Interim report Q1 2016

repayment of mortgage credit loans as well as trading margin on refinancing and loan disbursements. ... At the end of Q1 2016, the weighted risk expos...

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Interim report Q1 2016 Published 28 April 2016

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Contents

Management’s Review Contents

Page

DLRkredit in key figures Q1 in headlines Statements by Management Comments on result for the period Capital and solvency Risk management Outlook for 2016 as a whole Accounting policies Further information Contact persons Management’s Statement

3 4 4 4 7 8 8 8 8 9 10

Interim financial statements Profit and loss account and Statement of Comprehensive Income Balance Sheet Statement of Changes in Equity Capital and solvency Notes

11 12 13 14 15

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DLRkredit in key figures* Year to date

Profit and Loss Account*

Administration fee income Other core income, net Interest expenses, subordinated debt Interest expenses, senior debt (SBB) Fee and commission income, net Core income (mortgage credit income) Staff costs and administrative expenses, etc. Provision for loan and receivable impairment, etc. Results from core activities (mortgage credit earnings) Portfolio earnings (securities) Profit before tax Profit after tax

Balance Sheet at 31 March

Q1 2016

Q1 2015

Q4 2015

Q3 2015

Q2 2015

Q1 2015

358 20 (2) (23) (60) 293 (56) (39)

101 83 42 104 105 109 102

362 17 (10) (62) 306 (61) (39)

361 22 (10) (36) 337 (62) (39)

361 21 (16) (56) 309 (52) (6)

361 24 (2) (16) (66) 300 (54) (10)

358 20 (2) (23) (60) 293 (56) (39)

206 43 249 194

198 133 332 253

104 32 75 77

206 43 249 194

235 13 248 190

251 (57) 194 148

236 (134) 102 78

198 133 332 253

Q1 2015

Assets Loans and advances Bonds and shares Other assets Total assets

134,237 11,623 2,413 148,274

133,548 9,236 6,636 149,421

Liabilities and equity Issued bonds Other debt and payables Equity Total liabilities and equity

134,797 1,342 12,135 148,274

132,596 4,673 12,151 149,421

Q1 2016

Q1 2015

Return on equity (ROE) Profit before tax in pc of equity Profit after tax in pc of equity Return on hybrid core capital Return on equity excl. hybrid core capital Solvency Capital ratio *** Lending Activity Growth in loan portfolio, pc (nominel) New loans, gross (DKKm) Number of new loans Loan/equity ratio

Q1 2016

362 17 (10) (62) 306 (61) (39)

Q1 2016

Financial ratios**

Com parison w ith other quarters

Ratio 16/15

Ratio 16/15

Q1 2016

Q4 2015

Q3 2015

Q2 2015

Q1 2015

101 126 36 99

134,237 11,623 2,413 148,274

133,038 12,033 3,371 148,442

132,236 9,691 4,368 146,294

132,621 7,898 3,663 144,182

133,548 9,236 6,636 149,421

102 29 100 99

134,797 1,342 12,135 148,274

134,342 1,597 12,503 148,442

131,402 2,557 12,335 146,294

126,945 5,030 12,207 144,182

132,596 4,673 12,151 149,421

Q1 2016

Q4 2015

Q3 2015

Q2 2015

Q1 2015

2.0% 1.6% 2.1% 1.4%

2.8% 2.1% 2.2% 1.9%

2.0% 1.6% 2.1% 1.4%

2.0% 1.6% 2.1% 1.4%

1.6% 1.2% 2.1% 1.0%

0.8% 0.6% 2.2% 0.5%

2.8% 2.1% 2.2% 1.9%

14.8%

12.4%

14.8%

12.9%

12.4%

12.4%

12.4%

0.5 3,914 1,353 11.1

(0.4) 8,392 3,092 11.0

0.5 3,914 1,353 11.1

(0.1) 13,641 5,314 12.2

(0.4) 8,392 3,092 11.0

0.6 23,469 8,585 10.6

0.1 17,247 6,684 12.0

*) A change has been made to DLR's accounting policies in respect of the classification of interest expenses relating to hybrid core capital. Comparative figures for 2015 have been adjusted. Please refer to note 1 "Accounting Policies" for details. **) The financial ratios have been calculated on the basis of the definitions by the Danish Financial Supervisory Authority.

