Ringkjøbing Landbobank’s announcement of the annual accounts for 2015 - Record increase in customer numbers creates the best profit in the bank’s history

The profit before tax was DKK 588 million, which is marginally better than 2014 and equivalent to a return of 20% on equity at the beginning of the period. The core earnings show an increase of 13% to DKK 588 million, which is thus above the upwardly adjusted DKK 500 - 575 million interval. The profit before tax and the core earnings are the best in the bank's history and considered highly satisfactory.


 

 (million DKK) 2015 2014 2013 2012 2011
Total core income 954 907 844 823 767
Total costs and depreciations -306 -298 -273 -265 -248
Core earnings before impairments 648 609 571 558 519
Impairment charges for loans etc. -60 -87 -120 -157 -129
Core earnings 588 522 451 401 390
Result for portfolio 0 +65 +23 +49 +1
Expenses for bank packages 0 0 -2 -2 -11
Profit before tax 588 587 472 448 380

   

2015 in headlines:

  • The best profit in the bank’s history
  • The profit before tax was DKK 588 million, equivalent to a return of 20% on equity at the beginning of the period
  • Core earnings exceed expectations, increasing by 13% to DKK 588 million
  • Best ever net increase in customers
  • High levels of customer satisfaction and willingness to recommend the bank
  • The rate of costs improved by 2% to 32.1 - the lowest in Denmark
  • 12% increase in loans and 10% increase in deposits
  • Proposed dividend raised from DKK 26 to DKK 30 per share. A new buy-back programme for up to DKK 140 million is also proposed, increasing total distribution to 61%
  • Expectations for core earnings of DKK 475 - 575 million in 2016, to which must be added the result for portfolio

Please do not hesitate to contact the bank’s management if you have any questions.

 

Yours sincerely,
Ringkjøbing Landbobank
 
John Fisker        Jørn Nielsen


 

Management Report

Core income

The total core income was 5% higher for the year, with an increase from DKK 907 million in 2014 to DKK 954 million in 2015. The bank considers the increase satisfactory. 

Net interest income was DKK 638 million in 2015, which is marginally higher than in 2014, where net interest income was DKK 635 million. 

The modest increase in net interest income should be compared to a 12% increase in lending. The net interest income was thus influenced by a falling interest margin which reflects the competition in the sector, and the net interest income was also affected by the low level of interest rates. The increase in lending was also primarily realised in the second half-year.

Fees, commissions and foreign exchange income amounted to net DKK 275 million in 2015 against net DKK 243 million in 2014, a 13% increase. The increase is attributable inter alia to strengthened earnings from securities trading and custody accounts as a result of greater trading activity and from asset management as a result of increasing volumes, and the conversion activity within mortgage loans also had a positive effect on earnings in 2015.

Earnings from sector shares also increased by DKK 10 million from DKK 26 million in 2014 to DKK 36 million in 2015.

 

Costs and depreciations

Total costs including depreciations on tangible assets were DKK 306 million in 2015 against DKK 298 million last year, an increase of 3%. 

The increase in costs for the year is attributable to the appointment of additional employees and a general salary increase. There was also a small increase in other administration costs, and the total expenses for the Guarantee Fund and the Resolution Fund in 2015 increased by just over DKK 2 million relative to 2014. Finally, write-downs on tangible assets fell in the year.

The rate of costs improved by 2% relative to 2014 and is now 32.1%, still the lowest in Denmark.   

 

Impairment charges for loans

Impairment charges for loans amounted to DKK 60 million against DKK 87 million in the previous year. The falling trend from 2014 thus continues for impairment charges, which are equivalent to 0.3% of the total average of loans, impairment charges, guarantees and provisions against 0.5% in 2014. 

It is noted generally that the average credit quality of the bank's loans portfolio remained at a high level in 2015. 

During 2015, individual impairment charges were reversed on a number of customers. The bank also terminated certain customer accounts in the financial year. These two circumstances contributed to a reduction of the bank's total balance of individual impairment charges during the financial year from DKK 701 million at the beginning of the year to DKK 665 million at the end of the year. 

The bank assessed that there was a need to increase the collective impairment charges by DKK 47 million from DKK 226 million at the beginning of the year to DKK 273 million at the end of the year. The increased collective impairment charges are mainly related to animal production in the bank’s agricultural portfolio. 

The quoted prices for both pork and conventional milk fell from the beginning to the end of 2015, which further increased the pressure on the sector. The exposure to animal production accounts for 3% of the bank’s total loans and guarantees. Individual impairment charges on cattle and pig farms were DKK 284 million and collective impairment charges totalled DKK 160 million, and the collective impairment ratio was 43% at the end of 2015. Given the challenges experienced in animal production, the bank is satisfied with the fact that its farmers are less indebted than the average in the sector, and we feel comfortable with the current impairment level.

The bank’s total account for impairment charges and provisions was DKK 943 million at the end of the year, equivalent to 4.6% of total loans and guarantees.

Actual losses on loans for the year less interest on the impaired part of loans and receivables previously written off were on a par with the impairment charges recognised as expenses, and provisions increased by DKK 12 million.

