Jyske Bank A/S · OMXCOP:JYSK
Jyske Bank A/S — Q1 2012 Earnings Presentation
41 slides from Jyske Bank A/S's earnings presentation, 2012
Slide 1: Jyske Bank Quarterly report Q1 2012
Jyske Bank Quarterly report Q1 2012 1
Slide 2: Agenda
A Agenda d Jyske Bank in brief Off to a good start in 2012 Jyske Bank performance 2008-2011 y Jyske Bank actions in 2010,, 2011 and 2012 • Strengthening the revenue base • Cost reductions • Selective acquisitions including portfolios • Optimizing capital structure • Improving funding structure Danis
Slide 3: Jyske Bank in brief
Jyske Bank in brief 3
Slide 4: Jyske Bank in brief
Jyske Bank in brief Jyske Bank focuses on core business Description Branch Network • Established and listed in 1967 • 2nd largest Danish bank by lending • Total lending of approx. DKK 124bn • 109 domestic branches • Approx 550,000 Approx. 550 000 customers • Business focus is on Danish private indiv
Slide 5: Jyske Bank has a differentiation strategy
Jyske Bank in brief Jyske Bank has a differentiation strategy “Jyske Differences” • Vision is to be Denmark’s most customer-oriented bank by p providingg high g standard p personal financial advice and taking ga genuine interest in customers • The strategy is to position Jyske Bank as a visible and
Slide 6: Off to a good start in 2012
Off to a good start in 2012 6
Slide 7: Off to a good start in 2012
Off to a good start in 2012 • Change of strategy: Organic growth and select acquisitions – Two acquisitions of portfolios in 2011 • U d l i earnings Underlying i capacity i iimproved ddduring i 2011 • 2012 and 2013 – Reap the fruits of actions taken in 2010, 2011 and beginning of 2012 – ROE RO movin
Slide 8: Off to a good start in 2012 - cont.
Off to a good start in 2012 - cont. Financial figures Q1 2012 • Strong earnings in Q1 2012 Funding agreement using covered bonds • The agreement with BRFkredit about Covered Bond funding of Jyske Bank’s home loans is expected to increase the income by DKK 25m-50m in 2012. The agreement offers a grow
Slide 9: Jyske Bank performance 2008-2011
Jyske Bank performance 2008-2011 9
Slide 10: Jyske Bank performance
Jyske Bank performance DKKm 2008 2009 2010 2011 Q1 2012 Profit before Bank Packages, Packages 1522 1208 1509 1269* 540 the Guarantee fund and tax ROE 15.7% 11.3% 12.1% 9.5% 15.6% * Exclusive of one off items and special items 10
Slide 11: Pre-tax profit (ROE on average equity)
Pre-tax prof it (ROE on avg. equity) Average: 50% 110% 87% 19% 40% 30% 20% 10% 0% -10% 10% -20% -30% 1968 8 1971 1 1974 4 1977 7 1980 0 1983 3 1986 6 1989 9 1992 2 1995 5 1998 8 2001 1 2004 4 2007 7 2010 0 11
Slide 12: Jyske Bank actions in 2010, 2011 and 2012
Jyske Bank actions in 2010, 2011 and 2012 • Strengthening the revenue base • Cost reductions • Selective acquisitions including portfolios • Optimizing capital structure • Improving funding structure 12
Slide 13: Strengthening the revenue base
Strengthening the revenue base • Interest rate hikes in April April, July July, October October, December 2011 and in June 2012 • 150 bp (gross) in 2011 due to higher funding costs and payments to the Guarantee Fund • Full effect of Q4 2011 hikes from Q2 2012, and of July 2012 from Q3 2012 Net Inter
Slide 14: Cost reductions
Cost reductions • Underlying growth in costs 2% in 2011 and 0% in Q1 2012 • Staff reductions – Expected 3550 employees (exclusive of approx. 50 temporary employees) end of 2012 against 4158 in Q3 2006 • 9 branch mergers in NW Jutland and Copenhagen • Converting IT systems to Bankdata systems • Total
