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Sydbank — Interim / Quarterly Report 2007
Aug 14, 2007
3387_ir_2007-08-14_a0c23df1-780f-4c33-8bcf-229fe208976d.pdf
Interim / Quarterly Report
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Sydbank's 2007 Interim Report
Highly satisfactory
Sydbank generated a pre-tax profit of DKK 1,177m for the first six months of 2007 – an increase of DKK 311m or 36% compared with H1 2006. The result equals a return of 37% p.a. on average shareholders' equity (Tier 1).
Core earnings have improved by DKK 353m to DKK 1,161m. The increase is mainly ascribable to continued growth in loans and advances and rising income from interest margins. In addition trading income has gone up by 10%. Also, DKK 270m concerning impairment of loans and advances was recognized as income.
Investment portfolios generated a loss of DKK 30m.
An extraordinary gain of DKK 46m has been realized from the sale of non-current assets.
Post-tax profit represents DKK 901m, equal to a return of 29% p.a. on average shareholders' equity (Tier 1). Earnings per share for the period have gone up by 44% from DKK 9.1 to DKK 13.1.
Performance and business developments are considered very satisfactory.
Proposal for capital reduction
As at 30 June 2007 the Group's solvency (total capital) ratio stands at 12.6% including a core capital (Tier 1) ratio of 9.3%. Against this background the Bank's Board of Directors recommends to an extraordinary general meeting scheduled for mid-September that the share capital be reduced by 2,500,000 shares, equal to 3.57%.
Increased outlook for the year
On the basis of realized core earnings for the first six months as well as current business and earnings developments, core earnings for 2007 are forecast to make up around DKK 2.0-2.2bn. At the release of the Bank's Q1 Report, core earnings for the year were projected to lie "in the upper end of DKK 1.6-1.9bn".
Yours faithfully
Carsten Andersen Group Chief Executive
Enquiries concerning this Announcement to Carsten Andersen, Group Chief Executive, tel +45 74 36 20 00 Mogens Asmund, Group Executive Vice President, tel +45 74 36 20 50
Stock Exchange Announcement No 14/07 14 August 2007
Contents
Financial Review
| Group Financial Highlights | 3 |
|---|---|
| Review | 4 |
| Management Statement | 8 |
| Audit | 8 |
| Financial Statements | |
| Accounting Policies | 9 |
| Income Statement | 10 |
| Balance Sheet | 11 |
| Group Structure | 12 |
| Group Financial Highlights – Quarterly | 13 |
| Shareholders' Equity (Tier 1) | 14 |
| Own Holdings – Solvency | 15 |
| Cash Flow Statement | 16 |
| Segment Statements | 17 |
| Notes | 18 |
| Group Financial Highlights – Half-yearly | 29 |
| Sydbank A/S Financial Highlights | 30 |
Group Financial Highlights
| H1 | H1 | Index | Full year | |
|---|---|---|---|---|
| Income statement (DKKm) | 2007 | 2006 | 07/06 | 2006 |
| Core income excl trading income | 1,235 | 1,101 | 112 | 2,298 |
| Trading income | 772 | 705 | 110 | 1,319 |
| Total core income | 2,007 | 1,806 | 111 | 3,617 |
| Costs and depreciation | 1,116 | 1,020 | 109 | 2,030 |
| Core earnings before impairment | 891 | 786 | 113 | 1,587 |
| Impairment of loans and advances etc | (270) | (22) | 1,227 | (171) |
| Core earnings | 1,161 | 808 | 144 | 1,758 |
| Profit/(Loss) on investment portfolios | (30) | 58 | (52) | 173 |
| Profit before gain on sale of non-current assets | 1,131 | 866 | 131 | 1,931 |
| Gain on sale of non-current assets | 46 | - | - | 120 |
| Profit before tax | 1,177 | 866 | 136 | 2,051 |
| Tax | 276 | 241 | 115 | 537 |
| Profit after tax | 901 | 625 | 144 | 1,514 |
| Balance sheet highlights (DKKbn) | ||||
