Sydbank — Earnings Release 2016

Nov 2, 2016

Aabenraa, Denmark, 2016-11-02 08:28 CET (GLOBE NEWSWIRE) --
Decline in costs and high credit quality ensure satisfactory result

Sydbank has delivered a satisfactory performance for the first nine months of
2016 and continues the positive trend. The Bank’s loans and advances have risen
by DKK 3.8bn whereas the Bank’s impairment charges have dropped by 58% compared
with one year ago. Moreover the financial statements show a decline in the
Bank’s costs (core earnings). In 2016 and 2017 Sydbank will allocate extra
resources to develop customer-oriented digital solutions.

CEO Karen Frøsig comments on Sydbank’s Q1-Q3 result:

-- It is highly satisfactory to note an increase of DKK 196m in profit after
tax compared with the same period in 2015. The improvements in costs,
impairment charges, investment portfolio earnings and non-recurring items
more than make up for the decline in core income and this is what creates
the increase in profit. Profit after tax equals a return of 12.0% p.a. on
shareholders’ equity.

Sydbank’s market share of corporate clients has increased. Karen Frøsig
comments:

-- I am pleased to note that Sydbank is also attracting new strong corporate
clients. As a result the Bank is growing into one of the largest corporate
banks in Denmark. Given the historically fierce competition in the market
place, this tells us that our advisory services and banking products are
among the very best in the sector.

Q1-Q3 2016 – highlights

-- Profit of DKK 1,028m. This is equal to a return on shareholders’ equity of
12.0% p.a. after tax.
-- Core income of DKK 3,131m. This is a decline of 5% compared with the same
period in 2015 when core income was historically high.
-- Total income of DKK 3,319m. This is a drop of 4% compared with the same
period in 2015.
-- Impairment charges for loans and advances represent DKK 114m and have
declined by 58% compared with the same period in 2015.
-- Bank loans and advances have risen by DKK 3.8bn, equal to 5.1%.
-- The Common Equity Tier 1 capital ratio has climbed by 0.4 percentage points
and constitutes 14.9%.
-- A share buyback of DKK 350m was commenced on 29 February 2016.

Outlook for 2016
Sydbank projects limited positive economic growth in the Danish economy in
2016. Furthermore we expect:

-- a slight decline in core income relative to income for 2015.
-- unchanged trading income relative to income for 2015 but dependent on
financial market developments.
-- a decrease in costs (core earnings) – in spite of the general pay rises
agreed for the financial sector of 1.80% and a payroll tax increase of
1.40% – as a result of the measures implemented and the discontinuation of
payments to the deposit guarantee scheme.
-- lower impairment charges in 2016.

Additional information

Jørn Adam Møller, CFO, tel +45 74 37 24 00
Dan Prangsgaard, Head of Communications, tel +45 21 54 18 74

Karen Frøsig, CEO, Bjarne Larsen, Deputy Group Chief Executive, and Jørn Adam
Møller, CFO, will present the Interim Report today at 10.00 (CET) at a
teleconference. The teleconference will be held in Danish and may be attended
via www.sydbank.dk/audiocast

Danish attendees are invited to call 70 22 35 00. International attendees are
invited to call +44 207 57 21 187. Please quote the following code: 23458423#