Interim Report - Q1-Q3 2009
Company Announcement No 12/2009
27 October 2009
Contents
Financial Review
Group Financial Highlights 3
Summary 4
Financial Review 6
Management Statement 10
Financial Statements - Sydbank Group
Income Statement 11
Statement of Comprehensive Income 11
Balance Sheet 12
Financial Highlights - Quarterly 13
Capital 14
Cash Flow Statement 16
Segment Statements 17
Notes 18
Supplementary Information 29
Group Financial Highlights
Q1-Q3 Q1-Q3 Index Full year
2009 2008 09/08 2008
Income statement (DKKm)
Core income excl trading income 2,450 2,236 110 3,066
Trading income 970 858 113 1,159
Total core income 3,420 3,094 111 4,225
Costs and depreciation 1,874 1,867 100 2,484
Core earnings before impairment 1,546 1,227 126 1,741
Impairment of loans and advances etc 849 85 - 544
Core earnings 697 1,142 61 1,197
Profit/(Loss) on investment portfolios 382 (362) - (385)
Profit before non-recurring items 1,079 780 138 812
Non-recurring items, net - 180 - 162
Profit before contribution to the Danish Contingency Committee 1,079 960 112 974
Contribution to the Danish Contingency Committee 327 - - 163
Profit before tax 752 960 78 811
Tax 188 216 87 205
Profit for the period 564 744 76 606
Balance sheet highlights (DKKbn)
Loans and advances at amortised cost 73.9 81.8 90 82.5
Loans and advances at fair value 9.1 10.2 89 13.3
Deposits and other debt 65.3 63.4 103 75.0
Bonds issued at amortised cost 10.1 10.1 100 10.1
Subordinated capital (Tier 2) 3.2 4.2 76 4.2
Shareholders' equity (Tier 1) 8.9 7.2 123 7.1
Total assets 153.4 143.5 107 156.0
Financial ratios per share (DKK per share of DKK 10)
EPS Basic 8.7 11.7 9.5
EPS Diluted 8.7 11.7 9.5
Share price at end of period 133.3 156.3 64.3
Book value 120.8 113.3 112.5
Share price/book value 1.10 1.38 0.57
Average number of shares outstanding (millions) 64.8 63.5 63.4
Other financial ratios and key figures
Solvency (total capital) ratio 14.8 15.5 14.7
Core capital (Tier 1) ratio 12.9 11.2 10.8
Pre-tax profit as % of average shareholders' equity 9.4 13.8 11.8
Post-tax profit as % of average shareholders' equity 7.1 10.7 8.8
Income/cost ratio (DKK) 1.25 1.46 1.24
Interest rate risk 0.4 1.0 1.4
Foreign exchange position 1.4 9.7 11.4
Foreign exchange risk 0.0 0.0 0.0
Loans and advances relative to deposits * 1.0 1.2 1.0
Loans and advances relative to shareholders' equity * 8.4 11.4 11.6
Growth in loans and advances during the period * (10.4) 9.8 10.7
Excess cover relative to statutory liquidity requirements 93.8 56.2 89.4
Total large exposures 20.1 53.3 23.8
Accumulated impairment ratio 1.5 0.9 1.0
Impairment ratio for the period 1.04 0.08 0.60
Number of full-time staff at end of period 2,385 2,487 96 2,479
Financial ratios are prepared according to “Recommendations & Financial Ratios
2005” published by the Danish Society of Financial Analysts.
* Financial ratios calculated on the basis of loans and advances at amortised
cost.
Summary
Considering the difficult economic situation, pre-tax profit of DKK 752m for
the first nine months of 2009 is considered satisfactory. Pre-tax profit equals
a return of 12.6% p.a. on average shareholders' equity (Tier 1).
The Interim Report is characterised by:
• 10% increase in core income excl trading income
• 13% rise in trading income
• Total core income of DKK 3,420m - an all-time high so far
• Unchanged level of costs (core earnings)
• Impairment of loans and advances of DKK 849m
• Profit on investment portfolios of DKK 382m
• Contribution of DKK 327m to the Danish Contingency Committee
• 10% reduction in bank loans and advances to DKK 73.9bn
• 13% decline in deposits to DKK 65.3bn
• 25% increase in shareholders' equity (Tier 1)
• Core capital (Tier 1) ratio of 12.9%
• Solvency (total capital) ratio of 14.8%.
Income statement - Q1-Q3 (DKKm) 2009 2008
Core income excl trading income 2,450 2,236
Trading income 970 858
Total core income 3,420 3,094
Costs and depreciation 1,874 1,867
Core earnings before impairment 1,546 1,227
Impairment of loans and advances etc 849 85
Core earnings 697 1,142
Profit/(Loss) on investment portfolios 382 (362)
Profit before non-recurring items 1,079 780
Non-recurring items, net - 180
Profit before contribution to the Danish Contingency Committee 1,079 960
Contribution to the Danish Contingency Committee 327 -
Profit before tax 752 960
Tax 188 216
Profit for the period 564 744
Core earnings before impairment represent DKK 1,546m against DKK 1,227m for the
first nine months of 2008. The improvement of DKK 319m consists of a rise in
core income excl trading income of DKK 214m, an increase in trading income of
DKK 112m and a DKK 7m growth in costs (core earnings).
Core earnings before impairment are in the upper end of the range as announced
in the Interim Report for 1H 2009.
Impairment of loans and advances and amounts owed represents DKK 849m (Q1-Q3
2008: DKK 85m).
Profit on investment portfolios amounts to DKK 382m and the expense to the
Danish Contingency Committee totals DKK 327m. Less a calculated tax charge of
DKK 188m, profit for the period stands at DKK 564m.