| Loans and advances at amortised cost | 68.9 | 61.1 | 113 | 65.5 |
| Loans and advances at fair value | 8.0 | 7.2 | 111 | 7.7 |
| Deposits and other debt | 57.1 | 46.0 | 124 | 50.0 |
| Bonds issued at amortised cost | 10.0 | 10.4 | 96 | 10.0 |
| Subordinated capital (Tier 2) | 3.8 | 3.5 | 109 | 3.5 |
| Shareholders' equity (Tier 1) | 6.2 | 5.2 | 119 | 6.3 |
| Total assets | 121.1 | 107.5 | 113 | 114.8 |
| Financial ratios per share (DKK per share of DKK 10) | ||||
| EPS Basic | 13.1 | 9.1 | 22.1 | |
| EPS Diluted | 13.1 | 9.1 | 22.1 | |
| Share price end of period | 264.0 | 193.5 | 270.0 | |
| Book value | 94.2 | 76.8 | 92.1 | |
| Share price/book value | 2.80 | 2.52 | 2.93 | |
| Average number of shares outstanding (millions) | 68.6 | 68.4 | 68.5 | |
| Other financial ratios and key figures | ||||
| Solvency (total capital) ratio ** | 12.6 | 10.4 | 11.8 | |
| Core capital (Tier 1) ratio ** | 9.3 | 7.3 | 9.0 | |
| Pre-tax profit as % of avg shareholders' equity | 18.7 | 17.0 | 36.2 | |
| Post-tax profit as % of avg shareholders' equity | 14.3 | 12.3 | 26.7 | |
| Income/cost ratio (DKK) | 2.38 | 1.86 | 2.10 | |
| Interest rate risk | 0.3 | 2.2 | 2.0 | |
| Foreign exchange position | 16.1 | 10.9 | 10.3 | |
| Foreign exchange risk | 0.2 | 0.1 | 0.1 | |
| Loans and advances relative to deposits * | 1.1 | 1.2 | 1.2 | |
| Loans and advances relative to shareholders' equity * | 11.1 | 11.8 | 10.3 | |
| Growth in loans and advances during the period * | 5.2 | 14.1 | 22.4 | |
| Excess cover relative to statutory liquidity requirements | 48.4 | 38.8 | 74.0 | |
| Total large exposures | 29.5 | 64.9 | 34.7 | |
| Accumulated impairment ratio | 1.4 | 1.9 | 1.6 | |
| Impairment ratio for the period Number of full-time staff end of period |
(0.31) 2,237 |
(0.03) 2,172 |
103 | (0.19) 2,190 |
Financial ratios prepared according to "Recommendations & Financial Ratios 2005" published by the Danish Society of Financial Analysts. * Ratios calculated on the basis of loans and advances at amortised cost.
** As of 30 September 2006 the solvency (total capital) ratio and core capital (Tier 1) ratio include profit for the period. Until 31 December 2006 the solvency (total capital) ratio and core capital (Tier 1) ratio were calculated in accordance with the former executive order on capital adequacy.
Review
Summary
- Post-tax profit amounts to DKK 901m against DKK 625m in H1 2006
- Earnings per share rose 44%
- Income from interest margins etc went up by 14%
- Rise in trading income of 10% to DKK 772m
- Growth in costs of 9%
- Income recognition of DKK 270m of impairment of loans and advances
- Loss on investment portfolios of DKK 30m
- Gain on sale of non-current assets of DKK 46m
- Growth in ordinary loans and advances of 13%
- Solvency (total capital) ratio of 12.6% proposal to reduce capital by 3.57%.
Sydbank generated a pre-tax profit of DKK 1,177m for the first six months of 2007 – an increase of DKK 311m or 36% compared with H1 2006. The result equals a return of 37% p.a. on average shareholders' equity (Tier 1).
Core earnings have improved by DKK 353m to DKK 1,161m. The increase is mainly ascribable to continued growth in loans and advances and rising income from interest margins. In addition trading income has gone up by 10%. Also, DKK 270m concerning impairment of loans and advances has been recognized as income.
Investment portfolios generated a loss of DKK 30m.
An extraordinary gain of DKK 46m has been realized from the sale of non-current assets.
Post-tax profit represents DKK 901m, equal to a return of 29% p.a. on average shareholders' equity (Tier 1). Earnings per share for the period have gone up by 44% from DKK 9.1 to DKK 13.1.
