Sydbank — Earnings Release 2016

Apr 27, 2016

News Details

UK Regulatory | 27 April 2016 08:26

Sydbank’s Interim Report – Q1 2016

Sydbank A/S / 1st Quarter Results

27-Apr-2016 / 08:26 CET/CEST
Dissemination of a Regulatory Announcement, transmitted by EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Aabenraa, Denmark, 2016-04-27 08:26 CEST (GLOBE NEWSWIRE) --
Continued tight rein on costs and credit quality ensures satisfactory start to
2016

Sydbank has got off to a satisfactory start in 2016: solid performance - with
growth in lending for the ninth consecutive quarter. The Bank's loans and
advances have risen by DKK 1.9bn and the Bank's impairment charges have fallen
by 67% 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 Froesig comments:

-- We have delivered a solid Q1 performance and we are pleased. We have
recorded growth in lending for the ninth quarter in a row and we are
particularly pleased to note that impairment charges continue the
favourable trend that we have seen since the beginning of 2014 and that we
have managed to lower costs.

On Sydbank's Q1 result she comments:

-- Core income and consequently the result are slightly below the projections
presented in the 2015 financial statements. This is mainly attributable to
the Group's adjustment of prices due to the market situation that arose
when the Group's mortgage loan provider announced increases in
administration margins on mortgage loans. The reasons why the overall
decline in profit is limited to DKK 34m are a sharp decline in impairment
charges of 67% as well as a drop in costs (core earnings).

She elaborates:

-- In 2016 Sydbank will accelerate process automation and DKK 25m will be
allocated annually in 2016 and in 2017 to optimise IT systems. Clients and
employees alike will experience improvements. Specifically the projects
include optimisation of housing loan processes and improved integration of
credit processes. Both projects will contribute to developing the Bank as
well as make it possible to adjust costs.

Q1 2016 - highlights

-- Profit of DKK 283m, equal to a return on shareholders' equity of 10.1% p.a.
after tax.
-- Core income of DKK 1,050m - a decline of 6% compared to the same period in
2015 when core income was historically high.
-- Total income of DKK 1,104m - a drop of 10% compared to the same period in
2015.
-- Impairment charges for loans and advances represent DKK 38m and have
declined by 67% compared with the same period in 2015.
-- Bank loans and advances have risen by DKK 1.9bn, equal to 2.6%.
-- The Common Equity Tier 1 capital ratio has declined by 0.1 percentage
points and constitutes 14.4%.
-- A share buyback programme 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 Sydbank expects:

-- a slight decline in core income due to price adjustments as a result of the
turmoil that arose following the announcement of increases in
administration margins on mortgage loans.
-- unchanged trading income relative to income for 2015 but dependent on
financial market developments.
-- a reduction 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. The uncertainty surrounding price
developments in the agricultural sector may however affect impairment
charges.

Additional information

Joern Adam Moeller, CFO, tel +45 74 37 24 00

Dan Prangsgaard, Head of Communications, tel +45 21 54 18 74

Karen Froesig, CEO, Bjarne Larsen, Deputy Group Chief Executive, and Joern Adam
Moeller, 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: 73246075#

Click on, or paste the following link into your web browser, to view
the associated documents

https://cns.omxgroup.com/cds/DisclosureAttachmentServlet?messageAttachmentId=558514
https://cns.omxgroup.com/cds/DisclosureAttachmentServlet?messageAttachmentId=558513

News Source: NASDAQ OMX

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27-Apr-2016 The EQS Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap.de/ukreg

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 Language:           English                       
 Company:            Sydbank A/S


                     Dänemark                     
 ISIN:               DK0010311471                  
 Category Code:      QRF                           
 TIDM:               0G6U                          
 Sequence Number:    3117                          
 Time of Receipt:    27-Apr-2016 / 08:25 CET/CEST


 End of Announcement    EQS News Service