The portfolio of loans with suspended calculation of interest amounts to DKK 74 million, equivalent to 0.4% of the bank’s total loans and guarantees at the end of the year.

On the basis of prospects for economic development in 2016, including those for trade and industry, the bank expects total impairment charges in 2016 to be lower than in 2015.

  

Core earnings

(Million DKK)  
2015
 
2014
 
2013
 
2012
 
2011
Total core income 954 907 844 823 767
Total costs and depreciations -306 -298 -273 -265 -248
Core earnings before impairments 648 609 571 558 519
Impairment charges for loans etc. -60 -87 -120 -157 -129
Core earnings 588 522 451 401 390

The core earnings were DKK 588 million against DKK 522 million last year, an increase of 13% and the best ever for the bank. At the beginning of the year, the bank announced expected core earnings for the year in the DKK 450 - 525 million range. This range was upwardly adjusted to DKK 500 - 575 million in connection with the presentation of the bank's half-yearly report, and the core earnings realised are thus above the upwardly adjusted range.

 

Portfolio income and market risk

The result for portfolio for all of 2015 was zero including funding costs for the portfolio.

The result for portfolio was affected by the interest rate fluctuations which characterised the financial markets throughout 2015.

Shares etc. at the end of the year amounted to DKK 467 million, DKK 11 million of which was in listed shares, DKK 197 million in investment fund certificates and DKK 259 million in sector shares etc. The bond portfolio amounted to DKK 3,115 million, and the majority of the portfolio consists of AAA-rated Danish government and mortgage credit bonds.

The total interest rate risk - calculated as the impact on the profit of 1%-point change in the interest level - was 2.2% of the bank’s Tier 1 capital at the end of the year.

The bank’s total market risk within exposures to interest rate risk, listed shares etc. and foreign currency remains at a moderate level, and this policy will continue.

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 2015:   

  Risk in DKK million Risk relative to equity
end of year in %
Highest risk of loss:
Lowest risk of loss:
Average risk of loss:
25.8
5.2
15.7
0.78%
0.16%
0.48%
End of the year risk of loss: 15.0 0.46%

  

Profit after tax

The profit before tax was DKK 588 million. The profit after tax of DKK 129 million was DKK 459 million against last year’s DKK 446 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 20 % and 15 % respectively.

 

Balance sheet

The bank’s balance sheet at the end of the year stood at DKK 22,317 million against last year’s DKK 21,238 million.

The bank’s deposits increased by 10% from DKK 15,450 million at the end of 2014 to DKK 16,987 million at the end of 2015. The bank’s loans increased by 12% from DKK 15,507 million at the end of 2014 to DKK 17,300 million at the end of 2015. 

The growth in the bank’s loans is broadly based with growth from both the branch network and the bank’s niche concepts. The bank thus also in 2015 met its goal of realising growth in loans via an organic growth strategy.

The bank’s portfolio of guarantees at the end of the year was DKK 2,234 million against DKK 2,218 million in 2014.

 

Liquidity

The bank’s liquidity is good, and the excess liquidity relative to the statutory requirement is 100%. The bank’s short-term funding with term to maturity of less than 12 months amounts to DKK 0.5 billion, balanced by DKK 4.0 billion, primarily in short-term placings in the Central Bank of  Denmark and in liquid securities. The bank is thus not dependent on the short-term money market.

During 2015, the bank raised long-term funding to the equivalent value of a total of DKK 0.7 billion with an average term of 5 years.

The bank's loans excluding reverse transactions are at the same level as the bank's deposits at the end of the year. The loans portfolio is thus more than fully financed by the bank’s deposits and equity. In addition, part of the loans portfolio for wind turbines in Germany was refinanced back-to-back with KfW Bankengruppe, which means that DKK 1,102 million can 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.

New liquidity regulations came into force with effect from 1 October 2015, viz. the so-called LCR (Liquidity Coverage Ratio) key figure. The key figure will show the ability of banks to honour their payment obligations for a 30-day period without access to market funds, and the key figure will replace the current Section 152 liquidity key figure. The LCR key figure is computed as the ratio of the bank’s cash and cash equivalents / liquid assets to its payment obligations for the next 30 days as computed in accordance with specific rules.

Non-SIFI banks must have a cover of minimum 60% on 1 October 2015, gradually increasing by 10% on 1 January 2016 and 1 January 2017 and by 20% on 1 January 2018 such that the key figure must be minimum 100% on 1 January 2018. SIFI banks must have a cover of 100% as early as 1 October 2015.

Ringkjøbing Landbobank wishes to follow the rules applying to SIFI banks, and the bank’s target for the LCR key figure was 100% as early as 1 October 2015.

On 31 December 2015 the bank’s LCR key figure was 106% and the bank thus met the target.

 

Dividend and share buy-back programme

Under the share buy-back programme which was adopted by the annual general meeting in February 2015, 100,000 shares have been bought and earmarked during the year. It is proposed to the general meeting that these 100,000 shares be finally cancelled in connection with a capital reduction, thus reducing the number of shares in the bank from 4,670,000 to 4,570,000. 

The bank’s board of directors will also propose to the general meeting that a dividend of DKK 30 per share, equivalent to DKK 140 million, be paid for the 2015 financial year. A dividend of DKK 26 per share was paid for the 2014 financial year. 