Performance and business developments are considered very satisfactory.
As at 30 June 2007 the Group's solvency (total capital) ratio stands at 12.6% including a core capital (Tier 1) ratio of 9.3%. Against this background the Bank's Board of Directors recommends to an extraordinary general meeting scheduled for mid-September that the share capital be reduced by 2,500,000 shares, equal to 3.57%.
On the basis of realized core earnings for the first six months as well as current business and earnings developments, core earnings for 2007 are forecast to make up around DKK 2.0-2.2bn. At the release of the Bank's Q1 Report, core earnings for the year were projected to lie "in the upper end of DKK 1.6- 1.9bn".
| Income statement – H1 (DKKm) | ||
|---|---|---|
| 2007 | 2006 | |
| Core income excl trading income | 1,235 | 1,101 |
| Trading income | 772 | 705 |
| Total core income | 2,007 | 1,806 |
| Costs and depreciation | 1,116 | 1,020 |
| Core earnings before impairment | 891 | 786 |
| Impairment of loans and advances etc | (270) | (22) |
| Core earnings | 1,161 | 808 |
| Profit/(Loss) on investment portfolios | (30) | 58 |
| Profit before gain on non-current assets | 1,131 | 866 |
| Gain on sale of non-current assets | 46 | - |
| Profit before tax | 1,177 | 866 |
| Tax | 276 | 241 |
| Profit after tax | 901 | 625 |
Income statement
Core income excl trading income represents DKK 1,235m (2006: DKK 1,101m).
Income from interest margins etc went up by 14% to DKK 988m, favourably supported by a rise in ordinary loans and advances of 13%. During H1 interest margins were stable to slightly receding.
Trading income improved by 10% – from DKK 705m in H1 2006 to DKK 772m in H1 2007.
Total core income makes up DKK 2,007m, a rise of 11%.
Costs and depreciation recorded DKK 1,116m, equivalent to an increase of 9%. At the end of the first six months of 2007, staff members numbered 2,237 compared with 2,172 at the same time in 2006. The number of Danish Sydbank branches totals 107 against 108 a year ago.
The Bank's third German branch opened on 1 April in Kiel. Based on the acquired retail banking segment of the Kiel based bank, Bank Companie Nord, the branch with its staff of 15 is off to a good start with a profit in Q2 2007 and a growing business volume.
In H1 2007, DKK 270m concerning impairment of loans and advances etc was recognised as net income (H1 2006: DKK 22m). This is the result of several factors, including the favourable business conditions in Denmark, lower portfolio credit risk and an unexpected positive settlement of several major accounts.
Total core earnings represent DKK 1,161m compared with DKK 808m in H1 2006, equivalent to an increase of 44%.
Investment portfolios recorded a loss of DKK 30m in H1 2007 (2006: profit of DKK 58m). The reason is the significant turmoil which occurred in the financial markets in Q2 2007.
In H1 2007 DMK-Holding and two properties were sold at a profit of DKK 26m and DKK 20m, respectively. The gain on the sale of DMK-Holding is tax-exempt. The subsidiary, Sydbank (Schweiz) AG, contributes a pre-tax profit of DKK 13m (2006: DKK 2m).
The Group's pre-tax profit represents DKK 1,177m. With a tax charge of DKK 276m, equal to 25%, profit amounts to DKK 901m.
Return on shareholders' equity (Tier 1) represents 28.7% against 24.6% in H1 2006. Earnings per share rose from DKK 9.1 to DKK 13.1, equal to an increase of 44%.
Balance Sheet
The Group's total assets make up DKK 121bn (31 December 2006: DKK 115bn).
| Assets (DKKbn) | 30 Jun 2007 |
31 Dec 2006 |
|---|---|---|
| Amounts owed by credit institutions etc | 13.5 | 16.3 |
| Loans and advances at fair value (reverse repo transactions) | 8.0 | 7.7 |
| Loans and advances at amortised cost (ordinary loans and advances) | 68.9 | 65.5 |
| Securities and holdings etc | 17.7 | 14.4 |
| Assets related to pooled plans | 6.7 | 6.5 |
| Other assets etc | 6.3 | 4.4 |
| Total | 121.1 | 114.8 |
Ordinary loans and advances – loans and advances at amortised cost – have grown by DKK 3.4bn to DKK 68.9bn since 31 December 2006. The rise constitutes DKK 7.8bn or 13% compared with H1 2006.
