Jyske Bank

Quarterly Report • Aug 18, 2020

Interim Financial Report

H1 2020

Interim Financial Report, H1 2020

Management's Review

The Jyske Bank Group	2
Summary	3
Financial Review	5
Capital and Liquidity Management	10
Other Information	13

Business Segments

Banking Activities	14
Mortgage Activities	16
Leasing Activities	18

Interim Financial Statements

Jyske Bank Group
Income Statement and Statement of Comprehensive Income	19
Balance Sheet	20
Statement of Changes in Equity	21
Capital Statement	22
Summary of Cash Flow Statement	23
Notes	24
Jyske Bank A/S	45

Statement by the Executive and Supervisory Boards 58

Jyske Bank A/S Vestergade 8-16 DK-8600 Silkeborg Tel.: +45 89 89 89 89 www.jyskebank.dk Email: jyskebank@jyskebank.dk Business Reg. No. (CVR): 17616617

The Jyske Bank Group Core profit and net profit for the period (DKKm)

Core profit and net profit for the period (DKKm)
--------------------------------------------------	--

	H1	H1	Index	Q2	Q1	Q4	Q3	Q2	FY
	2020	2019	20/19	2020	2020	2019	2019	2019	2019
Net interest income	2,515	2,603	97	1,287	1,228	1,270	1,279	1,309	5,152
Net fee and commission income	1,057	1,047	101	407	650	653	611	554	2,311
Value adjustments	218	185	118	331	-113	252	-95	-8	342
Other income	56	106	53	26	30	41	7	59	154
Income from operating lease (net)	7	58	12	-1	8	15	28	34	101
Core income	3,853	3,999	96	2,050	1,803	2,231	1,830	1,948	8,060
Core expenses*	2,510	2,541	99	1,164	1,346	1,213	1,275	1,256	5,029
Core profit before loan impairment charges	1,343	1,458	92	886	457	1,018	555	692	3,031
Loan impairment charges	1,011	-7	-	8	1,003	-64	-30	9	-101
Core profit	332	1,465	23	878	-546	1,082	585	683	3,132
Investment portfolio earnings	-227	-61	-	223	-450	144	-136	-50	-53
Pre-tax profit	105	1,404	7	1,101	-996	1,226	449	633	3,079
Tax	23	295	8	239	-216	260	84	134	639
Net profit for the period	82	1,109	7	862	-780	966	365	499	2,440
Summary of balance sheet, end of period (DKKbn)
Loans and advances	481.5	479.9	100	481.5	485.2	485.9	483.8	479.9	485.9
- of which mortgage loans	339.8	336.9	101	339.8	336.6	337.5	338.7	336.9	337.5
- of which traditional loans and advances	95.3	103.3	92	95.3	99.2	98.7	101.7	103.3	98.7
- of which new home loans	3.4	4.7	72	3.4	3.4	3.4	4.0	4.7	3.4
- of which repo loans	43.0	35.0	123	43.0	46.0	46.3	39.4	35.0	46.3
Bonds and shares, etc.	94.7	98.6	96	94.7	90.9	91.9	94.8	98.6	91.9
Total assets	642.1	646.4	99	642.1	674.1	649.7	662.5	646.4	649.7
Deposits	145.9	152.7	96	145.9	146.8	140.2	157.9	152.7	140.2
- of which bank deposits	132.0	139.4	95	132.0	131.2	126.9	138.2	139.4	126.9
- of which repo deposits and tri-party deposits	13.9	13.3	105	13.9	15.6	13.3	19.7	13.3	13.3
Issued bonds at fair value	339.6	350.7	97	339.6	347.3	357.0	359.5	350.7	357.0
Issued bonds at amortised cost	46.7	38.4	122	46.7	42.7	38.6	39.4	38.4	38.6
Subordinated debt	5.8	4.3	135	5.8	5.8	4.3	4.3	4.3	4.3
Holders of Additional Tier 1 Capital	3.2	3.2	100	3.2	3.2	3.3	3.2	3.2	3.3
Shareholders' equity	32.0	32.2	99	32.0	31.2	32.5	32.0	32.2	32.5
Financial ratios and key figures
Earnings per share for the period (DKK)**	0.0	12.8		11.3	-11.1	12.2	4.2	5.7	29.0
Profit for the period, per share (diluted) (DKK)**	0.0	12.8		11.3	-11.1	12.2	4.2	5.7	29.0
Pre-tax profit p.a. as a percentage of average				13.4	-13.0	14.7	5.1	7.3
equity**	0.1	8.3							9.1
Profit for the period p.a. as a percentage of
average equity**	0.0	6.6		10.4	-10.3	11.5	4.0	5.7	7.1
Expenses as a percentage of income	65.1	63.5		56.8	74.7	54.4	69.7	64.5	62.4
Capital ratio (%)	22.2	19.8		22.2	21.5	21.5	20.2	19.8	21.5
Common Equity Tier 1 capital ratio (CET1 %)	17.3	16.0		17.3	16.7	17.4	16.3	16.0	17.4
Individual solvency requirement (%)	11.1	10.7		11.1	11.0	11.2	11.0	10.7	11.2
Capital base (DKKbn)	40.3	38.6		40.3	39.3	39.0	38.3	38.6	39.0
Weighted risk exposure (DKKbn)	181.7	195.1		181.7	182.9	181.4	189.7	195.1	181.4
Share price at end of period (DKK)	195	228		195	169	243	221	228	243
Distributed dividend per share (DKK)	-	-		-	-	-	-	-	-
Book value per share (DKK)**	440	408		440	430	434	418	408	434
Price/book value per share (DKK)**	0.4	0.6		0.4	0.4	0.6	0.5	0.6	0.6
No. of full-time employees at end-period***	3,420	3,660		3,420	3,508	3,559	3,639	3,660	3,559

Relationships between income statement items under 'The Jyske Bank Group' (key financial data) and the income statement page 19 appear from note 4.

* Costs relating to the sale of Jyske Bank (Gibraltar) amounted to DKK 75m in the first half of 2020.

**Financial ratios are calculated as if Additional Tier 1 Capital is recognised as a liability.

*** The number of employees at the end of the first half of 2020 less 49 employees who are financed externally against approx. 50 employees in the other quarters.

Summary

"The results for the first half of 2020 are affected by the impact of the COVID-19 outbreak on impairment charges and investment portfolio earnings by about DKK -1.3 bn before tax in comparison with the first half of 2019. The credit quality remains strong with insignificant individual impairment charges in the first half of the year as well as a low proportion of non-performing loans. In the first half of the year, during difficult circumstances and during the entire lockdown period, the Jyske Bank organisation's operational performance was satisfactory. Also, due to its solid capital and liquidity position, Jyske Bank is in a good position to handle the consequences of the COVID-19 outbreak", states Anders Dam, CEO and Managing Director.

In Denmark, the reopening of the economy as well as the extraordinary economic support from the Danish government has reduced the risk of the worst crisis scenarios materialising after the outbreak of COVID-19, even though there is still limited visibility. So far, after the reopening, the Danish economy has developed in a stable manner with a low level of bankruptcies as well as stabilisation of the housing market and consumer spending.

The clients' capital and liquidity position is strong and supported by compensation schemes relating to COVID-19 as well as deferment of tax and VAT payments. This, in combination with a lower activity and investment level in the economy, resulted in a lower demand for credit. As the extraordinary economic support will be partially phased out in the second half of the year, it is expected that the economic consequences of the outbreak of COVID-19 will be increasingly pronounced. Therefore, Jyske Bank recognised as an expense DKK 1 bn in the first quarter in the form of a management's estimate for impairment charges.

In addition to the economic challenges, the outbreak of COVID-19 also resulted in adjustments in society, among other things of work habits and client behaviour. This caused, for instance a stronger trend towards digital client interactions and an increasingly cashless society.

Net profit of DKK 82m in first half of 2020

The net profit for the period corresponded to a return on equity of 0.0% p.a. against 6.6% p.a. for the corresponding period of 2019. The lower profit can chiefly be attributed to an increased management's estimate for impairment charges in the amount of DKK 1 bn after the outbreak of COVID-19, to the turbulent financial markets and to expenses relating to the sale of Jyske Bank (Gibraltar).

Moreover, activity levels were adversely affected by the outbreak of COVID-19. Hence, core income fell by 4% relative to the first half of 2019, among other things due to lower bank loans and advances. The lower bank loans and advances contributed to an

increase in the deposit surplus by DKK 8 bn to DKK 33 bn in the first half of the year despite the introduction of negative deposit rates for parts of personal clients' deposits as of 1 December 2019.

However, the second quarter saw signs of improvement as net interest income rose by 5% due to a lower limit of DKK 250,000 for zero interest on personal clients' deposit as of 1 May. Hence, this initiative countered the lower demand for credit as well as a higher deposit rate on clients' deposits in e.g. NemKonto, to -0.60% from -0.75%.

Adjusted for costs relating to the sale of Jyske Bank (Gibraltar), core expenses fell by 4%, as the number of full-time employees was reduced by 7%, and the changed work routines after the outbreak of COVID-19 reduced expenses for e.g. travelling.

In the first half of the year, credit quality remained strong, and the proportion of non-performing loans and advances continued to fall. In the first quarter, an amount of DKK 1 bn was recognised as an expense for potential impairment charges in consequence of the outbreak of COVID-19, and this management's estimate was still intact at the end of the first half of the year. Jyske Bank's direct exposure to especially affected industries, such as the airline, shipping and retail industries, hotels and restaurants as well as the leisure industry is estimated to be smaller than would be implied by the bank's normal market share.

At the end of the first half of 2020, Jyske Bank had a historically high capital ratio of 22.2% with a capital buffer of DKK 13 bn and a liquidity coverage (LCR) of DKK 92 bn. The capital and liquidity buffer continues to be able to withstand severe stress scenarios.

Outlook

Jyske Bank anticipates that the economic activity level in Denmark will deteriorate significantly in 2020 due to the outbreak of COVID-19.

It is expected that a lower level of core income will be generated compared to 2019 due to more moderate fee income, while it is still expected that net interest income over the coming quarters will be higherthan in the first quarter of 2020.

Jyske Bank aims to keep core expenses, inclusive of expenses of a one-off nature of DKK 75m, at an unchanged level in 2020, through continuing focus on costs.

Due to the expected economic and technological development the number of employees is expected to decrease by 150-200 by mid-2021. The natural employee turnover is normally 200- 300 annually, and the reduction is thus expected to be realised primarily by natural attrition. Additionally, a decrease in the number of branches of approximately 20% is expected by mid-2021 due to changed customer behaviour.

It is expected that loan impairment charges will be at a higher level than in 2019 due to a management's estimate relating to COVID-19.

For 2020, a net profit of DKK 1.0 bn - 1.5 bn is expected. The expectations are based on the assumption that the financial markets will show a stable development, and the expectations are exclusive of expenses of a one-off nature, which amounted to DKK 75m in the first half of the year.

Financial Review

Core profit and net profit for the period (DKKm)

	H1	H1	Index	Q2	Q1	Q4	Q3	Q2	FY
	2020	2019	20/19	2020	2020	2019	2019	2019	2019
Net interest income	2,515	2,603	97	1,287	1,228	1,270	1,279	1,309	5,152
Net fee and commission income	1,057	1,047	101	407	650	653	611	554	2,311
Value adjustments	218	185	118	331	-113	252	-95	-8	342
Other income	56	106	53	26	30	41	7	59	154
Income from operating lease (net)	7	58	12	-1	8	15	28	34	101
Core income	3,853	3,999	96	2,050	1,803	2,231	1,830	1,948	8,060
Core expenses	2,510	2,541	99	1,164	1,346	1,213	1,275	1,256	5,029
Core profit before loan impairment charges	1,343	1,458	92	886	457	1,018	555	692	3,031
Loan impairment charges	1,011	-7	-	8	1,003	-64	-30	9	-101
Core profit	332	1,465	23	878	-546	1,082	585	683	3,132
Investment portfolio earnings	-227	-61	-	223	-450	144	-136	-50	-53
Pre-tax profit	105	1,404	7	1,101	-996	1,226	449	633	3,079
Tax	23	295	8	239	-216	260	84	134	639
Net profit for the period	82	1,109	7	862	-780	966	365	499	2,440

Net profit for the period

Net profit amounted to DKK 82m in the first half of 2020 against DKK 1,109m in the corresponding period in 2019. The lower profit can primarily be attributed to a higher management's estimate for impairment charges following the outbreak of COVID-19.

Core income

Core income amounted to DKK 3,853m against DKK 3,999m in the first half of 2019. The decline can primarily be attributed to lower net interest income.

Net interest income amounted to DKK 2,515m against DKK 2,603m in the same period in 2019, corresponding to a decline by 3%. The decline can, in addition to the sale of Jyske Bank (Gibraltar), be attributed to higher funding costs as well as a lower contribution from trading activities. Lower bank loans and advances and pressure on lending rates were compensated for by rising nominal mortgage loans and lower deposit rates.

Strategic balance sheet and risk management (DKKm)

	H1	H1
	2020	2019
Net interest income	59	45
Value adjustments	-86	-14
Banking activities, total	-27	31
Net interest income	40	44
Value adjustments	21	-13
Mortgage activities, total	61	31
Jyske Bank Group, total	34	62

Excl. strategic balance sheet and risk management (DKKm)

	H1 2020	H1 2019
Net interest income	2,416	2,514
Value adjustments	283	212

Net fee and commission income amounted to DKK 1,057m against DKK 1,047m in the first half of 2019, i.e. an increase by 1%. In the first half of 2020, performance fees amounted to DKK 67m against DKK 38m for the same period in 2019 that also included fee expenses relating to the issue of a covered bond in the amount of EUR 500m by Jyske Realkredit. Adjusted for these two effects, net fee and commission income fell by 3%, as the outbreak of COVID-19 posed a challenge, in particular, in relation to income from money transfers and card payments, while also remortgaging activity fell in the second quarter of 2020.

Value adjustments increased to DKK 218m from DKK 185m in the first half of 2019. The effect from turbulent financial markets following the outbreak of COVID-19 were in the second quarter of 2020 compensated for by positive financial markets, which ensured a total increase relative to the first half of 2019 despite lower value adjustments in the amount of DKK 38m from the strategic balance sheet and risk management.

Other income fell to DKK 56m from DKK 106m, primarily due to gains from the sale of real property in the first half of 2019 and value adjustment of equity investments in associates. Income from operating lease (net) fell to DKK 7m from DKK 58m due to the higher management's estimate for impairment charges and lower expected residual values of leased cars.

Core expenses

In the first first half of 2020, core expenses fell by 1% compared with the same period in 2019 despite extraordinary expenses of DKK 75m relating to the sale of Jyske Bank (Gibraltar), as well as an increased payroll tax and a higher contribution to the Resolution Fund under Finansiel Stabilitet (the Danish resolution authority). Adjusted for the sale of Jyske Bank (Gibraltar), core expenses fell by 4% relative to the first half of 2019. At the end of the first half of 2020, the number of full-time employees of Jyske Bank was 3,420 compared to 3,660 at the end of the first half of 2019, corresponding to a decline by 7%, and also the outbreak of COVID-19 reduced expenses for travelling etc.

Core expenses (DKKm)

	H1 2020	H1 2019
Staff costs	1,507	1,508
IT costs	681	682
Rent, etc. Amortisation, depreciation and	28	38
impairment	57	75
Other operating expenses	162	238
Sale of Jyske Bank (Gibraltar)	75	0
Total	2,510	2,541

Impairment charges

Loan impairment charges and provisions for guarantees amounted to an expense of DKK 1,011m against an income of DKK 7m in the first half of 2019. The increase can be attributed to a higher management's estimate due to expected economic effects from the outbreak of COVID-19. At the end of the first half of 2020, impairment charges based on the management's estimates amounted to DKK 1,569m against DKK 561m at the same time a year ago.

Investment portfolio earnings

For the first half of 2020, investment portfolio earnings amounted to DKK -227m against DKK -61m for the same period of 2019. The negative earnings can in particular be attributed to the market turmoil after the outbreak of COVID-19, resulting in widening of the spreads on Danish mortgage bonds and a flatter yield curve. To this must be added a negative effect from certain currency positions. The hedging of AT-1 capital instruments in SEK had a positive effect of DKK 15m in the first half of 2020, which was offset by a negative adjustment of shareholders' equity.

Investment portfolio earnings (DKKm)

	H1 2020	H1 2019
Net interest income	47	50
Value adjustments	-258	-97
Other income	0	2
Income	-211	-45
Expenses	16	16
Investment portfolio earnings	-227	-61

The Group's own securities portfolio still consists of tactical market risk positions (primarily interestrate and currency risk exposures) and a smaller amount of bond investments.

Q2 2020 compared to Q1 2020

Net profit rose to DKK 862m from DKK -780m in Q1.

Core income amounted to DKK 2,050m against DKK 1,803m in Q1, as higher value adjustments more than offset lower net fee and commission income.

Net interest income rose by 5% to DKK 1,287m against DKK 1,228m in Q1. The increase can be attributed to a lower limit of DKK 250,000 for zero interest on personal clients' deposits as of 1 May and to a higher contribution from trading activities. These effects outweighed lower bank loans and the sale of Jyske Bank (Gibraltar).

Net fee and commission income came to DKK 407m against DKK 650m in Q1. The decline was caused by lower remortgaging activity and the absence of performance fees, which amounted to DKK 67m in Q1. To this must be added seasonally lower refinancing activity and fee income relating to Letpension and Letsikring as well as the sale of Jyske Bank (Gibraltar). Finally, the outbreak of COVID-19 reduced activity levels and affected in particular payment services, while mix changes reduced wealth management fees.