A proposal will also be made to the general meeting that a new buy-back programme be established under which shares for up to DKK 140 million can be bought for cancellation at a future general meeting.

The total distribution increases from 60% in 2014 to 61% in 2015 on the basis of the above proposals.

 

Capital

The equity at the beginning of 2015 was DKK 3,099 million. To this must be added the profit for the year, while 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 3,296 million, an increase of 6%. 

The bank’s total capital ratio was computed at 18.8% at the end of 2015, and the Tier 1 capital ratio was computed at 17.1%.

 

Capital ratios 2015 2014 2013 2012 2011
Common Equity Tier 1 capital ratio (%) 17.1 17.5 18.7 19.6 18.3
Tier 1 capital ratio (%) 17.1 17.5 19.2 20.9 19.8
Total capital ratio (%) 18.8 17.5 20.0 22.4 21.4
Individual solvency requirement (%) 9.0 8.9 8.9 8.0 8.0

   

In 2015 the bank redeemed previously issued additional Tier 1 capital and Tier 2 capital because these items could no longer be fully included in the bank’s capital base due to the phasing-out rules of the CRD IV provisions. 

The additional Tier 1 capital of nom. DKK 200 million issued in 2005 was consequently redeemed in March 2015, and early redemption of the Tier 2 capital of nom. EUR 27 million issued in 2008 was made in June 2015.

In May 2015 the bank issued Tier 2 capital of EUR 50 million in replacement of the redeemed capital. The issue, which was oversubscribed, has a maturity period of 10 years with a first call-option / early redemption after five years. The interest on the issue was fixed at the Euribor 3M plus 180 basis points and with fixing of interest every three months. The issue took place under the bank’s EMTN programme and it is registered at the London Stock Exchange. 

The bank calculates the individual solvency requirement on the basis of the so-called 8+ model. The calculation method is based on 8% plus any supplements calculated inter alia for customers with financial problems. The 8+ model thus 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 2015 was calculated at 9.0%, which is on level with the end of 2014. 

 

High levels of customer satisfaction and willingness to give referrals

The bank has gained a large number of satisfied and loyal customers over many years. The good customer relationships have greatly contributed to the bank's growth in recent years because existing customers have referred new customers to the bank. 

The bank is very proud of and pleased with the high levels of customer satisfaction and willingness to refer new customers to the bank. We are also very satisfied with the fact that these two points were confirmed in a major customer satisfaction survey among the 20 biggest banks in Denmark (Voxmeter Customer Experience Management survey 2015).

Measured on customer satisfaction, the bank is in third place and it also ranks as the bank in Denmark with the highest rate of customers (47%) who most actively recommend it to others.

 

Record increase in customer numbers

The bank has carried out a large number of outreach initiatives towards both existing and new customers in recent years, including opening a Private Banking branch in Aarhus and upgrading the bank’s Private Banking branch in Holte in 2014. Over the years, other outreach initiatives have also been carried out within both the other niche products and the branch network in Central and West Jutland. 

The outreach activities were maintained during 2015, which contributed to a net increase in customer numbers in 2015, the greatest net increase ever recorded measured on the contribution margin. 

The increase in customer numbers is broadly based and relates to new customers in both the branch network and niche concepts, and the loss of customers was also in 2015 at a modest level.

The outreach initiatives are scheduled to continue in 2016 at both regional and national levels.  

 

Expected result and plans for 2016

The bank’s core earnings in 2015 were DKK 588 million, which is above the upwardly adjusted DKK 500 - 575 million interval for the year.

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 financial products. In 2016, the bank expects a continuing positive inflow of customers to its branches in Central and West Jutland because of its long-term outreach marketing and its market position in general.

The bank will also focus on developing the activities in its niche concepts in the forthcoming year. Focus will thus be placed on serving the bank’s existing customers and further developing the portfolio within inter alia renewable energy, wholesale loans and medical practitioners / dentists.

The bank’s Private Banking branches in Ringkøbing, Herning, Holte and Aarhus were also successful in 2015. The bank continues to see major opportunities in this segment, and it will continue to focus strongly on the segment, inter alia with the opening of the Private Banking branch in the Triangle Region. The bank will provide highly competent and dedicated staff to serve the segment, and the bank expects to be able to continue developing this business area in the future.

Based on the prospects for 2016 and the activities and initiatives we want to carry out in 2016, the bank expects to be able to realise a growth in lending during 2016. Continuing pressure on the bank's interest margin is, however, also expected. The bank does not expect the conversion activity to continue in 2016, whereas the bank's activities in Private Banking and asset management are expected to continue to develop positively in the coming year. Finally, an increase in the level of cost of approximately 3% relative to the total costs in 2015 is expected, and impairment charges in 2016 are expected to be lower than in 2015.

As a whole, core earnings in 2016 are expected to be in the range DKK 475-575 million. To this must be added the profit from the bank’s portfolio of securities.

 

Accounting policies and key figures

The accounting policies applied are unchanged relative to the audited annual report presented for 2014.  