| Shareholders' equity and liabilities (DKKbn) | 30 Jun 2007 |
31 Dec 2006 |
|---|---|---|
| Amounts owed to credit institutions | 25.4 | 26.5 |
| Deposits and other debt | 57.1 | 50.0 |
| Deposits in pooled plans | 6.7 | 6.5 |
| Bonds issued | 10.0 | 10.0 |
| Other liabilities etc | 11.7 | 11.6 |
| Provisions | 0.2 | 0.4 |
| Subordinated capital (Tier 2) | 3.8 | 3.5 |
| Shareholders' equity (Tier 1) | 6.2 | 6.3 |
| Total | 121.1 | 114.8 |
Since year-end 2006 deposits and other debt has gone up by DKK 7.1bn to DKK 57.1bn. The rise constitutes DKK 11.1bn or 24% compared with H1 2006.
Capital
To further strengthen and optimize the Group's capital structure, EUR 49m hybrid Tier 1 capital was raised under the Bank's Global MTN Programme during the half-year.
Shareholders' equity (Tier 1) has been reduced by DKK 131m since year-end and constitutes DKK 6,218m as of 30 June 2007. The change appears as dividend distribution etc of net DKK 222m, net purchase of own shares of DKK 833m, tax income on equity items of DKK 23m and profit for the period of DKK 901m.
New Totalkredit cooperation model
According to the cooperation agreement with Totalkredit, Sydbank has stopped as of 30 June 2007 issuing guarantees in connection with Totalkredit mortgage loans provided by the Bank. As a consequence guarantees of DKK 6bn have lapsed during the half-year, contributing to a rise in the solvency (total capital) ratio of 0.4 percentage points.
The cooperation is subsequently based on a set-off option available to Totalkredit in the event of losses on the loans provided by Sydbank. Set-off is possible only in future current commission from Totalkredit to Sydbank.
New capital adequacy rules
New capital adequacy rules came into force as of 1 January 2007 as regards the measurement of credit, market and operational risks.
In autumn 2006 Sydbank filed an application with the Danish Financial Supervisory Authority (FSA) for approval of models to determine the capital requirement in accordance with Basel II for the purpose of measuring credit risk outside the trading portfolio in accordance with the Internal Ratings Based Approach (IRB) as from 1 January 2008. As regards retail customers, the application concerns approval for the use of the advanced approach and as regards corporate clients the application initially concerns approval for the use of the foundation approach.
For the 2007 financial year Sydbank has decided to apply the Standardised Approach to measure credit risk outside the trading portfolio. Moreover the Bank has decided to continue to apply the Standardised Approach to market risk. The Standardised Approach will be applied to measure operational risk.
Incorporating profit for the period, the solvency (total capital) ratio as of 30 June 2007 stands at 12.6%, of which 9.3% is ascribable to the Group's core capital (Tier 1). The core capital (Tier 1) ratio excluding hybrid core capital constitutes 7.9%. Risk-weighted items total DKK 76.4bn at the end of H1 2007.
Other issues
Moody's ratings: Aa3 (long-term), P-1 (short-term) and C+ (financial strength).
Outlook for 2007
On the basis of realized core earnings for the first six months as well as current business and earnings developments, the Bank's core earnings forecast for 2007 is upgraded to a level of around DKK 2.0- 2.2bn. Previously core earnings have been projected to lie "in the upper end of DKK 1.6-1.9bn."
As a consequence of the Bank's comfortable solvency level the Board of Directors has resolved to recommend to a future extraordinary general meeting that the Bank's share capital be reduced by DKK 25m nominal. The general meeting will be convened in the near future.
Sydbank's Quarterly Report – Q3 2007 is scheduled for 23 October 2007.
Management Statement
Today we have prepared the 2007 Interim Report of Sydbank A/S.
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU, and the interim financial statements of the Parent have been prepared in accordance with the Danish Financial Business Act. Furthermore, the interim report has been prepared in compliance with additional Danish disclosure requirements for interim reports of listed financial companies.
