2,154,942 | 1,754,884 |
Money market operations and bilateral credits - term to maturity under 1 year |
938,001 | 1,201,025 | 656,258 | |
Bilateral credits - term to maturity over 1 year | 132,254 | 103,024 | 130,058 | |
Bilateral credits from KfW Bankengruppe | 1,097,407 | 850,893 | 968,568 | |
17 | Deposits and other debts | 14,230,772 | 12,825,932 | 14,113,816 |
18 | Issued bonds at amortised cost price | 245,897 | 104,341 | 249,814 |
Actual tax liabilities | 59,588 | 23,447 | 0 | |
Other liabilities | 200,952 | 296,634 | 173,806 | |
Periodic-defined items | 146 | 163 | 917 | |
Total debt | 16,905,017 | 15,405,459 | 16,293,237 | |
Provisions for deferred tax | 13,188 | 15,151 | 13,188 | |
12 | Provisions for losses on guarantees | 4,711 | 5,156 | 4,256 |
Total provisions for liabilities | 17,899 | 20,307 | 17,444 | |
Subordinated loan capital | 199,711 | 199,556 | 200,193 | |
Hybrid core capital | 166,896 | 171,829 | 170,847 | |
19 | Total subordinated debt | 366,607 | 371,385 | 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 | 3,016,014 | 2,781,121 | 2,755,211 | |
Proposed dividend etc. | - | - | 121,500 | |
Total shareholders’ equity | 3,040,103 | 2,805,513 | 2,901,100 | |
Total liabilities and equity | 20,329,626 | 18,602,664 | 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 September 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 | -87,682 | -87,682 | |||
Total comprehensive income | 346,163 | 346,163 | |||
Shareholders’ equity on the balance sheet date | 23,900 | 189 | 3,016,014 | 0 | 3,040,103 |
On 30 September 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 | -59,741 | -59,741 | |||
Total comprehensive income | 257,347 | 257,347 | |||
Shareholders’ equity on the balance sheet date | 24,200 | 192 | 2,781,121 | 0 | 2,805,513 |
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 |
1.1-30.9 2014 DKK 1,000 |
1.1-30.9 2013 DKK 1,000 |
1.1-31.12 2013 DKK 1,000 |
|
1 | Interest receivable | |||
Claims on credit institutions and central banks | 13,352 | 17,443 | 23,425 | |
Loans and other debtors | 554,183 | 539,985 | 719,154 | |
Loans - interest concerning the impaired part of loans | -33,384 | -32,665 | -43,913 | |
Bonds | 70,177 | 63,487 | 86,007 | |
Total derivatives financial instruments, of which | -12,061 | -5,008 | -8,617 | |
Currency contracts | -153 | -3,386 | -4,104 | |
Interest-rate contracts | -11,908 | -1,622 | -4,513 | |
Other interest receivable | 773 | 0 | 212 | |
Total interest receivable | 593,040 | 583,242 | 776,268 | |
2 | Interest payable | |||
Credit institutions and central banks | 20,108 | 17,402 | 23,385 | |
Deposits and other debts | 71,022 | 77,840 | 101,280 | |
Issued bonds | 5,686 | 6,431 | 8,015 | |
Subordinated debt | 9,363 | 9,352 | 13,221 | |
Other interest payable | 9 | 15 | 136 | |
Total interest payable | 106,188 | 111,040 | 146,037 | |
3 | Dividend from shares etc. | |||
Shares | 7,897 | 1,919 | 12,610 | |
Total dividend from shares etc. | 7,897 | 1,919 | 12,610 | |
4 | Gross income from fees and commissions | |||
Securities trading | 32,698 | 24,600 | 33,646 | |
Asset management | 64,716 | 58,359 | 84,785 | |
Payment handling | 17,784 | 15,943 | 21,524 | |
Loan fees | 5,118 | 4,861 | 6,273 | |
Guarantee commissions | 39,687 | 45,200 | 61,527 | |
Other fees and commissions | 23,057 | 18,316 | 22,058 | |
Total gross income from fees and commissions | 183,060 | 167,279 | 229,813 | |