 

Disclaimer:
“This document is a translation of an original document in Danish. The original Danish text shall be the governing text for all purposes and in case of any discrepancy the Danish wording shall be applicable.”

  

 

Main and key figures 

  2015 2014 2013 2012 2011
Main figures for the bank (million DKK)          
Total core income 954 907 844 823 767
Total costs and depreciations -306 -298 -273 -265 -248
Core earnings before impairments 648 609 571 558 519
Impairment charges for loans etc. -60 -87 -120 -157 -129
Core earnings 588 522 451 401 390
Result for portfolio 0 +65 +23 +49 +1
Expenses for bank packages 0 0 -2 -2 -11
Profit before tax 588 587 472 448 380
Profit after tax 459 446 358 328 286
           
Shareholders’ equity 3,296 3,099 2,901 2,676 2,483
Deposits 16,987 15,450 14,114 12,867 12,755
Loans 17,300 15,507 13,849 12,424 12,747
Balance sheet total 22,317 21,238 19,583 17,682 17,549
Guarantees 2,234 2,218 1,902 1,667 1,052
           
Key figures for the bank (per cent)          
Return on equity before tax, beginning of year 19.8 21.1 18.1 18.5 16.9
Return on equity after tax, beginning of year 15.4 16.0 13.7 13.6 12.7
Rate of costs 32.1 32.8 32.4 32.2 32.4
Common Equity Tier 1 capital ratio 17.1 17.5 18.7 19.6 18.3
Tier 1 capital ratio 17.1 17.5 19.2 20.9 19.8
Total capital ratio 18.8 17.5 20.0 22.4 21.4
Individual solvency requirement 9.0 8.9 8.9 8.0 8.0
           
Key figures per 5 DKK share (DKK)          
Core earnings 129 112 94 83 79
Profit before tax 129 126 99 93 77
Profit after tax 100 95 75 68 58
Net asset value 721 664 607 553 503
Price, end of period 1,500 1,152 1,099 770 579
Dividend 30 26 25 14 13


 

Profit and loss account

Note 1.1 - 31.12 2015
DKK 1,000
1.1 - 31.12 2014
DKK 1,000
1 Interest receivable 736,995 787,924
2 Interest payable 91,165 139,253
  Net income from interest 645,830 648,671
3 Dividend from shares etc. 13,010 7,897
4 Income from fees and commissions 301,076 261,082
4 Fees and commissions paid 41.687 31,701
  Net income from interest and fees 918,229 885,949
5 Value adjustments +29,583 +82,293
  Other operating income 4,964 4,001
6,7 Staff and administration costs 281,634 270,532
  Amortisations, depreciations and write-downs on
intangible and tangible assets
7,351 12,192
  Other operating costs    
      Miscellaneous other operating costs 68 268
      Costs Guarantee Fund and Resolution Fund 17,233 15,041
8 Impairment charges for loans and other debtors etc. -60,367 -87,186
  Result of investments in associated companies 2,137 -11
  Profit before tax 588,260 587,013
9 Tax 129,595 141,152
  Profit after tax 458,665 445,861
       
  Other comprehensive income 0 0
  Total comprehensive income 458,665 445,861

 

  

Proposed distribution of profit

  Profit after tax 458,665 445,861
  Total amount available for distribution 458,665 445,861
  Spent on ordinary dividend 140,100 124,280
  Spent on charitable purposes 500 500
  Transferred to reserve for net revaluation under the
equity method
2,137 -11
  Appropriation to own funds 315,928 321,092
  Total distribution of the amount available 458,665 445,861

  

Core earnings

  1.1 - 31.12 2015
DKK 1,000
1.1 - 31.12 2014
DKK 1,000
Net income from interest 637,960 634,681
Net income from fees excl. commission 211,541 192,941
Income from sector shares etc. 36,413 25,576
Foreign exchange income 15,812 13,489
Other operating income 4,964 4,001
Total core income excl. trade income 906,690 870,688
Trade income 47,848 36,440
Total core income 954,538 907,128
Staff and administration costs 281,634 270,532
Amortisations, depreciations and write-downs on
intangible and tangible assets
7,351 12,192
Other operating costs 17,301 15,177
Total costs etc. 306,286 297,901
Core earnings before impairments 648,252 609,227
Impairment charges for loans and other debtors etc. -60,367 -87,186
Core earnings 587,885 522,041
Result for portfolio +375 +65,104
Expenses for bank packages 0 132
Profit before tax 588,260 587,013
Tax 129,595 141,152
Profit after tax 458,665 445,861

  

Balance sheet

Note End Dec. 2015
DKK 1,000
End Dec. 2014
DKK 1,000
  Assets    
  Cash in hand and claims at call on central banks 331,563 190,873
10 Claims on credit institutions and central banks 717,602 180,490
     Claims at notice on central banks 130,019 0
     Money market operations and bilateral loans
   - term to maturity under 1 year
262,583 60,490
     Bilateral loans - term to maturity over 1 year 325,000 120,000
11,12,13 Loans and other debtors at amortised cost price 17,299,920 15,507,134
     Loans and other debtors at amortised cost price 15,914,993 13,842,752
     Wind turbine loans with direct funding 1,101,739 1,081,240
     Collateralised repurchase agreements /     
reverse transactions
283,188 583,142
14 Bonds at current value 3,114,721 4,659,495
15 Shares etc. 467,049 283,047
  Investments in associated companies 2,667 530
  Land and buildings total 64,287 66,401
     Investment properties 6,056 6,056
     Domicile properties 58,231 60,345
  Other tangible assets 4,206 4,666
  Current tax assets 71,624 87,779
  Temporary assets 5,200 997
  Other assets 230,620 248,863
  Prepayments and accrued income 7,970 7,633
  Total assets 22,317,429 21,237,908