***) The capital ratio for Q1 2016 is calculated under consideration that DLR has been recognised as an IRB institution in regard to lending to production farms. For all other periods the capital ratio has been calculated according to the standard method.

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Q1 2016 in headlines • • • • •

Core earnings amounted to DKK 206m – an increase of 4 % Provisions for loan and receivable impairment (impairment losses and write-downs) amounted to DKK 39m, which is level with the same period in 2015 Profit before tax came to DKK 249m After tax on profit for the period and reimbursements to owners of hybrid core capital, DKK 173m has been retained to equity In Q1, the loan portfolio calculated at nominal value increased by DKK 595m

Statements by Management In connection with the publication of the Interim Report for Q1 2016, managing director and CEO Jens Kr. A. Møller states: ”DLR’s profit before tax for Q1 2016 at DKK 249m is satisfactory and slightly better than expected. The result has been positively influenced by the falling interest rate level towards the end of the quarter. It is gratifying that DLR’s loan portfolio has been increasing through Q1 2016, and this applies to both agricultural and urban trade property loans. In spite of the difficult financial conditions for parts of the agricultural industry it is satisfactory that, taken as a whole, the level of losses and provisions for impairment were not worsened compared to 2015. For DLR, the ascertained losses from the loss offset agreements with the banks are mitigated.

Comments on results for the period Profit and loss account In Q1 2016, DLR achieved a satisfactory profit before tax at DKK 249m which is DKK 83m less than for the same period in 2015, but slightly better than expected. After tax, profit came to DKK 194m for Q1 2016. DLR’s earnings primarily stem from: • •

Core earnings: Return on mortgage credit operations in the form of administration fee income, fees and commissions, etc. less the related administrative expenses as well as impairment losses and write-downs. Portfolio earnings: Return on the securities portfolio

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Table 1. Profit and loss account, DKKm Profit and Loss Account*

Administration fee income Other core income, net Interest expenses, subordinated debt Interest expenses, senior debt (SBB) Fee and commission income, net Core income (mortgage credit income) Staff costs and administrative expenses, etc. Provision for loan and receivable impairment, etc. Results from core activities (mortgage credit earnings) Portfolio earnings (securities) Profit before tax Profit after tax

Q1 2016

Q1 2015

362 17 (10) (62) 306 (61) (39)

358 20 (2) (23) (60) 293 (56) (39)

206 43 249 194

198 133 332 253

Core earnings Core earnings came to DKK 362m, which is almost unchanged, compared to the same period in 2015. Interest expenses for senior loans relate to issued Senior Secured Bonds (SSBs). The interest expenses amounted to DKK 10m which is DKK 13m less than for the same period in 2015. The lower expenses are due to a total smaller issuance than for the same period in 2015. Fees and commissions comprise income from fees and brokerage in connection with payment and repayment of mortgage credit loans as well as trading margin on refinancing and loan disbursements. Fee and commission payments relate to expenditure to financial institutions that have provided loans to DLR. The expenses include both loan-provision commission and commission for provision of loss guarantees, etc. Net fee and commission paid constituted expenses of DKK 62m against expenses at DKK 60m in the same period of 2015. Subsequently, core income amounted to DKK 306m, which is DKK 13m more than for the same period in 2015. The increase constitutes 4.6 pc. Staff costs and administrative expenses, etc. increased from DKK 56m in Q1 2015 to DKK 61m in 2016, which is an increase of 9 pc. DKK 3m of the increase constitutes an expense to the statutory settlement funds, which was not incumbent on DLR in the same period of 2015. Excluding the expenses to the settlement funds, the cost increase amounted to 3.6 pc. Provisions for loan and receivable impairment, including adjustments from previous years, have been calculated at DKK 39m, which is unchanged, compared to the same period of 2015. Portfolio earnings Portfolio earnings amounted to income at DKK 44m against DKK 133m in 2015. The lower return for 2016 should be seen in connection with the low interest rate level.

