Vestjysk Bank’s Q1-Q3 2021 Quarterly ReportNasdaq Copenhagen A/S
18 November 2021
Q1-Q3 2021 Highlights Continuing the positive trend, Vestjysk Bank reported a profit after tax of DKK 884 million for Q1-Q3 2021. As described in the interim reports for Q1 and Q2 2021, the performance was strongly affected by non-recurring income and costs in connection with the merger with Den Jyske Sparekasse in January 2021. Adjusted for non-recurring items from that event, the profit after tax for Q1-Q3 amounted to DKK 492 million, which is highly satisfactory. The profit from ordinary banking operations remains supported by the high level of activity among the bank’s customers. It is satisfactory that the Bank’s loans and advances and business volume rose from Q2 to Q3 2021. In Q3, the synergies from the merger with Den Jyske Sparekasse really gathered momentum, resulting in a significantly reduced cost ratio in Q3 compared with Q2 2021. The expected synergies are still on track to be realised. Moreover, we expect non-recurring costs in connection with the merger to be lower than previously estimated. The positive outlook in relation to synergies and non-recurring costs is particularly attributable to the successful consolidation of the IT systems in early October. The Bank continued to see net reversal of impairment. The reversals reflect the positive developments in the Danish economy despite the COVID-19 pandemic. The Bank’s impairment allowances during the period were not affected to any significant extent by the pandemic. The Bank maintains the impairment provision for economic uncertainty at DKK 258 million, equalling some 1.5% of the Bank’s net lending. The reason is increasing raw material and energy prices for the Bank's business customers, sharply declining pork prices affecting pig breeders and the risk of bottleneck problems affecting the labour market. The highlights below were calculated after adjustment for non-recurring items resulting from the merger with Den Jyske Sparekasse, and the comparative figures are at 30 June 2021 as they represent post-merger figures. - Profit after tax of DKK 492 million (30 June 2021: DKK 300 million).
- Return on equity of 13.7% p.a. after tax (30 June 2021: 12.8%).
- Core income of DKK 1,137 million (30 June 2021: DKK 753 million).
- Cost ratio of 60.0% (30 June 2021: 63.9%).
- Core earnings before impairment allowances of DKK 455 million (H1 2021: DKK 272 million).
- Net reversals of impairment of loans and receivables, etc. of DKK 52 million (30 June 2021: net reversals of DKK 34 million).
- Common equity tier 1 capital ratio of 16.0% (30 June 2021: 15.9%).
Outlook for 2021
In connection with its annual report for 2020, the Bank guided a profit after tax in the range of DKK 500-550 million for 2021, adjusted for non-recurring items resulting from the merger with Den Jyske Sparekasse. The Bank also guided for an overall profit including non-recurring items after tax of about DKK 800–900 million. The Bank has subsequently twice upgraded the guidance – on 9 August 2021 and 12 October 2021. The forecast net of non-recurring items relating to the merger with Den Jyske Sparekasse is now a profit after tax of DKK 650-700 million. And the Bank’s expectations for the overall profit including non-recurring items after tax is now DKK 950-1,050 million.
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
Industrivej Syd 13C
7400 Herning
Tel. (+45) 96 63 20 00
CVR no. 34 63 13 28 www.vestjyskbank.dk
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