Net income from fees and commissions | ||||
Securities trading | 26,289 | 19,931 | 26,925 | |
Asset management | 60,741 | 54,710 | 79,755 | |
Payment handling | 15,565 | 14,331 | 19,347 | |
Loan fees | 3,722 | 3,381 | 4,204 | |
Guarantee commissions | 39,687 | 45,200 | 61,527 | |
Other fees and commissions | 13,775 | 6,554 | 6,932 | |
Total net income from fees and commissions | 159,779 | 144,107 | 198,690 | |
Foreign exchange income | 10,675 | 9,935 | 13,293 | |
Total net income from fees, commissions and foreign exchange income | 170,454 | 154,042 | 211,983 |
Notes
Note |
1.1-30.9 2014 DKK 1,000 |
1.1-30.9 2013 DKK 1,000 |
1.1-31.12 2013 DKK 1,000 |
|
5 | Value adjustments | |||
Loans and other debtors, current value adjustment | 8,693 | -2,536 | -974 | |
Bonds | 28,839 | -6,534 | 1,653 | |
Shares etc. | 21,500 | 13,606 | 9,479 | |
Investment properties | 0 | 0 | 150 | |
Foreign exchange income | 10,675 | 9,935 | 13,293 | |
Total derivatives financial instruments, of which | -7,322 | -5,535 | -7,846 | |
Interest-rate contracts | -7,863 | -5,662 | -8,289 | |
Share contracts | 541 | 127 | 443 | |
Issued bonds | 2,987 | 2,138 | 2,491 | |
Other liabilities | 3,969 | 3,683 | 4,828 | |
Total value adjustments | 69,341 | 14,757 | 23,074 | |
6 |
Staff and administration costs | |||
Payments to general management, board of directors and shareholders’ committee |
||||
General management | 3,025 | 2,980 | 3,973 | |
Board of directors | 696 | 647 | 1,294 | |
Shareholders’ committee | 0 | 0 | 366 | |
Total | 3,721 | 3,627 | 5,633 | |
Staff costs | ||||
Salaries | 90,003 | 84,803 | 117,365 | |
Pensions | 9,539 | 8,987 | 12,066 | |
Social security expenses | 674 | 1,247 | 900 | |
Costs depending on number of staff | 12,427 | 11,004 | 16,195 | |
Total | 112,643 | 106,041 | 146,526 | |
Other administration costs | 75,776 | 75,086 | 102,750 | |
Total staff and administration costs | 192,140 | 184,754 | 254,909 | |
7 | Number of full-time employees | |||
Average number of employees during the period converted into full-time employees |
257 | 250 | 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 | 84,841 | 105,176 | 95,058 | |
Actual realised net losses | 11,926 | 22,247 | 69,030 | |
Interest concerning the impaired part of loans | -33,384 | -32,665 | -43,913 | |
Total impairment charges on loans and other debtors etc. | 63,383 | 94,758 | 120,175 |
Notes
Note |
1.1-30.9 2014 DKK 1,000 |
1.1-30.9 2013 DKK 1,000 |
1.1-31.12 2013 DKK 1,000 |
|
9 | Tax | |||
Tax calculated on the period’s profit | 108,325 | 83,800 | 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 | 108,325 | 83,800 | 114,199 | |
Effective tax rate (%): | ||||
The current tax rate of the bank | 24.5 | 25.0 | 25.0 | |
Permanent deviations | -0.7 | -0.4 | -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 | 24.6 | 24.2 | |
Note |
End Sept. 2014 DKK 1,000 |
End Sept. 2013 DKK 1,000 |
End Dec. 2013 DKK 1,000 |
|
10 | Claims on credit institutions and central banks | |||
Claims at call | 233,798 | 168,327 | 114,032 | |
Up to and including 3 months | 0 | 1,434 | 100,000 | |
More than 3 months and up to and including 1 year | 0 | 100,000 | 0 | |
More than 1 year and up to and including 5 years | 122,881 | 204,220 | 202,881 | |
More than 5 years | 0 | 500 | 0 | |
Total claims on credit institutions and central banks | 356,679 | 474,481 | 416,913 | |
11 | Loans and other debtors at amortised cost price | |||