Value adjustments rose to DKK 331m from DKK - 113m. Contrary to Q1, value adjustments were favourably affected by developments in the financial markets, incl. narrowing of credit spreads and rising equity markets.

Core expenses fell to DKK 1,164m from DKK 1,346m. In Q1, expenses relating to operations and sale of Jyske Bank (Gibraltar) totalled about DKK 100m. To this must be added a lower number of employees, lower IT expenses and a broadbased reduction of administrative expenses, among other things due to less travelling, etc. after the outbreak of COVID-19.

Loan impairment charges and provisions for guarantees amounted to DKK 8m against DKK 1,003m for the preceding quarter. The higher level in the first quarter related to a higher management's estimate due to potential effects from the outbreak of COVID-19.

Investment portfolio earnings rose to DKK 223m from DKK -450m in the first quarter of 2020 and were favourably affected by narrowing credit spreads and currency positions.

Business volume

Summary of balance sheet, end of period (DKK bn)

	H1	H1	Index	Q2	Q1	Q4	Q3	Q2	FY
	2020	2019	20/19	2020	2020	2019	2019	2019	2019
Loans and advances	481.5	479.9	100	481.5	485.2	485.9	483.8	479.9	485.9
- of which mortgage loans	339.8	336.9	101	339.8	336.6	337.5	338.7	336.9	337.5
- of which traditional loans and advances	95.3	103.3	92	95.3	99.2	98.7	101.7	103.3	98.7
- of which new home loans	3.4	4.7	72	3.4	3.4	3.4	4.0	4.7	3.4
- of which repo loans	43.0	35.0	123	43.0	46.0	46.3	39.4	35.0	46.3
Bonds and shares, etc.	94.7	98.6	96	94.7	90.9	91.9	94.8	98.6	91.9
Total assets	642.1	646.4	99	642.1	674.1	649.7	662.5	646.4	649.7
Deposits	145.9	152.7	96	145.9	146.8	140.2	157.9	152.7	140.2
- of which bank deposits	132.0	139.4	95	132.0	131.2	126.9	138.2	139.4	126.9
- of which repo deposits and tri-party
deposits	13.9	13.3	105	13.9	15.6	13.3	19.7	13.3	13.3
Issued bonds at fair value	339.6	350.7	97	339.6	347.3	357.0	359.5	350.7	357.0
Issued bonds at amortised cost	46.7	38.4	122	46.7	42.7	38.6	39.4	38.4	38.6
Subordinated debt	5.8	4.3	135	5.8	5.8	4.3	4.3	4.3	4.3
Holders of Additional Tier 1 Capital	3.2	3.2	100	3.2	3.2	3.3	3.2	3.2	3.3
Shareholders' equity	32.0	32.2	99	32.0	31.2	32.5	32.0	32.2	32.5

Jyske Bank's total loans and advances exclusive of repo loans amounted to DKK 438.5 bn at the end of the first half of 2020 against DKK 439.6 bn at the end of 2019. The reason for the decline was that the increase in mortgage loans was more than offset by the decline in bank loans and advances.

Mortgage loans at fair value rose to DKK 339.8 bn from DKK 337.5 bn at the end of 2019 due to higher loans for corporate clients. Nominal mortgage loans also rose by 1%. At the end of the first half of 2020, the level of new home loans was unchanged at DKK 3.4 bn, and mortgage loans at fair value amounted to 78% of total loans and advances exclusive of repo loans.

Traditional bank loans and advances fell by 3% to DKK 95.3 bn compared with the level at the end of 2019. The decline took place in the second quarter, where particularly loans and advances for corporate clients fell due to the limited demand for credit following the outbreak of COVID-19 as well

as the launch of extraordinary economic support from the Danish government. Loans and advances for personal clients still fell.

At the end of the first half of 2020, bank deposits amounted to DKK 132.0 bn, reflecting an increase by 4% relative to the level at the end of 2019 caused by higher deposits from corporate clients.

At the end of the first half of 2020, bank deposits amounted to DKK 33 bn more than bank loans and advances, i.e. an increase by DKK 8 bn as compared to the level at the end of 2019.

At the end of the first half of 2020, the assets under management amounted to DKK 165 bn as compared to DKK 171 bn at the end of 2019. The first half of the year was characterised by turbulent financial markets. On the whole, net sales to retail clients was positive for the first half of 2020, which also saw continuing inflow of new funds from professional clients.

Credit quality

Non-performing loans and guarantees (DKK bn)

	H1	H1	Index	Q2	Q1	Q4	Q3	Q2	FY
Loans, advances and guarantees	2020 493.2	2019 495.0	20/19 100	2020 493.2	2020 497.4	2019 497.8	2019 495.4	2019 495.0	2019 497.8
Non-performing loans and guarantees	9.2	10.4	89	9.2	9.8	10.3	10.2	10.4	10.3
Impairment charges and provisions Non-performing loans and guarantees after	3.6	3.5	104	3.6	3.6	3.4	3.3	3.5	3.4
impairment charges	5.6	6.9	83	5.6	6.2	6.9	6.9	6.9	6.9
NPL ratio	1.1%	1.4%	80	1.1%	1.2%	1.4%	1.4%	1.4%	1.4%
NPL coverage ratio	39.8%	35.1%	114	39.8%	37.3%	34.6%	34.4%	35.1%	33.4%
Non-performing loans and past due
exposures	1.1	1.4	79	1.1	1.1	1.2	1.3	1.4	1.2
Loan impairment charges and provisions for
guarantees for the period	1.0	0.0	-	0.0	1.0	-0.1	0.0	0.0	-0.1
Operating losses	0.3	0.5	59	0.1	0.2	0.1	0.1	0.2	0.7

At the end ofthe first half of 2020, non-performing loans and advances amounted to 1.1% of loans, advances and guarantees against 1.4% at the end of 2019. Loans and advances subject to forbearance amounted to 1.3% against 2.0% at the end of 2019.

At the end of the first half of 2020, Jyske Bank's balance of loan impairment charges amounted to DKK 5.9 bn, corresponding to 1.2% of loans, advances and guarantees against DKK 5.1 bn and 1.0%, respectively, at the end of 2019.

Loans, advances and guarantees – by sector (DKK bn/%)

		Loans, advances and guarantees	Impairment ratio
	Q2 2020	Q4 2019	Q2 2020	Q4 2019
Public authorities	10.8	8.7	0.0	0.0
Agriculture, hunting, forestry and fishing	7.1	7.3	8.2	9.5
Manufacturing industry and mining	10.2	8.6	2.5	2.4
Energy supply	6.1	4.9	0.9	0.8
Construction	8.0	7.7	1.8	1.6
Commerce	12.3	13.4	2.4	1.4
Transport, hotels and restaurants	6.9	6.9	2.2	1.4
Information and communication	0.5	0.8	26.6	25.4
Finance and insurance	39.9	46.8	2.0	1.4
Real property	155.1	152.4	0.7	0.5
Other sectors	17.6	17.7	1.7	1.1
Corporate clients	263.7	266.5	1.5	1.3
Personal clients	218.7	222.6	0.9	0.8
Total	493.2	497.8	1.2	1.0

At the end of first half of 2020, impairment charges based on management's estimates amounted to DKK 1,569m, of which DKK 140m related to agricultural clients against DKK 589m and DKK 180m, respectively, at the end of 2019. The

increase can be attributed to a higher management's estimate due to expected effects from the outbreak of COVID-19, resulting in a total estimate of DKK 1,045m.

Loans, advances and guarantees by IFRS 9 stages (DKK bn/%)

		Loans, advances and		Balance of impairment		Impairment ratio
		guarantees		charges
	Q2 2020	Q4 2019	Q2 2020	Q4 2019	Q2 2020	Q4 2019
Stage 1	466.9	468.4	0.8	0.7	0.2	0.1
Stage 2	21.4	23.5	1.7	1.1	7.2	4.7
Stage 3	4.9	5.9	3.4	3.3	41.0	35.5
Total	493.2	497.8	5.9	5.1	1.2	1.0

Agriculture

At the end of the first half of 2020, the impairment ratios for dairy farmers and pig farming were 35% and 10%, respectively, of loans, advances and guarantees against 34% and 11%, respectively, at the end of 2019. Settlement prices for milk were stable in the first half of 2020, while settlement prices for slaughter pigs fell in the second quarter of 2020 after a period of increases.

Agriculture exclusive of fishing (DKKm/%)

		Loans, advances and guarantees		Balance of impairment charges		Impairment ratio
	Q2	Q4	Q2	Q4	Q2	Q4
	2020	2019	2020	2019	2020	2019
Milk	552	613	299	312	35.1	33.7
Pigs	1,427	1,380	162	178	10.2	11.5
Plants	2,311	2,039	87	98	3.6	4.6
Fur farming	91	115	20	42	18.0	26.8
Other	1,252	1,243	59	124	4.5	9.1
Total	5,633	5,390	627	754	10.0	12.3

Capital and Liquidity Management

Capital management

Jyske Bank's objective is to maintain a capital ratio of 20%-22% and a common equity tier 1 capital ratio of 15%-17% over the next two or three years. At these levels, Jyske Bank can comfortably meet capital requirements and has at the same time the required strategic scope.

At the end of the first half of 2020, Jyske Bank had a capital ratio of 22.2% and a common equity tier 1 capital ratio of 17.3%. At the end of 2019, the capital ratios were 21.5% and 17.4%, respectively.

Capital ratios (%)
	Q2 2020	Q4 2019
Capital ratio	22.2	21.5
Core Tier 1 capital ratio	19.2	19.4
Common Equity Tier 1 capital ratio	17.3	17.4

The total risk weighted exposure amounted to DKK 181.7 bn at the end of the first half of 2020 against DKK 181.4 bn at the end of 2019.

Weighted risk exposure (DKKm)

	Q2	Q4
	2020	2019
Credit risk, etc.	156,307	153,912
Market risk	10,707	11,606
Operational risk	14,680	15,930
Total	181,694	181,448

In connection with the presentation of its 2019 Annual Report, Jyske Bank announced that it raised and extended the current share buy-back programme by DKK 500m to DKK 1,500m. In consequence of "the Joint statement of the Danish government and Finance Denmark in the light of the coronavirus outbreak" of 23 March 2020 and in the light of the increased macroeconomic uncertainty, Jyske Bank's Supervisory Board decided to cancel the remaining part of the current share buy-back programme. Buybacks in the amount of DKK 412m were outstanding under the share buy-back programme, under which a total of 4,992,980 shares had been bought back before the cancellation. The extraordinary general meeting on 28 July 2020 adopted a similar reduction of the share capital. After registration with the Danish Business Authority, the share capital will amount to 72,560,778 shares, each of a nominal value of DKK 10.

The Supervisory Board of Jyske Bank will consider the possibilities of activating the capital distribution policy, when the economic consequences of the

COVID-19 outbreak have been clarified to a greater extent.

Jyske Bank sold DLR Kredit shares in the equivalent value of DKK 155m as part of the ordinary reallocation of shares in DLR Kredit A/S. Hence Jyske Bank's equity interest fell to DKK 935m and 6.9% compared to the high of DKK 1,832m and 15.7% at the end of 2017.

Capital requirement

At the end of the first half of 2020, Jyske Bank's individual solvency requirement was 11.1% of the weighted risk exposure against 11.2% at the end of 2019. To this must be added a SIFI requirement of 1.5% and a capital conservation buffer of 2.5%. Both the SIFI requirements and the capital conservation buffer have been fully phased in. In the first half of 2020, the countercyclical buffer was released, which lowered the capital requirement by 1% of the risk-weighted items. The current level of the countercyclical capital buffer will be maintained at least for the coming four quarters. The buffer is expected to be phased in at the earliest as of the beginning of 2022.

Capital requirement (%)
	Capital ratio		CET1 ratio
	Q2	Q4	Q2	Q4
	2020	2019	2020	2019
Pillar I	8.0	8.0	4.5	4.5
Pillar II	3.1	3.2	1.8	1.8
SIFI	1.5	1.5	1.5	1.5
Capital conservation
buffer	2.5	2.5	2.5	2.5
Countercyclical buffer	0.0	1.0	0.0	1.0
Capital requirement	15.1	16.2	10.3	11.3

This forms the basis of the total capital requirement of 15.1% against 16.2% at the end of 2019 and results in a capital buffer of 7.1% of the weighted risk exposure, corresponding to DKK 12.8 bn against 5.3% and DKK 9.7 bn, respectively, at the end of 2019.

Capital buffer (%)

	Q2 2020	Q4 2019
Capital ratio	22.2	21.5
Overall capital requirement	15.1	16.2
Capital buffer	7.1	5.3

Liquidity management

Jyske Bank's biggest source of funding was covered bonds and mortgage bonds, which amounted to DKK 343 bn, corresponding to 53% of the balance sheet in the first half of 2020. The

second-largest source of funding in the amount of DKK 132 bn was client deposits, of which a high proportion consists of deposits from small and medium-sized enterprises as well as personal clients.

At the end of the first half of 2020, Jyske Bank's Liquidity Coverage Ratio (LCR) was 350%, against 253% at the end of 2019. The Group's internal guideline points to a LCR of at least 150%. The increase of the buffer in the first half of 2020 was primarily caused by higher deposits, falling bank loans and advances and a higher outstanding volume under the CP programme. The LCR buffer after haircuts at the end of the first half of 2020 is shown below.

LCR buffer
	DKKbn	%
Level 1a assets	41.4	45
Level 1b assets	47.8	52
Level 2a + 2b assets	2.8	3
Total	92.0	100

Refinancing profile

At the end of the first half of 2020, outstanding unsecured senior debt and supplementary tier 2 capital amounted to DKK 20.6 bn and DKK 4.7 bn, respectively, against DKK 25.5 bn and DKK 3.3 bn at the end of 2019.

The run-off profile for the Group's unsecured senior debt, etc. determined at the end of the first half of 2020 is illustrated by the below chart.

At the end of the first half of 2020, covered bonds involving refinancing risk amounted to DKK 206.5 bn, and the run-off profile of the underlying mortgage loans is shown the chart below.

Issuer activity and funding plans

In January 2020, Jyske Bank issued new supplementary tier 2 capital in the amount of EUR 200m at an interest rate corresponding to 3 month CIBOR + 1.3%. The time to maturity of the issue is ten years with the right of early redemption after five years. In addition, Jyske Bank is on an ongoing basis active in the French CP market. At the end of the first half of 2020, the outstanding volume under the CP programme amounted to DKK 28.5 bn against DKK 15.6 bn at the end of 2019.

The release of the counter-cyclical buffer in March 2020 and Jyske Bank's tier 2 issue in January 2020 resulted in a reduction of the Group's need to issue non-preferred senior debt in order to meet the minimum requirement for own funds and eligible liabilities (MREL). The implementation of the amendments to the EU Crisis Management Directive (BRRD II) also entails that a part of the MREL can be met with preferred senior debt, which also reduces the need to issue non-preferred senior debt.

Depending on the market conditions, among other things, Jyske Bank aims at issuing MREL-eligible debt instruments in the amount of EUR 500m in the second half of 2020. Once the transitional arrangements for MREL have been phased out at the beginning of 2022, Jyske Bank anticipates a requirement for MREL-eligible debt instruments in an amount of about DKK 16 bn, of which DKK 4 bn - 5 bn in preferred senior debt and DKK 11 bn - 12 bn in the form of non-preferred senior debt.

Credit rating

Jyske Bank is being rated by Standard & Poor's (S&P). Jyske Realkredit has the same credit rating as Jyske Bank.

S&P credit rating

Jyske Bank issuer rating	Rating	Outlook
Stand Alone Credit Profile (SACP)	A-	Stable
Short-term unsecured senior debt (preferred senior)	A-1	Stable
Long-term unsecured senior debt (preferred senior)	A	Stable
Long-term non-preferred senior debt (non-preferred senior)	BBB+	Stable
Tier 2	BBB	Stable
Additional Tier 1 (AT1)	BB+	Stable
Jyske Realkredit Bond issues
Capital Centre E covered bonds	AAA
Capital Centre B mortgage bonds	AAA

The supervisory diamond for Jyske Realkredit A/S

	Q2 2020	Q4 2019
Concentration risk <100%	48.5%	47.9%
Increase in loans <15% annually in the
segment:
Owner-occupied homes and vacation
homes	-0.2%	2.4%
Residential rental property	4.1%	0.2%
Other sectors	5.9%	6.1%
Borrower's interest-rate risk <25%
Residential property	17.5%	17.8%
Interest-only schemes <10%
Owner-occupied homes and vacation
homes	6.1%	6.4%
Loans with frequent interest-rate fixing:
Refinancing (annually) <25%	16.3%	15.0%
Refinancing (quarterly) <12.5%	4.3%	1.7%

Jyske Realkredit A/S meets all the benchmarks of the supervisory diamond.

Supervisory diamond

The supervisory diamond defines a number of special risk areas including specified limits that financial institutions should generally not exceed.

The supervisory diamond for Jyske Bank A/S
	Q2	Q4
	2020	2019
Sum of large exposures <175% of common
qquity tier 1 capital	88%	84%
Increase in loans and advances <20%
annually	-8%	-7%
Exposures to property administration and
property transactions <25% of total loans
and advances	10%	10%
Funding ratio <1	0.50	0.52
Liquidity benchmark >100%	169%	188%

Jyske Bank A/S meets all the benchmarks of the supervisory diamond.

