Q1 Report 2006 for Spar Nord Bank

Transcription

1 To the Copenhagen Stock Exchange and the press 26 April 2006 Stock Exchange Announcement no. 7, 2006 Contact: Keld Gammelgaard, tel Q1 Report 2006 for Spar Nord Bank Sustained high activity level and pre-tax profit of DKK 208.5m Annualized 29.1 pct. return on equity before tax Core earnings up 49.5 pct. to DKK 198.6m 19.5 pct. growth in deposits, and loans and advances up 32.4 pct. Positive DKK 7.1m net impact from impairment of loans and advances Costs up as a result of surge in activities In the first three months Spar Nord Bank recorded a pre-tax profit of DKK 208.5m, the best quarterly performance ever and an increase of DKK 50.9m on the same period last year. This profit performance corresponds to an annualized 29.1 pct. pre-tax return on the beginning shareholders equity, excl. dividends. This performance is better than forecast at the beginning of the year, for which reason the Bank lifted its full-year core earnings forecast from DKK m to DKK m prior to the Annual General Meeting. This outstanding performance is due to the sustained high activity level, a positive impact from impairment of loans, advances, etc. and non-recurring income of about DKK 30m. The heightened activity occurred in all business areas and spurred an increase in the number of employees, up 94 on the previous year. The newly established local banks outside North Jutland continued increasing their earnings at a faster-than-anticipated pace. In the first quarter of 2006, the Bank recorded a continuing advance in customer intake and a sustained increase in the number of shareholders, which rounded 90,000 some time in the first three months. Spar Nord Bank A/S Skelagervej 15 P.O. Box 162 DK-9100 Aalborg Spar Nord Bank A/S, CVR nr , Aalborg Management considers this development highly satisfactory. Reg. no Tel.: Fax.: Telex spano dk Swift spno dk 22 sparnord@sparnord.dk Page 1 of 11

2 Income Net interest income advanced 17.1 pct. during the first three months of the year, up from DKK 208.8m to DKK 244.5m, now amounting to 51.3 pct. of core income (54.6 pct. in the same period last year). The satisfactory increase in net interest income was attributable to the high growth in deposits, loans and advances and occurred even though the interest margin narrowed 0.76-percentage point during the period. Net income from fees, charges and commissions surged 57.0 pct. to DKK 132.0m compared to the same period last year. Net income from fees, charges and commissions amounted to 27.7 pct. of core income for the quarter (22.0 pct. in Q1 June 2005). Securities trading (+23.6m) and asset management (+20.6m) topped the list as best performers in the category net income from fees, charges and commissions. The launch of the investment company KapitalPleje characterized Q1, with DKK 867m in share capital being taken up by investors. Climbing interest rates in the first three months of 2006 caused market-value adjustments to drop DKK 3.4m to DKK 58.7m. The Trading, Financial Markets unit reported a downturn in market-value adjustments, whereas gains were made on the sale of shares in PBS International Holding A/S, Dankort A/S and Phase One A/S of totally DKK 16m. Other operating income remained largely unchanged compared with Q DKK 15.6m in Q versus DKK 15.5m in Q1 last year. Profit on investments in associates and group enterprises (previously termed Market value-adjustment of equity investments ) almost doubled in Q to DKK 23.0m, up from DKK 11.9m a year earlier. Of this amount, DKK 12.3m stemmed from a market-value adjustment made because Nørresundby Bank reported better-than-expected 2005 financial statements. Costs The high activity level has distinctly driven costs up in Q Half the 19.7-pct. increase was due to the 94 persons added to the staff since the same time last year. Almost the entire increase occurred in the earnings units. The other half of the cost increase was due to mounting marketing costs, increasing IT costs brought on by the high activity level, rising rent and building maintenance costs and climbing expenses connected with the annual shareholders meetings. In 2006, 4,000 more shareholders attended shareholders meetings than the previous year, and in total slightly more than 20,400 attended the 32 shareholders meetings nationwide. For the year as a whole, costs are now expected to rise by about 8 pct. Spar Nord Bank A/S, CVR nr , Aalborg Impairment of loans and advances, etc. Impairment of loans and advances, etc. was down from DKK 11.2m in Q to DKK 7.1m in Q This reduction was due to the excellent repayment ability among the Bank s customers, some reasons for which include the record-low unemployment rate, the sustained low interest level and elevated property prices. At 31 March 2006, the Bank s total provisions amounted to DKK 685.8m, while non-performing loans totalled DKK 44.0m. Thus, the cover ratio may be calculated at Page 2 of 11