At call | 1,409,603 | 1,190,016 | 1,311,786 | |
Up to and including 3 months | 882,144 | 424,908 | 674,795 | |
More than 3 months and up to and including 1 year | 2,066,618 | 1,674,398 | 1,542,624 | |
More than 1 year and up to and including 5 years | 5,027,407 | 4,684,262 | 4,601,579 | |
More than 5 years | 5,579,983 | 5,014,228 | 5,718,501 | |
Total loans and other debtors at amortised cost price | 14,965,755 | 12,987,812 | 13,849,285 |
Notes
Note |
End Sept. 2014 DKK 1,000 |
End Sept. 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 | 180,001 | 223,075 | 255,157 | |
Reverse entry - impairment charges made in previous financial years |
-128,246 | -84,411 | -90,895 | |
Booked losses covered by impairment charges | -16,454 | -24,508 | -60,278 | |
Cumulative individual impairment charges for loans and other debtors on the balance sheet date | 771,814 | 746,685 | 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 | 49,084 | -3,180 | -2,224 | |
Cumulative collective impairment charges for loans and other debtors on the balance sheet date | 161,736 | 111,696 | 112,652 | |
Total cumulative impairment charges for loans and other debtors on the balance sheet date | 933,550 | 858,381 | 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 | 2,093 | 2,954 | 3,282 | |
Reverse entry - provisions made in previous financial years | -1,602 | -8,317 | -9,245 | |
Booked losses covered by provisions | -36 | -439 | -739 | |
Cumulative individual provisions for losses on guarantees on the balance sheet date | 4,711 | 5,156 | 4,256 | |
Total cumulative impairment charges for loans and other debtors and provisions for losses on guarantees on the balance sheet date | 938,261 | 863,537 | 853,421 | |
13 | Suspended calculation of interest | |||
Loans and other debtors with suspended calculation of interest on the balance sheet date |
91,811 | 116,280 | 85,258 |
Notes
Note |
End Sept. 2014 DKK 1,000 |
End Sept. 2013 DKK 1,000 |
End Dec. 2013 DKK 1,000 |
|
14 | Bonds at current value | |||
Listed on the stock exchange | 4,422,010 | 4,346,048 | 4,669,732 | |
Total bonds at current value | 4,422,010 | 4,346,048 | 4,669,732 | |
15 | Shares etc. | |||
Listed on NASDAQ Copenhagen | 38,661 | 32,130 | 15,700 | |
Unlisted shares at current value | 1,372 | 3,005 | 1,372 | |
Sector shares at current value | 161,806 | 199,075 | 191,625 | |
Total shares etc. | 201,839 | 234,210 | 208,697 | |
16 | Debt to credit institutions and central banks | |||
Debt payable on demand | 264,514 | 241,156 | 298,236 | |
Up to and including 3 months | 685,726 | 893,775 | 315,311 | |
More than 3 months and up to and including 1 year | 99,374 | 156,478 | 137,287 | |
More than 1 year and up to and including 5 years | 613,285 | 458,417 | 560,112 | |
More than 5 years | 504,763 | 405,116 | 443,938 | |
Total debt to credit institutions and central banks | 2,167,662 | 2,154,942 | 1,754,884 | |
17 | Deposits and other debts | |||
On demand | 8,908,720 | 8,022,184 | 8,325,047 | |
Deposits and other debts at notice: | ||||
Up to and including 3 months | 1,492,362 | 867,423 | 1,205,176 | |
More than 3 months and up to and including 1 year | 749,306 | 1,159,137 | 1,426,171 | |
More than 1 year and up to and including 5 years | 1,439,183 | 1,264,431 | 1,501,668 | |
More than 5 years | 1,641,201 | 1,512,757 | 1,655,754 | |
Total deposits and other debts | 14,230,772 | 12,825,932 | 14,113,816 | |
Distributed as follows: | ||||