Other Information

Jyske Bank (Gibraltar) Ltd.

The sale of Jyske Bank (Gibraltar) Ltd. to Rooke Investments Ltd. was completed on 3 April 2020. Jyske Bank (Gibraltar)'s equity amounted to DKK 686m, loans and advances to DKK 1.4 bn, and deposits to DKK 4.0 bn. Also, the company had 81 full-time employees.

In the first half of 2020, the completion of the sale resulted in total expenses of DKK 75m. In the first quarter, the earnings of Jyske Bank (Gibraltar) amounted to about DKK 4m, which are included in the ordinary items for the first half of the year.

Moreover, in the first half of the year, Jyske Bank sold the owner-occupied property in Gibraltar at the carrying amount to Rooke Investments Ltd.

Further information

For further information, please see investor.jyskebank.com/investorrelations. Here you will find an interview with Anders Dam, CEO and Managing Director, detailed financial information as well as Jyske Bank's Annual Report 2019 and Risk and Capital Management 2019, which give further information about Jyske Bank's internal risk and capital management as well as regulatory issues, including a description of the most important risks and elements of uncertainty that may affect Jyske Bank.

Also, please see www.jyskerealkredit.com. Jyske Realkredit's interim financial report for the first half of 2020, the Annual Report for 2019 and detailed financial information about Jyske Realkredit are available on that website.

Business Segments

The business segments reflect all activities in banking, mortgage financing and leasing.

Banking Activities

Summary of income statement (DKKm)

	H1	H1	Index	Q2	Q1	Q4	Q3	Q2	FY
	2020	2019	20/19	2020	2020	2019	2019	2019	2019
Net interest income	1,098	1,183	93	579	519	550	568	590	2,301
Net fee and commission income	1,325	1,350	98	547	778	802	816	721	2,968
Value adjustments	129	136	95	198	-69	256	-63	-37	329
Other income	47	98	48	21	26	34	-12	61	120
Core income	2,599	2,767	94	1,345	1,254	1,642	1,309	1,335	5,718
Core expenses	2,251	2,291	98	1,034	1,217	1,089	1,150	1,131	4,530
Core profit before loan impairment charges	348	476	73	311	37	553	159	204	1,188
Loan impairment charges	330	-6	-	-125	455	-99	-33	-19	-138
Core profit	18	482	4	436	-418	652	192	223	1,326
Investment portfolio earnings	-227	-61	-	223	-450	144	-136	-50	-53
Pre-tax profit	-209	421	-	659	-868	796	56	173	1,273

Summary of balance sheet, end of period (DKKbn)

Loans and advances	122.6	123.8	99	122.6	129.0	128.7	125.7	123.8	128.7
- of which traditional loans and advances	76.2	84.1	91	76.2	79.6	79.0	82.3	84.1	79.0
- of which new home loans	3.4	4.7	72	3.4	3.4	3.4	4.0	4.7	3.4
- of which repo loans	43.0	35.0	123	43.0	46.0	46.3	39.4	35.0	46.3
Total assets	253.5	244.4	104	253.5	274.9	242.6	248.8	244.4	242.6
Deposits	145.7	152.5	96	145.7	146.6	140.0	157.6	152.5	140.0
- of which bank deposits	131.8	139.2	95	131.8	131.0	126.7	137.9	139.2	126.7
- of which repo deposits and tri-party
deposits	13.9	13.3	105	13.9	15.6	13.3	19.7	13.3	13.3
Issued bonds	42.2	38.4	110	42.2	36.8	38.6	39.4	38.4	38.6

Banking activities cover advisory services relating to traditional financial solutions targeting personal clients, private banking clients as well as corporate clients and also trading and investment activities targeting corporate clients and institutional clients, including trading in interest-rate products, currencies, equities, commodities and derivatives.

The strategic balance sheet and risk management as well as the investment portfolio earnings of Jyske Bank are also allocated to Banking activities.

Pre-tax profit

Pre-tax profit amounted to DKK -209m in the first half of 2020 against DKK 421m in the corresponding period in 2019. The lower profit can primarily be attributed to a higher management's estimate for impairment charges following the outbreak of COVID-19 as well as lower investment portfolio earnings and net interest income.

Core income

Core income fell by 6% relative to the first half of 2019. The decline can primarily be attributed to lower net interest income.

Net interest income amounted to DKK 1,098m against DKK 1,183m in the same period in 2019, corresponding to a decline by 7%. The decline can, in addition to the sale of Jyske Bank (Gibraltar), be attributed to higher funding costs as well as a lower net interest income relating to trading activities. Lower bank loans and advances and pressure on lending rates were compensated for by lower deposit rates.

Net fee and commission income fell by 2% to DKK 1,325m from DKK 1,350m in the first half of 2019. The first half of 2020 saw performance fees in the amount of DKK 67m against DKK 38m in the corresponding period of 2019. Adjusted for this item, net fee and commission income fell by 4%, as the outbreak of COVID-19 challenged, in particular, the income from money transfers and card payments, while remortgaging activity fell in the second quarter of 2020.

Value adjustments fell to DKK 129m from DKK 136m in the first half of 2019 due to a decline by DKK 72m in value adjustment from the strategic

balance sheet and risk management. The effect from the turbulent financial markets following the outbreak of COVID-19 was more than offset by the development in the second quarter of 2020.

Core expenses

Compared with the same period of 2019, core expenses fell by 2% in the first half of 2020 despite extraordinary expenses of DKK 75m relating to the sale of Jyske Bank (Gibraltar) as well as the increased payroll tax and contributions to the Resolution Fund under Finansiel Stabilitet (the Danish resolution authority). Adjusted for extraordinary expenses, core expenses fell by 5% relative to the first half of 2019 due to the lower number of employees. To this must be added that the outbreak of COVID-19 reduced travel expenses, among other things, in the first half of 2020.

Impairment charges

Loan impairment charges and provisions for guarantees amounted to an expense of DKK 330m against an income of DKK 6m in the first half of 2019. Of the impairment charges in the first half of 2020, DKK 575m can be attributed to a higher management's estimate relating to the outbreak of COVID-19. The estimate was partially offset by the continuing positive development, among other things in the situation of agricultural clients.

Investment portfolio earnings

For the first half of 2020, investment portfolio earnings amounted to DKK -227m against DKK -61m for the same period of 2019. The negative earnings can in particular be attributed to the market turmoil caused by the outbreak of COVID-19, resulting in widening of the spreads on Danish mortgage bonds and a flatter yield curve. To this must be added a negative effect from certain currency positions.

Business volume

At the end of the first half of 2020, traditional bank loans and advances amounted to DKK 76.2 bn, i.e. a decline 4% relative to the level at the end of 2019. The decline took place in the second quarter, where particularly loans and advances for corporate clients fell due to the limited demand for credit following the outbreak of COVID-19 as well as the launch of extraordinary economic support from the Danish government. Loans and advances for personal clients continued to decline.

At the end of the first half of 2020, bank deposits amounted to DKK 131.8 bn, reflecting an increase by 4% relative to the level at the end of 2019 caused by higher deposits from corporate clients.

Q2 2020 compared to Q1 2020

Pre-tax profit rose to DKK 659m in Q2 from DKK - 868m in Q1 2020.

Core income amounted to DKK 1,345m against DKK 1,254m in Q1, as higher value adjustments and net interest income more than offset lower net fee and commission income.

Net interest income rose by 12% to DKK 579m against DKK 519m in Q1. The increase can be attributed to lower deposit rates after the limit for zero interest on personal clients' deposits was lowered to DKK 250,000 as of 1 May and to a higher contribution to net interest income from trading activities. These circumstances more than compensated for the falling bank loans and advances and the sale of Jyske Bank (Gibraltar).

Net fee and commission income came to DKK 547m against DKK 778m in Q1. The decline was caused by lower remortgaging activity and the absence of performance fees, which amounted to DKK 67m in Q1. To this must be added seasonally lower refinancing activity and fee income relating to Letpension and Letsikring as well as the sale of Jyske Bank (Gibraltar). Finally, the outbreak of COVID-19 reduced activity levels and affected in particular payment services, while mix effects reduced wealth management fees.

Value adjustments rose to DKK 198m from DKK -69m. Contrary to Q1, value adjustments were favourably affected by the development in the financial markets, including the narrowing of credit spreads and rising equity markets.

Core expenses fell to DKK 1,034m from DKK 1,217m. In Q1, core expenses relating to operations and the sale of Jyske Bank (Gibraltar) totalled about DKK 100m. To this must be added the lower number of employees, lower IT expenses and a broad-based reduction of administrative expenses, among other things due to less travelling after the COVID-19 outbreak.

Loan impairment charges and provisions for guarantees amounted to an income of DKK 125m against an expense of DKK 455m in the preceding quarter. Q1 was impacted by a higher management's estimate for impairment charges due to expected economic effects from the outbreak of COVID-19.

Investment portfolio earnings rose to DKK 223m from DKK -450m in Q1 and were favourably affected by narrowing credit spreads and currency positions.

Mortgage Activities

Summary of income statement (DKKm)

	H1	H1	Index	Q2	Q1	Q4	Q3	Q2	FY
	2020	2019	20/19	2020	2020	2019	2019	2019	2019
Administration margin income, etc.1	1,167	1,158	101	580	587	590	586	582	2,334
Other net interest income	21	33	64	15	6	15	10	21	58
Net fee and commission income	-247	-297	83	-128	-119	-144	-200	-165	-641
Value adjustments	77	49	157	74	3	-21	-23	23	5
Other income	0	1	-	0	0	4	17	1	22
Core income	1,018	944	108	541	477	444	390	462	1,778
Core expenses	172	157	110	85	87	77	76	78	310
Core profit before loan impairment charges	846	787	107	456	390	367	314	384	1,468
Loan impairment charges	606	17	3,565	121	485	41	-23	43	35

Pre-tax profit 240 770 31 335 -95 326 337 341 1,433 1 Administration margin income, etc. covers administration margin income as well as interest rate margin on jointly funded loans.

Summary of balance sheet (DKKbn)
Mortgage loans	339.8	336.9	101	339.8	336.6	337.5	338.7	336.9	337.5
Total assets	367.0	380.2	97	367.0	376.7	384.9	391.6	380.2	384.9
Issued bonds	344.1	350.7	98	344.1	353.2	357.0	359.5	350.7	357.0

Mortgage activities comprise financial solutions for the financing of real property carried out by Jyske Realkredit. Mortgage activities are aimed mainly at Danish personal clients, corporate clients and subsidised rental housing.

Pre-tax profit

Pre-tax profit amounted to DKK 240m in the first half of 2020 against DKK 770m in the corresponding period in 2019. The profit for the first half of 2020 was affected by an increased management's estimate relating to impairment charges in the amount of DKK 415m in consequence of the outbreak of COVID-19.

Core income

Core income amounted to DKK 1,018m in the first half of 2020 against DKK 944m in the first half of 2019. The increase can primarily be attributed to higher net fee and commission income as well as value adjustments.

Administration margin income, etc. increased by 1% to DKK 1,167m in the first half of 2020. Hence, to some extent, margin pressure counteracted an increase by 2% of mortgage loans stated at nominal value over the same period. Personal clients, in particular, opted for products for which the administration margin rate and risk are lower during the elevated remortgaging activity in Q2 2019-Q1 2020.

Other net interest income fell to DKK 21m from DKK 33m in the first half of 2019. The decline can be attributed to a lower interest on the portfolio of securities.

In the first half of 2020, net fee and commission income amounted to DKK -247m against DKK -297m in the first half of 2019. The improvement can be attributed to lower distribution fee payments.

Due to the positive development in the financial markets in the second quarter of 2020, value adjustments amounted to DKK 77m in the first half of 2020 against DKK 49m in the first half of 2019.

Core expenses

Core expenses amounted to DKK 172m in the first half of 2020 against DKK 157m for the same period of 2019. The increase can be attributed to a higher number of split employees allocated to Jyske Realkredit.

Impairment charges

Loan impairment charges and provisions for guarantees amounted to an expense of DKK 606m in the first half of 2020 against DKK 17m in the first half of 2019. Of the impairment charges in the first half of 2020, DKK 415m can be attributed to a higher management's estimate relating to the outbreak of COVID-19. The remaining part of the increase relates primarily to single name-driven individual impairment charges due to a reassessment of the value of the underlying collateral provided.

Business volume

Mortgage loans at fair value rose to DKK 339.8 bn from DKK 337.5 bn at the end of 2019. Nominal mortgage loans rose by 1% to DKK 330.7 bn from DKK 327.8 bn, primarily due to a higher volume of loans to corporate clients.

For further details about Jyske Realkredit, please see Jyske Realkredit's Interim Financial Report for the first half of 2020.

Q2 2020 compared to Q1 2020

In Q2 2020, pre-tax profit amounted to DKK 335m against DKK -95m in Q1. The increase can be attributed to higher impairment charges recorded in the first quarter in consequence of a higher management's estimate following the COVID-19 outbreak.

Administration margin income, etc. amounted to DKK 580m in the second quarter of 2020 against DKK 587m in the first quarter of 2020. The decline can mainly be attributed to personal clients remortgaging to products for which the administration margin rate and the risk are lower.

Other net interest income amounted to DKK 15m against DKK 6m in the preceding quarter. The increase can chiefly be attributed to a higher interest on the portfolio of securities.

Net fee and commission income amounted to DKK -128m against DKK -119m in the first quarter of 2020. The decline was caused by lower remortgaging and refinancing activity.

Value adjustments amounted to DKK 74m against DKK 3m in the first quarter of 2020. The increase was caused by a positive development in the financial markets with narrowing spreads for Danish mortgage bonds contrary to the preceding quarter.

Core expenses amounted to DKK 85m in the second quarter of 2020 against DKK 87m in the preceding quarter.

Impairment charges amounted to an expense of DKK 121m in the second quarter of 2020 against an expense of DKK 485m in the first quarter of 2020. The primary reason for the lower level was that a management's estimate relating to COVID-19 was recognised in the first quarter of 2020.

Leasing Activities

Summary of income statement (DKKm)

	H1	H1	Index	Q2	Q1	Q4	Q3	Q2	FY
	2020	2019	20/19	2020	2020	2019	2019	2019	2019
Net interest income	229	229	100	113	116	115	115	116	459
Net fee and commission income	-21	-6	350	-12	-9	-5	-5	-2	-16
Value adjustments	12	0	-	59	-47	17	-9	6	8
Other income	9	7	129	5	4	3	2	-3	12
Income from operating lease (net)	7	58	12	-1	8	15	28	34	101
Core income	236	288	82	164	72	145	131	151	564
Core expenses	87	93	94	45	42	47	49	47	189
Core profit before loan impairment charges
and provisions for guarantees	149	195	76	119	30	98	82	104	375
Loan impairment charges	75	-18	-	12	63	-6	26	-15	2
Pre-tax profit	74	213	35	107	-33	104	56	119	373

Summary of balance sheet, end of period (DKKbn)
Loans and advances Total assets	19.1 21.7	19.2 21.9	99 99	19.1 21.7	19.6 22.5	19.7 22.1	19.4 22.1	19.2 21.9	19.7 22.1
Deposits	0.2	0.2	100	0.2	0.2	0.2	0.2	0.2	0.2

Leasing activities cover financial solutions in the form of leasing and financing within car financing as well as leasing and financing of equipment for the corporate sector. The activities primarily target Danish personal and corporate clients as well as dealer cooperation schemes and partnerships. Secondarily, the activities target car financing in Sweden.

Pre-tax profit

In the first half of 2020, pre-tax profit amounted to DKK 74m against DKK 213m in the first half of 2019. The decline was primarily caused by higher impairment charges relating to the outbreak of COVID-19, which also resulted in lower income from operating lease (net).

Net interest income was unchanged at DKK 229m in the first half of 2020, as the higher average business volume during in the first half of the year countered the margin pressure.

Net fee and commission income amounted to DKK -21m in the first half of 2020 against DKK -6m in the same period in 2019.

Value adjustments increased to DKK 12m against DKK 0m in the first half of 2019. The increase was caused by a value adjustment of a shareholding.

Income from operating lease (net) fell to DKK 7m from DKK 58m, as expected residual values of cars under operating lease were written down due to the outbreak of COVID-19. To this must be added writedowns on certain car models.

Expenses fell by 6% relative to the first half of 2019.

Loan impairment charges rose to DKK 75m against an income of DKK 18m in the first half of 2019. The increase can be attributed to a management's estimate of DKK 55m for impairment charges after the outbreak of COVID-19.

Business volume

In the first half of 2020, loans under leasing activities fell by 1% to DKK 19.1 bn relative to the same period in 2019. The decline was seen in the second quarter of 2020 when clients reduced their inventories due to the lower levels of activity following the outbreak of COVID-19.

Q2 2020 compared to Q1 2020

Pre-tax profit amounted to DKK 107m against DKK -33m in Q1. The improvement was primarily caused by higher value adjustments and lower impairment charges.

Core income rose to DKK 164m from DKK 72m. The development can be attributed to the foreign currency hedging of the Swedish portfolio in EUR, which contrary to the first quarter resulted in a positive effect in the second quarter. The effect from the foreign currency hedging was partially offset in income from operating lease (net), which in the first quarter was also affected by an estimate of DKK 30m relating to the COVID-19 outbreak.

Core expenses rose by DKK 3m to DKK 45m.

Impairment charges amounted to DKK 12m vs. DKK 63m in Q1, where a management's estimate for impairment charges due to the outbreak of COVID-19 was booked.

