Jyske Bank A/S · OMXCOP:JYSK
Jyske Bank A/S — Citi's Nordic Banks Day 2016
19 slides from Jyske Bank A/S's conference presentation, Dec 8, 2016
Slide 1: Jyske Bank – Citi's Nordic Banks Day
Jyske Bank Citi’s Nordic Banks Day 8 December 2016
Slide 2: Jyske Bank
Jyske Bank • One of the four large financial institutions in Denmark and a Danish SIFI – 3 segments (Banking, Mortgage and Leasing) – Estimated market share of 10% – Danish play – Approx. 890,000 customers and nationwide branch network of 99 branches – Total assets of DKK 562bn and total loans of DK
Slide 3: Our targets
Our targets Q3 2016 • Delivering an attractive long-term return on equity – Long-term target of delivering an after tax ROE between 8-12% 9.6% • DKK 100bn in housing-related loans from Jyske Bank branch network and DKK 20bn in DKK 73.9bn mortgage loans for corporate clients and DKK 11.2bn • Harvesti
Slide 4: Q3 2016
G JYSKE BANK Q3 2016
Slide 5: Q3 2016 highlights
Q3 2016 highlights • Danish economy – Slow recovery continues – Negative interest rate environment persists and is expected to continue – Danish dairy and pig farmers still facing low commodity prices • Jyske Bank delivers a net profit of DKK 721m, equal to after tax ROE 9.6% p.a. – NII supported fr
Slide 6: Delivering ROE within target range
Delivering ROE within target range Net profit • Delivering a net profit of DKK 721m in Q3 and DKK 1,914m YTD 900 18% DKKm 800 16% • After tax ROE of 9.6% p.a. in Q3 and 8.5% p.a. YTD 700 14% 600 12% 500 10% 400 8% 300 6% 200 4% 100 2% 0 0% Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Net profit ROE (afte
Slide 7: Jyske Bank/BRFkredit growth case
Jyske Bank/BRFkredit growth case 7
Slide 8: Jyske Bank/BRFkredit merger rationale
Jyske Bank/BRFkredit merger rationale Losses and impairment charges 1985 – 2014 (as a % of loans) 3.0 • Firmly establishes Jyske Bank as one of the four major % Mortgage (PIT) financial institutions in Denmark with a full product range 2.5 Banks (PIT) 2.0 Average losses and • Extensive distribution
Slide 9: Synergies harvested 18 months ahead of plan
Synergies harvested 18 months ahead of plan • Target for annual earnings and cost synergies of minimum DKK 600m achieved by end of Q2 2016 – Full impact from Q3 2016 and onwards – 18 months earlier than originally planned • New volume: – Volume of new home loan products DKK 73.9bn of which DKK 72.7b
Slide 10: …and growth in home loans and mortgages continues
…and growth in home loans and mortgages continues • Growth in volume: New home loan products – Volume of new home loan products DKK 73.9bn of which DKK 12 80 72.7bn was booked by end of Q3. The majority of these are booked DKKbn 70 as mortgage loans 10 60 – In Q1-Q3 2016, the Group has experienced a
Slide 11: Why are we successful in attracting customers?
Why are we successful in attracting customers? • Our customers can choose between two different product Margins on home loans incl. quotation cut1) (LTV 0-80%) types: With Fixed F5 F1 Floater2) – Transparent traditional mortgage products in BRFkredit instalments – Clear and simple new products in Jy
Slide 12: Profitable growth
Profitable growth 18 • Jyske Bank home loans are profitable on a stand-alone basis as: Fixed costs 16 Average lending costs per loan – Growth in the lending portfolio drives average costs down 14 towards capital costs 12 10 – Capital requirements are relatively low due to residential clients with lo
Slide 13: Capital
G JYSKE BANK Capital 13
Slide 14: Strong capital position
Strong capital position Capital ratio and CET1 • Capital ratio 17.8% and CET1 ratio 15.9% end of Q3 2016 compared to 20 17.0% and 16.1% end of 2015. Change in capital ratios due to: 18 0.7 – Consolidation 16 2.5 1.2 15.9 – Higher REA (primarily volume growth in property related loans) 14 1.5 – Share
Slide 15: Capital adjustment in process
Capital adjustment in process Capital ratio • Capital ratio 17.8% and CET1 ratio 15.9% end of Q3 2016 vs. long-term 20 targets of 17.5% and 14% (based on fully implemented CRD IV pct requirements as per 2020) 15 • Gradual capital adjustment towards targets initiated in Q3 2015 10 – Majority of adjus
Slide 16: Credit Quality
G JYSKE BANK Credit Quality 16
Slide 17: Net reversals exclusive of agriculture
Net reversals exclusive of agriculture • Impairment charges under core profit in the amount of DKK 77m of Loan impairment charges (under core profit) which DKK 112m relate to agriculture 200 DKKm 150 100 • End of Q3 total balance of management’s estimate of DKK 547m, of 50 which DKK 295m relate to a
Slide 18: Limited exposure to dairy and pig farmers
Limited exposure to dairy and pig farmers • Exposure to dairy and pig farmers accounts for less than 1% of Loans, advances and Balance of loan Impairment ratio the Group’s loans and guarantees guarantees impairment charges DKKm/% Q3 2016 Q4 2015 Q3 2016 Q4 2015 Q3 2016 Q4 2015 Dairy farmers 941 1,15
Slide 19: General legal disclaimer
General legal disclaimer • This presentation and the information contained therein is furnished and has been prepared solely for information purposes by Jyske Bank A/S. It is furnished for your private information with the express understanding, which recipient acknowledges, that it is not an offer,