 

  

Balance sheet

Note End Dec. 2015
DKK 1,000
End Dec. 2014
DKK 1,000
  Liabilities and equity    
16 Debt to credit institutions and central banks 1,502,586 1,911,215
     Money market operations and bilateral credits
   - term to maturity under 1 year
344,879 697,712
     Bilateral credits - term to maturity over 1 year 55,968 132,263
     Bilateral credits from KfW Bankengruppe 1,101,739 1,081,240
17 Deposits and other debts 16,986,543 15,450,273
18 Issued bonds at amortised cost price 0 236,238
  Other liabilities 142,737 156,231
  Deferred income and accruals 1,130 1,205
  Total debt 18,632,996 17,755,162
       
  Provisions for deferred tax 10,579 14,476
12 Provisions for losses on guarantees 5,478 3,995
  Total provisions for liabilities 16,057 18,471
       
  Tier 2 capital 372,278 200,216
  Additional Tier 1capital 0 165,451
19 Total subordinated debt 372,278 365,667
       
20 Share capital 23,350 23,900
  Reserve for net revaluation under the equity method 2,317 178
  Profit carried forward 3,129,831 2,949,750
  Proposed dividend etc. 140,600 124,780
  Total shareholders’ equity 3,296,098 3,098,608
  Total liabilities and equity 22,317,429 21,237,908
 
21
Own capital share    
22 Contingent liabilities etc.    
23 Assets furnished as security    
24 Capital statement    
25 The supervisory diamond    
26 Miscellaneous comments    

 

    

Statement of shareholders’ equity

2014
 
 
DKK 1,000
Share capital Reserve for net revaluation under the equity method Profit
carried

forward
Proposed
dividend
etc.
Total share-holders’
equity
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     -128,875   -128,875
Total comprehensive income   -11 321,092 124,780 445,861
Shareholders’ equity on  the balance sheet date 23,900 178 2,949,750 124,780 3,098,608

 

  

2015
 
 
DKK 1,000
Share capital Reserve for net revaluation under the equity method Profit
carried

forward
Proposed
dividend

etc.
Total share-holders’
equity
Shareholders’ equity at
the end of the previous
financial year
23,900 178 2,949,750 124,780 3,098,608
Reduction of share capital -550   550   0
Dividend etc. paid       -124,780 -124,780
Dividend received on own shares     3,385   3,385
Shareholders’ equity after allocation of dividend etc. 23,350 178 2,953,685 0 2,977,213
Purchase and sale of own shares     -139,780   -139,780
Total comprehensive income   2,139 315,926 140,600 458,665
Shareholders’ equity on  the balance sheet date 23,350 2,317 3,129,831 140,600 3,296,098

 

 
Notes

Note 1.1 - 31.12 2015
DKK 1,000
1.1 - 31.12 2014
DKK 1,000
1 Interest receivable    
  Claims on credit institutions and central banks 15,990 16,750
  Loans and other debtors 700,503 740,222
  Loans - interest concerning the impaired part of loans -38,435 -44,221
  Reverse loans 5,094 -3,457
  Bonds 54,379 90,054
  Total derivatives financial instruments, of which -4,281 -12,782
     Currency contracts 1,166 193
     Interest-rate contracts -5,447 -12,975
  Other interest receivable 3,745 1,358
  Total interest receivable 736,995 787,924
       
2 Interest payable    
  Credit institutions and central banks 24,354 26,425
  Deposits and other debts 54,268 92,049
  Repo deposits 66 0
  Issued bonds 3,679 7,207
  Subordinated debt 8,790 13,023
  Other interest payable 8 549
  Total interest payable 91,165 139,253
       
3 Dividend from shares etc.    
  Shares 13,010 7,897
  Total dividend from shares etc. 13,010 7,897
       
4 Gross income from fees and commissions    
  Securities trading and custody accounts 58,631 45,378
  Asset management 111,887 96,994
  Payment handling 26,357 23,883
  Loan fees 15,879 11,851
  Guarantee commissions 56,362 51,891
  Other fees and commissions 31,960 31,085
  Total gross income from fees and commissions 301,076 261,082
       
  Net income from fees and commissions    
  Securities trading and custody accounts 47,848 36,440
  Asset management 105,496 91,443
  Payment handling 17,384 20,849
  Loan fees 13,242 9,723
  Guarantee commissions 56,362 51,891
  Other fees and commissions 19,057 19,035
  Total net income from fees and commissions 259,389 229,381
  Foreign exchange income 15,812 13,489
  Total net income from fees, commissions and foreign exchange income 275,201 242,870


