Vestjysk Bank’s Half-Year Report 2019
The Danish Financial Supervisory Authority
Nasdaq Copenhagen A/S
21 August 2019
H1 2019 highlights
Vestjysk Bank realised a profit after tax of DKK 163 million in H1 2019. The Bank’s earnings before impairment amounted to DKK 212 million in H1 2019. Impairment losses were generally at a significantly lower level than in H1 2018, and in light of the historical financial challenges that the agricultural sector has faced, the Bank’s overall profit after tax for H1 2019 is considered satisfactory.
- Profit after tax of DKK 163 million (H1 2018: DKK 119 million), equalling a return on equity after tax of 12.3 per cent.
- Core income of DKK 453 million (H1 2018: DKK 458 million).
- Total costs amounted to DKK 241 million in H1 2019 compared with DKK 234 million in H1 2018, resulting in a cost ratio of 53.1 per cent (H1 2018: 51.1 per cent). The increase in costs was mainly due to higher IT costs related to the Bank’s IT centre, as expenses for compliance and particularly anti-money laundering measures have risen to new levels. This trend is expected to continue in 2019 and the years ahead.
- Core earnings before impairment of DKK 212 million (H1 2018: DKK 224 million). The difference is entirely attributable to non-recurring income in 2018 under other operating income.
- Impairment of loans and receivables, etc. of DKK 37 million (H1 2018: DKK 95 million). Impairment losses on agriculture is still accounted for the majority of the Bank’s impairment losses, where the adjustment of hectare prices is recognized.
- The Bank’s capital requirement was 13.2 per cent, consisting of an individual solvency need of 10.2 per cent, a general capital conservation buffer of 2.5 per cent and a countercyclical buffer of 0.5 per cent.
- The Bank’s total capital ratio was 18.6 per cent, implying an excess coverage of 5.4 percentage points or DKK 763 million.
- The Bank’s MREL requirement represent 18.9 per cent. The MREL requirement was phased in at 0.625 per cent, which is added to the capital requirement. The MREL requirement was 13,8 per cent. The excess coverage is hereafter 5.1 percentage point or DKK 728 million.
- The Bank’s LCR was 236.5 per cent, compared with a requirement of 100 per cent.
Outlook for 2019
As announced in company announcement of 28 June 2019, profit guidance for 2019 was raised as a result of the upcoming sale of 75 per cent of Vestjysk Bank’s shares in Sparinvest Holdings SE. Vestjysk Bank expects to generate a profit after tax for 2019 in the upper part of DKK 360-410 million.
The public authority approvals for the sale of Sparinvest Holdings SE are obtained within the end of H1, the transaction will be completed in Q3 of 2019.
Enquiries
Please address any enquiries regarding the present announcement to Jan Ulsø Madsen, CEO, at tel. +45 96 63 21 04.
Vestjysk Bank A/S
Kim Duus Jan Ulsø Madsen
Chairman CEO
Vestjysk Bank A/S
Torvet 4-5
7620 Lemvig
Denmark
Phone +45 96 63 20 00
CVR no. 34631328
www.vestjyskbank.dk
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