3 Earnings from investment portfolios Earnings from investment portfolios dropped from DKK 24.8m in Q to DKK 9.9m in Q Of this amount, DKK 12.9m was attributable to Erhvervsinvest Nord, deriving from the sale of shares in a portfolio company, among other factors. The downtrend in earnings from investment portfolios should be viewed in light of the mounting interest rates in the first three months, resulting in a capital loss on the Bank s bond portfolio. Business volume The total business volume compared with Q grew 25.0 pct. to DKK 57.2bn. The mounting lending volume forms the backdrop for the high growth rate, up 32.4 pct. to DKK 27.6bn, and an increase in deposits of 19.5 pct. to DKK 23.3bn. New local banks At the beginning of 2006, the decision was made to establish three more local banks outside North Jutland during the year. The first of these will open in Silkeborg in May, and the next in Næstved the following month. Later in the year, a branch will be opening in Risskov under Bank Region Århus. With the three new local banks, Spar Nord has 11 local banks outside North Jutland. KapitalPleje In cooperation with a number of other banks, Spar Nord established the independent listed investment company KapitalPleje A/S in January KapitalPleje invests both shareholder funds and loan capital in a mixed portfolio of listed shares, bonds and financial instruments. KapitalPleje has concluded a portfolio management agreement with Spar Nord. The launching of this company was met with great interest, and new shares worth DKK 867m were subscribed for in a general issue. The company was listed on the Copenhagen Stock Exchange on 8 February Solvency ratio The solvency ratio, for which the Bank has a target of minimum 10.0, amounted to 11.4 at the end of Q compared with 10.9 in Q The core capital percentage amounted to 9.4 versus 9.0 in Q The core capital percentage, excl. hybrid core capital, amounted to 8.4 at the end of Q1, thus exceeding the bank s target of 7.5. Liquidity To boost liquidity, the Bank floated two senior loans of NOK 0.5bn and DKK 0.4bn at the beginning of March. Apart from that, an increase in deposits improved liquidity. Thus, the Bank met its internal liquidity target at the end of Q Year 2006 forecast follow-up In the 2005 Consolidated Annual Report, Management forecast core earnings to range around DKK m for all of In light of the profit reported for Q1 2006, Management decided on 20 April to lift the core earnings forecast by DKK 100m to DKK m. The approx. DKK 150 million that the Bank can carry to income if Nykredit exercises its option to buy the remaining shares in Totalkredit is not included in the core earnings Page 3 of 11

4 forecast. If Nykredit exercises this option, the Bank therefore expects a pre-tax profit (excl. earnings from investment portfolios) in the DKK m range. Share split At the Annual General Meeting held on 20 April 2006, the decision was made to implement a share split in the ratio of one-for-ten. 8 May 2006 is expected to be the last listing day for shares in the old denomination of DKK 100. Please direct any queries you may have to Lasse Nyby, Chief Executive Officer, who can be reached on tel Sincerely yours, Spar Nord Bank Torben Fristrup Chairman of the Supervisory Board Lasse Nyby Chief Executive Officer Spar Nord Bank shares held by the Supervisory Board and the Executive Board: 18 January 10 April Torben Fristrup Erling Kjær 1,176 1,176 Niels Ole Arndt Trine Bruun Haals Niels Kristian Kirketerp Jan Høholt Jensen Carsten Normann 0 0 Ole Skov Per Søndergaard Pedersen 1,467 1,467 Lasse Nyby 2,738 2,738 John Lundsgaard 3,807 3,807 Lars Møller 3,376 3,376 Note: The holdings include all shares held by the entire household. Accounting policies The Quarterly Financial Statements are presented in accordance with the Danish Financial Business Act, the Danish Executive Order on the Presentation of Financial Statements by Credit Institutions, etc. and the guidelines issued by the Danish Financial Supervisory Authority. In addition, the Quarterly Financial Statements have been prepared in compliance with the Copenhagen Stock Exchange regulations regarding disclosure obligations for issuers of listed securities and in accordance with the principles governing recognition and measurement in applicable IFRS rules. The accounting policies have been consistently applied compared to the previous year. Companies that are included in the Consolidated Financial Statements of Spar Nord Bank A/S Ownership interest, pct Finans Nord A/S, Aalborg Erhvervsinvest Nord A/S, Aalborg Sparekassen Nordjyllands Investeringsselskab af A/S, Aalborg Page 4 of 11