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At the end of Q1 2016, DLR’s bond holdings amounted to DKK 19.7bn. Allocation of comprehensive income for the period Comprehensive income for the period came to DKK 194m. Hereof, DKK 27m has been paid to owners of hybrid core capital. As this expense is deductible, DLR’s net expenses amount to DKK 21m. Overall, this entails that DKK 173m has been transferred to DLR’s equity. Balance sheet At the end of Q1 2016, mortgage loans amounted to DKK 134.2bn. Q1 saw moderate lending activities as gross new lending amounted to DKK 3.9bn (1,353 paid-out loans). The portfolio of bonds amounted to DKK 26.6bn, of which the portfolio of DLR bonds came to DKK 15bn that are offset in “Issued bonds at fair value”, while DKK 11.6bn relates to investments in government securities and other mortgage credit bonds. Bonds issued at amortised cost increased by DKK 3bn in Q1 2016. The increase relates to the raising of senior loans, see the paragraph on interest expenses for senior loans in the above section of “Core earnings”. At the end of Q1 2016, DLR’s balance sheet total came to DKK 148.3bn, which levels with end-2015.

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Capital and solvency Table 2. DLR’s capital and solvency Capital and solvency Equity Profit not recognised in equity Hybrid core capital recognised in equity Deductions as a consequence of prudent valuation Difference between expected loss and write downs Deferred tax Actual core capital Hybrid core capital

31 March 31 December 2016 2015 12,135 12,503 (173) (1,300) (1,300) (19) (17) (659) (1) (1) 9,982 11,185 1,300

1,300

Capital base

11,282

12,485

Risk-weighted exposure with credit risk, etc. Risk-weighted exposure with market risk Risk-weighted exposure with operational risk Total risk-weighted exposure

70,830 3,352 2,249 76,431

91,278 3,505 2,249 97,032

13.1% 14.8%

11.5% 12.9%

Actual core capital ratio Capital ratio

***) The capital ratio for Q1 2016 is calculated under consideration that DLR has been recognised as an IRB institution in regard to lending to production farms. For all other periods the capital ratio has been calculated according to the standard method.

Capital base: In 2016, DLR has been repurchasing own shares at a value of DKK 542m which has, seen in isolation, reduced the capital base. Furthermore, DLR has been recognised as an IRB institution in regard to lending to production farms, which means that the difference between ”Anticipated losses in the IRB model” and ”Accounting impairment provisions” must be deducted from the capital base. The amount of DKK 173m transferred to equity (cf. the section: ”Allocation of comprehensive income for the period”) is not included in the capital base since DLR has not applied for permission from the Danish FSA to include the profit for the period in the capital base and since the financial statements have not been reviewed by the accountants. At the end of Q1 2016, DLR’s capital was based solely on core capital and hybrid core capital, which is noncallable on the debtor’s part and amounted to DKK 11.3bn at the end of Q1 2016 against DKK 12.5bn at the end of 2015. Risk exposure: In Q1 2016, the weighted risk exposure including credit risk fell from DKK 91.3bn to DKK 70.8bn which is primarily due to the above IRB approval. At the end of Q1 2016, the weighted risk exposure totalled DKK 76.4bn. Capital ratio: Thus, the capital ratio can be calculated at 14.8 at the end of Q1 2016 against 12.9 at the end of 2015. The actual core capital ratio amounted to 13.1 at the end of Q1 2016 against 11.5 at the end of 2015.

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Risk management DLR’s credit and market risks are estimated as limited. This is due to partly the statutory requirements, partly DLR’s internal credit policy guidelines. To this should be added the loan loss schemes, including guarantee provision, that have been set up for DLR’s various lending areas according to agreements with the shareholding banks. At the end of Q1 2016, approx. 90 pc of DLR’s total loan portfolio was comprised by loan loss guarantee schemes. The bulk of the loan commitments that are not covered by guarantees typically have low LTV values. For further information of both market and credit risks, please refer to DLR’s Risk and Capital Management Report 2015 that may be accessed at www.dlr.dk. Arrears and forced sales At the end of Q1 2016, non-paid mortgage payments due to DLR amounted to DKK 131m against DKK 122m at the end of 2015. Of this amount, the bulk stems from term payments that are not more than 3½ months overdue. The number of implemented forced sales of properties in which DLR holds a mortgage came to 43 in Q1 2016. DLR foreclosed on 20 of these properties. DLR’s portfolio of foreclosed properties contained 30 properties at the end of Q1 2016. The value of these properties came to DKK 143m at the end of Q1 2016 against DKK 62m at the end of 2015.