 

Notes

Note 1.1 - 31.12 2015
DKK 1,000
1.1 - 31.12 2014
DKK 1,000
5 Value adjustments    
  Loans and other debtors, current value adjustment 9,249 11,129
  Bonds -29,648 21,779
  Shares etc. 34,659 23,594
  Foreign exchange income 15,812 13,489
  Total derivatives financial instruments, of which -489 3,482
     Interest-rate contracts -1,650 2,543
     Share contracts 1,161 939
  Issued bonds 0 3,295
  Other liabilities 0 5,525
  Total value adjustments 29,583 82,293
       
6 Staff and administration costs    
  Payments to general management, board of directors
and shareholders’ committee
   
     General management 5,037 4,001
     Board of directors 1,633 1,392
     Shareholders’ committee 415 393
     Total 7,085 5,786
  Staff costs    
     Salaries 130,240 124,664
     Pensions 13,281 12,749
     Social security expenses 932 905
     Costs depending on number of staff 20,485 17,826
     Total 164,938 156,144
  Other administration costs 109,611 108,602
  Total staff and administration costs 281,634 270,532
       
7 Number of full-time employees    
  Average number of employees during the financial year converted into full-time employees 269 257
       
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 11,552 77,980
  Actual realised net losses 87,250 53,427
  Interest concerning the impaired part of loans -38,435 -44,221
  Total impairment charges on loans and other debtors etc. 60,367 87,186

  

Notes

Note   1.1 - 31.12 2015
DKK 1,000
1.1 - 31.12 2014
DKK 1,000
9 Tax    
  Tax calculated on the year’s profit 133,489 139,780
  Adjustment of deferred tax -2,973 1,826
  Adjustment of deferred tax due to change in tax rate -924 -538
  Adjustment of tax calculated for previous years 3 84
  Total tax 129,595 141,152
       
  Effective tax rate (%):    
  The current tax rate of the bank 23.5 24.5
  Permanent deviations -1.3 -0.4
  Adjustment of deferred tax due to change in tax rate -0.2 -0.1
  Adjustment of tax calculated for previous years 0.0 0.0
  Total effective tax rate 22.0 24.0
       
Note   End Dec. 2015
DKK 1,000
End Dec. 2014 DKK 1,000
10 Claims on credit institutions and central banks    
  Claims at call 98,583 59,014
  Up to and including 3 months 230,019 0
  More than 3 months and up to and including 1 year 64,000 1,476
  More than 1 year and up to and including 5 years 320,000 120,000
  More than 5 years 5,000 0
  Total claims on credit institutions and central banks 717,602 180,490
       
11 Loans and other debtors at amortised cost price    
  At call 2,055,385 1,383,877
  Up to and including 3 months 1,054,786 1,248,521
  More than 3 months and up to and including 1 year 2,273,914 1,869,846
  More than 1 year and up to and including 5 years 5,849,053 5,281,673
  More than 5 years 6,066,782 5,723,217
  Total loans and other debtors at amortised cost price 17,299,920 15,507,134
   
Of which collateralised repurchase agreements  /
   reverse transactions
283,188 583,142


  

Notes

Note   End Dec. 2015
DKK 1,000
End Dec. 2014 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 701,131 736,513
  Impairment charges / value adjustments during the year 149,057 179,129
  Reverse entry - impairment charges made in previous
financial years
-121,034 -174,736
  Booked losses covered by impairment charges -64,604 -39,775
  Cumulative individual impairment charges for loans and other debtors on the balance sheet date 664,550 701,131
       
  Collective impairment charges    
  Cumulative collective impairment charges for loans and other debtors at the end of the previous financial year 226,272 112,652
  Impairment charges / value adjustments during the year 46,650 113,620
  Cumulative collective impairment charges for loans and other debtors on the balance sheet date 272,922 226,272
       
  Total cumulative impairment charges for loans and other debtors on the balance sheet date 937,472 927,403
       
  Provisions for losses on guarantees    
  Cumulative individual provisions for losses on guarantees at the end of the previous financial year 3,995 4,256
  Provisions / value adjustments during the year 5,152 2,261
  Reverse entry - provisions made in previous financial years -3,586 -2,469
  Booked losses covered by provisions -83 -53
  Cumulative individual provisions for losses on guarantees on the balance sheet date 5,478 3,995
       
  Total cumulative impairment charges for loans and other debtors and provisions for losses on guarantees on the balance sheet date 942,950 931,398
       
13 Suspended calculation of interest    
  Loans and other debtors with suspended calculation of
interest on the balance sheet date
74,220 58,244


 

Notes

Note   End Dec. 2015
DKK 1,000
End Dec. 2014 DKK 1,000
14 Bonds at current value    
  Listed on the stock exchange 3,114,721 4,659,495
  Total bonds at current value 3,114,721 4,659,495
       
15 Shares etc.    
  Listed on Nasdaq Copenhagen 11,492 13,237
  Investment fund certificates 196,590 27,413
  Unlisted shares at current value 1,450 1,473
  Sector shares at current value 257,517 240,924
  Total shares etc. 467,049 283,047
       