We consider the accounting policies applied to be appropriate and the interim report gives a true and fair view of the Group's and the Parent's assets, liabilities and financial position at 30 June 2007 and of the results of the Group's and the Parent's operations and consolidated cash flows for the financial period 1 January – 30 June 2007.
Aabenraa, 14 August 2007
| Group Executive Management | ||||
|---|---|---|---|---|
| Carsten Andersen Preben L. Hansen Torben A. Nielsen (Group Chief Executive) |
||||
| Board of Directors | ||||
| Kresten Philipsen (Chairman) |
Anders Thoustrup (Vice-Chairman) |
Otto Christensen | ||
| Vagn F. Christensen | Peder Damgaard | Harry Max Friedrichsen | ||
| Peter Gæmelke | Hanni Toosbuy Kasprzak | Per Olesen | ||
| Sven Rosenmeyer Paulsen | Jan Uldahl-Jensen | Margrethe Weber |
Audit
The interim report has not been audited or reviewed.
Accounting Policies
The consolidated financial statements for H1 2007 have been prepared in accordance with IAS 34 Interim Financial Reporting as well as additional Danish disclosure requirements for interim financial reporting. As a result of the use of IAS 34, the presentation is more limited than the presentation of a complete annual report, and the measurement principles are in compliance with IFRS. The interim financial statements of the parent for H1 2007 have been prepared in accordance with the Danish Financial Business Act.
As previously announced the subsidiary Sydleasing A/S (formerly SBK-Invest A/S) has merged with Sydbank A/S. The merger took effect as of 1 January 2007 and has been recognized in the interim report. Comparative figures of Sydbank A/S, including financial highlights and ratios, have been restated.
The accounting policies applied are consistent with those adopted in the 2006 Annual Report.
At the time of the release of this Interim Report, a series of new and amended financial reporting standards, including IFRS 7 Financial Instruments: Disclosures, and interpretations have come into force. The application of these new and amended financial reporting standards and interpretations has not resulted in any changes in the accounting policies in terms of recognition and measurement.
The measurement of certain assets and liabilities requires managerial estimates as to how future events will affect the value of such assets and liabilities. Estimates significant to the presentation of the financial statements are made for instance in connection with impairment of loans and advances, fair values of unlisted financial instruments as well as provisions. Estimates are based on assumptions that are considered reasonable by management but which by their nature are uncertain.
Income Statement
| Sydbank Group | Sydbank A/S | ||||
|---|---|---|---|---|---|
| H1 | H1 | H1 | H1 | ||
| DKKm | Note | 2007 | 2006 | 2007 | 2006 |
| Interest income | 1 | 2,590 | 1,797 | 2,587 | 1,796 |
| Interest expense | 2 | 1,566 | 886 | 1,570 | 890 |
| Net interest income | 1,024 | 911 | 1,017 | 906 | |
| Dividends on shares | 18 | 18 | 18 | 18 | |
| Fee and commission income | 3 | 752 | 757 | 728 | 736 |
| Fee and commission expense | 86 | 127 | 85 | 125 | |
| Net interest and fee income | 1,708 | 1,559 | 1,678 | 1,535 | |
| Market value adjustments | 4 | 268 | 299 | 264 | 296 |
| Other operating income | 5 | 22 | 10 | 9 | 9 |
| Staff costs and administrative expenses | 6 | 1,066 | 982 | 1,047 | 964 |
| Depreciation and impairment of property, plant and equipment | 47 | 43 | 45 | 42 | |
| Other operating expenses | 9 | 0 | 9 | 0 | |
| Impairment of loans and advances etc | 8 | (270 | (22) | (270) | (22) |
| Profit on holdings in associates and | |||||
| subsidiaries | 9 | 31 | 1 | 57 | 10 |
| Profit before tax | 1,177 | 866 | 1,177 | 866 | |
| Tax | 10 | 276 | 241 | 276 | 241 |
| Profit after tax | 901 | 625 | 901 | 625 | |
| EPS Basic (DKK) * | 13.1 | 9.1 | |||
| EPS Diluted (DKK) * | 13.1 | 9.1 | |||
* Calculation based on the average number of shares outstanding, see page 15.