Profit for the period equals a return of 9.4% p.a. on average shareholders'
equity (Tier 1). Earnings per share stands at DKK 8.7 compared with DKK 11.7 in
2008.
In June and September 2009, the Group prepaid supplementary capital (Tier 2)
representing EUR 140m. Subordinated capital (Tier 2) totals DKK 3,175m at
end-September 2009. The Group's core capital (Tier 1) ratio has risen to 12.9%
due to a successful share issue, a reduction in the portfolio of own shares and
a core capital strengthened via income. The solvency (total capital) ratio
stands at 14.8%.
The Group's liquidity measured under the 15% and 10% statutory requirements
constitutes 31.9% and 19.4%, respectively, at 30 September 2009.
The Group projects core earnings before impairment of loans and advances in the
region of DKK 1,900-2,100m in 2009. The estimate represents a positive change
in level compared with previous announcements of DKK 1,800-2,000m.
Financial Review
Core income excl trading income
Total core income excl trading income grew by 10% to DKK 2,450m.
Core income excl trading income - Q1-Q3 (DKKm) 2009 2008
Interest margins etc 2,058 1,880
Mortgage credit 166 131
Payment services 108 105
Remortgaging and loan fees 61 54
Other commission 41 47
Other operating income 16 19
Total 2,450 2,236
Despite a 10% decline in bank loans and advances, income from interest margins
etc continues to show significant robustness with an increase of DKK 178m to
DKK 2,058m, a 9% rise.
The remaining income components of core income excl trading income have gone up
by a total of 10% compared with Q1-Q3 2008.
Trading income
Total trading income rose by 13% - from DKK 858m in 2008 to DKK 970m in 2009.
The level of activity within Sydbank Markets, made up as the number of customer
transactions, is in line with or above that of Q1-Q3 2008.
Bond trading within the Group has benefited from a considerable increase in
business volume with institutional clients. The Group's income from asset
management is affected by reductions in volume triggered by the markets.
Trading income - Q1-Q3 (DKKm) 2009 2008
Bonds 243 88
Shares 192 160
Foreign exchange 185 217
Money market 138 81
Asset management 212 312
Total 970 858
Costs and depreciation
The Group's total costs and depreciation recorded DKK 2,082m against DKK 1,998m
in 2008. In 2009 DKK 200m can be ascribed to guarantee commission to the Danish
Contingency Committee and in 2008 DKK 124m can be ascribed to the integration
of bankTrelleborg.
Costs and depreciation - Q1-Q3 (DKKm)
2009 2008
Staff costs 1,099 1,087
Other administrative expenses 698 794
Depreciation and impairment of property, plant and equipment 85 117
Other operating expenses 200 1
Total costs and depreciation 2,082 1,998
Distributed as follows:
Costs, core earnings 1,874 1,867
Costs, investment portfolio earnings 8 7
Costs, integration of bankTrelleborg - 124
Costs, guarantee commission to the Danish Contingency Committee 200 -
Costs (core earnings) in 2009 are virtually unchanged compared with one year
ago. At end-Q3 2009 the Group's staff numbered 2,385 (full-time equivalent)
compared with 2,487 at 30 September 2008.
Core earnings before impairment of loans and advances
Core earnings before impairment of loans and advances represent DKK 1,546m - an
increase of DKK 319m or 26% compared with one year ago.
Impairment of loans and advances etc
Impairment of loans and advances constitutes DKK 849m (2008: DKK 85m). Relative
to loans and advances and guarantees made up at 30 September 2009, the
impairment ratio stands at 1.04%. At end-September accumulated impairment and
provisions (excl the provision of DKK 175m for the Danish Contingency
Committee) amount to DKK 1,230m, a rise of DKK 171m compared with the beginning
of the year.
Core earnings
Core earnings represent DKK 697m compared with DKK 1,142m in 2008.
Investment portfolio earnings
Less funding charges and less related costs of DKK 8m, investment portfolios
generated a profit of DKK 382m (2008: loss of DKK 362m). The overall result is
adversely affected by an unrealised capital loss of DKK 26m on the Group's
portfolio of CDOs. The market value of the CDO portfolio represents DKK 45m as
of 30 September 2009.
The Group's interest rate risk comprises DKK 34m at 30 September. The Group's
exchange rate risk continues to be very low and its equity position is modest.
Contribution to the Danish Contingency Committee
In Q1-Q3 2009, guarantee commission and the provision for the guarantee to the
Danish Contingency Committee amount to DKK 200m and DKK 127m, respectively,
totalling DKK 327m.
Subsidiaries
The subsidiary bank, Sydbank (Schweiz) AG, which conducts private banking
activities in St. Gallen, Switzerland, recorded a loss after tax of DKK 7m
(2008: loss of DKK 4m). Ejendomsselskabet recorded a loss after tax of DKK 1m
(2008: loss of DKK 2m).
Profit for the period
Pre-tax profit amounts to DKK 752m. Less a calculated tax charge of DKK 188m,
profit for the period stands at DKK 564m compared with DKK 744m in 2008.
Return
Return on shareholders' equity (Tier 1) represents 9.4% p.a. against 14.3% p.a.
in 2008. Earnings per share decreased from DKK 11.7 to DKK 8.7.
Developments in Q3 2009
Total core income decreased by DKK 50m in Q3 compared with Q2. DKK 10m can be
ascribed to core income excl trading income and DKK 40m can be attributed to
trading income.
Costs decreased by DKK 43m compared with Q2, owing to a recurring seasonal
adjustment.
During the same period, impairment of loans and advances etc went down by DKK
11m, and investment portfolio earnings improved from DKK 139m in Q2 to DKK 171m
in Q3.
