Interim Financial Report Q1-Q3 2023
- Earnings per share rose by 94% to DKK 62.0 (Q1-Q3 2022:
DKK 31.9)
- For 2023, it is now anticipated that earnings per share
will be at the upper end of the range of DKK 70-80
- Pre-tax profit of DKK 5,501m is a doubling relative to
Q1-Q3 2022 (DKK 2,742m)
- Net interest income rose by 75% to DKK 7,155m (Q1-Q3
2022: DKK 4,083m)
- Core income was up by 70% to DKK 10,244m (Q1-Q3 2022:
DKK 6,025m)
- Core expenses rose by 27% to DKK 4,498m (Q1-Q3 2022:
DKK 3,550m)
- Loan impairment charges amounted to an expense of DKK
96m (Q1-Q3 2022: income of DKK 447m)
- The capital ratio is 20.9 of this a common equity tier
1 capital ratio at 16.7 compared with 19.5 and
15.2 at end-2022
- The 30 planned branch mergers attributed to the
acquisition of Handelsbanken Denmark have been
implemented
- The acquisition of Handelsbanken Denmark is expected to
contribute with an additional DKK 0.3bn to a total of DKK 1.3bn
p.a. to the pre-tax profit with full effect as from
2025
- The acquisition of PFA Bank A/S closed on 1 October
2023
- For adoption at an extraordinary general meeting on 1
December 2023, the Supervisory Board proposes distribution of an
extraordinary dividend at DKK 500m, equivalent to DKK 7.78 per
share
- Due to the higher earnings capacity, the Supervisory
Board will aim for a mix of dividends and share buybacks as capital
distribution going forward
- The activities from Kgs. Lyngby, Havneholmen and
Vesterbrogade will be gathered at Kalvebod Brygge in Copenhagen as
from mid-2025
- Lars Stensgaard Mørch will take over as CEO and
Managing Director from Anders Dam on 1 November 2023.
Summary
”Jyske Bank’s earnings per share rose by 94% to DKK 62 in the
first nine months of 2023 and have already now exceeded the
record-setting year 2022. The increase was due to the acquisition
of Handelsbanken Denmark, a higher interest-rate level and a
favourable development in the financial markets. The integration of
the former Handelsbanken Denmark is still on track. The last of the
30 branch mergers were implemented in October, and the migration
from BEC to Bankdata will take place on 11 November 2023. On 1
October, we welcomed new colleagues and clients following the
acquisition of PFA Bank which contributed to a further
strengthening of the business volume within asset management and
wealth management advice. On the basis of the positive trend in
2023, we now expect to report results at the upper end of the range
of DKK 70-80 per share, and consequently, the Supervisory Board
recommend a dividend at DKK 500m at an extraordinary general
meeting on 1 December 2023,” says Anders Dam, CEO and Managing
Director.
Earnings per share amounted to DKK 62.0 in the first nine months
of 2023 against DKK 31.9 in the same period in 2022. The improved
performance was driven by 75% higher net interest income due to the
acquisition of Handelsbanken Denmark and the higher interest-rate
level. The Danish central bank’s rate of interest on certificates
of deposit rose from -0.6% at mid-2022 to 3.6% p.a. Net fee and
commission income showed a minor setback due to lower activity in
the property market and lower lending activity. The lower activity
level mirrors that large parts of the Danish economy were dominated
by a slowdown in growth in the first nine months of 2023 despite a
continued resilient labour market. The slowdown in growth can
primarily be attributed to the solid increase in interest rates. As
expected, core expenses were up due to the acquisition of
Handelsbanken Denmark whereas the cost/income ratio was reduced to
44% in the first nine months of 2023 from 59% in 2022. Credit
quality remained solid and offers a good basis for countering
macro-economic uncertainty and moderate growth prospects for the
Danish economy with a management's estimate at DKK 1,415m. Based on
the development in the first nine months of 2023, earnings
expectations for 2023 were raised three times from originally DKK
55-65 per share and most recently narrowed to the upper end of the
range of DKK 70-80 per share.
After almost 34 years with Jyske Bank - of these the past 28
years on the Group Executive Board - Anders Dam has decided to
retire at end-October 2023, cf. Corporate Announcement No. 15/2023.
Jyske Bank’s balance sheet has increased more than tenfold since
Anders Dam took over as CEO and Managing Director in 1997, and
earnings per share have risen from DKK 9.7 in 1997 to expectedly up
to DKK 80 in 2023. With effect as from 1 November 2023, Jyske
Bank’s Supervisory Board has employed Lars Stensgaard Mørch as new
CEO and Managing Director. In addition, Managing Director, Per
Skovhus, has announced his wish to retire in the course of the
first half of 2024.