	DKKm	H1 2020	H1 2019	Q2 2020	Q2 2019
	Income statement
5 5	Interest income calculated according to the effective interest method Other interest income	1,630 2,997	1,658 3,571	759 1,514	785 1,843
6	Interest expenses	2,067	2,563	961	1,280
	Net interest income	2,560	2,666	1,312	1,348
7	Fees and commission income	1,263	1,265	509	655
	Fees and commission expenses	206	218	102	101
	Net interest and fee income	3,617	3,713	1,719	1,902
8	Value adjustments	-38	75	537	-91
9	Other income	354	373	167	192
10	Employee and administrative expenses, etc.	2,474	2,492	1,146	1,236
	Amortisation, depreciation and impairment charges	343	272	168	125
12	Loan impairment charges	1,011	-7	8	9
	Pre-tax profit	105	1,404	1,101	633
11	Tax	23	295	239	134
	Net profit for the period	82	1,109	862	499
	Distributed to:
	Jyske Bank A/S shareholders	-1	1,037	820	459
	Holders of Additional Tier 1 Capital (AT1)	83	72	42	40
	Total	82	1,109	862	499
	Earnings per share for the period
	Earnings per share for the period, DKK	-0.02	12.81	11.29	5.71
	Earnings per share for the period, DKK, diluted	-0.02	12.81	11.29	5.71
	Statement of Comprehensive Income
	Net profit for the period	82	1,109	862	499
	Other comprehensive income:
	Items that can be recycled to the income statement:
	Foreign currency translation adjustment of international units	-20	3	7	-29
	Hedge accounting of international units	20	-3	-7	29
	Tax on hedge accounting	-6	1	0	-6
	Other comprehensive income after tax	-6	1	0	-6
	Comprehensive income for the period	76	1,110	862	493
	Distributed to:
	Jyske Bank A/S shareholders	-7	1,038	820	453
	Holders of Additional Tier 1 Capital (AT1)	83	72	42	40
	Total	76	1,110	862	493

	DKKm BALANCE SHEET	30 June 2020	31 Dec. 2019	30 June 2019
	ASSETS
	Cash balance and demand deposits with central banks	10,862	9,889	15,067
	Due from credit institutions and central banks	15,867	23,392	14,199
15,16 17	Loans and advances at fair value Loans and advances at amortised cost	342,231 139,297	339,906 145,994	340,210 139,665
	Bonds at fair value	71,646	78,333	85,799
	Bonds at amortised cost	20,511	11,136	9,476
	Shares, etc.	2,568	2,422	3,333
	Intangible assets	0	1	2
	Property, plant and equipment	4,404	4,530	4,402
	Tax assets	302	168	774
	Assets held temporarily with a view to sale	263	2,476	586
18	Other assets	34,166	31,491	32,903
	Total assets	642,117	649,738	646,416
	EQUITY AND LIABILITIES Liabilities
	Due to credit institutions and central banks	23,650	29,278	21,306
19	Deposits	145,923	140,235	152,719
20	Issued bonds at fair value	339,618	357,037	350,746
	Issued bonds at amortised cost	46,658	38,556	38,386
	Liabilities in disposal group with a view to sale	5	4,037	0
21	Other liabilities	43,766	39,189	41,826
22	Provisions	1,497	1,369	1,708
23	Subordinated debt	5,805	4,327	4,335
	Liabilities, total	606,922	614,028	611,026
	Equity
	Share capital	776	776	816
	Revaluation reserve	205	205	243
	Retained profit	30,972	31,472	31,096
	Jyske Bank A/S shareholders	31,953	32,453	32,155
	Holders of Additional Tier 1 Capital (AT1) Total equity	3,242 35,195	3,257 35,710	3,235 35,390
	Total equity and liabilities	642,117	649,738	646,416

DKKm

Statement of Changes in Equity

		Revalua	Currency transla			Sharehol
	Share capital	tion reserve	tion reserve	Retained profit	Proposed dividend	ders of Jyske Bank A/S	AT1 capital*	Total equity
Equity at 1 January 2020	776	205	0	31,472	0	32,453	3,257	35,710
Net profit for the period	0	0	0	-1	0	-1	83	82
Other comprehensive income:
Properties other movements	0	0	0	0	0	0	0	0
Foreign currency translation for
international units	0	0	-20	0	0	-20	0	-20
Hedge of international units	0	0	20	0	0	20	0	20
Tax on other comprehensive
income	0	0	0	-6	0	-6	0	-6
Other comprehensive income after
tax	0	0	0	-6	0	-6	0	-6
Comprehensive income for the
period	0	0	0	-7	0	-7	83	76
Interest paid on Additional Tier 1
Capital	0	0	0	0	0	0	-83	-83
Currency translation adjustment	0	0	0	15	0	15	-15	0
Acquisition of own shares	0	0	0	-1,261	0	-1,261	0	-1,261
Sale of own shares	0	0	0	753	0	753	0	753
Transactions with owners	0	0	0	-493	0	-493	-98	-591
Equity at 30 June 2020	776	205	0	30,972	0	31,953	3,242	35,195
Equity at 1 January 2019	849	316	0	30,101	520	31,786	2,546	34,332
Net profit for the period	0	0	0	1,037	0	1,037	72	1,109
Other comprehensive income:
Properties other movements	0	-73	0	73	0	0	0	0
Foreign currency translation for
international units	0	0	3	0	0	3	0	3
Hedge of international units	0	0	-3	0	0	-3	0	-3
Tax on other comprehensive
income	0	0	0	1	0	1	0	1
Other comprehensive income after
tax	0	-73	0	74	0	1	0	1
Comprehensive income for the
period	0	-73	0	1,111	0	1,038	72	1,110
AT1 capital issue	0	0	0	0	0	0	716	716
Transaction costs	0	0	0	-7	0	-7	0	-7
Interest paid on Additional Tier 1
Capital	0	0	0	0	0	0	-64	-64
Currency translation adjustment	0	0	0	35	0	35	-35	0
Proposed dividend reversed	0	0	0	520	-520	0	0	0
Reduction of share capital	-33	0	0	33	0	0	0	0
Acquisition of own shares	0	0	0	-1,240	0	-1,240	0	-1,240
Sale of own shares	0	0	0	543	0	543	0	543
Transactions with owners	-33	0	0	-116	-520	-669	617	-52
Equity at 30 June 2019	816	243	0	31,096	0	32,155	3,235	35,390

*Additional Tier 1 Capital (AT1) has no maturity. Payment of interest and repayment of principal are voluntary. Therefore Additional Tier 1 Capital is recognised as equity. In September 2016, Jyske Bank issued AT1 amounting to SEK 1.25bn and AT1 amounting to DKK 500m with the possibility of early redemption in September 2021 at the earliest. The interest rates applicable to the issue until September 2021 are STIBOR+5.80% and CIBOR+5.30%, respectively. In September 2017, Jyske Bank issued AT1 amounting to EUR 150bn with the possibility of early redemption in September 2027 at the earliest. The issue has a coupon of 4.75% until September 2027. In April 2019, Jyske Bank issued AT1 in the amount of SEK 1 bn, with the possibility of early redemption in April 2024 at the earliest. The interest rate applicable to the issue until April 2024 is STIBOR+5%. It applies to all AT1 issues, that if the Common Equity Tier 1 capital ratio of Jyske Bank A/S or the Jyske Bank Group falls below 7%, the loans will be written down.

Jyske Bank / H1 2020 / Statement of Changes in Equity / Page 21 of 58

DKKm	30 June 2020	31 Dec. 2019	30 June 2019
Capital statement
Shareholders' equity	31,953	32,453	32,155
Share buy-back programme, non-utilised limit	0	-404	-218
Expected dividend, calculated as required by law	0	0	-255
Intangible assets	0	-1	-2
Prudent valuation	-396	-366	-334
Other deductions	-82	-27	-88
Common Equity Tier 1 capital	31,475	31,655	31,258
Additional Tier 1 Capital (AT1) after reduction	3,475	3,619	3,598
Core capital	34,950	35,274	34,856
Subordinated loan capital after reduction	5,341	3,763	3,780
Capital base	40,291	39,037	38,636
Weighted risk exposure involving credit risk etc.	156,307	153,912	161,749
Weighted risk exposure involving market risk	10,707	11,606	17,432
Weighted risk exposure involving operational risk	14,680	15,930	15,930
Total weighted risk exposure	181,694	181,448	195,111
Capital requirement, Pillar I	14,536	14,516	15,609
Capital ratio (%)	22.2	21.5	19.8
Core Tier 1 Capital ratio (%)	19.2	19.4	17.9
Common Equity Tier 1 capital ratio (%)	17.3	17.4	16.0

For a statement of the individual solvency requirement, please see Risk and Capital Management 2019 or investor.jyskebank.com/investorrelations/capitalstructure.

DKKm	H1 2020	H1 2019
Summary of cash flow statement
Net profit for the period	82	1,109
Adjustment for non-cash operating items and change in working capital	-7,253	9,121
Cash flows from operating activities	-7,171	10,230
Acquisition and sale of property, plant and equipment Dividend received	-251 33	-126 35
Cash flows from investment activities	-218	-91
AT1 capital issue Interest paid on Additional Tier 1 Capital Acquisition of own shares Sale of own shares Additional subordinated debt Redemption of subordinated debt Repayment on lease commitment Cash flows from financing activities	0 -83 -1,261 753 1,478 -11 -34 842	709 -64 -1,240 543 0 -11 -34 -97
Cash flow for the period	-6,547	10,042
Cash and cash equivalents, beginning of period	33,276	19,224
Cash and cash equivalents, end of period	26,729	29,266
Cash and cash equivalents, end of period, comprise: Cash balance and demand deposits with central banks Due from credit institutions and central banks Cash and cash equivalents, end of period	10,862 15,867 26,729	15,067 14,199 29,266

1 Accounting policies

The Interim Financial Report for the period 1 January to 30 June 2020 was prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. Furthermore, the Interim Financial Report was prepared in accordance with the additional Danish disclosure requirements for the interim reports of listed financial undertakings.

The accounting policies are identical to those applied to and described in detail in the Annual Report 2019.

2 Material accounting estimates

Measurement of the carrying value of certain assets and liabilities requires the management's estimate of the influence of future events on the value of such assets and liabilities. Estimates of material importance to the financial reporting are, among other things, based on the determination of loan impairment charges and provisions for guarantees, the fair value of unlisted financial instruments and provisions already made, cf. the detailed statement in the Annual Report 2019. The estimates are based on assumptions which management finds reasonable, but which are inherently uncertain. Besides, the Group is subject to risks and uncertainties which may cause results to differ from those estimates.

The COVID-19 outbreak in the first quarter of 2020 has a significant negative impact on economic growth. However, there is considerable uncertainty about the extent of the negative impact, which adds to the uncertainty when determining loan impairment charges and provisions for guarantees.

	DKKm	Q2 2020	Q1 2020	Q4 2019	Q3 2019	Q2 2019
3	Key figures and ratios, five quarters
	Summary of Income Statement
	Net interest income	1,312	1,248	1,303	1,342	1,348
	Net fee and commission income	407	650	653	611	554
	Value adjustments	537	-575	371	-286	-91
	Other income	167	187	180	138	192
	Income	2,423	1,510	2,507	1,805	2,003
	Expenses	1,314	1,503	1,345	1,386	1,361
	Profit or loss before loan impairment charges	1,109	7	1,162	419	642
	Loan impairment charges	8	1,003	-64	-30	9
	Pre-tax profit	1,101	-996	1,226	449	633
	Tax	239	-216	260	84	134
	Net profit for the period	862	-780	966	365	499
	Financial ratios and key figures Pre-tax profit, per share (DKK) Earnings per share for the period (DKK) Earnings per share for the period (diluted) (DKK) Core profit per share (DKK) Share price at end of period (DKK)	14.6 11.3 11.3 11.5 195	-14.0 -11.1 -11.1 -7.9 169	15.7 12.2 12.2 13.8 243	5.3 4.2 4.2 7.0 221	7.4 5.7 5.7 8.0 228
	Book value per share (DKK) Price/book value per share (DKK)	440 0.44	430 0.4	434 0.6	418 0.5	408 0.6
	Outstanding shares in circulation ('000)	72,557	72,655	74,841	76,582	78,814
	Average number of shares in circulation ('000)	72,564	73,991	75,637	77,515	80,364
	Capital ratio (%)	22.2	21.5	21.5	20.2	19.8
	Tier 1 Capital ratio (%)	19.2	18.6	19.4	18.2	17.9
	Common Equity Tier 1 capital ratio (%)	17.3	16.7	17.4	16.3	16.0
	Pre-tax profit as a pct. of average equity	3.3	-3.3	3.7	1.3	1.8
	Profit for the period as a pct. of av. equity*	2.6	-2.6	3.0	1.0	1.4
	Income/cost ratio (%), inclusive of impairment charges	1.0	0.6	2.0	1.3	1.5
	Interest-rate risk (%)	0.8	1.4	0.5	0.2	-0.1
	Currency risk (%)	0.1	0.0	0.0	0.0	0.0
	Accumulated impairment ratio (%)	1.2	1.2	1.0	1.0	1.0
	Impairment ratio for the period (%)	0.0	0.2	0.0	0.0	0.0
	No. of full-time employees at end-period	3,469	3,565	3,614	3,693	3,713
	Average number of full-time employees in the period	3,517	3,590	3,654	3,703	3,711

*Financial ratios are calculated as if Additional Tier 1 Capital (AT1) is recognised as a liability.

DKKm

4	Segmental financial statements	Banking activities	Mortgage activities	Leasing activities	The Jyske Bank Group*
	H1 2020
	Net interest income	1,098	1,188	229	2,515
	Net fee and commission income	1,325	-247	-21	1,057
	Value adjustments	129	77	12	218
	Other income	47	0	9	56
	Income from operating lease (net)	0	0	7	7
	Core income	2,599	1,018	236	3,853
	Core expenses	2,251	172	87	2,510
	Core profit before loan impairment charges and provisions
	for guarantees	348	846	149	1,343
	Loan impairment charges	330	606	75	1,011
	Core profit	18	240	74	332
	Investment portfolio earnings	-227	0	0	-227
	Pre-tax profit	-209	240	74	105
	Loans and advances	122,607	339,801	19,120	481,528
	- of which mortgage loans	0	339,801	0	339,801
	- of which bank loans	79,625	0	19,120	98,745
	- of which repo loans	42,982	0	0	42,982
	Total assets	253,468	366,986	21,663	642,117
	Deposits	145,709	0	214	145,923
	- of which bank deposits	131,807	0	214	132,021
	- of which repo deposits and tri-party deposits	13,902	0	0	13,902
	Issued bonds	42,206	344,070	0	386,276
	H1 2019
	Net interest income	1,183	1,191	229	2,603
	Net fee and commission income	1,350	-297	-6	1,047
	Value adjustments	136	49	0	185
	Other income	98	1	7	106
	Income from operating lease (net)	0	0	58	58
	Core income	2,767	944	288	3,999
	Core expenses	2,291	157	93	2,541
	Core profit before loan impairment charges and provisions
	for guarantees	476	787	195	1,458
	Loan impairment charges	-6	17	-18	-7
	Core profit	482	770	213	1,465
	Investment portfolio earnings	-61	0	0	-61
	Pre-tax profit	421	770	213	1,404
	Loans and advances	123,810	336,881	19,184	479,875
	- of which mortgage loans	0	336,881	0	336,881
	- of which bank loans	88,846	0	19,184	108,030
	- of which repo loans	34,964	0	0	34,964
	Total assets	244,380	380,161	21,875	646,416
	Deposits	152,489	0	230	152,719
	- of which bank deposits	139,141	0	230	139,371
	- of which repo deposits and tri-party deposits	13,348	0	0	13,348
	Issued bonds	38,386	350,746	0	389,132

* The relationship between income statement items under 'The Jyske Bank Group' (key financial data) and the income statement page 19 appears from the next page.

DKKm

4 Segmental financial statements, cont.

Core profit and investment portfolio earnings

The pre-tax profit for the first half of 2020 broken down by core earnings and investment portfolio earnings is stated below:

Breakdown of the net profit or loss for

the period

DKKm		H1 2020					H1 2019
		Invest				Invest
		ment				ment
	Core	portfolio	Reclassifi		Core	portfolio	Reclassifi
	profit	earnings	-cation	Total	profit	earnings	-cation	Total
Net interest income	2,515	47	-2	2,560	2,603	50	13	2,666
Net fee and commission income	1,057	0	0	1,057	1,047	0	0	1,047
Value adjustments	218	-258	2	-38	185	-97	-13	75
Other income	56	0	6	62	106	2	10	118
Income from operating lease (net)	7	0	285	292	58	0	197	255
Income	3,853	-211	291	3,933	3,999	-45	207	4,161
Expenses	2,510	16	291	2,817	2,541	16	207	2,764
Profit before loan impairment charges and provisions for guarantees	1,343	-227	0	1,116	1,458	-61	0	1,397
Loan impairment charges	1,011	0	0	1,011	-7	0	0	-7
Pre-tax profit	332	-227	0	105	1,465	-61	0	1,404

Alternative performance targets

The alternative performance targets applied in the management's review constitute valuable information for readers of financial statements as they provide a more uniform basis for comparison of accounting periods. No adjusting entries are made, and therefore the net profit or loss for the period will be the same in the alternative performance targets of the management's review and in the IFRS financial statements.

Core profit is defined as the pre-tax profit exclusive of investment portfolio earnings. Hence earnings from clients are expressed better than in the IFRS financial statements.