Outlook for 2016 as a whole In 2016, DLR expects the performance to remain at a satisfactory level, however slightly below results for 2015, which amounted to DKK 875m before tax. Expectations remain unchanged compared to the outlook in DLR’s latest Annual Report, and therefore DLR still expects core earnings for 2016 at around DKK 700m to DKK 800m.

Accounting policies DLR’s Interim Report for Q1 has been prepared in accordance with the accounting rules for mortage banks issued by the Danish Financial Supervisory Authority (FSA) as well as the disclosure requirements for issuers of listed bonds specified by NASDAQ Copenhagen. Compared to the Annual Report 2015, the accounting policies are unchanged. For further information, please refer to the description of accounting policies in the Annual Report 2015 at www.dlr.dk.

Further information For access to supplementary information about DLR, please refer to www.dlr.dk where i.a. the Annual Report for 2015 as well as the Risk and Capital Management Report may be downloaded. Also, supplementary information about cover pools and rating conditions for DLR can be found at DLR’s website.

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Contact persons Please address any inquiries concerning the financial statements to: Managing Director and CEO Jens Kr. A. Møller, phone +45 33 42 07 24, or Managing Director Michael Jensen, phone +45 33 42 07 06

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Management’s Statement Today, the Board of Directors and the Executive Board reviewed and approved the Interim Report for the period 1 January to 31 March 2016 of DLR Kredit A/S. The Interim Report has been prepared in accordance with the accounting provisions for mortgage banks laid down by the Danish Financial Supervisory Authority (FSA), as well as the additional disclosure requirements provided by NASDAQ Copenhagen for financial reporting by issuers of listed bonds. Management’s Review includes a fair review of the development in the Company’s activities and economic conditions as well as a description of significant risks and uncertainty factors that may affect the Company. In our opinion, the accounting policies are appropriate so that the Interim Financial Statements give a true and fair view of the Company’s assets, liabilities, equity and financial position at 31 March 2016 as well as of the results of the Company’s operations for the period 1 January – 31 March 2016. The Interim Report has not been subject to any audit or review.

Copenhagen, 28 April 2016 Executive Board

Jens Kr. A. Møller Managing Director, CEO

Michael Jensen Managing Director

Board of Directors

Vagn Hansen Chairman

Anders Dam Deputy Chairman

Claus Andreasen

Ole Selch Bak

Karen Frøsig

Peter Gæmelke

Jakob G. Hald

Søren Jensen

Agnete Kjærsgaard

Lars Møller

Torben Nielsen

Benny Pedersen

Jan Pedersen

Lars Petersson

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Profit and Loss Account and Statement of Comprehensive Income

DKKm

Q1

Q1

Profit and loss account

2016

2015

Interest income Interest expenses Net interest income

837 (417) 420

922 (481) 441

Fee and commission income Fee and commission paid Net interest and fee income

33 (95) 358

45 (105) 381

Value adjustments

(12)

40

4

5

(57)

(55)

Depreciation and impairment losses

(1)

(1)

Other operating expenses

(3)

Note

1 2

3

Other operating income 4

5

Staff costs and administrative expenses

-

Provisions for loan and receivable impairment, etc.

(39)

(39)

Profit before tax

249

331

Tax

(55)

(78)

Profit for the year

194

253

Statement of Comprehensive Income

Q1 2016

Q1 2015

Profit for the year

194

253

Revaluation of domicile properties Of which tax Other total comprehensive income after tax

-

-

Total comprehensive income for the year

194

253

Attributable to: Shareholders of DLR Kredit A/S* Owners of hybrid core capital

167 27

225 28

Total comprehensive income for the year

194

253

Note

* In addition the shareholders of DLR Kredit A/S receive 6 mio. DKK as a result of a tax deduction on payment to owners of hybrid core capital.