On 21 July 2023, Standard & Poor’s upgraded Jyske Bank’s
issuer rating to ’A+’ from ’A’. The higher rating was due to a
higher level of eligible liabilities, improved profitability, and a
solid capital base. Outlook is considered stable. No Danish
financial institutions have a higher issuer rating at Standard
& Poor’s.
On 13 June 2023, Jyske Bank announced the acquisition of PFA
Bank and an agreement with PFA Invest on the administration and
portfolio management of the clients’ funds. The price totalled DKK
247m inclusive of equity of DKK 120m and the acquisition was
implemented on 1 October 2023 following approval by the Danish
Competition and Consumer Authority. Jyske Bank took over approx.
10,000 personal clients and private banking clients, deposits of
DKK 0.7bn, assets under management of DKK 16.1bn and 40 full-time
employees. Non-recurring costs are expected to amount to approx.
DKK 50m in 2024, inclusive of IT integration in H1 2024. The deal
is expected to give a positive contribution to the net profit
before non-recurring costs in 2024 and to have its full financial
impact as from 2025. Jyske Bank has a good value proposition within
asset management and wealth management advice, and the Group’s
private banking clients have according to the research company
Voxmeter been Denmark’s most satisfied clients for the past eight
years running.
The acquisitions of Handelsbanken Denmark in 2022 and PFA Bank
in 2023 mirror Jyske Bank’s ambitions of high-quality growth and
underline the Group’s desired role in market consolidation. The
larger scale supports the possibilities of developing and offering
attractive products and services to Jyske Bank's existing and
future clients. The acquisitions also offer the possibility of
realising economies of scale based on a common IT platform starting
with Handelsbanken Denmark as of November 2023.
The integration of the former Handelsbanken Denmark is
proceeding according to plan as regards financial, business and
organisational issues. The future tasks of all employees were
clarified in Q1 2023, when also business analyses, forming the
basis of the migration of data to Bankdata from BEC, were
finalised. Branch mergers in cities where both the former
Handelsbanken Denmark and Jyske Bank were present have reduced the
total number of branches by 1/4 after the last planned mergers were
implemented in October 2023. The preparations for the migration
data to Bankdata from BEC are proceeding according to plan
following a successful trial run conducted in October 2023 with
more than 200 employees involved. The acquisition of Handelsbanken
Denmark is already now estimated to have attained the 2025 target
of a contribution to the Group’s pre-tax profit at DKK 1.0bn p.a.,
and the potential for the pre-tax profit is estimated to be approx.
DKK 0.3bn above the original expectations.
Jyske Bank will gather activities from Jyske Realkredit’s head
office at Kgs. Lyngby, the head office of the former Handelsbanken
Denmark at Havneholmen as well as existing business activities at
Vesterbrogade at Kalvebod Brygge in Copenhagen as from mid-2025.
The re-location is expected to create a good physical working
environment for the employees, a strong professional environment
and will also result in cost synergies.
In the first nine months of 2023, the corporate client area
realised continued advance in business volume. In July 2023, The
European Investment Bank (EIB) and Jyske Bank signed a loan
agreement of DKK 1.5bn to support small and medium-sized
enterprises in Denmark with particular focus on climate-relevant
business models or investment plans. Jyske Forsikring has developed
insurance concepts targeted at specific sectors to the benefit of
corporate clients. The personal client area launched new strategic
initiatives in order to implement best practice in connection with
the acquisition of Handelsbanken Denmark and on a further
strengthening of the local mandata as well as initiatives to obtain
even better client experiences. The first nine months of 2023 were
dominated by branch mergers, organisational changes, client
satisfaction analyses and a more client-oriented adviser model with
easier access to personal advisers and specialised advisory
services when required. According to Voxmeter’s image survey Jyske
Bank reported the most significant improvement among Danish
banks.
Jyske Bank’s product range was also supported by the recent
introduction of the bank mortgage loan “Prioritetslån+”. The loan
is designed for personal clients who want flexibility in their
financial affairs and makes it possible to link a deposit account
on attractive terms and conditions. Moreover, Jyske Bank announced
positive deposit rates on transaction accounts for both personal
clients and corporate clients. The offering of savings products and
fixed-term deposits was also improved, including a recently
launched interest-rate guarantee of 3% p.a.
Running a sustainable and responsible business is one of Jyske
Bank’s targets, and climate is the most important impact area for
the Group. Jyske Bank’s target is net zero CO2 emission across
business-oriented activities in the form of loans and investments
not later than in 2045 and 2050, respectively. In addition, Jyske
Bank aims at lending growth contributing to mitigate climate
changes, and for the CO2 emission from Jyske Bank’s own activities
the target is a reduction of 65% from 2020 to 2030.