5 PERFORMANCE INDICATORS - THE SPAR NORD BANK A/S GROUP INCOME STATEMENT - SUMMARY DKK million 1st qua. 1st qua. Increase in pct Net interest income... Net income from fees, charges and commissions... Dividends on shares, etc.... Market-value adjustments... Other operating income... Profit on equity investments in associates and group enterprises... Core income Operating costs, depreciation and amortization... Core earnings before impairment of loans and advances, etc Impairment of loans and advances, etc.... Core earnings Earnings from investment portfolios... Profit before tax Tax... Profit after tax Balance sheet figures - DKK million Total assets... Deposits... Loans and advances... Guarantees, etc.... Shareholders equity... Subordinated capital contributions... 48, , , , , , , , , , , , , , , , , ,692.8 Risk-weighted assets... Core capital... Impairment of loans, advances and guarantees... Non-performing loans... 33, , , , , , Financial ratios Return on equity before tax, pct.... Return on equity after tax, pct.... Cost share of core income... Cost share of core income, incl. impairment of loans and advances, etc.... Impairment in per cent... Solvency ratio... Core capital ratio, incl. hybrid capital... Core capital ratio, excl. hybrid capital The Spar Nord Bank share (DKK per share of DKK 100) Earnings after tax... Official price, end of period... Book value, incl. profit for the period... Share price/book value , Page 5 of 11

6 PERFORMANCE INDICATORS - THE SPAR NORD BANK A/S GROUP INCOME STATEMENT - SUMMARY DKK million Net interest income... Net income from fees, charges and commissions... Dividends on shares, etc.... Market-value adjustments... Other operating income... Profit on equity investments in associates and group enterprises... Core income... 1st qua. 2nd qua. 3rd qua. 4th qua. 1st qua Operating costs, depreciation and amortization... Core earnings before impairment of loans and advances, etc Impairment of loans and advances, etc.... Core earnings Earnings from investment portfolios... Profit before tax Tax... Profit after tax Balance sheet figures - DKK million Total assets... Deposits... Loans and advances... Guarantees, etc.... Shareholders equity... Subordinated capital contributions... 37,632 42,385 43,904 45,962 48,499 19,536 22,063 21,401 22,289 23,346 20,862 24,826 25,501 27,134 27,618 5,337 6,215 6,348 6,394 6,200 2,469 2,435 2,603 3,039 3,207 1,436 1,463 1,459 1,693 1,670 Risk-weighted assets... Core capital... Impairment of loans, advances and guarantees... Non-performing loans... 27,304 29,731 30,147 31,665 33,262 2,111 2,098 2,123 3,137 3, Financial ratios Return on equity before tax, pct.... Return on equity after tax, pct.... Cost share of core income... Cost share of core income, incl. impairment of loans and advances, etc.... Impairment in per cent... Solvency ratio... Core capital ratio, incl. hybrid capital... Core capital ratio, excl. hybrid capital The Spar Nord Bank share (DKK per share of DKK 100) Earnings after tax... Official price, end of period... Book value, incl. profit for the period... Share price/book value Page 6 of 11

7 Note 1 2 INCOME STATEMENT Interest income... Interest expenses... Spar Nord Spar Nord Spar Nord Bank A/S Bank A/S Bank A/S The Group The Group The Group 1st qua st qua DKK '000 DKK '000 DKK ' , ,909 1,517, , , ,280 Net interest income , , , Dividends on shares, etc.... Fees, charges and commissions received... Fees, charges and commissions paid... 3, , ,973 99, ,193 14,946 15,170 70,106 Net income from interest, fees, charges and commissions , ,199 1,339, Market-value adjustments... Other operating income... Staff costs and administrative expenses... Depreciation, amortization and impairment of intangible assets and property, plant and equipment... Other operating expenses... Impairment of loans, advances and receivables, etc.... Profit on equity investments in associates and group enterprises... 63,258 80, ,637 15,619 15,525 73, , , ,290 17,630 13,999 82, ,971-7,109 11,685 34,349 22,955 9,497 61,998 Profit before tax , , ,454 Tax... 51,330 46, ,133 Profit , , ,321 Page 7 of 11