16 Debt to credit institutions and central banks    
  Debt payable on demand 268,254 258,042
  Up to and including 3 months 55,023 478,264
  More than 3 months and up to and including 1 year 171,936 76,818
  More than 1 year and up to and including 5 years 593,775 611,326
  More than 5 years 413,598 486,765
  Total debt to credit institutions and central banks 1,502,586 1,911,215
       
17 Deposits and other debts    
  On demand 11,332,913 9,209,187
  Deposits and other debts at notice:    
  Up to and including 3 months 1,891,994 1,761,577
  More than 3 months and up to and including 1 year 667,677 1,064,673
  More than 1 year and up to and including 5 years 966,866 948,383
  More than 5 years 2,127,093 2,466,453
  Total deposits and other debts 16,986,543 15,450,273
       
  Distributed as follows:    
  On demand 10,912,726 8,815,421
  At notice 327,306 348,422
  Time deposits 2,352,697 2,735,273
  Long term deposit agreements 2,192,532 2,238,720
  Special types of deposits 1,201,282 1,312,437
    16,986,543 15,450,273

 

  

Notes

Note   End Dec. 2015
DKK 1,000
End Dec. 2014 DKK 1,000
18 Issued bonds at amortised cost price    
  Up to and including 3 months 0 2,573
  More than 3 months and up to and including 1 year 0 233,665
  Total issued bonds at amortised cost price 0 236,238
       
  Distributed as follows:    
  Issues in Norwegian kroner:    
    Nom. NOK 100 million 0 82,320
    Regulation at amortised cost price and adjustment to
  current value of issues
0 2,473
  Issues in euro:    
    Nom. EUR 20 million 0 148,872
  Other issues 0 2,573
    0 236,238
       
19 Subordinated debt    
  Tier 2 capital:    
     Floating rate loan, principal EUR 50 million, expiry
   20.5.2025
373,125 0
     Floating rate loan, principal EUR 27 million, expiry
   30.6.2021
0 200,977
  Additional Tier 1 capital:    
     4.795% bond loan, nom. DKK 200 million,
   indefinite term
0 200,000
     Own holding of subordinated loan capital 0 -35,500
  Regulation at amortised cost price and adjustment to     current value of Tier 2 capital and Additional Tier 1 capital -847 190
  Total subordinated debt 372,278 365,667
       
20 Share capital    
  Number of shares at DKK 5 each:    
  Beginning of period 4,780,000 4,840,000
  Cancellation during the year -110,000 -60,000
  End of period 4,670,000 4,780,000
     Reserved for subsequent cancellation 100,000 110,000
  Total share capital 23,350 23,900

 

  

Notes

Note   End Dec. 2015
DKK 1,000
End Dec. 2014 DKK 1,000
21 Own shares    
  Own shares included in the balance sheet at 0 0
  The market value is 151,226 130,781
       
  Number of own shares:    
  Beginning of year 113,525 62,554
  Purchases during the year 347,731 290,886
  Sales during the year -250,439 -179,915
  Cancellation during the year -110,000 -60,000
  End of year 110,817 113,525
     Reserved for subsequent cancellation 100,000 110,000
       
  Nominal value of holding of own shares, end of year 504 568
  Own shares’ proportion of share capital, end of year (%) 2.2 2.4
       
22 Contingent liabilities etc.    
  Contingent liabilities    
  Finance guarantees 1,112,688 978,987
  Guarantees against losses on mortgage credit loans 80,981 62,074
  Guarantees against losses Totalkredit 116,104 187,068
  Registration and conversion guarantees 641,756 728,745
  Sector guarantees 45,321 48,596
  Other contingent liabilities 237,531 212,340
  Total contingent liabilities 2,234,381 2,217,810
       
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.    
  The balance sheet item is 1,101,739 1,081,240
       
  As security for clearing etc., the bank has pledged securities from its total holding to the Central Bank of Denmark to a total market price of 231,505 275,685


   

Notes

Note   End Dec. 2015
DKK 1,000
End Dec. 2014 DKK 1,000
24 Capital statement    
       
  Credit risk 14,173,867 12,879,048
  Market risk 1,539,489 1,464,214
  Operational risk 1,750,809 1,567,369
  Total risk exposure amount 17,464,165 15,910,631
       
  Shareholders’ equity 3,296,098 3,098,608
  Proposed dividend etc. -140,600 -124,780
  Deduction for prudent valuation -3,910 0
  Deduction for the sum of equity investments etc. > 10% -118,672 -143,584
  Deduction of trading framework for own shares -55,000 -55,000
  Actual utilization of the trading framework for own shares 1,221 4,061
  Common Equity Tier 1 capital 2,979,137 2,779,305
  Additional Tier 1 capital 0 131,600
  Deduction for the sum of equity investments etc. > 10% 0 -131,600
  Tier 1 capital 2,979,137 2,779,305
  Tier 2 capital 373,125 160,782
  Deduction for the sum of equity investments etc. > 10% -176,769 -160,782
  Own funds 3,275,493 2,779,305
       
  Common Equity Tier 1 capital ratio (%) 17.1 17.5
  Tier 1 capital ratio (%) 17.1 17.5
  Total capital ratio (%) 18.8 17.5
       
  Own funds requirements 1,397,133 1,272,850
       
25 The supervisory diamond
(Danish Financial Supervisory Authority limits)
   
       
  Stable funding (funding ratio) (< 1) 0.8 0.8
  Excess liquidity (> 50%) 99,7% 140.7%
  Total large exposures (< 125%) 63,4% 47.8%
  Growth in loans (< 20%) 14,0% 7.8%
  Real estate exposure (< 25%) 14,1% 11.6%
       
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 2015: 4,570,000 shares, 2014: 4,670,000 shares, 2013: 4,780,000 shares, 2012: 4,840,000 shares and 2011: 4,940,000 shares.
 