Investment portfolio earnings are defined as the return on the Group's portfolio of shares, bonds, derivatives and equity investments, yet exclusive of the liquidity buffer and certain strategic equity investments. Investment portfolio earnings are calculated after expenses for funding and attributable costs.

The above table illustrates relationships between income statement items under 'The Jyske Bank Group' (key financial data), page 2, and income statement items in the IFRS financial statements, page 19.

Reclassification relates to the following:

• Income of DKK 2m (first half of 2019: expenses of DKK 13m) due to value adjustments relating to the balance principle at Jyske Realkredit was reclassified from value adjustments to interest income. Income of DKK 6m (first half of 2019: DKK 10m) from external sales was reclassified from income to offsetting against expenses.
• Income of DKK 6m (first half of 2019: DKK 10m) from external sales was reclassified from income to offsetting against expenses.
• Depreciation and amortisation of DKK 285m (first half of 2019: DKK 197m) were reclassified from expenses to income from operating lease (net).

Please see below for definitions of the additional financial ratios stated under the Jyske Bank Group, page 2.

"Earnings per share for the period", "Earnings per share for the period (diluted)", "Pre-tax profit p.a. as a percentage of average equity" and "Net profit for the period p.a. as a percentage of average equity" are calculated as if Additional Tier 1 capital was recognised as a liability. In the numerator, the profit is less interest expenses of DKK 83m (first half of 2019: DKK 72m) for Additional Tier 1 Capital (AT1), and the denominator is calculated as equity exclusive of Additional Tier 1 Capital (AT1) of DKK 3,242m. (first half of 2019: DKK 3,235m).

"Expenses as a percentage of income" is calculated as Core expenses divided by Core income.

"Book value per share" and "Price/book value per share" are calculated as if Additional Tier 1 Capital (AT1) is accounted for as liabilities. Book value was calculated exclusive of Additional Tier 1 Capital (AT1) of DKK 3,242m (first half of 2019: DKK 3,235m).

DKKm

4	Segmental financial statements, cont.	H1 2020		H1 2019
			Full-time employees,		Full-time employees,
	Revenue by country	Revenue	end of period	Revenue	end of period
	Denmark	6,194	3,412	6,765	3,594
	Gibraltar	28	0	53	89
	Germany	8	8	5	9
	Total	6,230	3,420	6,823	3,692

Revenue is defined as interest income, fee and commission income and also other operating income.

Jyske Bank has activities in the countries stated below in the form of subsidiaries or branches. The names of the subsidiaries appear from the group chart.

Activities in individual countries:

Denmark: The Jyske Bank Group has activities within banking and mortgage banking, trading and wealth management advice as well as leasing.

Gibraltar: Until 3 April 2020, the Jyske Bank Group had activities within banking as well as trading and wealth management advice. Germany: The Jyske Bank Group has activities within banking.

DKKm	H1 2020	H1 2019
5 Interest income
Due from credit institutions and central banks	10	10
Loans and advances	2,782	3,523
Administration margin	922	875
Bonds	251	353
Derivatives, total	193	197
Of which:
Currency contracts	198	152
Interest-rate contracts	-5	45
Others	0	1
Total	4,158	4,959
Interest on own mortgage bonds, set off against interest on issued bonds	62	91
Total after offsetting of negative interest	4,096	4,868
Negative interest income set off against interest income	207	136
Negative interest expenses set off against interest expenses	324	225
Total before offsetting of negative interest income	4,627	5,229

Negative interest income amounted to DKK 207m (2019: DKK 136m) and related primarily to repo transactions. In the above table, negative interest income is set off against interest income. In the income statement, negative interest income is listed as interest expenses, and negative interest expenses are listed as interest income.

6 Interest expenses

Due to credit institutions and central banks	68	41
Deposits	-159	14
Issued bonds	1,684	2,146
Subordinated debt	54	49
Other	-49	43
Total	1,598	2,293
Interest on own mortgage bonds, set off against interest on issued bonds	62	91
Total after offsetting of negative interest	1,536	2,202
Negative interest expenses set off against interest expenses	324	225
Negative interest income set off against interest income	207	136
Total before offsetting of negative interest income	2,067	2,563

Negative interest expenses amounted to DKK 324m (2019: DKK 225m) and related primarily to repo transactions. In the above table, negative interest expenses are set off against interest expenses. In the income statement, negative interest expenses are listed as interest income, and negative interest income is listed as interest expenses.

7 Fees and commission income
Securities trading and custody services	674	648
Money transfers and card payments	87	105
Loan application fees	213	220
Guarantee commission	53	56
Other fees and commissions	236	236
Total	1,263	1,265

Fee income for the period, amounting to DKK 1,263m less the fees and commissions paid for the period of DKK 206m, constitutes the net fee and commission income for the period in the amount of DKK 1,057m (2019: DKK 1,047m). These are recognised in the segmental financial statements for the bank's three business areas, cf. note 4.

	DKKm	H1 2020	H1 2019
8	Value adjustments
	Loans and advances at fair value	56	5,584
	Bonds	-14	318
	Shares, etc.	116	163
	Currency	-39	41
	Currency, interest-rate, share, commodity and other contracts as well as other derivatives	99	217
	Issued bonds	-244	-6,221
	Other assets and liabilities	-12	-27
	Total	-38	75

9 Other income

Income on real property	24	24
Profit on the sale of property, plant and equipment	0	34
Income from operating lease¹	292	255
Dividends, etc.	33	35
Profit on investments in associates and group enterprises	-19	9
Other income	24	16
Total	354	373

¹) Expenses relating to operating lease affected the item Amortisation, depreciation and impairment charges in the amount of DKK 285m in the first half of 2020 against DKK 197m in the same period of 2019.

10 Employee and administrative expenses

Employee expenses
Wages and salaries, etc.	1,170	1,191
Pensions	159	145
Social security	166	164
Total	1,495	1,500
Salaries and remuneration to management bodies
Executive Board	17	17
Supervisory Board	4	4
Shareholders' Representatives	0	1
Total	21	22
Other administrative expense, etc.
IT	681	682
Other operating expenses	77	80
Expenses relating to the sale of Jyske Bank (Gibraltar)	75	0
Other administrative expenses	125	208
Total	958	970
Employee and administrative expenses, total	2,474	2,492

	DKKm	H1 2020	H1 2019
11	Effective tax rate
	Corporation tax rate in Denmark	22.0	22.0
	Non-taxable income and non-deductible expenses, etc.	-0.1	-1.0
	Total	21.9	21.0

12 Loan impairment charges and provisions for guarantees recognised in the income statement

Loan impairment charges and provisions for guarantees for the period	947	-34
Impairment charges on balances due from credit institutions in the period	4	-1
Provisions for loan commitments and unutilised credit lines in the period	96	-15
Recognised as a loss, not covered by loan impairment charges and provisions	126	179
Recoveries	-123	-82
Recognised discount for acquired loans	-39	-54
Loan impairment charges and provisions for guarantees recognised in the income statement	1,011	-7
Earnings impact exclusive of loans and advances at fair value and discount balance	444	30
DKKm 13 Balance of loan impairment charges and provisions for guarantees	H1 2020	H1 2019
Balance of loan impairment charges and provisions, beginning of period	5,227	5,607
Loan impairment charges and provisions for the period	1,043	-49
Recognised as a loss, covered by loan impairment charges and provisions Other movements	-153 33	-292 36
Balance of loan impairment charges and provisions, end of period	6,150	5,302
Loan impairment charges and provisions for guarantees at amortised cost	3,891	3,745
Loan impairment charges at fair value	1,764	1,159
Provisions for guarantees	259	265
Provisions for credit commitments and unutilised credit lines	236	133
Balance of loan impairment charges and provisions, end of period	6,150	5,302

DKKm

Balance of loan impairment charges and provisions for guarantees by stage – total	Stage 1	Stage 2	Stage 3	Total
Balance, beginning of 2020	705	1,193	3,329	5,227
Transfer of impairment charges at beginning of period to stage 1	195	-181	-14	0
Transfer of impairment charges at beginning of period to stage 2	-20	91	-71	0
Transfer of impairment charges at beginning of period to stage 3	-2	-85	87	0
Impairment charges on new loans, etc.	181	239	100	520
Impairment charges on discontinued loans and provisions for guarantees	-116	-201	-230	-547
Effect from recalculation Previously recognized as impairment charges, now final loss	-53 0	681 -3	475 -150	1,103 -153
Balance of loan impairment charges and provisions for guarantees on 30
June 2020	890	1,734	3,526	6,150
Balance of loan impairment charges and provisions for guarantees by stage –
total	Stage 1	Stage 2	Stage 3	Total
Balance, beginning of 2019	640	1,306	3,661	5,607
Transfer of impairment charges at beginning of period to stage 1	223	-171	-52
Transfer of impairment charges at beginning of period to stage 2	-32	160	-128	0
Transfer of impairment charges at beginning of period to stage 3	-1	-66	67	0 0
Impairment charges on new loans, etc.	141	97	68	306
Impairment charges on discontinued loans and provisions for guarantees	-98	-130	-221	-449
Effect from recalculation	-286	139	277	130
Previously recognized as impairment charges, now final loss	-1	-3	-288	-292
Balance of loan impairment charges and provisions for guarantees on 30 June 2019	586	1,332	3,384	5,302
Balance of impairment charges by stage - loans at amortised cost	Stage 1	Stage 2	Stage 3	Total
Balance, beginning of 2020	325	505	2,830	3,660
Transfer of impairment charges at beginning of period to stage 1	90	-81	-9	0
Transfer of impairment charges at beginning of period to stage 2	-13	68	-55	0
Transfer of impairment charges at beginning of period to stage 3	-1	-76	77	0
Impairment charges on new loans, etc.	76	36	48	160
Impairment charges on discontinued loans and provisions for guarantees	-49	-49	-172	-270
Effect from recalculation	47	232	192	471
Previously recognized as impairment charges, now final loss	0	0	-130	-130
Balance of loan impairment charges and provisions for guarantees on 30
June 2020	475	635	2,781	3,891
Balance of impairment charges by stage - loans at amortised cost
	Stage 1	Stage 2	Stage 3	Total
Balance, beginning of 2019	322	590	3,166	4,078
Transfer of impairment charges at beginning of period to stage 1	91	-71	-20	0
Transfer of impairment charges at beginning of period to stage 2	-23	76	-53	0
Transfer of impairment charges at beginning of period to stage 3	-1	-42	43	0
Impairment charges on new loans, etc.	47	35	48	130
Impairment charges on discontinued loans and provisions for guarantees	-28	-68	-154	-250
Effect from recalculation	-120	58	123	61
Previously recognized as impairment charges, now final loss	-1	0	-273	-274
Balance of loan impairment charges and provisions for guarantees on 30
June 2019	287	578	2,880	3,745

DKKm

Balance of impairment charges by stage– loans at fair value
	Stage 1	Stage 2	Stage 3	Total
Balance, beginning of 2020	323	623	248	1,194
Transfer of impairment charges at beginning of period to stage 1	96	-92	-4
Transfer of impairment charges at beginning of period to stage 2	-6	12	-6
Transfer of impairment charges at beginning of period to stage 3	0	-8	8
				0
Impairment charges on new loans, etc.	75	188	12	275
Impairment charges on discontinued loans and provisions for guarantees	-48	-140	-34	-222
Effect from recalculation	-120	411	246	537
Previously recognized as impairment charges, now final loss	0	-3	-17	-20
Balance of loan impairment charges and provisions for guarantees on 30
June 2020	320	991	453	1,764
Balance of impairment charges by stage– loans at fair value	Stage 1	Stage 2	Stage 3	Total
	249	634	283	1,166
Balance, beginning of 2019
Transfer of impairment charges at beginning of period to stage 1	109	-82	-27	0
Transfer of impairment charges at beginning of period to stage 2	-7	78	-71	0
Transfer of impairment charges at beginning of period to stage 3	-1	-23	24	0
Impairment charges on new loans, etc.	66	51	8	125
Impairment charges on discontinued loans and provisions for guarantees	-43	-37	-36	-116
Effect from recalculation	-143	74	68	-1
Previously recognized as impairment charges, now final loss	0	-2	-13	-15
Balance of loan impairment charges and provisions for guarantees on 30
June 2019	230	693	236	1,159
Balance of provisions by stage - guarantees and loan commitments
	Stage 1	Stage 2	Stage 3	Total
Balance, beginning of 2020	57	65	251	373
				0
Transfer of impairment charges at beginning of period to stage 1	9	-8	-1
Transfer of impairment charges at beginning of period to stage 2	-1	11	-10	0
Transfer of impairment charges at beginning of period to stage 3	0	-1	1	0
Impairment charges on new loans, etc.	28	16	40	84
Impairment charges on discontinued loans and provisions for guarantees	-18	-12	-25	-55
Effect from recalculation	20	38	37	95
Previously recognized as impairment charges, now final loss	0	0	-2	-2
Balance of loan impairment charges and provisions for guarantees on 30
June 2020	95	109	291	495
Balance of provisions by stage - guarantees and loan commitments
	Stage 1	Stage 2	Stage 3	Total 363
Balance, beginning of 2019	69	82	212
Transfer of impairment charges at beginning of period to stage 1	23	-19	-4	0
Transfer of impairment charges at beginning of period to stage 2	-2	6	-4	0
Transfer of impairment charges at beginning of period to stage 3	0	-1	1	0
Impairment charges on new loans, etc.	28	12	10	50
Impairment charges on discontinued loans and provisions for guarantees	-26	-25	-31	-82
Effect from recalculation	-23	7	86	70
Previously recognized as impairment charges, now final loss	0	0	-3	-3
Balance of loan impairment charges and provisions for guarantees on 30
June 2019	69	62	267	398

DKKm

14	Gross loans, advances and guarantees by stage
		Stage 1	Stage 2	Stage 3	Total
	Gross loans, advances and guarantees, 1 January 2020	469,093	24,608	9,217	502,918
	Transfer of loans, advances and guarantees to stage 1	7,519	-7,344	-175	0
	Transfer of loans, advances and guarantees to stage 2	-6,701	7,136	-435	0
	Transfer of loans, advances and guarantees to stage 3	-630	-589	1,219	0
	Other movements	-1,574	-737	-1,453	-3,764
	Gross loans, advances and guarantees, 30 June 2020	467,707	23,074	8,373	499,154
	Loan impairment charges and provisions for guarantees, total	816	1,664	3,433	5,913
	Net loans, advances and guarantees, 30 June 2020	466,891	21,410	4,940	493,241
	Gross loans, advances and guarantees by stage	Stage 1	Stage 2	Stage 3	Total
	Gross loans, advances and guarantees, 1 January 2019	449,690	27,305	10,049	487,044
	Transfer of loans, advances and guarantees to stage 1	12,813	-12,411	-402	0
	Transfer of loans, advances and guarantees to stage 2	-7,982	8,517	-535	0
	Transfer of loans, advances and guarantees to stage 3	-673	-1,412	2,085	0
	Other movements	15,245	2,609	-1,980	15,874
	Gross loans, advances and guarantees, 31 December 2019	469,093	24,608	9,217	502,918
	Loan impairment charges and provisions for guarantees, total	663	1,151	3,272	5,086
	Gross loans, advances and guarantees, 31 December 2019	468,430	23,457	5,945	497,832

DKKm

		H1 2020				31 Dec. 2019
Performing	PD band (%)	Stage 1	Stage 2	Stage 3	Total	Total
1	0.00 - 0.10	37,967	383	0	38,350	41,057
2	0.10 - 0.15	11,974	22	0	11,996	10,691
3	0.15 - 0.22	35,491	239	0	35,730	33,419
4	0.22 - 0.33	36,255	93	0	36,348	37,827
5	0.33 - 0.48	97,871	313	0	98,184	92,561
STY Ratings 1 – 5		219,558	1,050	0	220,608	215,555
6	0.48 - 0.70	81,330	786	0	82,116	82,304
7	0.70 - 1.02	68,537	928	0	69,465	71,193
8	1.02 - 1.48	40,879	1,628	0	42,507	45,712
9	1.48 - 2.15	27,604	1,283	0	28,887	31,443
10	2.15 - 3.13	10,683	1,520	0	12,203	12,018
11	3.13 - 4.59	7,434	2,334	0	9,768	10,041
STY Ratings 6 – 11		236,467	8,479	0	244,946	252,711
12	4.59 - 6.79	4,528	2,452	0	6,980	6,216
13	6.79 - 10.21	1,639	3,229	0	4,868	5,322
14	10.21 - 25.0	949	6,955	0	7,904	9,145
STY Ratings 12-14		7,116	12,636	0	19,752	20,683
Others		4,415	291	0	4,706	3,853
Non-performing loans		152	619	8,371	9,142	10,116
Total		467,708	23,075	8,371	499,154	502,918

14 Loans, advances and guarantees by stage and internal rating - gross before impairment charges and provisions

Irrevocable credit commitments of DKK 16,735m (end of 2019: DKK 18,770m) are all in stage 1 and are distributed according to internal ratings (STY Rating) in this way: STY Rating 1: DKK 2,166m, STY Rating 2: DKK 881m, STY Rating 3: DKK 1,007m, STY Rating 4: DKK 540, STY Rating 7: DKK 4,609m, STY Rating 8: DKK 40m, STY Rating 9: DKK 1,874m and STY Rating 11: DKK 5,618m

(End of 2019: STY Rating 1: DKK 2,565m, STY Rating 2: DKK 520m, STY Rating 3: DKK 473m, STY Rating 4: DKK 784m STY Rating 7: DKK 5,543m, STY Rating 9: DKK 1,886m and STY Rating 11: DKK 6,999m).