The contribution to the Danish Contingency Committee decreased by DKK 29m in Q3
from DKK 142m in Q2. After tax, profit for Q3 amounts to DKK 245m compared with
DKK 195m in Q2.
Balance sheet
The Group's total assets made up DKK 153.4bn at 30 September 2009 against DKK
156.0bn at year-end 2008.
Assets (DKKbn) 30 Sep 2009 31 Dec 2008
Amounts owed by credit institutions etc 14.5 12.9
Loans and advances at fair value (reverse repo transactions) 9.1 13.3
Loans and advances at amortised cost (bank loans and advances) 73.9 82.5
Securities and holdings etc 38.2 28.3
Assets related to pooled plans 6.4 5.8
Other assets etc 11.3 13.2
Total 153.4 156.0
The Group's bank loans and advances total DKK 73.9bn - a decline of 10%
compared with year-end 2008 and 30 September 2008.
Shareholders' equity and liabilities (DKKbn) 30 Sep 2009 31 Dec 2008
Amounts owed to credit institutions etc 45.1 38.9
Deposits and other debt 65.3 75.0
Deposits in pooled plans 6.4 5.8
Bonds issued 10.1 10.1
Other liabilities etc 14.2 14.8
Provisions 0.2 0.1
Subordinated capital (Tier 2) 3.2 4.2
Shareholders' equity (Tier 1) 8.9 7.1
Total 153.4 156.0
The Group's deposits make up DKK 65.3bn against DKK 75.0bn at year-end 2008 and
DKK 63.4bn at end-September 2008. The decline in deposits in 2009 is solely
ascribable to time deposits.
Capital
In June and September 2009, the Group prepaid supplementary capital (Tier 2) of
EUR 100m and EUR 40m, respectively. Subordinated capital (Tier 2) totals DKK
3,175m.
On 29 October 2009 a further DKK 50m in supplementary capital will be repaid.
At end-Q3 2009, shareholders' equity (Tier 1) constitutes DKK 8,853m - an
increase of DKK 1,765m equal to 25% since year-end 2008. The change comprises
additions concerning the share issue in September of net DKK 855m, net sale of
own shares of DKK 408m, profit for the period of DKK 564m and less tax
concerning equity items of DKK 62m.
In 2009, the core capital (Tier 1) ratio has grown from 10.8% to 12.9%. During
the same period, the core capital (Tier 1) ratio excluding hybrid core capital
has risen from 9.3% to 11.5%.
At end-Q3 2009, the solvency (total capital) ratio stands at 14.8% compared
with 14.7% at year-end 2008.
Outlook for 2009
The Group projects core earnings before impairment of loans and advances in the
region of DKK 1,900-2,100m in 2009. The estimate represents a positive change
in level compared with previous announcements of DKK 1,800-2,000m.
The Danish Contingency Committee
Guarantee commission to the Danish Contingency Committee will represent DKK 70m
in Q4 2009. To this must be added the Bank's share of the Committee's payment
to cover any further loss of the Winding-Up Company - ranging from the loss of
DKK 4.6bn so far up to DKK 10.0bn. Sydbank's share of this risk constitutes DKK
202m.
Management Statement
Today we have reviewed and approved the Interim Report - Q1-Q3 2009 of Sydbank
A/S.
The consolidated interim financial statements for Q1-Q3 2009 have been prepared
in accordance with the International Financial Reporting Standards as approved
by the EU. Furthermore, the Interim Report has been prepared in compliance with
additional Danish disclosure requirements for interim reports of listed
financial companies. The Interim Report has not been audited or reviewed.
We consider the accounting policies applied to be appropriate and the Interim
Report gives a true and fair view of the Group's assets, shareholders' equity
and liabilities and financial position at 30 September 2009 and of the results
of the Group's operations and consolidated cash flows for the accounting period
1 January - 30 September 2009 as well as a description of the most significant
risks and elements of uncertainty which may affect the Group.
Aabenraa, 27 October 2009
Group Executive Management
Carsten Andersen Karen Frøsig
(Group Chief Executive)
Preben L. Hansen Allan Nørholm
Board of Directors
Kresten Philipsen Anders Thoustrup Svend Erik Busk
(Chairman) (Vice-Chairman)
Otto Christensen Peder Damgaard Harry Max Friedrichsen
Peter Gæmelke Hanni Toosbuy Kasprzak Per Olesen
Sven Rosenmeyer Paulsen Jan Uldahl-Jensen Margrethe Weber
Income Statement - Sydbank Group
Q1-Q3 Q1-Q3 Q3 Q3
DKKm Note 2009 2008 2009 2008
Interest income 2 4,543 5,391 1,281 1,929
Interest expense 3 1,982 3,391 413 1,225
Net interest income 2,561 2,000 868 704
Dividends on shares 32 25 1 3
Fee and commission income 4 808 971 279 298
Fee and commission expense 120 122 38 39
Net interest and fee income 3,281 2,874 1,110 966
Market value adjustments 5 494 17 198 (167)
Other operating income 6 16 138 5 7
Staff costs and administrative expenses 7 1,797 1,881 561 567
Depreciation and impairment of property, plant and equipment 85 117 28 42
Other operating expenses 200 0 71 0
Impairment of loans and advances etc 9 976 85 327 98
Profit on holdings in associates and
subsidiaries 10 19 14 0 3
Profit on assets temporarily acquired 0 0 0 0
Profit before tax 752 960 326 102
Tax 11 188 216 82 26
Profit for the period 564 744 244 76
EPS Basic for the period (DKK) * 8.7 11.7 3.7 1.2
EPS Diluted for the period (DKK) * 8.7 11.7 3.7 1.2
Dividend per share (DKK) - - - -
* Based on average number of shares outstanding, see page 14.