Impairment charges for loans etc.
  • Impairment charges for loans etc. are listed excl. expenses for bank packages.

 

   

Quarterly overview 

 
(Million DKK)
4th qtr.
2015
3rd qtr.
2015
2nd qtr.
2015
1st qtr.
2015
4th qtr.
2014
3rd qtr.
2014
2nd qtr.
2014
1st qtr.
2014
4th qtr. 2013 3rd qtr. 2013 2nd qtr.
2013
1st qtr.
2013
Net income from interest 163 160 154 161 160 158 159 158 156 155 151 153
Net income from fees and commissions excl.
trade income
55  
45
61 51 60 37 51 45 48 33 55 36
Income from sector shares etc. 8 7 11 10 4 4 2 16 5 3 4 2
Foreign exchange income 5 4 4 3 2 4 4 3 3 3 2 5
Other operating income 2 1 1 1 1 1 1 1 1 1 1 0
Total core income excl. trade income 233  
217
231 226 227 204 217 223 213 195 213 196
Trade income 12 11 13 12 10 7 8 11 7 5 9 6
Total core income 245 228 244 238 237 211 225 234 220 200 222 202
Staff and administration costs 78 65 74 65 79 62 68 62 70 61 66 58
Amortisation, depreciation and write-downs on intangible and tangible assets 4  
1
1 1 7 1 3 1 2 1 0 1
Other operating costs 3 6 4 4 3 4 4 4 4 3 3 4
Total costs etc. 85 72 79 70 89 67 75 67 76 65 69 63
Core earnings before impairments 160  
156
165 168 148 144 150 167 144 135 153 139
Impairment charges for loans and other debtors etc. -16  
-15
-14 -15 -24 -23 -25 -15 -25 -34 -40 -21
Core earnings 144 141 151 153 124 121 125 152 119 101 113 118
Result for portfolio -1 -14 -8 +23 +9 +12 +20 +24 +12 -4 +9 +6
Expenses for bank packages 0 0 0 0 0 0 0 0 0 -1 0 -1
Profit before tax 143 127 143 176 133 133 145 176 131 96 122 123
Tax 31 29 31 39 33 32 36 40 30 23 30 31
Profit after tax 112 98 112 137 100 101 109 136 101 73 92 92


  

Danish Financial Supervisory Authority key figures
for Danish banks

   2015 2014 2013 2012 2011
Capital ratios:            
Total capital ratio % 18.8 17.5 20.0 22.4 21.4
Tier 1 capital ratio % 17.1 17.5 19.2 20.9 19.8
Individual solvency requirement % 9.0 8.9 8.9 8.0 8.0
             
Earnings:            
Return on equity before tax % 18.4 19.6 16.9 17.4 15.9
Return on equity after tax % 14.3 14.9 12.8 12.7 11.9
Income / cost ratio DKK 2.60 2.52 2.19 2.06 1.98
Return on assets % 2.1 2.1 1.8 1.9 1.6
             
Market risk:            
Interest rate risk % 2.2 1.2 0.6 0.6 0.7
Foreign exchange position % 0.8 0.4 1.6 0.6 0.9
Foreign exchange risk % 0.0 0.0 0.0 0.0 0.0
             
Liquidity risk:            
Excess cover relative to statutory liquidity
Requirement
% 99.7 140.7 166.2 185.5 140.5
Loans and impairments thereon relative to deposits % 107.4 106.4 104.1 102.4 105.0
             
Credit risk:            
Loans relative to shareholders’ equity   5.2 5.0 4.8 4.6 5.1
Growth in loans for the year % 14.0 12.0 11.5 -2.5 -3.1
Total large exposures % 63.4 47.8 35.0 27.2 11.8
Cumulative impairment percentage % 4.6 5.0 5.1 5.1 4.5
Impairment percentage for the year % 0.29 0.47 0.72 1.06 0.89
Proportion of debtors at reduced interest % 0.4 0.3 0.5 0.8 0.4
             
Share return:            
Result for the year after tax per share * / *** DKK 1,941.4 1,853.9 1,462.8 1,314.6 1,135.2
Book value per share * / ** DKK 14,428 13,280 12,145 11,049 10,055
Dividend per share * DKK 600 520 500 280 260
Share price relative to profit for the year per share * / ***   15.5 12.4 15.0 11.7 10.2
Share price relative to book value per share * / **   2.08 1.73 1.81 1.39 1.15
 
*        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.

 

 


Attachments

Announcement of the annual accounts 2015.pdf