Loan impairment charges and provisions for guarantees by stage and internal rating

		H1 2020				31 Dec. 2019
Performing	PD band (%)	Stage 1	Stage 2	Stage 3	Total	Total
1	0.00 - 0.10	9	1	0	10	17
2	0.10 - 0.15	9	0	0	9	10
3	0.15 - 0.22	20	2	0	22	31
4	0.22 - 0.33	26	0	0	26	29
5	0.33 - 0.48	90	6	0	96	92
STY Ratings 1- 5		154	9	0	163	179
6	0.48 - 0.70	119	16	0	135	86
7	0.70 - 1.02	94	27	0	121	102
8	1.02 - 1.48	127	23	0	150	109
9	1.48 - 2.15	97	29	0	126	109
10	2.15 - 3.13	62	85	0	147	65
11	3.13 - 4.59	71	88	0	159	111
STY Ratings 6 – 11		570	268	0	838	582
12	4.59 - 6.79	43	112	0	155	90
13	6.79 - 10.21	22	224	0	246	136
14	10.21 - 25.0	13	873	0	886	575
STY Ratings 12-14		78	1,209	0	1,287	801
Others		14	30	0	44	142
Non-performing loans		1	145	3,435	3,581	3,381
Total		817	1,661	3,435	5,913	5,085

Note				Jyske Bank Group
	DKKm	30 June 2020	31 Dec. 2019	30 June 2019
15	Loans and advances at fair value
	Mortgage loans, nominal value	330,698	327,926	323,410
	Adjustment for interest-rate risk, etc. Adjustment for credit risk	10,457 -1,784	10,410 -1,286	14,334 -1,266
	Mortgage loans at fair value, total	339,371	337,050	336,478
	Arrears and outlays, total	88	148	114
	Other loans and advances	2,772	2,708	3,618
	Loans and advances at fair value, total	342,231	339,906	340,210
	DKKm	30 June 2020	31 Dec. 2019	30.06.2019
16	Loans and advances at fair value broken down by property category
	Owner-occupied homes	168,997	170,836	171,395
	Vacation homes	8,232	8,285	8,285
	Subsidised housing (rental housing)	54,304	53,989	55,421
	Cooperative housing	14,451	14,820	16,103
	Private rental properties (rental housing)	52,358	49,366	46,939
	Industrial properties	3,003	2,630	1,832
	Office and retail properties	34,910	34,365	34,812
	Agricultural properties	120	63	62
	Properties for social, cultural and educational purposes	5,722	5,415	5,214
	Other properties Total	134 342,231	137 339,906	147 340,210
	DKKm	30 June 2020	31 Dec. 2019	30.06.2019
17	Loans and advances at amortised cost and guarantees broken down by sector Public authorities	10,312	8,255	7,080
	Agriculture, hunting, forestry, fishing	6,938	7,083	8,647
	Manufacturing, mining, etc.	9,628	8,114	9,092
	Energy supply	5,015	4,029	3,889
	Building and construction	3,882	4,265	4,245
	Commerce	9,802	11,187	12,721
	Transport, hotels and restaurants	5,807	6,044	6,578
	Information and communication	433	706	1,076
	Finance and insurance	37,646	44,079	32,479
	Real property	16,199	17,083	16,884
	Other sectors	8,465	7,348	8,312
	Corporates, total	103,815	109,938	103,923
	Personal clients, total	36,883	39,733	43,820

Total 151,010 157,926 154,823

18	DKKm Other assets	30 June 2020	31 Dec. 2019	30 June 2019
	Positive fair value of derivatives	28,241	24,911	25,854
	Assets in pooled deposits	3,758	4,128	4,018
	Interest and commission receivable	247	280	309
	Investments in associates and joint ventures	238	257	302
	Prepayments	391	370	651
	Investment properties	28	28	28
	Other assets	1,263	1,517	1,741
	Total	34,166	31,491	32,903
	Netting
	Positive fair value of derivatives, etc., gross	43,727	37,138	38,922
	Netting of positive and negative fair value	15,486	12,227	13,068
	Total	28,241	24,911	25,854

Netting of fair value can be attributed to clearing of derivatives through a central clearing house (CCP clearing).

	111,398
	2,645
	27,940
	7,016
	3,720
	152,719
111,591 1,439 22,879 5,918 4,096 145,923	106,481 1,777 21,405 6,370 4,202 140,235

20 Issued bonds at fair value

Issued bonds at fair value, nominal value	357,345	365,561	358,893
Adjustment to fair value	11,169	11,003	14,938
Own mortgage bonds offset, fair value	-28,896	-19,527	-23,085
Total	339,618	357,037	350,746

DKKm	30 June 2020	31 Dec. 2019	30 June 2019
21 Other liabilities
Set-off entry of negative bond holdings in connection with repos/reverse repos	5,327	3,988	5,457
Negative fair value of derivatives, etc.	31,158	26,882	27,699
Interest and commission payable	1,236	1,562	1,921
Deferred income	137	139	166
Lease commitment	335	369	332
Other liabilities	5,573	6,249	6,251
Total	43,766	39,189	41,826
Netting
Negative fair value of derivatives, etc., gross	46,644	39,109	40,767
Netting of positive and negative fair value	15,486	12,227	13,068
Total	31,158	26,882	27,699

Netting of fair value can be attributed to clearing of derivatives through a central clearing house (CCP clearing).

22 Provisions

Provisions for pensions and similar liabilities	647	639	596
Provisions for guarantees	259	233	265
Provisions for losses on loan commitments and unutilised credit lines	228	140	133
Provisions for deferred tax	241	241	565
Other provisions	122	116	149
Total	1,497	1,369	1,708

23 Subordinated debt

Supplementary capital:
1.25% bond loan EUR 200m 28.01.2031	1,491	0	0
2.25% bond loan EUR 300m 05.04.2029	2,236	2,241	2,239
Var. % bond loan SEK 600m 19.05.2026	426	429	424
3.25% bond loan SEK 400m 19.05.2026	284	286	283
6.73% bond loan EUR 9m 2021-2026	67	78	78
Var. % bond loan EUR 10m 13.02.2023	75	75	75
5.65% bond loan EUR 10m 27.03.2023	75	75	75
5.67% bond loan EUR 10m 31.07.2023	75	75	75
	4,729	3,259	3,249
Hybrid core capital:
Var. % bond loan EUR 72.8m Perpetual	542	544	543
Var. % bond loan EUR 60.7m Perpetual	452	453	453
	994	997	996
Subordinated debt, nominal	5,723	4,256	4,245
Hedging of interest-rate risk, fair value	82	71	90
Total	5,805	4,327	4,335
Subordinated debt included in the capital base	5,600	4,151	4,168

The above-mentioned issues of hybrid core capital issued in 2004 and 2005 do not meet the conditions for Additional Tier 1 Capital in the Capital Requirements Regulation, CRR. The issues are recognised under liability other than provision according to IAS 32.

	DKKm	30 June 2020	31 Dec. 2019	30 June 2019
24	Contingent liabilities
	Guarantees, etc.	11,713	11,932	15,158
	Other contingent liabilities, etc.	16,809	18,846	20,094
	Total guarantees and other contingent liabilities	28,522	30,778	35,252

Guarantees are primarily payment guarantees, where the risk equals that involved in credit facilities.

Other contingent liabilities primarily consist of irrevocable credit commitments relating to mortgage loans.

Jyske Bank is also a party to a number of legal disputes arising from its business activities. Jyske Bank estimates the risk involved in each individual case and makes any necessary provisions which are recognised under contingent liabilities. Jyske Bank does not expect such liabilities to have material influence on Jyske Bank's financial position.

Because of its mandatory participation in the deposit guarantee scheme, the sector has paid an annual contribution of 2.5‰ of the covered net deposits until the assets of Pengeinstitutafdelingen (the financial institution fund) exceed 0.8% of the total net deposits covered, which level has been reached. According to Bank Package 3 and Bank Package 4, Pengeinstitutafdelingen bears the immediate losses attributable to covered net deposits and relating to the winding up of financial institutions in distress. Any losses in connection with the final winding up are covered by the Guarantee Fund's Afviklings- og Restruktureringsafdeling (settlement and restructuring fund), where Jyske Bank currently guarantees 8.70% of any losses.

The statutory participation in the resolution financing arrangements (Resolution Fund) as of June 2015 entailed that credit institutions pay an annual contribution over a 10-year period to a Danish national fund with a target size totalling 1% of the covered deposits. Credit institutions are to contribute according to their relative sizes and risk in Denmark, and the first contributions to the Resolution Fund were paid at the end of 2015. The Jyske Bank Group expects having to pay a total of about DKK 500m over the 10-year period 2015 -2025.

Due to Jyske Bank's membership of Bankdata, the bank is - in the event of its withdrawal - under the obligation to pay a material exit charge to Bankdata.

Jyske Bank is a management company under Danish joint taxation. Therefore, according to the provisions of the Danish Company Taxation, Jyske Bank is liable as of the accounting year 2013 for corporation tax, etc. for the jointly taxed companies and as of 1 July 2012 for any liabilities to withhold tax on interest and dividends for the jointly taxed companies.

25 Shareholders

BRFholding a/s, Kgs. Lyngby, Denmark informed Jyske Bank that it owns 23.28% of the share capital. BRFholding a/s is a 100% owned subsidiary of BRFfonden. According to Jyske Bank's Articles of Association, BRFholding a/s has 4,000 votes. As at 30 June 2020, Jyske Bank owns 6.44% of the share capital.

26 Related parties

Jyske Bank is the banker of a number of related parties. Transactions between related parties are characterised as ordinary financial transactions and services of an operational nature. Transactions with related parties were executed on an arm's length basis or at cost.

Over the period, there were no unusual transactions with related parties. Please see Jyske Bank's Annual Report 2019 for a detailed description oftransactions with related parties.

27 Bonds provided as security

The Jyske Bank Group has deposited bonds with central banks and clearing houses, etc. in connection with clearing and settlement of securities and currency transactions as well as tri-party repo transactions totalling a market value of DKK 21,276m (end of 2019: DKK 23,743m).

In addition, in connection with CSA agreements, the Jyske Bank Group has provided cash collateral in the amount of DKK 7,145m (end of 2019: DKK 6,544m) as well as bonds in the amount of DKK 3,005m (end of 2019: 1,677m).

Repo transactions involve an arrangement where bonds are provided as collateral for the amount borrowed. Repo transactions amounted to DKK 8,744m (end of 2019: DKK 10,058m).

28 Notes on fair value

Methods for measuring fair value

Fair value is the price that, at the time of measurement, would be obtained by selling an asset or paid for by transferring a liability in an ordinary transaction between independent market participants. The fair value may equal the book value where book value is recognised on the basis of underlying assets and liabilities measured at fair value.

For all assets listed on active markets, fair values are measured at official prices (the category "Quoted prices". Where no price is quoted, a different official price is used which is taken to reflect most closely the fair value (category: "Observable prices". Financial assets and liabilities of which quoted prices or other official prices are not available or are not taken to reflect the fair value are measured at fair value according to other evaluation techniques and other observable market information. In those cases where observable prices based on market information are not available or are not taken to be useful for measuring fair value, the fair value is measured by recognised techniques, including discounted future cash flows, and own expertise (category "non-observable prices"). The basis of the measurement may be recent transactions involving comparable assets or liabilities, interest rates, exchange rates, volatility, credit spreads, etc. Generally, the Group's unlisted shares are placed in this category.

Generally, quoted prices and observable input are obtained in the form of interest rates and equity and bond prices, exchange rates, volatilities, etc. from recognised stock exchanges and providers.

Specific details on methods for measuring fair value

Loans at fair value are predominantly mortgage loans and generally measured at prices of the underlying bonds quoted on a recognised stock exchange. If such a market price is not available for the preceding 7 days, a calculated price based on the official market rate will be applied for determining the value. If derivatives are part of the funding of the mortgage loans, the value of these will be integrated in the valuation of the loans. The fair value is reduced by the calculated impairment charge, which for loans at fair value is measured according to the same principles that apply to impairments of loans and advances at amortised cost.

Bonds at fair value, shares, assets linked to pooled deposits, and derivatives are measured at fair value in the accounts to the effect that the carrying amounts equal fair values.

Generally bonds are measured at prices quoted on a recognised stock exchange. Alternatively, prices are applied that are calculated on the basis of Jyske Bank's own measurement models based on a yield curve with a credit spread. Essentially, the calculated prices are based on observable input.

Generally equities, etc. are measured at prices quoted on a recognised stock exchange. Alternatively, prices are applied that are calculated on the basis of Jyske Bank's own measurement models based on observable input, shareholders' agreements, executed transactions, etc. Unlisted equities are measured on the basis of discounted cash flow models (DCF).

Derivatives are measured on the basis of the following measurement techniques.

• Forward exchange transactions are measured on the basis of yield curves as well as exchange rates obtained.
• Interest-rate and currency swaps are measured on the basis of exchange rates, interest points, interpolation between these, exchange rates as well as correction of credit risk (CVA and DVA). Client margins are amortised over the remaining time to maturity. Present value calculations with discounting is applied.
• Futures are measured on the basis of prices obtained in the market for stock-exchange traded futures.
• Options are measured on the basis of volatilities, correlation matrices, prices of underlying assets and exercise prices. For this purpose, option models, such as Black-Scholes, are applied.

Assets related to pooled deposits are measured according to the above principles.

Information about differences between recognised value and measurement of fair value

Loans and advances exclusive of mortgage loans and certain other home loans are recognised at amortised cost. The difference to fair value is assumed to be fee and commission received, costs defrayed in connection with lending, plus interest-ratedependent value adjustment calculated by comparing current market rates with market rates at the time when the loans and advances were established. Changes in credit quality are assumed to be included under impairment charges both for carrying amounts and fair values.

Subordinated debt and issued bonds exclusive of issues of mortgage bonds are recognised at amortised cost supplemented with the fair value of the hedged interest-rate risk. The difference to fair value was calculated on the basis of own-issue prices obtained externally.

Deposits are recognised at amortised cost. The difference to fair value is assumed to be the interest-rate dependent value adjustment calculated by comparing current market rates with market rates at the time when the deposits were made.

Balances with credit institutions are recognised at amortised cost. The difference to fair value is assumed to be the interest-rate dependent value adjustment calculated by comparing current market rates with market rates at the time when the transactions were established. Changes in the credit quality of balances with credit institutions are assumed to be included under impairment charges for loans, advances, and receivables. Changes in the fair values of balances due to credit institutions because of changes in Jyske Bank's own credit rating are not taken into account.

The calculated fair values of financial assets and liabilities recognised at amortised cost are materially non-observable prices (level 3) in the fair value hierarchy.

28 Notes on fair value, cont.

Information about changes in credit risk on derivatives with positive fair value.

In order to allow for the credit risk on derivatives for clients without credit impairment, the fair value is adjusted (CVA). Adjustments will also be made for clients with credit impairment, but on an individual basis.

For any given counterparty's total portfolio of derivatives, CVA is a function of the probability of the counterparty's probability of default (PD), the expected positive exposure (EPE) as well as the loss given default (LGD). Jyske Bank applies risk-neutral PDs calculated on the basis of IRB PDs. The IRB PDs are adjusted through the correlation to the observable price of risk in the market, calculated on the basis of the OMX C25 index. By using this method, PDs are generated that correspond to PDs that can be observed in the market. Another way of seeing market-observable PDs is to infer them from Credit Default Swap (CDS) spreads. However, Jyske Bank enters primarily into derivatives transactions with unlisted Danish counterparties, for which there only to a most limited extent exist CDS or CDS proxy spreads, and therefore the former method is used instead. The calculation of CVA also allows for the expected development of the rating over time. This takes place on the basis of historical rating migrations. When determining the EPE, a model is used to establish the expected positive exposure to the counterparty's portfolio over the maturity of the derivatives. For LGD, internal estimates are used for the individual counterparty, adjusted for any collateral received as well as CSA agreements concluded.

In addition to CVA, also an adjustment is made of the fair value of derivatives that have an expected future negative fair value. This takes place to allow for changes in the counterparties' credit risk against the Jyske Bank Group (debt valuation adjustment - DVA). The DVA takes place according to the same principles that apply to the CVA, yet PD for Jyske Bank is determined on the basis of Jyske Bank's external rating by Standard & Poor's. At the end ofthe first half of 2020, CVA and DVA amounted, on an accumulated basis, to net DKK 140m, which accumulated amount was recognised as an expense under value adjustment against an accumulated amount of DKK 73m at the end of 2019.

29 Fair value of financial assets and liabilities

The table shows the fair value of financial assets and liabilities and the carrying amounts. The Group has non-financial assets at fair value through Other comprehensive income.

The re-statement at fair value of financial assets and liabilities shows a total unrecognised unrealised gain of DKK 79m at the end of the first half of 2020 against an unrealised loss of DKK 136m at the end of 2019.