8 BALANCE SHEET ASSETS Cash balances and demand deposits with central banks... Receivables from credit institutions and central banks... Loans, advances and other receivables at amortized cost... Bonds at fair value... Shares, etc.... Equity investments in associates... Equity investments in group enterprises... Assets linked to pooled schemes... Intangible assets... Investment properties... Corporate headquarters properties... Land and buildings, total... Other property, plant and equipment... Temporary assets... Other assets... Prepayments... Total assets... LIABILITIES Payables to credit institutions and central banks... Deposits and other payables... Deposits in pooled schemes... Other non-derivative financial liabilities at fair value... Current tax liabilities... Temporary liabilities... Other liabilities... Deferred income... Total payables... PROVISIONS FOR LIABILITIES Provisions for pensions and related liabilities... Provisions for deferred tax... Provisions for losses on guarantees... Other provisions... Total provisions... SUBORDINATED CAPITAL CONTRIBUTIONS Subordinated capital contributions... SHAREHOLDERS EQUITY Share capital... Revaluation reserves... Accumulated changes in value... Statutory reserves... Other reserves... Retained earnings... Total shareholders equity... Total liabilities... OFF-BALANCE-SHEET ITEMS Guarantees, etc.... Other contingent liabilities... Total off-balance-sheet items... Spar Nord Spar Nord Spar Nord Bank A/S Bank A/S Bank A/S The Group The Group The Group DKK '000 DKK '000 DKK '000 1,163, , ,330 4,700,330 2,543,980 3,860,068 27,617,908 20,861,567 27,133,644 8,468,607 8,677,643 7,835, , , , , , , ,913 4,420 3,051,690 2,245,308 2,890,714 44,915 46,857 44,852 6,735 13,015 5, , , , , , , , , ,390 19,112 38,273 29,296 1,615,798 1,040,808 1,428,113 36,408 38,728 48,625 48,498,686 37,631,502 45,961,737 17,736,441 12,220,227 16,472,223 20,294,462 17,291,119 19,398,526 3,051,690 2,245,308 2,890, ,175 78, ,965 70,383 37,290 36,842 5, ,322 2,039,224 1,626,823 2,021,134 85,031 73,139 85,867 43,461,702 33,572,442 41,073,593 3,673 3,756 3, , , ,322 20,476 8,500 28,000 18,555 12,034 19, , , ,429 1,669,731 1,436,208 1,692, , , ,688 44,993 44,521 44,993 44,993 44,521 44, , , , , , ,269 2,347,311 1,747,895 2,200,993 3,207,419 2,469,121 3,038,943 48,498,686 37,631,502 45,961,737 6,199,507 5,336,628 6,394, ,000 13,000 6,199,507 5,338,628 6,407,161 Page 8 of 11

