Company name Jyske Bank A/S
Headline Interim Report H1 2012


RNS Number : 8116H
Jyske Bank A/S
17 July 2012
 



Announcement of Jyske Bank - Interim Report H1 2012

 

                                                                                                             July 17, 2012


Summary

•   Core earnings before loan impairment charges and provisions for guarantees, etc. rose by 28% to DKK 1,309m.

•   The Danish Financial Supervisory Authority's more stringent guidelines regarding loan impairment charges and provisions for guarantees affected the pre-tax profit negatively by about DKK 900m.

 

Comments

 

Marked improvement of operating performance

The profit for the first half of the year before the effect from the FSA's new guidelines came to DKK 691m against DKK 318m for the first half of 2011. This is the best profit for the first half of the year since 2008. Core earnings before loan impairment charges and provisions for guarantees, etc. rose by 28%. Net interest and fee income under core earnings rose by 11%; other operating income rose by 15%; and income from leasing activities inclusive of acquired activities rose by 107%. Costs exclusive of special items showed zero growth.

Jyske Bank's portfolio of held-to-maturity bonds amounted to DKK 17.9bn against DKK 18.9bn at end-2011. At the end of the first half of 2012, the fair value of the held-to-maturity portfolio was higher than the carrying amount by DKK 180m. At the end-2011, the fair value of the held-to-maturity portfolio was lower than the carrying amount by DKK 7m.

The Jyske Bank Group's solvency ratio came to 15.8%, its Core Tier 1 capital ratio came to 14.3%; and its Core Tier 1 capital ratio excluding hybrid capital came to 13.1%. The individual solvency requirement was calculated at 9.6%.  Compared with the actual capital base of DKK 17.3bn, the capital surplus amounted at the end of the first half of 2012 to DKK 6.8bn, corresponding to an  increase of DKK 1.7bn in the first half of 2012.

Hence the Jyske Bank Group still has a strong and satisfactory capital and liquidity base, and on the whole it is assessed that the earnings on the business activities in the first half of 2012 were satisfactory.

Effect from more stringent FSA guidelines for loan impairment charges and provisions for guarantees, etc.

In connection with the preparations of the interim financial statements 2012, Jyske Bank contacted the FSA for an interpretation of the FSA's new and more stringent guidelines for loan impairment charges and provisions for guarantees, etc. that took effect as of the second quarter of 2012.

In isolation, the interpretation and the implementation of this had a negative effect on pre-tax profit in the amount of about DKK 900m, which is broken down to about DKK 540m for loan impairment charges and provisions for guarantees and about DKK 360m for value adjustments relating to customers' interest-rate hedging, which was intensified due to the falling interest rate in the second quarter of 2012.

The new FSA guidelines do not alter Jyske Bank's view on the risk related to the loan portfolio emphasised by the decline in the individual solvency requirement. It is still expected that loan impairment charges and provisions for guarantees for the year will be in the range of DKK 1.6bn to 2.0bn, inclusive of the effect from the FSA's new and more stringent guidelines for loan impairment charges, yet exclusive of value adjustments relating to customers' interest-rate hedging. Jyske Bank's balance of loan impairment charges and provisions for guarantees increased in the first half of the year by DKK 723m to DKK 4,594m, corresponding to 3.2% of loans and guarantees against 2.8% at the end of 2011.


Please click on the link below to see the full interim report:

http://www.rns-pdf.londonstockexchange.com/rns/8116H_-2012-7-17.pdf
 

Other information

Jyske Bank will publish its Interim Financial Report for the first half of 2012 on 21 August 2012.

 

For further information, please contact:

 

CFO:   Birger Kroegh Nielsen

Tel:      0045 89 89 64 44


This information is provided by RNS
The company news service from the London Stock Exchange
 
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