	30 June 2020		31 Dec. 2019
	Recognised		Recognised
	value	Fair value	value	Fair value
FINANCIAL ASSETS
Cash balance and demand deposits with central banks	10,862	10,862	9,889	9,889
Due from credit institutions and central banks	15,867	15,874	23,392	23,397
Loans and advances at fair value	342,231	342,231	339,906	339,906
Loans and advances at amortised cost	139,297	139,305	145,994	146,033
Bonds at fair value	71,646	71,646	78,333	78,333
Bonds at amortised cost	20,511	20,590	11,136	11,245
Shares, etc.	2,568	2,568	2,422	2,422
Assets in pooled deposits	3,758	3,758	4,128	4,128
Derivatives	28,241	28,241	24,911	24,911
Total	634,981	635,075	640,111	640,264
FINANCIAL LIABILITIES
Due to credit institutions and central banks	23,650	23,692	29,278	29,315
Deposits	141,827	141,824	136,033	136,042
Pooled deposits	4,096	4,096	4,202	4,202
Issued bonds at fair value	339,618	339,618	357,037	357,037
Issued bonds at amortised cost	46,658	46,821	38,556	38,887
Subordinated debt	5,805	5,618	4,327	4,239
Set-off entry of negative bond holdings	5,327	5,327	3,988	3,988
Derivatives	31,158	31,158	26,882	26,882
Total	598,139	598,154	600,303	600,592

DKKm

30 The fair value hierarchy

30 June 2020

			Non
	Quoted	Observable	observable	Fair value,	Recognised
Financial assets	prices	prices	prices	total	value
Loans and advances at fair value	0	342,231	0	342,231	342,231
Bonds at fair value	57,310	14,336	0	71,646	71,646
Shares, etc.	669	416	1,483	2,568	2,568
Assets in pooled deposits	2,605	1,153	0	3,758	3,758
Derivatives	446	27,795	0	28,241	28,241
Total	61,030	385,931	1,483	448,444	448,444
Financial liabilities
Pooled deposits	0	4,096	0	4,096	4,096
Issued bonds at fair value	284,797	54,821	0	339,618	339,618
Set-off entry of negative bond holdings	4,866	461	0	5,327	5,327
Derivatives	393	30,766	0	31,159	31,159
Total	290,056	90,144	0	380,200	380,200
31 December 2019
Financial assets
Loans and advances at fair value	0	339,906	0	339,906	339,906
Bonds at fair value	60,178	18,155	0	78,333	78,333
Shares, etc.	418	474	1,530	2,422	2,422
Assets in pooled deposits	1	4,127	0	4,128	4,128
Derivatives	375	24,536	0	24,911	24,911
Total	60,972	387,198	1,530	449,700	449,700
Financial liabilities
Pooled deposits	0	4,202	0	4,202	4,202
Issued bonds at fair value	272,829	84,208	0	357,037	357,037
Set-off entry of negative bond holdings	3,677	311	0	3,988	3,988
Derivatives	302	26,580	0	26,882	26,882
Total	276,808	115,301	0	392,109	392,109

The above table shows the fair value hierarchy for financial assets and liabilities recognised at fair value. It is the practice of the Group that if prices of Danish bonds are not updated for two days, transfers will take place between the categories quoted prices and observable prices. This did not result in material transfers in 2020 and 2019.

NON-OBSERVABLE PRICES	H1 2020	2019
Fair value, beginning of period	1,530	2,052
Transfers for the period	0	0
Capital gain and loss for the period reflected in the income statement under value
adjustments	75	111
Sales or redemptions	160	633
Purchases	38	0
Fair value, end of period	1,483	1,530

Non-observable prices at the end of the first half of 2020 referred to unlisted shares recognised at DKK 1,483m against unlisted shares recognised at DKK 1,530m at the end of 2019. These are primarily sector shares. The measurements, which are associated with some uncertainty, are made on the basis of the shares' book value, market trades, shareholders' agreements as well as own assumptions and extrapolations, etc. In the cases where Jyske Bank calculates the fair value on the basis of the company's expected future earnings, a required rate of return of 15% p.a. before tax is applied. If it is assumed that the actual market price will deviate by +/10% relative to the calculated fair value, the effect on the income statement would amount to DKK 148m on 30 June 2020 (0.46% of the shareholders' equity on 30 June 2020). For 2019, the effect on the income statement is estimated at DKK 153m (0.48% of the shareholders' equity at the end of 2019). Capital gain and loss for the period on illiquid bonds and unlisted shares referred to assets held at the end of the first half of 2020. Jyske Bank finds it of little probability that the application of alternative prices in the measurement of fair value would result in a material deviation from the recognised fair value.

30 Fair value hierarchy, cont.

Non-financial assets recognised at fair value

Investment properties were recognised at a fair value of DKK 28m (end of 2019: DKK 28m). Fair value belongs to the category of non-observable prices calculated on the basis of a required rate of return of 7% (end of 2019: 7%).

Assets held temporarily comprise repossessed properties, equity investments and cars, etc. and similar assets held for sale. At the end of 2019, assets held temporarily also covered assets in disposal groups, which are recognised at the lower of cost and fair value less costs of sale. Assets held temporarily were recognised at DKK 263m (end of 2019: DKK 2,476m). Fair value belongs to the category of non-observable prices, except for bonds in the amount of DKK 0m (end of 2019: DKK 570m).

Owner-occupied properties, exclusive of leased properties, were recognised at the restated value corresponding to the fair value on the date of the revaluation less subsequent amortization, depreciation and impairment. The valuation of selected land and buildings is carried out with the assistance of external experts. Based on the returns method, the measurement takes place in accordance with generally accepted standards and with a weighted average required rate of return of 6.44% at the end of 2019. Owner-occupied properties, exclusive of leased properties, were recognised at DKK 1,774m (2019: DKK 1,776m). The revalued amount belongs to the category of non-observable prices. Leased properties were recognised at DKK 325m (end of 2019: DKK 360m).

31 Group overview

30 June 2020	Cur rency	Share capital 1.000 units	Owner ship share (%)	Vo ting share (%)	Assets DKKm, end of 2019	Liabilities DKKm, end of 2019	Equity DKKm, end of 2019	Earnings (DKKm) 2019	Profit or loss, DKKm 2019
Jyske Bank A/S1	DKK	776			304,100	268,390	35,710	6,228	2,440
Subsidiaries Jyske Realkredit, Kgs. Lyngby2 Trendsetter, S.L., Spain5 Jyske Bank Nominees Ltd., London4 Inmobiliaria Saroesma S.L., Spain5 Jyske Finans A/S, Silkeborg3 Ejendomsselskabet af 01.11.2017 A/S, Silkeborg5	DKK EUR GBP EUR DKK DKK	4,306 1 0 1 100 1	100 100 100 100 100 100	100 100 100 100 100 100	384,899 18 0 47 22,150 45	366,038 0 0 41 20,790 44	18,861 18 0 6 1,360 1	6,666 1 0 1 1,227 2	1,117 0 0 -10 294 1
Gl. Skovridergaard A/S, Silkeborg5 Ejendomsselskabet af 01.10.2015 ApS, Silkeborg5 Jyske Invest Fund Management A/S, Silkeborg4	DKK DKK DKK	1 1 76	100 100 100	100 100 100	30 114 397	27 113 73	3 1 324	19 1 134	0 1 24
Jyske Banks Vindmølle A/S, Hobro5	DKK	1	100	100	-	-	-	-	-

Activity:

1 Banking

2 Mortgage-credit activities

3 Leasing, financing and factoring

4 Investment and financing

5 Properties, wind turbine and course activities

All banks and mortgage credit institutions supervised by national financial supervisory authorities are subject to statutory capital requirements. Such capital requirements may limit intra-group facilities and dividend payments.

The registered offices ofthe companies are in Silkeborg, unless otherwise stated.

Note		Jyske Bank
DKKm	H1 2020	H1 2019
Income statement
Interest income	1,653	1,704
Interest expenses	515	494
Net interest income	1,138	1,210
Dividends, etc.	32	34
Fees and commission income	1,315	1,345
Fees and commission expenses	55	70
Net interest and fee income	2,430	2,519
Value adjustments	-132	16
Other operating income	191	175
Employee and administrative expenses	2,211	2,284
Amortisation, depreciation and impairment charges	55	63
Other operating expenses	103	18
Loan impairment charges	330	0
Profit on investments in associates and group enterprises	236	831
Pre-tax profit	26	1,176
Tax	-56	67
Net profit for the period	82	1,109
Distributed to:
Jyske Bank A/S shareholders	-1	1,037
Holders of Additional Tier 1 Capital (AT1) Total	83 82	72 1,109
Statement of Comprehensive Income
Net profit for the period	82	1,109
Other comprehensive income:
Items that can be recycled to the income statement:
Foreign currency translation adjustment of international units	-20	3
Hedge accounting of international units	20	-3
Tax on hedge accounting	-6	1
Other comprehensive income after tax	-6	1
Comprehensive income for the period	76	1,110

Note Jyske Bank

		30 June	31 Dec.	30 June
	DKKm	2020	2019	2019
	BALANCE SHEET
	ASSETS
	Cash balance and demand deposits with central banks	10,857	9,848	14,962
	Due from credit institutions and central banks	12,612	11,846	12,946
10	Loans and advances at fair value	2,430	2,357	3,328
8,9,10	Loans and advances at amortised cost	140,758	147,040	140,067
	Bonds at fair value	55,164	64,021	65,498
	Bonds at amortised cost	21,261	11,887	9,476
	Shares, etc.	2,262	2,137	3,010
	Investments in associates	233	252	302
	Equity investments in group enterprises	20,526	20,534	19,853
	Assets in pooled deposits	3,758	4,128	4,018
	Owner-occupied properties	1,753	1,759	1,757
	Owner-occupied properties, leasing	325	360	326
	Other property, plant and equipment	61	70	86
	Current tax assets	1,042	880	1,247
	Deferred tax assets Assets held temporarily	77 118	24 696	9 671
	Other assets	29,055	25,929	26,789
	Prepayments	342	332	356
	Total assets	302,634	304,100	304,701
	EQUITY AND LIABILITIES
	Debt and payables
	Due to credit institutions and central banks	25,687	47,188	37,042
11	Deposits	141,886	135,838	144,657
	Pooled deposits	4,096	4,202	3,720
	Issued bonds at amortised cost Other liabilities	46,658 42,050	38,556 37,158	38,387 40,046
	Deferred income	20	20	21
	Total debt	260,397	262,962	263,873
	Provisions
	Provisions for pensions and similar liabilities	612	603	563
	Provisions for guarantees	284	247	267
	Provisions for credit commitments and unutilised credit lines	228	138	126
	Other provisions	113	113	147
	Provisions, total	1,237	1,101	1,103
	Subordinated debt	5,805	4,327	4,335
	Equity
	Share capital	776	776	816
	Revaluation reserve	205	205	214
	Reserve according to the equity method	5,958	6,703	6,096
	Retained profit	25,014	24,769	25,029
	Jyske Bank A/S shareholders	31,953	32,453	32,155
	Holders of Additional Tier 1 Capital (AT1)	3,242	3,257	3,235
	Total equity	35,195	35,710	35,390
	Total equity and liabilities	302,634	304,100	304,701
	OFF-BALANCE SHEET ITEMS
	Guarantees, etc.	20,506	20,260	20,639
	Other contingent liabilities	4,687	4,397	4,881
	Total guarantees and other contingent liabilities	25,193	24,657	25,520

Jyske Bank

DKKm

Statement of Changes in Equity

				Reserve
			Currency	according		Propo	Sharehol
		Revalua	transla	to the	Retai	sed	ders of
	Share	tion	tion	equity	ned	divi	Jyske	AT1	Total
	capital	reserve	reserve	method	profit	dend	Bank A/S	capital*	equity
Equity at 1 January 2020	776	205	0	6,703	24,769	0	32,453	3,257	35,710
Net profit for the period	0	0	0	-745	744	0	-1	83	82
Other comprehensive income	0	0	0	0	-6	0	-6	0	-6
Comprehensive income for the
period	0	0	0	-745	738	0	-7	83	76
Interest paid on Additional Tier 1
Capital	0	0	0	0	0	0	0	-83	-83
Currency translation adjustment	0	0	0	0	15	0	15	-15	0
Acquisition of own shares	0	0	0	0	-1,261	0	-1,261	0	-1,261
Sale of own shares	0	0	0	0	753	0	753	0	753
Transactions with owners	0	0	0	0	-493	0	-493	-98	-591
Equity at 30 June 2020	776	205	0	5,958	25,014	0	31,953	3,242	35,195
Equity at 1 January 2019	849	214	0	5,612	24,591	520	31,786	2,546	34,332
Net profit for the period	0	0	0	484	553	0	1,037	72	1,109
Other comprehensive income	0	0	0	0	1	0	1	0	1
Comprehensive income for the
period	0	0	0	484	554	0	1,038	72	1,110
AT1 capital issue	0	0	0	0	0	0	0	716	716
Transaction costs	0	0	0	0	-7	0	-7	0	-7
Interest paid on Additional Tier 1
Capital	0	0	0	0	0	0	0	-64	-64
Currency translation adjustment	0	0	0	0	35	0	35	-35	0
Proposed dividend reversed	0	0	0	0	520	-520	0	0	0
Reduction of share capital	-33	0	0	0	33	0	0	0	0
Acquisition of own shares	0	0	0	0	-1,240	0	-1,240	0	-1,240
Sale of own shares	0	0	0	0	543	0	543	0	543
Transactions with owners	-33	0	0	0	-116	-520	-669	617	-52
Equity at 30 June 2019	816	214	0	6,096	25,029	0	32,155	3,235	35,390

*Additional Tier 1 Capital (AT1) has no maturity. Payment of interest and repayment of principal are voluntary. Therefore Additional Tier 1 Capital is recognised as equity. In September 2016, Jyske Bank issued AT1 amounting to SEK 1.25bn and AT1 amounting to DKK 500m with the possibility of early redemption in September 2021 at the earliest. The interest rates applicable to the issue until September 2021 are STIBOR+5.80% and CIBOR+5.30%, respectively. In September 2017, Jyske Bank issued AT1 amounting to EUR 150bn with the possibility of early redemption in September 2027 at the earliest. The issue has a coupon of 4.75% until September 2027. In April 2019, Jyske Bank issued AT1 in the amount of SEK 1 bn, with the possibility of early redemption in April 2024 at the earliest. The interest rate applicable to the issue until April 2024 is STIBOR+5%. It applies to all AT1 issues, that if the Common Equity Tier 1 capital ratio of Jyske Bank A/S or the Jyske Bank Group falls below 7%, the loans will be written down.

Jyske Bank

DKKm	30 June 2020	31 Dec. 2019	30 June 2019
Capital statement
Shareholders' equity	31,953	32,453	32,155
Share buy-back programme, non-utilised limit	0	-404	-218
Expected dividend, calculated as required by law	0	0	-255
Deferred tax assets	-77	-24	-9
Prudent valuation	-373	-349	-319
Other deductions	-82	-27	-88
Common Equity Tier 1 capital	31,421	31,649	31,266
Additional Tier 1 Capital (AT1) after reduction	3,475	3,619	3,598
Core capital	34,896	35,268	34,864
Subordinated loan capital after reduction	5,341	3,763	3,780
Capital base	40,237	39,031	38,644
Weighted risk exposure involving credit risk etc. Weighted risk exposure involving market risk	103,394 11,026	100,706 11,850	104,856 18,060
Weighted risk exposure involving operational risk	10,936	11,478	11,478
Total weighted risk exposure	125,356	124,034	134,394
Capital requirement, Pillar I	10,108	9,923	10,752
Capital ratio (%)	32.1	31.5	28.8
Core Tier 1 Capital ratio (%)	27.8	28.4	25.9
Common Equity Tier 1 capital ratio (%)	25.1	25.5	23.3

For a statement of the individual solvency requirement, please see Risk and Capital Management 2019 or investor.jyskebank.com/investorrelations/capitalstructure.

1 Accounting policies

The interim financial statements of the parent company Jyske Bank A/S for the period 1 January to 30 June 2020 were prepared in accordance with the Danish Financial Business Act, including the Danish Executive Order on Financial Reports for Credit Institutions, Stockbrokers, etc.

The rules applying to recognition and measurement at Jyske Bank A/S are consistent with IFRS.

With respect to classification and extent, the preparation for Jyske Bank A/S differs from the preparation for the Group. Please thee the full description of accounting policies in note 68 of the annual report 2019. The accounting policies are identical to those applied to and described in the annual report 2019.

Figures in the financial statements are in Danish kroner, rounded to the nearest million in Danish kroner.

Financial situation and risk information

Jyske Bank A/S is affected by the financial situation and the risk factors that are described in the management's review for the Group and reference is made to this.

DKKm	H1 2020	H1 2019
2 Financial ratios and key figures
Pre-tax profit p.a. as a percentage of average equity*	-0.2	6.9
Profit for the period as a pct. of av. equity*	0.0	3.3
Income/cost ratio (%)	1.0	1.5
Capital ratio (%)	32.1	28.8
Common Equity Tier 1 capital ratio (CET 1) (%)	25.1	23.3
Individual solvency requirement (%)	12.6	11.9
Capital base (DKKm)	40,237	38,644
Total risk exposure (DKKm)	125,356	134,394
Interest-rate risk (%)	0.6	-0.2
Currency risk (%)	0.1	0.0
Accumulated impairment ratio (%)	2.3	2.2
Impairment ratio for the period (%)	0.2	0.0
No. of full-time employees at end-period	3,231	3,367
Average number of full-time employees in the period	3,256	3,370

* Ratios are calculated as if Additional Tier 1 Capital (AT1) is recognised as a liability.