Statement of Comprehensive Income - Sydbank Group
Profit for the period 564 744 244 76
Other comprehensive income:
Translation of foreign entities 2 11 (2) 4
Hedge of net investment in foreign entities (2) (11) 2 (4)
Other comprehensive income after tax 0 0 0 0
Comprehensive income after tax 564 744 244 76
Balance Sheet - Sydbank Group
30 Sep 31 Dec 30 Sep
DKKm Note 2009 2008 2008
Assets
Cash and balances on demand at central banks 687 752 763
Amounts owed by credit institutions and central banks 12 13,865 12,165 13,513
Loans and advances at fair value 9,058 13,282 10,241
Loans and advances at amortised cost 73,941 82,476 81,798
Bonds at fair value 36,673 26,749 21,235
Shares etc 1,196 1,315 1,107
Holdings in associates etc 307 232 203
Assets related to pooled plans 6,364 5,777 6,131
Intangible assets 14 15 15
Total land and buildings 1,024 1,009 969
investment property 8 8 9
owner-occupied property 1,016 1,001 960
Other property, plant and equipment 128 158 111
Current tax assets 54 186 49
Deferred tax assets 10 10 24
Assets in temporary possession - 5 4
Other assets 13 10,002 11,796 7,276
Prepayments 55 48 61
Total assets 153,378 155,975 143,500
Shareholders' equity and liabilities
Amounts owed to credit institutions and central banks 14 45,097 38,889 39,844
Deposits and other debt 15 65,281 75,007 63,406
Deposits in pooled plans 6,364 5,777 6,131
Bonds issued at amortised cost 10,090 10,096 10,085
Current tax liabilities 10 13 7
Other liabilities 16 14,256 14,764 12,395
Deferred income 6 19 97
Total liabilities 141,104 144,565 131,965
Provisions 17 246 103 124
Subordinated capital (Tier 2) 18 3,175 4,219 4,224
Shareholders' equity (Tier 1):
Share capital 742 675 675
Revaluation reserves 90 91 91
Other reserves:
Reserves according to articles of association 411 411 399
Reserve for net revaluation according to the equity method 20 20 11
Retained earnings 7,590 5,891 6,011
Total shareholders' equity (Tier 1) 8,853 7,088 7,187
Total shareholders' equity and liabilities 153,378 155,975 143,500
Group Financial Highlights - Quarterly
Q3 Q2 Q1 Q4 Q3 Q2 Q1
2009 2009 2009 2008 2008 2008 2008
Income statement (DKKm)
Core income excl trading income 809 819 822 830 754 778 704
Trading income 329 369 272 301 223 320 315
Total core income 1,138 1,188 1,094 1,131 977 1,098 1,019
Costs and depreciation 586 629 659 617 591 617 659
Core earnings before impairment 552 559 435 514 386 481 360
Impairment of loans and advances etc 284 295 270 459 98 6 (19)
Core earnings 268 264 165 55 288 475 379
Profit/(Loss) on investment portfolios 171 139 72 (23) (170) (137) (55)
Profit before non-recurring items 439 403 237 32 118 338 324
Non-recurring items, net - - - (18) (16) (2) 198
Profit before contribution to the Danish Contingency
Committee 439 403 237 14 102 336 522
Contribution to the Danish Contingency Committee 113 142 72 163 - - -
Profit before tax 326 261 165 (149) 102 336 522
Tax 81 66 41 (11) 26 89 101
Profit for the period 245 195 124 (138) 76 247 421
Balance sheet highlights (DKKbn)
Loans and advances at amortised cost 73.9 75.6 78.2 82.5 81.8 82.5 81.3
Loans and advances at fair value 9.1 12.9 15.8 13.3 10.2 11.5 8.0
Deposits and other debt 65.3 71.6 73.5 75.0 63.4 67.6 70.1
Bonds issued at amortised cost 10.1 10.1 10.1 10.1 10.1 10.1 10.1
Subordinated capital (Tier 2) 3.2 3.5 4.2 4.2 4.2 4.2 4.2
Shareholders' equity (Tier 1) 8.9 7.5 7.2 7.1 7.2 7.1 6.8
Total assets 153.4 160.1 161.4 156.0 143.5 149.8 141.1
Financial ratios per share (DKK per share of DKK 10)
EPS Basic 3.7 3.0 2.0 (2.2) 1.2 3.9 6.6
EPS Diluted 3.7 3.0 2.0 (2.2) 1.2 3.9 6.6
Share price at end of period 133.3 122.5 71.5 64.3 156.3 180.5 171.8
Book value 120.8 116.2 114.0 112.5 113.3 112.0 107.5
Share price/book value 1.10 1.05 0.63 0.57 1.38 1.61 1.60
Average number of shares outstanding
(millions) 67.0 64.3 63.0 63.2 63.7 63.5 63.4
Other financial ratios and key figures
Solvency (total capital) ratio 14.8 13.8 15.0 14.7 15.5 14.8 14.3
Core capital (Tier 1) ratio 12.9 11.4 11.3 10.8 11.2 10.7 10.1
Pre-tax profit as % of average equity 4.0 3.5 2.3 (2.1) 1.4 4.8 7.7
Post-tax profit as % of average equity 3.0 2.7 1.7 (1.9) 1.1 3.5 6.2
Income/cost ratio (DKK) 1.33 1.24 1.16 0.88 1.14 1.53 1.70
Interest rate risk 0.4 2.2 2.3 1.4 1.0 3.0 2.4
Foreign exchange position 1.4 3.4 1.5 11.4 9.7 12.9 5.6
Foreign exchange risk 0.0 0.1 0.0 0.0 0.0 0.0 0.0
Loans and advances relative to deposits * 1.0 1.0 1.0 1.0 1.2 1.1 1.1
Loans and advances relative to equity * 8,4 10,1 10,8 11,6 11,4 11,6 12,0
Growth in loans and advances during the period
* (2.2) (3.3) (5.2) 0.8 (0.9) 1.5 9.2
Excess cover relative to statutory liquidity req.