Slide 15: Cost reductions
Cost reductions Continued reduction in no. of employees • 150 employees in Sept 2011 - one off costs of DKK 80m in Q3 2011 • 100 employees by natural wastage in 2012 • Full effect DKK 150m • +141 employees from acquisitions • Expected 3.550 employees (exclusive of approx. 50 temporary employees) end
Slide 16: Selective acquisitions including portfolios
Selective acquisitions including portfolios Parts of Finans Nord Fjordbank Mors (branch) • Future new sales and administration of existing • Retail and SME portfolio; 43.000 customers, corporate leasing portfolio; approx. DKK 6bn (gross), loans DKK 2.3bn, deposits DKK 3.5bn, AUM DKK 300m on Jyske Ba
Slide 17: Optimizing capital structure
Optimizing capital structure Redemption of EUR 25m supplementary capital in Q2 2011 • Profit before tax: DKK - 52m • 7% b bond d lloan • Contractual maturity in 2024 Buy back of EUR 50m hybrid capital in Q4 2011 • Profit after tax: DKK +155m • Price of 55 • Offers for EUR 68m • Core Tier 1 Capital r
Slide 18: Solvency ratio
Solvency ratio 18 18 16 16 14 14 pct pct 12 12 10 10 8 8 6 6 4 4 2 2 0 0 2007 2008 2009 2010 2011 Core Tier 1 Hybrid Tier 1 Tier 2 Core Tier 1 Hybrid Tier 1 1,4 Tier 2 •Focus on equity •Aligned capital targets with requirements for Swedish SIFI’s (Core Tier 1 of 12%) •No government capital •No divid
Slide 19: Improving funding structure
Improving funding structure Agreement with BRF Kredit to issue covered bonds - Feb. 2012 • Home loans tranferred from JB balance sheet to BRF Kredit • Issue AAA covered bonds from existing capital centre • All new loans l f from F b February 2012 • Part of the existing stock of home loans, dependent
Slide 20: Liquidity position and run-off
Liquidity position and run-off 45 40 35 30 25 DKKbn 20 D 15 10 5 0 -5 31.03.2012 20
Slide 21: Long-term funding strategy
Long-term funding L f di strategy – A rare but regular issuer in the EMTN market Funding F di plans l f from 2012 andd beyond b d will ill d depend d on ddevelopments l t iin th the b balance l sheet h t (f (funding di gap)) - policy is to maintain a deposit/loan ratio in the region of 90% (end Q1 2
Slide 22: Danish FSA reports
Danish FSA reports 22
Slide 23: Danish FSA reports received in 2011 and 2012
Danish FSA reports received in 2011 and 2012 SME customers and IRB setup • Decision making material satisfactory • No ground for changing impairment charges • IRB models satisfactory IT inspection • Principles and policies meet required demands Market Risk and Compliance • Management of market risk
Slide 24: Q1 2012 in figures
Q1 2012 in figures • Core earnings • Credit quality • Investment portfolio earnings • Fee and commission income • Value adjustments 24
Slide 25: Core earnings
Core earnings 25
Slide 26: Core earnings
Core earnings Profit for the pperiod Index Q Q1 Q Q4 Q Q3 Q Q2 Q Q1 DKKm Q1 2012 Q1 2011 12/11 2012 2011 2011 2011 2011 2011 Net interest income 1,148 1,067 108 1,148 1,186 1,091 1,066 1,067 4,410 Dividends, etc. 3 2 150 3 0 1 14 2 17 Net fee and commission income 405 325 125 405 387 306 292 325 1,3
Slide 27: Core earnings before loan impairment charges