Balance Sheet
| Sydbank Group | Sydbank A/S | ||||
|---|---|---|---|---|---|
| 30 Jun | 31 Dec | 30 Jun | 31 Dec | ||
| DKKm | Note | 2007 | 2006 | 2007 | 2006 |
| Assets | |||||
| Cash and balances on demand at central banks | 686 | 571 | 674 | 558 | |
| Amounts owed by credit institutions and central banks | 11 | 12,792 | 15,708 | 13,660 | 16,359 |
| Loans and advances at fair value | 7,974 | 7,671 | 7,974 | 7,671 | |
| Loans and advances at amortised cost | 68,933 | 65,512 | 67,963 | 64,720 | |
| Bonds at fair value | 16,339 | 13,112 | 16,339 | 13,112 | |
| Shares etc | 1,178 | 1,159 | 1,178 | 1,159 | |
| Holdings in associates etc | 198 | 149 | 198 | 147 | |
| Holdings in subsidiaries | - | - | 220 | 220 | |
| Assets related to pooled plans | 6,661 | 6,522 | 6,661 | 6,522 | |
| Total land and buildings | 755 | 769 | 595 | 596 | |
| – investment property | 20 | 44 | 20 | 44 | |
| – owner-occupied property | 735 | 725 | 575 | 552 | |
| Other property, plant and equipment | 108 | 108 | 105 | 107 | |
| Current tax assets | - | 55 | - | 59 | |
| Deferred tax assets | 6 | 6 | 6 | 6 | |
| Other assets | 12 | 5,468 | 3,379 | 5,455 | 3,362 |
| Prepayments | 44 | 37 | 44 | 37 | |
| Total assets | 121,142 | 114,758 | 121,072 | 114,635 | |
| Shareholders' equity and liabilities | |||||
| Amounts owed to credit institutions and central banks | 25,442 | 26,498 | 25,698 | 26,508 | |
| Deposits and other debt | 13 | 57,070 | 49,991 | 56,764 | 49,892 |
| Deposits in pooled plans | 6,661 | 6,522 | 6,661 | 6,522 | |
| Bonds issued at amortised cost | 10,033 | 10,049 | 10,033 | 10,049 | |
| Current tax liabilities | 150 | 28 | 149 | 28 | |
| Other liabilities | 14 | 11,464 | 11,433 | 11,444 | 11,399 |
| Deferred income | 71 | 67 | 72 | 67 | |
| Total liabilities | 110,891 | 104,588 | 110,821 | 104,465 | |
| Provisions | 15 | 211 | 346 | 211 | 346 |
| Subordinated capital (Tier 2) | 16 | 3,822 | 3,475 | 3,822 | 3,475 |
| Shareholders' equity (Tier 1): | |||||
| Share capital | 700 | 700 | 700 | 700 | |
| Other reserves: | |||||
| Reserves according to articles of association | 388 | 388 | 388 | 388 | |
| Other reserves | 8 | 8 | 8 | 8 | |
| Retained earnings | 5,122 | 5,253 | 5,122 | 5,253 | |
| Total shareholders' equity (Tier 1) * | 6,218 | 6,349 | 6,218 | 6,349 | |
| Total shareholders' equity and liabilities | 121,142 | 114,758 | 121,072 | 114,635 | |
| * Including proposed dividend etc. | - | 230 | - | 230 |
Group Structure
| Activity | Share capital (in millions) |
Shareholders' equity (DKKm) * DKKm* |
Result | Ownership share (%) |
||
|---|---|---|---|---|---|---|
| Sydbank A/S – parent | DKK 700 | |||||
| Consolidated subsidiaries: | ||||||
| Sydbank (Schweiz) AG, St. Gallen, Switzerland Ejendomsselskabet af 1. juni 1986 A/S, Aabenraa |