93.8 106.8 66.6 89.4 56.2 69.7 78.5
Total large exposures 20.1 34.6 21.4 23.8 53.3 39.5 44.7
Accumulated impairment ratio 1.5 1.3 1.3 1.0 0.9 0.8 0.9
Impairment ratio for the period 0.35 0.37 0.27 0.50 0.10 0.01 (0.02)
Number of full-time staff at end of
period 2,385 2,414 2,429 2,479 2,487 2,457 2,469
Financial ratios are prepared according to “Recommendations & Financial Ratios
2005” published by the Danish Society of Financial Analysts.
* Financial ratios calculated on the basis of loans and advances at amortised
cost.
Capital - Sydbank Group
Reserve for
Reserves net
according to revaluation
Share Revaluation articles of acc.to equity Retained Proposed
DKKm capital reserves association method earnings dividend etc Total
Shareholders' equity at 1 Jan 2009 675 91 411 20 5,891 - 7,088
Changes in equity in 2009:
Purchase of own shares - - - - (2,223) - (2,223)
Sale of own shares - - - - 2,631 - 2,631
Share issue * 67 - - - 788 - 855
Adjustment concerning property sold - (1) - - 1 - -
Tax on equity items - - - - (62) - (62)
Comprehensive income for the period - - - - 564 - 564
Total changes in equity 67 (1) - - 1,699 - 1,765
Shareholders' equity at 30 Sep 2009 742 90 411 20 7,590 - 8,853
Shareholders' equity at 1 Jan 2008 675 91 399 11 5,298 223 6,697
Changes in equity in 2008:
Purchase of own shares - - - - (2,322) - (2,322)
Sale of own shares - - - - 2,193 - 2,193
Adjusted purchase price bankTrelleborg - - - - (5) - (5)
Employee shares - - - - 18 - 18
Adopted dividend etc - - - - - (223) (223)
Tax on equity items - - - - 69 - 69
Dividends, own shares - - - - 16 - 16
Comprehensive income for the period - - - - 744 - 744
Total changes in equity - - - - 713 (223) 490
Shareholders' equity at 30 Sep 2008 675 91 399 11 6,011 - 7,187
* Shares issued in connection with capital increase
of Sydbank A/S of DKK 67,499,990 nominal
(6,749,999 shares of DKK 10 nominal).
30 Sep 31 Dec 30 Sep
2009 2008 2008
The Sydbank share
Share capital (DKK) 742,499,990 675,000,000 675,000,000
Number of shares issued (number) 74,249,999 67,500,000 67,500,000
Shares outstanding at end of period (number) 73,295,694 63,011,999 63,449,489
Average number of shares outstanding (number) 64,771,336 63,446,971 63,532,166
Capital - Sydbank Group
30 Sep Full year 30 Sep
DKKm 2009 2008 2008
Solvency:
Shareholders' equity (Tier 1) 8,853 7,088 7,187
Revaluation reserves (90) (91) (91)
Proposed dividend - -
-
Intangible assets and capitalised tax assets (24) (26) (39)
Core capital (excl hybrid core capital) 8,739 6,971 7,057
Hybrid core capital 1,388 1,230 1,246
50% of holdings > 10% (106) (98) (100)
50% of total holdings etc > 10% - (34) -
50% of difference between expected losses and
accounting value adjustments and accounting provisions (187) -
-
Core capital 9,834 8,069 8,203
Subordinated loan capital (Tier 2) 1,794 2,839 2,843
Revaluation reserves 90 91 91
Hybrid core capital - 158 145
Difference between expected losses and impairment charges -
26 259
Capital base before deductions 11,718 11,183 11,541
50% of holdings > 10% (106) (98) (100)
50% of total holdings etc > 10% - (34)
-
50% of difference between expected losses and
accounting value adjustments and accounting provisions (187)
- -
Holdings in associates (125) (62) (59)
Capital base (Tiers 1+2) after deductions 11,300 10,989 11,382
Credit risk 62,608 60,616 59,303
Market risk 7,113 7,261 7,423
Operational risk 6,537 6,731 6,731
Risk-weighted items 76,258 74,608 73,457
Capital requirement under Pillar I 6,101 5,968 5,877
Pillar II and transitional rules (18) 711 1,147
Capital requirement 6,083 6,679 7,024
Core capital (Tier 1) ratio (excl hybrid core capital) 11.5 9.3 9.6
Core capital (Tier 1) ratio 12.9 10.8 11.2
Solvency (total capital) ratio 14.8 14.7 15.5
Cash Flow Statement - Sydbank Group
Q1-Q3 Full year Q1-Q3
DKKm 2009 2008 2008
Operating activities:
Pre-tax profit for the period 752 811 960
Taxes paid (103) (128) (88)
Adjustment of non-cash operating items 1,185 731 126
Cash flows from working capital (2,075) (85) (111)
Cash flows from operating activities (241) 1,329 887
Investing activities:
Purchase and sale of holdings in associates (57) (22) 12
Purchase and sale of intangible assets - (16) (15)
Purchase and sale of property, plant and equipment (69) (370) (229)
Cash flows from investing activities (126) (408) (232)
Financing activities:
Purchase and sale of own holdings 347 8 (32)
Dividend - (223) (223)
Share issue 855 - -
Raising of subordinated capital (Tier 2) (1,044) 390 396
Issue of bonds (6) 20 9
Cash flows from financing activities 152 195 150
Cash flows for the period (215) 1,116 805
Cash equivalent positions at 1 Jan 6,200 5,084 5,084
Cash flows for the period (changes during the period) (215) 1,116 805
Cash equivalent positions at end of period 5,985 6,200 5,889
Segment Statements - Sydbank Group
DKKm Banking Markets Treasury Other Total
Business segments Q1-Q3 2009:
Core income excl trading income 2,506 (56) - - 2,450
Trading income 465 505 - - 970
Core income 2,971 449 - - 3,420
Costs and depreciation 1,613 222 8 39 1,882
Impairment of loans and advances etc 846 3 - - 849
Core earnings 512 224 (8) (39) 689
Investment portfolio income - - 388 2 390
Profit before non-recurring items 512 224 380 (37) 1,079
Non-recurring items, net - - - - -
Profit before contribution to the Danish Contingency
Committee 512 224 380 (37) 1,079
Contribution to the Danish Contingency Committee - - - 327 327
Profit for the period 512 224 380 (364) 752
Notes - Sydbank Group
DKKm
Note 1
Accounting policies:
The Interim Report has been prepared in accordance with IAS 34 “Interim
Financial Reporting” as approved by the EU and in compliance with additional
Danish disclosure requirements for interim reports. As a result of the use of
IAS 34, the presentation is less complete compared with the presentation of an
annual report and the measurement principles are in compliance with IFRS.