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Balance Sheet

DKKm

31 March 2016

31 December 2015

Cash in hand and demand deposits with central banks Receivables from credit institutions and central banks Loans, advances and other receivables at fair value Loans, advances and other receivables at amortised cost Bonds at fair value Shares, etc. Land and buildings, domicile properties Other tangible assets Current tax assets Deferred tax assets Assets temporarily foreclosed Other assets Prepayments

122 1,860 134,214 23 11,568 55 98 5 0 1 143 164 20

249 2,713 133,016 22 11,978 55 98 5 0 1 62 223 19

Total assets

148,274

148,442

0 0 127,797 7,000 6 1,329 3 136,134

0 0 130,342 4,000 4 1,585 2 135,934

5 5

5 5

Share capital Revaluation reserve Undistributable reserve Retained earnings Owners of hybrid core capital Total equity

570 43 2,338 7,884 1,300 12,135

570 43 2,338 8,251 1,300 12,503

Total liabilities and equity

148,274

148,442

16

16

Note

Assets

7 7 9 10 11 12

13

Liabilities and equity

14 15 16

Debt to credit institutions and central banks Deposits and other debt Issued bonds at fair value Issued bonds at amortised cost Current tax liabilities Other debt and payables Deferred income Total debt Provisions for deferred tax Total provisions

Off-balance sheet items

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Statement of Changes in Equity

DKKm

Share capital 1)

Revaluation reserve

Undistributable reserve

Retained earnings

Owners of hybrid core capital 2)

Total

2015 Equity at 1 January 2015

570

Profit for the year Domicile properties

-

-

Equity at 31 December 2015

570

43

2,338

26 8,251

(112) , 1,300

(112) 26 12,503

2016 Equity at 1 January 2016

570

43

2,338

8,252

1,300

12,503

Profit for the year Domicile properties

-

-

-

167 -

27 -

194 -

570

43

2,338

(542) 6 7,884

Transactions with owners Interest on hybrid core capital Tax

Transactions with owners Own shares Interest on hybrid core capital Tax Equity at 31 March 2016

43

2,338 -

7,667

1,300

11,919

558 -

112 -

670 -

(27) 1,300

(542) (27) 6 12,135

1) The share capital is divided into shares of each DKK 1.00. DLR Kredit A/S has only one class of shares where all shares carry the same rights. 2) Hybrid core capital that comply with the rules in the Capital Requirements Regulation (CRR). The DKK 1,300m with a conversion obligation was raised on 27 August 2012. The maturity is infinite. The interest rate is floating and based on the six-months money market interest rate (CIBOR) with addition of 8.25 per cent. The total hybrid core capital can be included in the capital base at 31 December 2015. Interest: 27 DKKm

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Capital and solvency Equity Profit not recognised in equity Hybrid core capital recognised in equity Deductions as a consequence of prudent valuation Difference between expected loss and write downs Deferred tax Actual core capital Hybrid core capital

31 March 31 December 2016 2015 12,135 12,503 (173) (1,300) (1,300) (19) (17) (659) (1) (1) 9,982 11,185 1,300

1,300

Capital base

11,282

12,485

Risk-weighted exposure with credit risk, etc. Risk-weighted exposure with market risk Risk-weighted exposure with operational risk Total risk-weighted exposure

70,830 3,352 2,249 76,431

91,278 3,505 2,249 97,032

13.1% 14.8%

11.5% 12.9%

Actual core capital ratio Capital ratio

***) The capital ratio for Q1 2016 is calculated under consideration that DLR has been recognised as an IRB institution in regard to lending to production farms. For all other periods the capital ratio has been calculated according to the standard method.