Banking Real property |
CHF DKK |
40 7 |
188 12 |
6 (19) |
100 100 |
| Associates: | ||||||
| Foreningen Bankdata, Fredericia | IT | DKK 248 | 285 | 1 | 53 | |
| Core Property Management A/S, Copenhagen ** Value-Call S.á r.l., Luxembourg |
Real property Investment and finance |
DKK EUR |
9 1 |
9 35 |
- 30 |
22 25 |
| Other entities in which the Group owns more than 10% of the share capital: |
||||||
| Scandinavian Private Equity | Capital funds | DKK | 5 | 5 | - | 17 |
| PRAS A/S Linde Partners Asset Management S.A., |
Investment and finance | DKK 578 | 1,492 | 150 | 10 | |
| Luxembourg | Investment and finance | EUR | 1 | 45 | 35 | 10 |
| * According to the most recent annual report. |
** Established in 2006.
Group Financial Highlights – Quarterly
| Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |
|---|---|---|---|---|---|---|
| 2007 | 2007 | 2006 | 2006 | 2006 | 2006 | |
| Income statement (DKKm) | ||||||
| Core income excl trading income | 620 | 615 | 617 | 580 | 568 | 533 |
| Trading income | 395 | 377 | 349 | 265 | 316 | 389 |
| Total core income | 1,015 | 992 | 966 | 845 | 884 | 922 |
| Costs and depreciation | 546 | 570 | 547 | 463 | 486 | 534 |
| Core earnings before impairment | 469 | 422 | 419 | 382 | 398 | 388 |
| Impairment of loans and advances etc | (133) | (137) | (86) | (63) | (14) | (8) |
| Core earnings | 602 | 559 | 505 | 445 | 412 | 396 |
| Profit/(Loss) on investment portfolios | (44) | 14 | 61 | 54 | (21) | 79 |
| Profit before gain on sale of non-current assets | 558 | 573 | 566 | 499 | 391 | 475 |
| Gain on sale of non-current assets | 8 | 38 | - | 120 | - | - |
| Profit before tax | 566 | 611 | 566 | 619 | 391 | 475 |
| Tax | 112 | 164 | 156 | 140 | 108 | 133 |
| Profit after tax | 454 | 447 | 410 | 479 | 283 | 342 |
| Balance sheet highlights (DKKbn) | ||||||
| Loans and advances at amortised cost | 68.9 | 67.5 | 65.5 | 61.5 | 61.1 | 57.4 |
| Loans and advances at fair value | 8.0 | 7.4 | 7.7 | 7.1 | 7.2 | 7.3 |
| Deposits and other debt | 57.1 | 56.5 | 50.0 | 48.4 | 46.0 | 47.0 |
| Bonds issued at amortised cost | 10.0 | 10.0 | 10.0 | 8.6 | 10.4 | 6.7 |
| Subordinated capital (Tier 2) | 3.8 | 3.8 | 3.5 | 3.5 | 3.5 | 2.7 |
| Shareholders' equity (Tier 1) | 6.2 | 6.5 | 6.3 | 5.9 | 5.2 | 5.2 |
| Total assets | 121.1 | 119.2 | 114.8 | 108.0 | 107.5 | 103.5 |
| Financial ratios per share (DKK per share of DKK 10) | ||||||
| EPS Basic | 6.7 | 6.5 | 5.9 | 7.0 | 4.1 | 5.0 |
| EPS Diluted | 6.7 | 6.5 | 5.9 | 7.0 | 4.1 | 5.0 |
| Share price end of period | 264.0 | 300.0 | 270.0 | 216.5 | 193.5 | 193.0 |
| Book value | 94.2 | 94.7 | 92.1 | 86.2 | 76.8 | 75.2 |
| Share price/book value | 2.80 | 3.17 | 2.93 | 2.51 | 2.52 | 2.57 |
| Average number of shares outstanding (millions) | 68.2 | 68.9 | 68.9 | 68.3 | 68.4 | 68.3 |
| Other financial ratios and key figures | ||||||
| Solvency (total capital) ratio ** | 12.6 | 13.1 | 11.8 | 12.0 | 10.4 | 10.0 |
| Core capital (Tier 1) ratio ** | 9.3 | 9.8 | 9.0 | 9.3 | 7.3 | 7.6 |
| Pre-tax profit as % of avg shareholders' equity | 8.9 | 9.5 | 9.2 | 11.1 | 7.6 | 9.3 |
| Post-tax profit as % of avg shareholders' equity | 7.1 | 7.0 | 6.7 | 8.6 | 5.5 | 6.7 |
| Income/cost ratio (DKK) | 2.36 | 2.40 | 2.22 | 2.54 | 1.83 | 1.90 |