On demand | 8,522,590 | 7,617,592 | 7,933,649 | |
At notice | 354,985 | 305,970 | 337,480 | |
Time deposits | 2,136,740 | 1,979,414 | 2,549,938 | |
Long term deposit agreements | 1,880,782 | 1,659,456 | 1,883,569 | |
Special types of deposits | 1,335,675 | 1,263,500 | 1,409,180 | |
14,230,772 | 12,825,932 | 14,113,816 |
Notes
Note |
End Sept. 2014 DKK 1,000 |
End Sept. 2013 DKK 1,000 |
End Dec. 2013 DKK 1,000 |
|
18 | Issued bonds at amortised cost price | |||
Up to and including 3 months | 0 | 0 | 3,727 | |
More than 3 months and up to and including 1 year | 97,035 | 3,727 | 0 | |
More than 1 year and up to and including 5 years | 148,862 | 100,614 | 246,087 | |
Total issued bonds at amortised cost price | 245,897 | 104,341 | 249,814 | |
Distributed as follows: | ||||
Issues in Norwegian kroner: | ||||
Nom. 100 million NOK | 91,680 | 91,920 | 88,540 | |
Regulation at amortised cost price and adjustment to current value of issues |
2,782 | 6,121 | 5,768 | |
Issues in Euro: | ||||
Nom. 20 million EUR | 148,862 | 0 | 149,206 | |
Other issues | 2,573 | 6,300 | 6,300 | |
245,897 | 104,341 | 249,814 | ||
19 | Subordinated debt | |||
Subordinated loan capital: | ||||
Floating rate loan, principal EUR 27 million, expiry 30 June 2021 |
200,964 | 201,366 | 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 | 1,143 | 5,519 | 5,112 | |
Total subordinated debt | 366,607 | 371,385 | 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 | 75,000 | 50,000 | 60,000 | |
Total share capital | 23,900 | 24,200 | 24,200 |
Notes
Note |
End Sept. 2014 DKK 1,000 |
End Sept. 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 | 88,877 | 61,638 | 68,747 | |
Number of own shares: | ||||
Beginning of year | 62,554 | 96,075 | 96,075 | |
Purchases during the period | 218,630 | 246,567 | 318,806 | |
Sales during the period | -143,426 | -184,383 | -252,327 | |
Cancellation during the period | -60,000 | -100,000 | -100,000 | |
End of period | 77,758 | 58,259 | 62,554 | |
Of which reserved for subsequent cancellation | 75,000 | 50,000 | 60,000 | |
Nominal value of holding of own shares, end of period |
389 | 291 | 313 | |
Own shares’ proportion of share capital, end of period (%) |
1.6 | 1.2 | 1.3 | |
22 | Contingent liabilities etc. | |||
Contingent liabilities | ||||
Finance guarantees | 1,051,547 | 1,678,351 | 949,047 | |
Guarantees against losses on mortgage credit loans | 56,747 | 51,617 | 55,841 | |
Guarantee against losses Totalkredit | 122,401 | 111,538 | 112,284 | |
Registration and conversion guarantees | 53,485 | 73,780 | 55,605 | |
Sector guarantees | 48,175 | 46,816 | 48,175 | |
Other contingent liabilities | 203,792 | 683,301 | 680,982 | |
Total contingent liabilities | 1,536,147 | 2,645,403 | 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. | 1,097,407 | 850,893 | 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 | 105,410 | 66,954 | 321,192 | |
Collateral under CSA agreements | 71,686 | 75,372 | 75,372 |
Notes
Note |
End Sept. 2014 DKK 1,000 |
End Sept. 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. |
||||
Credit risk | 12,443,403 | 12,035,999 | 12,235,761 | |
Market risk | 1,313,043 | 1,377,058 | 1,110,690 | |
Operational risk | 1,567,369 | 1,522,813 | 1,522,813 | |
Total weighted risk exposure | 15,323,815 | 14,935,870 | 14,869,264 | |
Shareholders’ equity | 3,040,103 | 2,805,513 | 2,901,100 | |
Proposed dividend etc. | 0 | 0 | -121,500 | |