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Noter DKKm

1

2

Q1 2016

Q1 2015

Interest income from: Receivables from credit institutions and central banks Loans and advances Administration fees Bonds Other interest income Total interest income

459 362 55 8 884

0 513 358 102 9 982

Interest from own mortgage bonds offset agains interest on issued bonds Total

(46) 837

(60) 922

Interest expenses for: Credit institutions and central banks Issued bonds Hybrid core capital (non CRR-compliant) Senior debt Other interest expenses Total interest expenses

0 454 10 (1) 464

2 514 30 23 569

Interest from own mortgage bonds Total

(46) 417

(60) 509

Of which interest expenses from genuine sale and repurchase transactions recognised as Debt to credit institutions and central banks 3

4

Value adjustments of: Mortgage loans Bonds Shares, etc. Other assets Foreign exchange Derivative financial instruments Issued bonds Total value adjustments

-

587 (5) 0 (2) (6) (587) (12)

923 40 (923) 40

1.6 0.5 2.0

2.3 0.5 2.8

Staff costs Salaries Pension costs Social security costs Total

25 3 5 33

23 2 4 29

Other administrative expenses Valuation expenses Office expenses, etc. Audit, supervision, etc. Other operating costs Total staff and administrative expenses

3 12 4 4 57

3 13 3 4 55

Staff costs and administrative expenses: Salaries and remuneration to the Board of Directors and Executive Board Executive Board* Board of Directors Total The company has no pension obligations to the Board of Directors and Executive Board.

* In the first quarter of 2016 there were two members of the executive board compared to first quarter of 2015, where there were three members of the executive board.

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Noter DKKm

31 March 31 December 2016 2015 5

Provisions and impairment losses for loan and receivable impairment etc. Impairment losses for the period Recovery of debt previously written off Provisions for the period Reversal of provisions Total provisions and impairment losses for loan and receivable impairment etc.

6

7

(52) 1 (69) 80 (39)

1 (105) 65 (39)

Individual provisions Provisions, loans and guarantees, beginning-of-year Provisions for the period Reversal of provisions Provisions, end-of-period

445 63 (80) 427

333 235 (123) 445

Collective provisions Provisions, loans and guarantees, beginning-of-year Provisions for the period Reversal of provisions Provisions, end-of-period

145 6 151

198 (54) 145

Total provisions for loan and receivable impairment etc., end-of-period

579

590

Provisions for loan and receivable impairment, etc.

Loans and advances Mortgage loans, nominal value Adjustment for interest rate risk Adjustment for credit risk Total mortgage loans at fair value

133,050 1,602 (554) 134,098

132,455 1,015 (562) 132,908

Arrears and outlays Other loans and advances Total loans and advances

116 23 134,237

108 22 133,038

Pursuant to special legislation, a government guarantee of DKK 500m has been provided as supplementary security for loans to young farmers. Interim loan guarantees of DKK 739m have been provided for debt rescheduling loans. As supplementary security for mortgage loans apart from mortgages, bankers' guarantees of DKK 16,568m have been provided. 8

Mortgage loans (nominal value) by property category (as a percentage) Agricultural properties Owner-occupied dwellings Subsidised rental housing properties Private rental housing properties Office and business properties Properties for manufacturing and manual industries Properties for social, cultural and educational purposes Other properties Total, as a percentage

64 6 0 13 15 1 0 1 100

64 6 0 13 15 1 0 1 100

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Noter DKKm

31 March 31 December 2016 2015 9

Bonds at fair value - Own mortgage bonds - Other mortgage bonds - Government bonds - Other bonds Total bonds Own mortgage bonds offset against issued bonds Own other mortgage bonds offset against issued bonds Total

10

11

12

Shares, etc. Other shares Total shares, etc.

14

26,235 10,635 1,343 38,213

(14,986) 11,568

(26,235) 11,978

55 55

55 55

Fair value, beginning-of-year Additions during the year Depreciation Value changes recognised in other comprehensive income Fair value, end-of-period

98 (0) 98

99 (1) 98

Other tangible assets Cost, beginning-of-year Additions during the year Disposals during the year Cost, end-of-period

29 0 29

32 3 (6) 29

Depreciation, beginning-of-year Depreciation for the year Depreciation written back Depreciation, end-of-period

24 1 25

26 3 (5) 24

Land and buildings (domicile properties)