With the exception of the below, the accounting policies are consistent with
those adopted in the 2008 Annual Report, to which reference is made.
The 2008 Annual Report provides a comprehensive description of the accounting
policies applied.
As from 1 January 2009, the Group has implemented IAS 1 (Revised 2007)
“Presentation of Financial Statements”, IAS 23 (Revised 2007) “Borrowing
Costs”, and IFRS 8 “Operating Segments”.
The implementation of the new reporting standards has not had any impact on
recognition or measurement. IAS 1 and IFRS 8 have resulted in changes only in
the notes and format. Any comparative figures in the notes have been restated.
IAS 1 has changed the presentation of the primary statements. The Group has
decided to present two statements: an income statement and a statement of
comprehensive income which shows profit for the period and the elements of
other comprehensive income.
The measurement of certain assets and liabilities requires managerial estimates
as to how future events will affect the value of such assets and liabilities.
The significant estimates made by the management in the use of the Group's
accounting policies and the inherent considerable uncertainty of such estimates
used in the preparation of the condensed interim report are identical to those
used in the preparation of the annual report as at 31 December 2008.
The Group's significant risks and the external elements which may affect the
Group are described in detail in the 2008 Annual Report.
Notes - Sydbank Group
Q1-Q3 Q1-Q3 Q3 Q3
DKKm 2009 2008 2009 2008
Note 2
Interest income/forward premium of:
Amounts owed by credit institutions and central banks 187 492 45 168
Loans and advances and other amounts owed 3,231 4,003 928 1,405
Bonds 953 507 299 214
Total derivatives 163 364 5 128
comprising
Foreign exchange contracts 244 376 58 124
Interest rate contracts (83) (12) (53) 4
Other contracts 2 - 0 -
Other interest income 9 25 4 14
Total 4,543 5,391 1,281 1,929
Of which income from genuine purchase
and resale transactions stated under:
Amounts owed by credit institutions and central banks 41 226 13 74
Loans and advances and other amounts owed 273 317 45 126
Note 3
Interest expense to:
Credit institutions and central banks 559 875 118 362
Deposits and other debt 1,168 1,971 241 670
Bonds issued 161 369 32 130
Subordinated capital (Tier 2) 93 171 21 60
Other interest expense 1 5 1 3
Total 1,982 3,391 413 1,225
Of which expense to genuine sale
and repurchase transactions stated under:
Amounts owed to credit institutions and central banks 4 39 (9) 19
Deposits and other debt 6 13 0 5
Notes - Sydbank Group
Q1-Q3 Q1-Q3 Q3 Q3
DKKm 2009 2008 2009 2008
Note 4
Fee and commission income:
Securities trading and custody accounts 433 589 154 173
Payment services 120 126 42 43
Loan fees 61 53 22 18
Guarantee commission 67 86 24 31
Other fees and commission 127 117 37 33
Total 808 971 279 298
Note 5
Market value adjustments:
Other loans and advances and amounts owed at fair value (5) (2) (3) 1
Bonds 334 (338) 136 62
Shares etc 110 11 69 6
Investment property 0 - 0 -
Foreign exchange 198 179 65 61
Total derivatives (142) 166 (69) (298)
Assets related to pooled plans 653 (824) 378 (258)
Deposits in pooled plans (653) 824 (378) 258
Other assets/liabilities (1) 1 0 1
Total 494 17 198 (167)
Trading portfolio 464 (24) 183 (173)
Equity investments 30 41 15 6
Total 494 17 198 (167)
Note 6
Other operating income:
Negative goodwill - 119 - -
Rental income - real property 9 8 3 3
Other operating income 7 11 2 4
Total 16 138 5 7
Notes - Sydbank Group
Q1-Q3 Q1-Q3 Q3 Q3
DKKm 2009 2008 2009 2008
Note 7
Staff costs and administrative expenses:
Salaries and emoluments to:
Group Executive Management:
Salaries 8 14 3 3
Pensions 1 1 0 0
Board of Directors 3 2 1 1
Shareholders' Committee 1 1 0 0
Total 13 18 4 4
Staff costs:
Wages and salaries 898 885 281 280
Pensions 107 93 37 33
Social security contributions 6 5 4 3
Payroll tax etc 75 86 20 28
Total 1,086 1,069 342 344
Other administrative expenses:
IT (including withdrawal and conversion in 2008) 364 444 112 124
Rent etc 100 112 35 37
Marketing and entertainment expenses 50 63 14 20
Other expenses 184 175 54 38
Total 698 794 215 219
Total 1,797 1,881 561 567
Note 8
Staff:
Average number of staff (full-time equivalent) 2,471 2,494 2,445 2,527
Notes - Sydbank Group
Q1-Q3 Q1-Q3 Q3 Q3
DKKm 2009 2008 2009 2008
Note 9
Impairment of loans and advances recognised in the income statement:
Impairment and provisions 621 51 191 47
Write-offs 376 71 144 56
Recovered from debt previously written off 21 37 8 5
Impairment of loans and advances etc 976 85 327 98
Impairment and provisions at end of period:
Individual impairment and provisions 1,209 723 1,209 723
Collective impairment and provisions 196 188 196 188