In the first nine months of 2023, Jyske Bank established two
additional solar cell systems with respect to meeting the
intermediate target for 2030. Sustainability was promoted through
webinars about energy renovation of properties, climate project
days for agricultural clients and the possibility of
sustainability-linked financing. Jyske Realkredit was awarded the
Euronext prize for issuing the highest amount of green mortgage
bonds in terms of volume in 2023. The resources of the special
branch, Green Energy, was expanded considerably, supporting the
ambition to increase the financing of renewable energy production
even further. Jyske Bank also introduced Jyske Billån offering a
favourable loan rate for cars with low emission intensity and a
”Fyr dit fyr” loan targeting the change of sources of heating. The
latter complements the sustainable value proposition to homeowners
of energy loans and partnerships targeted at the change of sources
of heating.
Earnings per share DKK 62.0 in Q1-Q3
2023Earnings per share rose to DKK 62.0 from DKK 31.9,
corresponding to a net profit of DKK 4,106m and a return of 13.5%
p.a. on equity against DKK 2,194m and 7.9% p.a., respectively in
the first nine months of 2022.
Jyske Bank’s loans and advances were roughly unchanged at the
end of the third quarter of 2023 relative to the end of 2022. Loans
and advances under banking activities declined by 4%, which can
partly be attributed to deferred tax and VAT payments. Bank
deposits were up by 3% due to a higher amount of time deposits from
corporate clients whereas personal clients selected savings
products with higher interest rates. Leasing and car financing
realised an increase of 4% driven by corporate clients. Nominal
mortgage loans rose by 1% since higher loans and advances to
corporate clients more than offset a lower amount of loans and
advances to personal clients.
Core income rose by 70% relative to the first nine months of
2022 due to markedly higher net interest income and value
adjustments. Net interest income was up by 75% and was supported by
a higher interest-rate level as well as higher loans and advances
to corporate clients and the acquisition of Handelsbanken Denmark.
Net fee and commission income declined from a record-high level due
to slower loan and refinancing activity compared with the first
nine months of 2022. Value adjustments showed a historically
significant increase due to more favourable financial markets.
Other income declined from an very high level whereas favourable
sales conditions in the used car market contributed to sustained
high income from operating lease (net).
Core expenses rose by 27% compared to the first nine months of
2022. The increase can primarily be attributed to the acquisition
of Handelsbanken Denmark which contributed, among other things, to
an increase in the number of full-time employees as well as higher
expenses for data processing centres and write-offs on acquired
client relations. Underlying core expenses rose by 3%, among other
things, as a result of an increased number of full-time employees
allocated to prevention of financial crime as wel as wage increases
relating to the collective agreement of 4.5%. In addition,
non-recurring expenses of DKK 156m relating to the acquisition of
Handelsbanken Denmark against DKK 78m the year before.
Loan impairment charges amounted to an expense of DKK 96m
against an income of DKK 447m in the first nine months of 2022.
Credit quality is still solid with a low level of non-performing
loans and the level of post-model adjustments relating to loan
impairment charges was DKK 1,415m.
At the end of the third quarter of 2023, Jyske Bank's common
equity tier 1 capital ratio was computed at 16.7%, which is within
the targeted range of 15%-17%. The capital position has been
deducted the expected dividend due to the Supervisory Board’s
recommendation for an extraordinary dividend at DKK 500m,
equivalent to DKK 7.78 per share, based on the solid earnings in
the first nine months of 2023. Due to the higher earnings capacity
the aim of the Supervisory Board is that capital distribution will
consist of both dividends and share buy-backs going forward.
2023 outlookJyske Bank anticipates earnings per
share at the upper end of the range of DKK 70-80 for 2023. This
corresponds to a net profit at the upper end of the range of DKK
4.7bn-5.3bn. Jyske Bank upgraded its earnings expectations on 8
February, 18 April and 11 July. Originally announced expectations
pointed to earnings per share of DKK 55-65, corresponding to a net
profit of DKK 3.7bn-4.3bn.
Core income is expected to surge in 2023, especially due to the
acquisition of Handelsbanken Denmark and the effect from a higher
level of interest rates.
Likewise, core expenses are expected to rise significantly in
2023. The increase can primarily be attributed to the acquisition
of Handelsbanken Denmark. To this must be added derived integration
and restructuring costs of about DKK 0.3bn.
Loan impairment charges are expected to amount to a minor
expense in 2023.
The expectations involve uncertainty and depend, for instance,
on macroeconomic circumstances and the development in the financial
markets.
Webcast and conference call Jyske Bank will
host a conference call in English targeting investors and analysts
today at 1.30 p.m. CET (link). Conference call and presentation
will be available via www.jyskebank.dk/ir.
Yours faithfully,Jyske Bank Contact:Anders Dam, Managing
Director and CEO, tel. +45 89 89 20 01.Birger Krøgh Nielsen, CFO,
tel. +45 89 89 64 44
- Jyske Bank Interim Financial Report Q1-Q3 2023
- Corporate Announcement_20231031
Jyske Bank AS (TG:JYS1)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
Jyske Bank AS (TG:JYS1)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024