Total other tangible assets 13

14,986 9,162 2,406 (0) 26,554

Other assets Positive market value of derivative financial instruments, etc. Other receivables Interest and commission receivable Total Issued bonds at fair value Mortgage bonds - nominal value Fair value adjustment Own mortgage bonds offset - at fair value Mortgage bonds at fair value Of which pre-issued Drawn for redemption in next term

4

5

10 39 114 164

5 63 155 223

141,109 1,674

155,403 1,175

(14,986) 127,797

(26,235) 130,342

5,342 713

16,423 820

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Noter DKKm

31 March 31 December 2016 2015 15

16

17

Issued bonds at amortised cost Issues in connection with senior debt Total issued bonds at amortised cost Offsetting of own bonds Total

7,000 7,000 7,000

4,000 4,000 4,000

Other debt and payables Negative market value of derivative financial instruments Interest and commission payable Other payables Total

4 1,202 123 1,329

8 1,311 266 1,585

Key figures in DKKm Q1 2016

Q1 2015

Q1 2014

Q1 2013

Q1 2012

358 4

381 5

319 4

288 5

244 5

(61) 301

(56) 330

(52) 271

(52) 241

(53) 196

(39) (12) 249 194

(39) 40 331 253

(25) (32) 214 162

(28) (58) 155 116

(31) (41) 124 93

Profit and loss account Net interest and fee income Other operating income, etc. Staff costs and administrative expenses, ect. Earnings Provision for loan and receivable impairment Value adjustments Profit before tax Profit after tax Balance sheet at 31 March Assets Loans and advances Bonds and shares, etc. Other assets Total assets

134,237 11,623 2,413 148,274

133,548 9,237 6,636 149,421

134,177 4,193 3,011 141,381

135,810 2,700 2,459 140,969

133,924 1,398 7,796 143,118

Liabilities and equity Issued bonds Other debt and payables Subordinated debt Equity Total liabilities and equity

134,797 1,342 12,135 148,274

132,597 3,921 752 12,151 149,421

125,169 2,974 3,073 10,165 141,381

121,491 5,146 5,247 9,085 140,969

122,529 7,285 5,625 7,679 143,118

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Noter DKKm 18

Financial ratios

Return on equity (ROE) Profit before tax in pc of equity*) Profit after tax in pc of equity*) Return on capital employed Return on capital employed*)

Q1 2016

Q1 2015

Q1 2014

Q1 2013

Q1 2012

2.0 1.6

2.8 2.1

2.1 1.6

1.7 1.3

1.6 1.2

0.13

0.17

0.12

0.15

0.07

Costs Costs in pc of loan portfolio Income/cost ratio*) Income/cost ratio, excl. write-downs for impairment

0.04 3.49

0.04 4.50

0.04 3.80

0.04 2.95

0.04 2.49

5.72

7.60

5.67

4.62

3.94

Solvency (incl. profit for the year) Capital ratio, pc*) Core capital ratio, pc*)

14.8 14.8

12.4 12.4

13.6 13.6

13.5 13.5

12.2 12.1

131.1

126.9

128.1

162.9

190.6

0.03

0.03

0.02

0.02

0.02

0.43

0.43

0.29

0.26

0.25

0.5 3,914 1,353 11.1

(0.4) 8,392 3,092 11.0

(0.2) 4,165 1,243 13.2

3,122 1,381 14.9

0.9 4,558 1,801 17.4

Margins Percentage of average loan portfolio (nominal): Profit before tax Administrative margin

0.19 0.27

0.25 0.27

0.16 0.26

0.12 0.26

0.09 0.23

Percentage of core capital after deductions: Foreign exchange position as a percentage of core capital after deductions*)

14.7

0.1

0.1

1.1

34.9

Losses and arrears Arrears, end-of-period (DKKm) Loss and impairment ratio for the period (in pc of loan portfolio)*) Accumulated loss and impairment ratio (in pc of loan portfolio) Lending activity Growth in loan portfolio, pc (nominal)*) New loans, gross (DKKm) Number of new loans Loan/equity ratio*)

*) The financial ratios have been calculated in accordance with the definitions by the Danish Financial Supervisory Authority.

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