Annual Report 2013 - The Nykredit Realkredit Group

Michael Rasmussen, Group Chief Executive, says in a comment:
"We have started a strategy process, "Nykredit 2015", which is to strengthen Nykredit's competitiveness. Our 1.1 million customers of course lie at the heart of this process. As one of the first initiatives, Nykredit and Totalkredit will start offering one-tier mortgage loans subject to an LTV limit of 80% or secured homeowner loans as a supplement to the existing two-tier mortgage loans. Our flexible loan offering will further develop and strengthen the Totalkredit alliance and will ensure that we provide our various customer groups with the best solutions in the industry.

The Danish economy seems to be recovering, but is affected by a divided housing market, with growth chiefly being concentrated in the cities. Our bank and mortgage lending volumes continue to go up, and the Group's market share of bank and mortgage lending is stable. Nykredit's profit before tax of DKK 1.9bn is at the level we expected at the beginning of the year. Core income has increased by more than 4%, the cost:income ratio is decreasing, and investment portfolio income is high. However, a more conservative assessment of lending to personal and small commercial customers in a few geographical areas of Denmark has raised mortgage loan impairments."

The Nykredit Realkredit Group recorded a profit before tax of DKK 1,914m

• Total core income grew by 4.4% to DKK 9,298m
• Declining cost:income ratio, down from 56.6% to 55.2%
• Loan impairment losses amounted to DKK 2,764m, reflecting a more conservative assessment of lending to personal customers and small commercial customers in a few geographical areas
• Investment portfolio income amounted to DKK 1,887m against exceptionally high income of DKK 2,444m in 2012
• Expanding market share, on the whole and for Totalkredit
  • Bank and mortgage lending up DKK 8bn to DKK 1,167bn
• Nykredit has a strong capital position – the CET1 capital ratio is 15.8%
  • This robust position will be strengthened in coming years, and our capital position will exceed regulatory requirements by a satisfactory margin in 2019, which will sustain Nykredit's high credit ratings.

Current activities

• Going forward, Totalkredit and Nykredit will continue to offer two-tier mortgaging, but will also offer one-tier mortgaging subject to an LTV limit of 80% as well as secured homeowner loans. The new products will be introduced in mid-2014.

 

Contacts

Michael Rasmussen, Group Chief Executive, or Søren Holm, Group Managing Director, tel +45 44 55 14 70 or Corporate Communications, tel +45 23 20 05 60 or +45 26 15 21 27