Core earnings g before loan impairment p charges g 3,500 1.000 900 3,000 800 DKKm DKKm 2,500 700 600 2 000 2,000 500 1,500 400 300 1,000 200 500 100 0 0 2007 2008 2009 2010 2011 •NII improving since Q2 2011 • Q1 driven by positive development in all major business areas • Expected to improve further
Slide 28: Credit quality
Credit quality 28
Slide 29: Loans and advances split by sector
Loans and advances split by sector Balance of loan impairment charges Loan impairment Jyske Bank A/S Loans, advances and and provisions for charges for the guarantees guarantees period Loss for the period Loans, advances and guarantees as well as loan impairment charges and provisions for guarantees
Slide 30: Large exposures
Large exposures per cent of capital base 70% 60% 50% 40% 30% 20% 10% 0% 2007 2008 2009 2010 2011 Q1 2012 • Long-term strategy is intact to reduce dependence on large corporates 30
Slide 31: Loan impairment charges
Loan impairment charges 3,000 1.000 900 2,500 800 DKKm DKKm 700 2,000 600 500 1 500 1,500 400 1,000 300 200 500 100 0 0 2007 2008 2009 2010 2011 • Strong performance throughout 2010 • Positive trend reversed in Q2 2011 driven by economic standstill • New level of impairment p charges, g , particular
Slide 32: Balance of loan impairment charges
Balance of loan impairment charges 5000 5000 4500 4500 4000 4000 DKKm DKKm 3500 3500 3000 3000 2500 2500 2000 2000 1500 1500 1000 1000 500 500 0 Q12009 Q22009 Q32009 Q42009 Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 0 2007 2008 2009 2010 2011 Balance of loan impairment charges Lo
Slide 33: Balance of loan impairment charges
Balance of loan impairment charges pct. t off loans l and d advances d 3.5% 4,0% 3,5% 3.0% 3,0% 2.5% 2,5% 2 0% 2.0% 2,0% 1.5% 1,5% 1.0% 1,0% 0 5% 0,5% 0.5% 0,0% Q12009 Q22009 Q32009 Q42009 Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 0.0% 2007 2008 2009 2010 2011 • Level of 2.9% fr
Slide 34: Earnings from investment portfolios
Earnings from investment portfolios 34
Slide 35: Earnings from investment portfolios
Earnings from investment portfolios 600 250 500 200 DKKm 400 DKKm 300 150 200 100 100 0 -100 50 -200 -300 0 Q12009 Q22009 Q32009 Q42009 Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 -400 2007 2008 2009 2010 2011 • Very satisfactory return in Q1 2012 of DKK 192m above quarterly 5-yea
Slide 36: Fee and commission income
Fee and commission income 36
Slide 37: Fee and commission income
2,000 Fee and commission income 450 1,800 400 1,600 DKKm DKKm 350 1,400 300 1,200 250 1,000 200 800 150 600 100 400 50 200 0 Q12009 Q22009 Q32009 Q42009 Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 0 2007 2008 2009 2010 2011 250 • Q1 2012 change of level 200 compared to 2009-2011 D
Slide 38: Value adjustments
Value adjustments 38
Slide 39: Value adjustments
Value adjustments 900 350 800 300 DKKm 700 250 DKKm 600 200 500 150 400 100 300 50 200 0 100 -50 0 -100 Q12009 Q22009 Q32009 Q42009 Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 -100 2007 2008 2009 2010 2011 150 100 • Rebound in Q1 2012 DKKm 50 • Turnover in FX improved, 0 derivativ
Slide 40: The Financial sector in Denmark
The Financial sector in Denmark 40
Slide 41: Danish financial institutions
Danish financial institutions 2008 2012 equity*) 1 Danske Bank 104.355 125.855 2 Jyske Bank 9.704 14.984 ¤ 3 FIH Erhvervsbank 7.849 7.166 4 Sydbank 6.697 9.595 5 Nykredit bank 6.099 14.202 6 Spar Nord 4.138 5.465 ¤ 7 Arbejdernes Landsbank 2.951 3.157 8 Roskilde Bank 2.633 - 9 Amagerbanken 2.319 - 10