Deduction for the sum of equity investments etc. > 10% | -90,403 | 0 | 0 | |
Deductions for accruals related to calculated dividend and the residual frame of the share buy-back programme | -132,413 | 0 | 0 | |
Reserve for net revaluation | 0 | -192 | -189 | |
Core tier 1 capital (excl. hybrid core capital) | 2,817,287 | 2,805,321 | 2,779,411 | |
Hybrid core capital | 131,600 | 164,500 | 164,500 | |
Deduction for equity investments etc. > 10% | 0 | -24,174 | -19,963 | |
Deduction for the sum of equity investments etc. > 10% | -97,013 | -52,324 | -63,503 | |
Tier 1 capital | 2,851,874 | 2,893,323 | 2,860,445 | |
Subordinated loan capital | 160,771 | 201,366 | 201,428 | |
Reserve for net revaluation | 0 | 192 | 189 | |
Deduction for equity investments etc. > 10% | 0 | -24,174 | -19,963 | |
Deduction for the sum of equity investments etc. > 10% | -159,125 | -52,324 | -63,503 | |
Capital base | 2,853,520 | 3,018,383 | 2,978,596 | |
Core tier 1 capital ratio (excl. hybrid core capital) (%) | 18.4 | 18.8 | 18.7 | |
Tier 1 capital ratio (%) | 18.6 | 19.4 | 19.2 | |
Solvency ratio - Tier 2 (%) | 18.6 | 20.2 | 20.0 | |
Capital base requirements under Section 124 (2) of the Danish FSA | 1,225,905 | 1,194,870 | 1,189,541 | |
25 |
The supervisory diamond (Danish Financial Supervisory Authority limits) |
|||
Stable funding (funding ratio) (< 1) | 0.8 | 0.8 | 0.7 | |
Excess liquidity (> 50%) | 175.2% | 171.4% | 166.2% | |
Total large exposures (< 125%) | 27.5% | 46.2% | 35.0% | |
Growth in loans (< 20%) | 12.7% | 4.4% | 11.5% | |
Real estate exposure (< 25%) | 12.3% | 11.0% | 11.4% | |
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 per annum after allocation of dividend etc., net. · Key figures per DKK 5 share are calculated on the basis of respectively1st-3rd quarter 2014: 4,780,000 shares, 1st-3rd quarter 2013: 4,840,000 shares and 2013: 4,780,000 shares. |
Main figures summary
1st-3rd qtr. 2014 |
1st-3rd qtr. 2013 |
Full year 2013 |
|
Profit and loss account summary (million DKK) | |||
Net income from interest | 487 | 472 | 630 |
Dividend on capital shares etc. | 8 | 2 | 12 |
Net income from fees and commissions | 160 | 144 | 199 |
Net income from interest and fees | 655 | 618 | 841 |
Value adjustments | +69 | +15 | +23 |
Other operating income | 2 | 2 | 3 |
Staff and administration costs | 192 | 185 | 255 |
Amortisations, depreciations and write-downs on intangible and tangible assets | 5 | 2 | 4 |
Other operating costs | 12 | 12 | 16 |
Impairment charges for loans and other debtors etc. | -63 | -95 | -120 |
Profit before tax | 454 | 341 | 472 |
Tax | 108 | 84 | 114 |
Profit after tax | 346 | 257 | 358 |
Main figures from the balance sheet (million DKK) | |||
Loans and other debtors | 14,966 | 12,988 | 13,849 |
Deposits and other debts | 14,231 | 12,826 | 14,114 |
Subordinated debt | 367 | 371 | 371 |
Shareholders’ equity | 3,040 | 2,806 | 2,901 |
Balance sheet total | 20,330 | 18,603 | 19,583 |
Quarterly overview
(Million DKK) |
3rd qtr. 2014 |
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 | 158 | 159 | 158 | 156 | 155 | 151 | 153 | 146 | 153 | 156 | 160 |
Net income from fees and provisions excl. commission |
37 | 51 | 45 | 48 | 33 | 55 | 36 | 51 | 30 | 48 | 33 |
Income from sector shares | 4 | 2 | 16 | 5 | 3 | 4 | 2 | 5 | -1 | 2 | 0 |
Foreign exchange income | 4 | 4 | 3 | 3 | 3 | 2 | 5 | 4 | 3 | 2 | 4 |
Other operating income | 1 | 1 | 1 | 1 | 1 | 1 | 0 | 0 | 1 | 1 | 1 |