	DKKm	H1 2020	H1 2019
3	Interest income
	Due from credit institutions and central banks	32	13
	Loans and advances	828	1,022
	Bonds	213	273
	Derivatives, total	127	91
	Of which currency contracts	-71	151
	Of which interest-rate contracts	198	-60
	Others	0	1
	Total after offsetting of negative interest	1,200	1,400
	Negative interest income set off against interest income	169	116
	Negative interest expenses set off against interest expenses	284	188
	Total before offsetting of negative interest income	1,653	1,704
	Of which interest income on reverse repos carried under:
	Due from credit institutions and central banks Loans and advances	-9 -94	-10 -60
4	DKKm Interest expenses	H1 2020	H1 2019
	Due to credit institutions and central banks	64	48
	Deposits	-165	4
	Issued bonds	105	84
	Subordinated debt	54	49
	Other interest expenses	4	5
	Total after offsetting of negative interest	62	190
	Negative interest expenses set off against interest expenses	284	188
	Negative interest income set off against interest income	169	116
	Total before offsetting of negative interest income	515	494
	Of which interest expenses on reverse repos carried under:
	Due to credit institutions and central banks	-28	-28
	Deposits	-10	-10
	DKKm	H1 2020	H1 2019
5	Fees and commission income Securities trading and custody services	509	473
	Money transfers and card payments	85	100
	Loan application fees	51	54
	Guarantee commission	52	56
	Other fees and commissions	618	662
	Total	1,315	1,345

DKKm	H1 2020	H1 2019
6 Value adjustments
Loans and advances at fair value	8	18
Bonds	19	168
Shares, etc.	80	143
Currency	-38	53
Currency, interest-rate, share, commodity and other contracts as well as other derivatives	-168	-265
Assets in pooled deposits	-257	429
Pooled deposits	257	-429
Other assets	0	8
Issued bonds	-21	-60
Other liabilities	-12	-49
Total	-132	16

7 Loan impairment charges and provisions for guarantees recognised in the income statement

Loan impairment charges and provisions for guarantees for the period	296	-8
Impairment charges on balances due from credit institutions in the period	4	-1
Provisions for loan commitments and unutilised credit lines in the period	91	-16
Recognised as a loss, not covered by loan impairment charges and provisions	53	91
Recoveries	-104	-57
Recognised discount for acquired loans	-10	-9
Loan impairment charges and provisions for guarantees recognised in the income statement	330	0

8 Balance of loan impairment charges and provisions for guarantees

Balance of loan impairment charges and provisions, beginning of period	3,801	4,118
Loan impairment charges and provisions for the period	388	-24
Recognised as a loss, covered by loan impairment charges and provisions	-127	-271
Other movements	33	37
Balance of loan impairment charges and provisions for guarantees	4,095	3,860
Loan impairment charges and provisions for guarantees at amortised cost	3,582	3,464
Loan impairment charges at fair value	2	3
Provisions for guarantees	283	267
Provisions for credit commitments and unutilised credit lines	228	126
Balance of loan impairment charges and provisions, end of period	4,095	3,860

DKKm

Balance of loan impairment charges and provisions for guarantees by stage – total
Balance, beginning of 2020	Stage 1 335	Stage 2 513	Stage 3 2,953	Total 3,801
Transfer of impairment charges at beginning of period to stage 1	83	-74	-9	0
Transfer of impairment charges at beginning of period to stage 2	-12	65	-53	0
Transfer of impairment charges at beginning of period to stage 3	-1	-70	71	0
Impairment charges on new loans, etc.	81	34	72	187
Impairment charges on discontinued loans and provisions for guarantees	-62	-52	-173	-287
Effect from recalculation	63	256	202	521
Previously recognized as impairment charges, now final loss	0	0	-127	-127
Balance of loan impairment charges and provisions for guarantees on 30
June 2020	487	672	2,936	4,095
Balance of loan impairment charges and provisions for guarantees by stage – total
	Stage 1	Stage 2	Stage 3	Total
Balance, beginning of 2019	320	603	3,195	4,118
Transfer of impairment charges at beginning of period to stage 1	97	-73	-24	0
Transfer of impairment charges at beginning of period to stage 2	-22	76	-54	0
Transfer of impairment charges at beginning of period to stage 3	-1	-39	40	0
Impairment charges on new loans, etc.	59	32	46	137
Impairment charges on discontinued loans and provisions for guarantees	-48	-76	-159	-283
Effect from recalculation	-103	62	200	159
Previously recognized as impairment charges, now final loss	-1	0	-270	-271
Balance of loan impairment charges and provisions for guarantees on 30
June 2019	301	585	2,974	3,860
Balance of impairment charges by stage - loans at amortised cost	Stage 1	Stage 2	Stage 3	Total
Balance, beginning of 2020	269	445	2,703	3,417
Transfer of impairment charges at beginning of period to stage 1	74	-65	-9	0
Transfer of impairment charges at beginning of period to stage 2	-11	54	-43	0
Transfer of impairment charges at beginning of period to stage 3	-1	-69	70	0
Impairment charges on new loans, etc.	53	17	35	105
Impairment charges on discontinued loans and provisions for guarantees	-44	-40	-147	-231
Effect from recalculation	43	216	157	416
Previously recognized as impairment charges, now final loss	0	0	-125	-125
Balance of loan impairment charges and provisions for guarantees on 30
June 2020	383	558	2,641	3,582
Balance of impairment charges by stage - loans at amortised cost	Stage 1	Stage 2	Stage 3	Total
Balance, beginning of 2019	253	522	2,986	3,761
Transfer of impairment charges at beginning of period to stage 1	68	-48	-20	0
Transfer of impairment charges at beginning of period to stage 2	-20	70	-50	0
Transfer of impairment charges at beginning of period to stage 3	-1	-37	38	0
Impairment charges on new loans, etc.	32	21	34	87
Impairment charges on discontinued loans and provisions for guarantees	-26	-61	-123	-210
Effect from recalculation	-74	53	115	94
Previously recognized as impairment charges, now final loss	1	0	-269	-268
Balance of loan impairment charges and provisions for guarantees on 30 June 2019	233	520	2,711	3,464

DKKm

Balance of impairment charges by stage– loans at fair value
	Stage 1	Stage 2	Stage 3	Total
Balance, beginning of 2020	0	0	1	1
Transfer of impairment charges at beginning of period to stage 1	0	0	0	0
Transfer of impairment charges at beginning of period to stage 2	0	0	0	0
Transfer of impairment charges at beginning of period to stage 3	0	0	0	0
Impairment charges on new loans, etc.	0	0	0	0
Impairment charges on discontinued loans and provisions for guarantees	0	0	0	0
Effect from recalculation	1	0	0	1
Previously recognized as impairment charges, now final loss	0	0	0	0
Balance of loan impairment charges and provisions for guarantees on 30
June 2020	1	0	1	2
Balance of impairment charges by stage– loans at fair value	Stage 1	Stage 2	Stage 3	Total
Balance, beginning of 2019	1	1	0	2
Transfer of impairment charges at beginning of period to stage 1	0	0	0	0
Transfer of impairment charges at beginning of period to stage 2	0	0	0	0
Transfer of impairment charges at beginning of period to stage 3	0	0	0	0
Impairment charges on new loans, etc.	0	0	1	1
	0	0	0	0
Impairment charges on discontinued loans and provisions for guarantees Effect from recalculation	0	0	0	0
Previously recognized as impairment charges, now final loss	0	0	0	0
Balance of loan impairment charges and provisions for guarantees on 30
June 2019	1	1	1	3
Balance of provisions by stage - guarantees and loan commitments	Stage 1	Stage 2	Stage 3	Total
Balance, beginning of 2020	65	68	250	383
Transfer of impairment charges at beginning of period to stage 1	9	-8	-1	0
Transfer of impairment charges at beginning of period to stage 2	-1	11	-10	0
Transfer of impairment charges at beginning of period to stage 3	0	-1	1	0
Impairment charges on new loans, etc.	28	16	39	83
Impairment charges on discontinued loans and provisions for guarantees	-19	-12	-24	-55
Effect from recalculation	21	39	44	104
Previously recognized as impairment charges, now final loss	0	0	-2	-2
Balance of loan impairment charges and provisions for guarantees on 30
June 2020	103	113	297	513
Balance of provisions by stage - guarantees and loan commitments	Stage 1	Stage 2	Stage 3	Total
Balance, beginning of 2019	66	80	209	355
Transfer of impairment charges at beginning of period to stage 1	29	-24	-5	0
Transfer of impairment charges at beginning of period to stage 2	-2	6	-4	0
Transfer of impairment charges at beginning of period to stage 3	0	-1	1	0
Impairment charges on new loans, etc.	27	12	9	48
Impairment charges on discontinued loans and provisions for guarantees	-24	-18	-29	-71
Effect from recalculation	-29	8	85	64
Previously recognized as impairment charges, now final loss	0	0	-3	-3
Balance of loan impairment charges and provisions for guarantees on 30
June 2019	67	63	263	393

DKKm

9	Gross loans, advances and guarantees by stage
		Stage 1	Stage 2	Stage 3	Total
	Gross loans, advances and guarantees, 1 January 2020	159,229	8,212	5,880	173,321
	Transfer of loans, advances and guarantees to stage 1	1,925	-1,824	-101	0
	Transfer of loans, advances and guarantees to stage 2	-2,955	3,074	-119	0
	Transfer of loans, advances and guarantees to stage 3	-195	-367	562	0
	Other movements	-4,311	-527	-923	-5,761
	Gross loans, advances and guarantees, 30 June 2020	153,693	8,568	5,299	167,560
	Loan impairment charges and provisions for guarantees, total	417	603	2,846	3,866
	Net loans, advances and guarantees, 30 June 2020	153,276	7,965	2,453	163,694
	Gross loans, advances and guarantees by stage
		Stage 1	Stage 2	Stage 3	Total
	Gross loans, advances and guarantees, 1 January 2019	143,725	9,840	6,491	160,056
	Transfer of loans, advances and guarantees to stage 1	5,810	-5,507	-303	0
	Transfer of loans, advances and guarantees to stage 2	-4,039	4,231	-192	0
	Transfer of loans, advances and guarantees to stage 3	-244	-946	1,190	0
	Other movements	13,977	594	-1,306	13,265
	Gross loans, advances and guarantees, 31 December 2019	159,229	8,212	5,880	173,321
	Loan impairment charges and provisions for guarantees, total	294	472	2,898	3,664
	Gross loans, advances and guarantees, 31 December 2019	158,935	7,740	2,982	169,657

DKKm

9 Loans, advances and guarantees by stage and internal rating - gross before impairment charges and provisions

		H1 2020
Performing	PD band (%)	Stage 1	Stage 2	Stage 3	Total	2019 Total
1	0.00 - 0.10	46,496	309	0	46,805	51,345
2	0.10 - 0.15	10,805	18	0	10,823	9,787
3	0.15 - 0.22	17,568	211	0	17,779	14,545
4	0.22 - 0.33	18,266	52	0	18,318	16,697
5	0.33 - 0.48	13,737	102	0	13,839	14,430
STY Ratings 1 – 5		106,872	692	0	107,564	106,804
6	0.48 - 0.70	15,686	545	0	16,231	18,060
7	0.70 - 1.02	8,275	743	0	9,018	9,732
8	1.02 - 1.48	8,105	685	0	8,790	9,157
9	1.48 - 2.15	7,424	924	0	8,348	11,386
10	2.15 - 3.13	4,057	992	0	5,049	4,423
11	3.13 - 4.59	1,006	582	0	1,588	2,300
STY Ratings 6 – 11		44,553	4,471	0	49,024	55,058
12	4.59 - 6.79	535	737	0	1,272	1,256
13	6.79 - 10.21	127	581	0	708	859
14	10.21 - 25.0	25	1,781	0	1,806	2,191
STY Ratings 12-14		687	3,099	0	3,786	4,306
Others		1,574	212	0	1,786	1,189
Non-performing loans		4	94	5,302	5,400	5,964
Total		153,690	8,568	5,302	167,560	173,321

Loan impairment charges and provisions for guarantees by stage and internal rating

			31 Dec.
Performing	PD band (%)	Stage 1	Stage 2	Stage 3	Total	2019 Total
1	0.00 - 0.10	4	1	0	5	7
2	0.10 - 0.15	8	1	0	9	10
3	0.15 - 0.22	19	2	0	21	20
4	0.22 - 0.33	20	0	0	20	21
5	0.33 - 0.48	37	1	0	38	29
STY Ratings 1- 5		88	5	0	93	87
6	0.48 - 0.70	62	11	0	73	32
7	0.70 - 1.02	47	25	0	72	52
8	1.02 - 1.48	64	15	0	79	48
9	1.48 - 2.15	47	21	0	68	67
10	2.15 - 3.13	44	72	0	116	43
11	3.13 - 4.59	36	42	0	78	51
STY Ratings 6 – 11		300	186	0	486	293
12	4.59 - 6.79	17	59	0	76	46
13	6.79 - 10.21	4	46	0	50	35
14	10.21 - 25.0	3	283	0	286	288
STY Ratings 12-14		24	388	0	412	369
Others		6	19	0	25	14
Non-performing loans		0	3	2,847	2,850	2,901
Total		418	601	2,847	3,866	3,664

Irrevocable credit commitments of DKK 4,633m (end of 2019: DKK 4,343m) are all in stage 1 and are distributed according to internal ratings (STY Rating) in this way: STY Rating 1: DKK 2,166m, STY Rating 2: DKK 881m, STY Rating 3: DKK 1,007m, STY Rating 4: DKK 540m and STY Rating 8: DKK 39m

(End of 2019: STY Rating 1: DKK 2,565m, STY Rating 2: DKK 520m, STY Rating 3: DKK 473m and STY Rating 4: DKK 785m).

DKKm

10 Loans, advances and guarantees as well as loan impairment charges and provisions for guarantees by sector

					Balance of loan impairment charges and provisions for		Loan impairment charges and provisions for guarantees for the
Sector			Loans, advances and guarantees		guarantees		period		Loss for the period
	%
	30
	June	% End	30 June	End of	30 June	End of	H1	H1	H1	H1
	2020	of 2019	2020	2019	2020	2019	2020	2019	2020	2019
Public authorities	6	5	10,111	8,244	0	0	0	0	0	0
Agriculture, hunting,
forestry, fishing	4	4	6,114	6,250	614	740	-109	76	69	170
Fishing	1	1	1,391	1,780	2	1	1	0	0	0
Dairy farmers	0	0	482	538	296	310	-35	-7	5	52
Plant production	1	1	2,049	1,759	84	97	-8	41	11	49
Pig farming	1	1	1,325	1,278	159	176	-31	22	0	43
Other agriculture	1	1	867	895	73	156	-36	20	53	26
Manufacturing, mining,
etc.	5	4	8,033	6,502	222	180	54	-45	20	34
Energy supply	3	2	4,631	3,717	49	38	19	-25	9	0
Building and
construction	2	2	2,670	3,190	112	105	13	29	9	4
Commerce	5	5	8,081	8,958	269	173	93	-16	4	24
Transport, hotels and
restaurants	2	2	3,991	4,044	112	81	27	-4	1	8
Information and
communication	0	0	383	652	185	267	-80	5	5	3
Finance and insurance	40	43	66,616	72,806	716	649	69	-6	17	48
Real property	10	10	16,079	16,960	438	339	86	8	1	15
Lease of real property Buying and selling of	5	6	8,477	9,362	340	269	59	3	1	10
real property	2	2	2,885	2,638	48	40	8	6	0	5
Other real property	3	3	4,717	4,960	50	30	19	-1	0	0
Other sectors	4	3	5,967	4,789	151	146	19	-2	19	10
Corporate clients	75	75	122,565	127,868	2,868	2,718	191	20	154	316
Personal clients	19	20	31,018	33,545	996	946	42	-4	27	46
Unutilised credit lines
and loan commitments	-	-	0	0	0	137	97	-16	0	0
Total	100	100	163,694	169,657	3,864	3,801	330	0	181	362

Note				Jyske Bank Group
	DKKm	30 June 2020	31 Dec. 2019	30 June 2019
11	Deposits
	Demand deposits	111,650	106,286	107,848
	Term deposits	1,439	1,777	2,645
	Time deposits	22,879	21,405	27,148
	Special deposits	5,918	6,370	7,016
	Total	141,886	135,838	144,657

Statement by the Executive and Supervisory Boards

We have today discussed and approved the Interim Financial Report of Jyske Bank A/S for the period 1 January to 30 June 2020.

The consolidated Interim Financial Statements were prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU, and the Parent's Interim Financial Statements in accordance with the Danish Financial Business Act. Further, the Interim Financial Report was prepared in accordance with the additional Danish disclosure requirements for interim financial reports of listed financial companies.

The Interim Financial Report is unaudited and has not been reviewed.

In our opinion, the Interim Financial Statements give a true and fair view of the Group's and the Parent's financial position at 30 June 2020 and also of their financial performance as well as the cash flows of the Group for the period 1 January to 30 June 2020.

In our opinion, the Management's Review gives a fair presentation of the development in the Group's and the Parent's performance and financial position, the profit for the period and the Group's and the Parent's financial position as a whole as well as a description of the most material risks and elements of uncertainty that may affect the Group and the Parent.

Silkeborg, 18 August 2020

EXECUTIVE BOARD

ANDERS DAM Managing Director and CEO

NIELS ERIK JAKOBSEN PETER SCHLEIDT PER SKOVHUS

/JENS BORUM Director, Finance

SUPERVISORY BOARD

KURT BLIGAARD PEDERSEN Chairman

PHILIP BARUCH Deputy Chairman

RINA ASMUSSEN JENS A. BORUP ANKER LADEN-ANDERSEN

KELD NORUP BENTE OVERGAARD PER SCHNACK

JOHNNY CHRISTENSEN Employee Representative

MARIANNE LILLEVANG Employee Representative

CHRISTINA LYKKE MUNK Employee Representative