Impairment and provisions at end of period 1,405 911 1,405 911
Individual impairment of loans and advances and provisions for guarantees:
Impairment and provisions at 1 Jan 954 738 1,136 696
Exchange rate adjustment 0 2 1 0
Impairment and provisions during the period 597 512 186 182
Other movements 0 (455) 0 (137)
Write-offs covered by impairment and provisions 342 74 114 18
Impairment and provisions at end of period 1,209 723 1,209 723
Individual impairment of loans and advances 1,016 699 1,016 699
Individual provisions for guarantees 193 24 193 24
Impairment and provisions at end of period 1,209 723 1,209 723
Collective impairment of loans and advances and provisions for guarantees:
Impairment and provisions at 1 Jan 152 157 194 173
Impairment and provisions during the period 44 31 2 15
Impairment and provisions at end of period 196 188 196 188
Sum of loans and advances and amounts owed
subject to collective impairment and provisions 22,589 18,761 22,589 18,761
Collective impairment and provisions 196 188 196 188
Loans and advances and amounts owed after collective impairment and
provisions 22,393 18,573 22,393 18,573
Individual impairment of loans and advances subject to objective evidence of
impairment:
Balance before impairment of individually assessed loans and
advances 2,116 1,400 2,116 1,400
Impairment of individually assessed loans and advances 1,016 699 1,016 699
Balance after impairment of individually assessed loans and
advances 1,100 701 1,100 701
Notes - Sydbank Group
Q1-Q3 Q1-Q3 Q3 Q3
DKKm 2009 2008 2009 2008
Note 10
Profit on holdings in associates and
subsidiaries:
Profit on holdings in associates etc 19 14 0 3
Total 19 14 0 3
Note 11
Effective tax rate:
Current tax rate of the Sydbank Group 25.0 25.0 25.0 25.0
Adjustment of deferred tax due to changed corporation tax rate - - - -
Permanent differences - (3.1) - -
Adjustment of tax of previous years 0.1 0.6 0.1 -
Total 25.1 22.5 25.1 25.0
30 Sep 31 Dec 30 Sep
DKKm 2009 2008 2008
Note 12
Amounts owed by credit institutions and central banks:
Amounts owed at notice by central banks 560 340 837
Amounts owed by credit institutions 13,305 11,825 12,676
Total 13,865 12,165 13,513
Note 13
Other assets:
Positive market value of derivatives etc 8,905 10,574 6,003
Sundry debtors 334 265 626
Interest and commission receivable 761 957 647
Other assets 2 0 0
Total 10,002 11,796 7,276
Note 14
Amounts owed to credit institutions and central banks:
Amounts owed to central banks 20,668 17,570 17,987
Amounts owed to credit institutions 24,429 21,319 21,857
Total 45,097 38,889 39,844
Notes - Sydbank Group
30 Sep 31 Dec 30 Sep
DKKm 2009 2008 2008
Note 15
Deposits and other debt:
On demand 38,961 37,843 38,275
At notice 732 727 748
Time deposits 19,987 30,784 19,477
Special categories of deposits 5,601 5,653 4,906
Total 65,281 75,007 63,406
Note 16
Other liabilities:
Negative market value of derivatives etc 8,205 8,833 4,660
Sundry creditors 5,562 5,286 6,710
Interest and commission etc 489 629 1,025
Other liabilities 0 16 0
Total 14,256 14,764 12,395
Note 17
Provisions:
Provisions for pensions and similar obligations 4 4 4
Provisions for deferred tax 25 24 71
Provisions for guarantees 193 66 39
Other provisions 24 9 10
Total 246 103 124
Notes - Sydbank Group
30 Sep 31 Dec 30 Sep
DKKm 2009 2008 2008
Note 18
Subordinated capital (Tier 2):
Interest rate Nominal (m) Maturity
Floating Bond loan EUR 100 29.06.12 - 745 745
Floating Bond loan EUR 40 17.09.12 - 298 298
Floating Bond loan DKK 50 29.10.12 50 50 50
Floating Bond loan EUR 100 21.10.13 744 745 745
Floating Bond loan DKK 200 14.11.14 200 200 200
Floating Bond loan EUR 100 04.04.15 744 744 746
Floating Bond loan EUR 8 31.10.15 55 55 56
Total supplementary capital 1,793 2,837 2,840
Floating Bond loan EUR 100 Perpetual 738 738 739
Floating Bond loan EUR 75 Perpetual 559 559 560
Floating Bond loan DKK 85 Perpetual 85 85 85
Total hybrid core capital 1,382 1,382 1,384
Total 3,175 4,219 4,224
Note 19
Contingent liabilities and other obligating agreements:
Contingent liabilities:
Financial guarantees 2,668 3,050 4,310
Mortgage finance guarantees 1,363 979 926
Registration and remortgaging guarantees 3,824 3,239 2,757
Loss guarantee/guarantee, the Danish Contingency Committee 576 871 -
Other contingent liabilities 1,358 1,436 1,679
Total 9,789 9,575 9,672
Other obligating agreements:
Irrevocable credit commitments 10 5 163
Other liabilities 55 74 79
Total 65 79 242
Notes - Sydbank Group
DKKm
Note 19 - continued
A group of minority shareholders (“Foreningen af Minoritetsaktionærer i
bankTrelleborg”) has filed a class action regarding the legality of the
compulsory redemption against Fonden for bankTrelleborg, Sydbank and the Danish
Financial Supervisory Authority.