Total core income excl. trade Income |
204 | 217 | 223 | 213 | 195 | 213 | 196 | 206 | 186 | 209 | 198 |
Trade income | 7 | 8 | 11 | 7 | 5 | 9 | 6 | 8 | 5 | 5 | 6 |
Total core income | 211 | 225 | 234 | 220 | 200 | 222 | 202 | 214 | 191 | 214 | 204 |
Staff and administration costs | 62 | 68 | 62 | 70 | 61 | 66 | 58 | 69 | 59 | 64 | 61 |
Amortisations, depreciations and write-downs on intangible and tangible assets |
1 | 3 | 1 | 2 | 1 | 0 | 1 | 0 | 1 | 1 | 1 |
Other operating costs | 4 | 4 | 4 | 4 | 3 | 3 | 4 | 3 | 0 | 4 | 2 |
Total costs etc. | 67 | 75 | 67 | 76 | 65 | 69 | 63 | 72 | 60 | 69 | 64 |
Core earnings before impairments |
144 | 150 | 167 | 144 | 135 | 153 | 139 | 142 | 131 | 145 | 140 |
Impairment charges for loans and other debtors etc. | -23 | -25 | -15 | -25 | -34 | -40 | -21 | -33 | -45 | -55 | -24 |
Core earnings | 121 | 125 | 152 | 119 | 101 | 113 | 118 | 109 | 86 | 90 | 116 |
Result for portfolio | +12 | +20 | +24 | +12 | -4 | +9 | +6 | -9 | +25 | +6 | +27 |
Expenses for bank packages | 0 | 0 | 0 | 0 | -1 | 0 | -1 | 0 | 0 | 0 | -2 |
Profit before tax | 133 | 145 | 176 | 131 | 96 | 122 | 123 | 100 | 111 | 96 | 141 |
Tax | 32 | 36 | 40 | 30 | 23 | 30 | 31 | 33 | 28 | 24 | 35 |
Profit after tax | 101 | 109 | 136 | 101 | 73 | 92 | 92 | 67 | 83 | 72 | 106 |
Danish Financial Supervisory Authority
key figures for Danish banks
1st-3rd 2014 |
1st-3rd 2013 |
Full year 2013 |
||
Solvency: | ||||
Solvency ratio - Tier 2 | % | 18.6 | 20.2 | 20.0 |
Tier 1 capital ratio | % | 18.6 | 19.4 | 19.2 |
Individual solvency requirement | % | 8.7 | 8.8 | 8.9 |
Earnings: | ||||
Return on equity before tax | % | 15.3 | 12.4 | 16.9 |
Return on equity after tax | % | 11.7 | 9.4 | 12.8 |
Income/cost ratio | DKK | 2.67 | 2.16 | 2.19 |
Market risk: | ||||
Interest rate risk | % | 0.7 | 1.1 | 0.6 |
Foreign exchange position | % | 0.7 | 0.8 | 1.6 |
Foreign exchange risk | % | 0.0 | 0.0 | 0.0 |
Liquidity risk: | ||||
Excess cover relative to statutory liquidity requirement |
% | 175.2 | 171.4 | 166.2 |
Loans and impairments thereon relative to deposits | % | 111.7 | 108.0 | 104.1 |
Credit risk: | ||||
Loans relative to shareholders’ equity | 4.9 | 4.6 | 4.8 | |
Growth in loans for the period | % | 8.1 | 4.5 | 11.5 |
Total large exposures | % | 27.5 | 46.2 | 35.0 |
Cumulative impairment percentage | % | 5.4 | 5.2 | 5.1 |
Impairment percentage for the period | % | 0.36 | 0.57 | 0.72 |
Proportion of debtors at reduced interest | % | 0.5 | 0.7 | 0.5 |
Share return: | ||||
Profit for the period after tax per share * / *** | DKK | 1,439.3 | 1,063.4 | 1,462.8 |
Book value per share * / ** | DKK | 12,930 | 11,734 | 12,145 |
Share price relative to profit for the period per share * / *** | DKK | 15.9 | 19.9 | 15.0 |
Share price relative to book value per share * / ** | 1.77 | 1.80 | 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 quarterly report for Ringkjøbing Landbobank A/S for the period 1 January - 30 September 2014.
The quarterly 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 quarterly report provides a true and fair view of the bank’s assets, liabilities and financial position as of 30 September 2014 and of the bank’s activities for the period 1 January - 30 September 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 quarterly 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, 22 October 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 |