• Total core income grew 8% relative to Q1-Q3 2014, ending at DKK 2,617 million. Net interest income dropped 1% to DKK 1,311 million, while net income from fees, charges and commissions rose by as much as 27% to DKK 791 million. Adjusted for the sale of the shareholding in Nørresundby Bank in 2015 and the sale of the Nets shareholding last year, core income grew by 7%.
• Costs and expenses rose 5% on Q1-Q3 2014, ending at DKK 1,374 million - a growth driven by acquisitions and preparations for the transition to a new data-processing centre, among other factors - and the cost-to-income ratio improved to 0.52 (if adjusted for the gain on the sale of the Nørresundby Bank shareholding, the cost-to-income ratio was 0.57).
• Thus, core earnings before impairment came to DKK 1,243 million, which is DKK 136 million, or 12%, up on the same period of 2014.
• Impairment of loans & advances, etc. amounted to DKK 240 million (2014: DKK 288 million), equal to an annualized impairment ratio of 0.64 – DKK 236 million of the DKK 240 million amount was attributable to agricultural exposures.
• The Group is in a comfortable capital and liquidity situation, with a Common Equity (Tier 1) ratio of 13.9%, an excess coverage relative to the individual solvency need ratio of 7.0 percentage points (DKK 3.3 billion) and a strategic liquidity of DKK 18.8 billion.
Q3 2015: SLUGGISH INTEREST RATES AND SUBDUED ACTIVITY LEVEL PUT PRESSUREON THE TOP LINE
• Core income in Q3 amounted to DKK 696 million versus DKK 781 million in Q2 and DKK 782 million in Q3 2014. The decline relative to the previous quarter is attributable to a 6% downturn in net interest income, a 14% drop in net income from fees, charges and commissions and the absence of share dividends. The decline compared with the corresponding period of 2014 is attributable exclusively to a 13% downturn in net interest income.
• Costs and expenses in Q3 amounted to DKK 409 million versus DKK 480 million in Q2 and DKK 388 million in Q3 2014.
• Loan impairment losses amounted to DKK 74 million, which is almost the same level as last quarter – agricultural customers impacted profits with DKK 97 million in Q3, while reversals for other customer categories amounted to DKK 23 million.
OUTLOOK
• In light of developments in Q1-Q3, the Group’s core earnings before impairment for all of 2015 are still expected to end at around DKK 1.5 billion.
• Loan impairment, etc. for the full year is still expected to end at around DKK 300-350 million.
Ole Madsen, Senior Vice President, tel. +45 9634 4010