9 1. Interest income/premium on forward transactions Receivables from credit institutions and central banks... Loans, advances and other receivables... Bonds... Foreign-exchange contracts... Interest-rate contracts... Share contracts... Derivative instruments, total... Other interest income... Total interest income Interest expenses Credit institutions and central banks... Deposits and other payables... Subordinated capital contributions... Other interest expenses... Total interest expenses Fees, charges and commissions received Securities trading and custody accounts... Asset management... Payment services... Loan transaction fees... - Of which, credit institutions... Guarantee commissions... Other fees, charges and commissions... Fees, charges and commissions received, total Fees, charges and commissions paid Securities trading and custody accounts... Asset management... Guarantee commissions... Other fees, charges and commissions... Fees, charges and commissions paid, total Net fees, charges and commissions received Securities trading and custody accounts... Asset management... Payment services... Loan transaction fees... - Of which, credit institutions... Guarantee commissions... Other fees, charges and commissions... Net fees, charges and commissions received, total Market-value adjustments of Other loans, advances and receivables at fair value... Bonds... Shares, etc.... Foreign exchange... Foreign exchange, interest, share, commodity and other contracts and derivative instruments... Assets linked to pooled schemes... Deposits in pooled schemes... Other assets... Miscellaneous commitments... Total market-value adjustments... Spar Nord Spar Nord Spar Nord Bank A/S Bank A/S Bank A/S The Group The Group The Group 1st qua st qua DKK '000 DKK '000 DKK '000 24,197 14,899 66, , ,463 1,169,586 75,202 68, ,917 8,262 10,984 49, ,020-33, ,670-6,036 16, , , ,909 1,517,876 90,077 47, ,064 71,925 63, ,262 21,552 15,168 74,349 1, , , , ,280 45,170 20, ,708 48,792 29, ,608 10,785 9,493 41,853 19,803 17,461 75,336 12,650 11,514 45,620 7,977 8,637 40,469 14,446 13,294 31, ,973 99, ,193 5,679 4,968 27,380 4,235 5,456 15,661 2,107 1,823 11,200 2,925 2,923 15,865 14,946 15,170 70,106 39,491 15, ,328 44,557 24, ,947 10,785 9,493 41,853 19,803 17,461 75,336 12,650 11,514 45,620 5,870 6,814 29,269 11,521 10,371 15, ,027 84, ,087-5,652 3, ,009 22,745 51,748 49,688 24,366 96,437 17,981-53, ,385 71,359 82, ,325 64,867 92, ,791-64,867-92, , , ,182 63,258 80, ,637 Page 9 of 11

10 7. Staff costs and administrative expenses Salaries and remuneration of Executive Board, Supervisory Board, and Committee of Representatives Executive Board... Supervisory Board... Salaries and remuneration of Supervisory Board and Executive Board, total... Of which, the management incentive scheme for the Executive Board accounts for... Staff costs Salaries... Pensions... Social security costs... Total staff costs... Other administrative expenses IT expenses... Marketing costs... Cost of premises... Telephone and postage... Other office expenses... Other administrative expenses... Other administrative expenses, total... Staff costs and administrative expenses, total... Capital movements Shareholders equity, beginning of year... Change in accounting policies, transition to IFRS... Adjusted shareholders equity... Revaluation of properties for the year... Revaluation of properties for the year reversed... Other capital movements in associates and group enterprises... Share-based management incentive scheme... Net gains/losses recognized directly in shareholders equity... Profit for the period... Total income for the year... Dividend to shareholders... Dividend received, treasury shares... Disposal upon acquisition of treasury shares... Addition upon sale of treasury shares... Tax on capital gain, treasury shares... Deferred tax, treasury shares portfolio... Capital increase... Other movements, total... Shareholders equity, incl. profit for the period... Spar Nord Spar Nord Spar Nord Bank A/S Bank A/S Bank A/S The Group The Group The Group 1st qua st qua DKK '000 DKK '000 DKK '000 3,445 2,688 9, ,796 3,945 3,091 11, , , , ,972 14,793 12,639 54,273 8,887 7,969 34, , , ,679 34,357 32, ,392 20,372 12,332 53,047 15,445 9,440 41,788 6,381 8,344 27,738 2,977 2,167 9,577 26,946 21,901 86, ,478 86, , , , ,290 3,038,943 2,227,870 2,227, , ,900 3,038,943 2,360,770 2,360, , ,223 8, ,708 2, ,580 11, , , , , , , , , ,881-2, , , , , ,564-1, , , ,092 3,207,419 2,469,121 3,038,943 The share capital consists of shares in the denomination of DKK 100. Page 10 of 11

11 Specification - change in accounting policies, total: Reduced impairment of loans and advances... Income from fees, charges and commissions, etc. on an accruals basis.. Amortization of goodwill on consolidation ceased... Revaluation of properties to fair value... Treasury shares recognized directly in shareholders equity... Own bonds recognized directly under subordinated capital contributions Changed method for calculating fair value of financial instruments... Total adjustments before dividend and tax... Total tax effect... Total adjustments before dividend... No provision for proposed dividend... Net impact on shareholders equity... Spar Nord Spar Nord Spar Nord Bank A/S Bank A/S Bank A/S The Group The Group The Group 1st qua st qua DKK '000 DKK '000 DKK ' ,307 7, ,746-56, ,091 5, ,587 20, ,642-10, ,091-4, ,442-38, ,688 15, ,754-22, , , , ,900 Page 11 of 11