In continuation of the transfer of the shares in bankTrelleborg to Sydbank, the
shares were priced by appraisers in accordance with section 144 (4) of the
Danish Financial Business Act. A few shareholders have brought the findings of
the appraisers before the courts.
Moreover, in Q2 2009 the group of minority shareholders (“Foreningen af
Minoritetsaktionærer i bankTrelleborg”) filed an action against Sydbank
regarding an inadequate prospectus in connection with the conversion of
sparTrelleborg to bankTrelleborg.
Finally, the Group is party to a number of legal actions.
These legal actions are under continuous review and the necessary provisions
made are based on an assessment of the risk of loss. Pending legal actions are
not expected to have any significant impact on the financial position of the
Group.
Sydbank and the majority of Danish banks participate in the government
guarantee scheme which was adopted by the Danish parliament on 10 October 2008.
The scheme extends from 5 October 2008 to 30 September 2010 and involves an
unconditional government guarantee for the obligations of Danish banks, except
for subordinated capital and covered bonds.
Note 20
Collateral:
As of 30 September 2009 the Group had deposited securities at a market value of
DKK 21,910m with Danish and foreign exchanges and clearing centres etc in
connection with margin calls and securities settlements etc.
Note 21
Related parties:
Sydbank is the bank of a number of related parties. Related party transactions
are settled on market terms.
No unusual transactions took place with related parties in Q1-Q3 2009.
Reference is made to the Group's 2008 Annual Report for a detailed description
of related party transactions.
Notes - Sydbank Group
30 Sep 31 Dec 30 Sep
DKKm 2009 2008 2008
Note 22
Reporting events occurring after the balance sheet date:
After the expiry of Q3, no matters of significant impact on the financial
position of the Sydbank Group have occurred.
Note 23
Genuine sale and repurchase transactions and
genuine purchase and resale transactions:
Of the below asset items genuine purchase
and resale transactions amount to:
Amounts owed by credit institutions and central banks 5,014 2,408 6,731
Loans and advances at fair value 9,058 13,282 10,241
Assets bought as part of genuine sale and repurchase transactions
Asset item:
Bonds at fair value 13,884 16,039 14,660
Shares etc 31 4 718
Of the below liability items genuine sale and repurchase
transactions amount to:
Amounts owed to credit institutions and central banks 4,283 1,108 883
Deposits and other debt - - 880
Assets sold as part of genuine sale and repurchase transactions
Asset item:
Bonds at fair value 4,243 1,108 1,322
Shares etc - - -
Note 24
Large shareholders:
Nykredit and ATP own more than 5% of the Bank's share capital.
Notes - Sydbank Group
Q1-Q3 Q1-Q3 Index Full year
DKKm 2009 2008 09/08 2008
Note 25
Core income:
Core income excl trading income:
Interest margins etc 2,058 1,880 109 2,610
Mortgage credit 166 131 127 176
Payment services 108 105 103 136
Remortgaging and loan fees 61 54 113 73
Other commission 41 47 87 48
Other operating income 16 19 84 23
Total 2,450 2,236 110 3,066
Trading income:
Bonds 243 88 276 156
Shares 192 160 120 193
Foreign exchange 185 217 85 311
Money market 138 81 170 124
Asset management 212 312 68 375
Total 970 858 113 1,159
Q3 Q2 Q1 Q4 Q3 Q2 Q1
DKKm 2009 2009 2009 2008 2008 2008 2008
Core income excl trading income:
Interest margins etc 680 679 699 730 642 651 587
Mortgage credit 57 61 48 45 39 44 48
Payment services 33 43 32 31 34 41 30
Remortgaging and loan fees 21 21 19 19 18 18 18
Other commission 13 11 17 1 14 18 15
Other operating income 5 4 7 4 7 6 6
Total 809 819 822 830 754 778 704
Trading income:
Bonds 88 94 61 68 15 33 40
Shares 67 78 47 33 18 78 64
Foreign exchange 51 57 77 94 81 62 74
Money market 45 67 26 43 18 30 33
Asset management 78 73 61 63 91 117 104
Total 329 369 272 301 223 320 315
Supplementary Information
Financial calendar
In 2010 the Group's company statements will be released as follows:
- 2009 Annual Report
16 February 2010
- General Meeting
4 March 2010
- Interim Report - Q1 2010
27 April 2010
- Interim Report - 1H 2010
17 August 2010
- Interim Report Q1-Q3 2010
26 October 2010
Sydbank contacts
Carsten Andersen, Group Chief Executive
Tel +45 74 36 20 00
Mogens Sandbæk, CFO
Tel +45 74 36 24 00
Jakob Aakjær, Head of Executive Secretariat
Tel +45 74 36 20 05
Address
Sydbank A/S
Peberlyk 4
DK-6200 Aabenraa
Tel +45 74 36 36 36
CVR No DK 12626509
Relevant links
www.sydbank.dk
www.sydbank.com
For further information reference is made to Sydbank's audited 2008 Annual
Report at
sydbank.com/about/ir/finreports.
Attachments
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