• Core income for H1 totalled DKK 1,551 million, which is 19% down on H1 2015 – if adjusted for the one-off impact of the sale of Spar Nord’s shareholding in Nørresundby Bank at year-start 2015, this represented a 9% drop.
• Net interest income dropped 9% on H1 2015 – the lending volume grew 3% since the same time last year, but during the past 12 months the interest margin has dropped some 40 basis points.
• Net income from fees, charges and commissions amounted to DKK 518 million in H1, equal to a 9% drop on last year’s exceptionally good H1.
• Market-value adjustments and dividends aggregated DKK 187 million, down 8% compared with H1 last year if figures are adjusted for the sale of the shareholding in Nørresundby Bank.
• In aggregate, costs and expenses totalled DKK 948 million, which is a 2% decrease compared with H1 2015 – payroll costs grew 2%, while other operating expenses fell by 8%.
• The period’s total core earnings before impairment added up to DKK 603 million, which, viewed against the announced full-year forecast of DKK 1.1 billion, are thus satisfactory.
• Impairment of the Group’s loans totalled DKK 133 million, corresponding to an impairment ratio of 0.52% p.a. – the impact on agricultural exposures amounted to DKK 132 million, equal to 99% of the combined profit impact.
Q2: TOP-LINE GROWTH, SUCCESSFUL IT MIGRATION AND CHALLENGES FOR DAIRY PRODUCERS
• Core income was 11% up compared with Q1: Net interest income increased 5% while net income from fees, charges and commissions grew 7% as both activity levels and prices improved satisfactorily, while market-value adjustments and dividends swelled 59%, driven by a variety of positive factors.
• The IT migration from SDC to BEC was successfully completed at the beginning of May after a highly satisfactory process – the previously announced benefits by way of cost savings and stronger development momentum are still expected to be realized.
• The Group’s total costs and expenses hovered around the same level as in Q1 after a decline in operating expenses while payroll costs increased as a result of the recent IT migration.
• Loan impairment rose from DKK 54 million to DKK 79 million driven by increased impairment of dairy producer exposures.
FORECAST AND STRATEGY
• In light of developments in H1, Spar Nord Bank maintains its full-year forecast for core earnings before impairment of around DKK 1.1 billion, while loan impairment losses are now expected to be slightly lower than in 2015.
• In conjunction with the Q1-Q3 quarterly report this year Spar Nord expects to publish a new strategy plan containing targets for the coming years.
Contact: Ole Madsen, Senior Vice President, Communication & Business Development, tel.: +45 9634 4010