| Interest rate risk | 0.3 | 2.5 | 2.0 | (1.3) | 2.2 | 1.0 |
| Foreign exchange position | 16.1 | 9.0 | 10.3 | 8.2 | 10.9 | 28.5 |
| Foreign exchange risk | 0.2 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
| Loans and advances relative to deposits * | 1.1 | 1.1 | 1.2 | 1.1 | 1.2 | 1.1 |
| Loans and advances relative to shareholders' equity * | 11.1 | 10.4 | 10.3 | 10.4 | 11.8 | 11.1 |
| Growth in loans and advances during the period * | 2.2 | 3.0 | 6.6 | 0.6 | 6.4 | 7.2 |
| Excess cover relative to statutory liquidity requirements | 48.4 | 53.8 | 74.0 | 19.7 | 38.8 | 53.5 |
| Total large exposures | 29.5 | - | 34.7 | 22.0 | 64.9 | 121.4 |
| Accumulated impairment ratio | 1.4 | 1.5 | 1.6 | 1.8 | 1.9 | 1.4 |
| Impairment ratio for the period | (0.16) | (0.15) | (0.10) | (0.07) | (0.02) | (0.01) |
| Number of full-time staff end of period | 2,237 | 2,208 | 2,190 | 2,203 | 2,172 | 2,124 |
Financial ratios prepared according to "Recommendations & Financial Ratios 2005" published by the Danish Society of Financial Analysts.
* Ratios calculated on the basis of loans and advances at amortised cost.
** As of 30 September 2006 the solvency (total capital) ratio and core capital (Tier 1) ratio include profit for the period. Until 31 December 2006 the solvency (total capital) ratio and core capital (Tier 1) ratio were calculated in accordance with the former executive order on capital adequacy.
Shareholders' Equity (Tier 1)
| Reserve for | ||||||
|---|---|---|---|---|---|---|
| Share | Restricted savings bank |
net revaluation according to |
Retained | Proposed | ||
| DKKm | capital | reserve | equity method | earnings | dividend etc | Total |
| Shareholders' equity 1 Jan 2007 | 700 | 388 | 8 | 5,023 | 230 | 6,349 |
| Changes in equity in 2007: | ||||||
| Translation of foreign entities | - | - | - | (6) | - | (6) |
| Hedge of net investment in foreign entities | - | - | - | 6 | - | 6 |
| Profit for the period | - | - | - | 901 | - | 901 |
| Total income | - | - | - | 901 | - | 901 |
| Purchase of own shares | - | - | - | (2,898) | - | (2,898) |
| Sale of own shares | - | - | - | 2,047 | - | 2,047 |
| Employee shares | - | - | - | 18 | - | 18 |
| Tax on equity items | - | - | - | 23 | - | 23 |
| Adopted dividend etc | - | - | - | - | (230) | (230) |
| Dividends, own shares | - | - | - | 8 | - | 8 |
| Total changes in equity | - | - | - | 99 | (230) | (131) |
| Shareholders' equity 30 Jun 2007 | 700 | 388 | 8 | 5,122 | - | 6,218 |
| Shareholders' equity 1 Jan 2006 | 700 | 381 | 8 | 3,677 | 220 | 4,986 |
| Changes in equity in 2006: | ||||||
| Translation of foreign entities | - | - | - | (1) | - | (1) |
| Hedge of net investment in foreign entities | - | - | - | 1 | - | 1 |
| Profit for the period | - | - | - | 625 | - | 625 |
| Total income | - | - | - | 625 | - | 625 |
| Purchase of own shares | - | - | - | (2,001) | - | (2,001) |
| Sale of own shares | - | - | - | 1,779 | - | 1,779 |
| Employee shares | - | - | - | 16 | - | 16 |
| Tax on equity items | - | - | - | (12) | - | (12) |
| Adopted dividend etc | - | - | - | - | (220) | (220) |
| Dividends, own shares | - | - | - | 6 | - | 6 |
| Total changes in equity | - | - | - | 413 | (220) | 193 |
| Shareholders' equity 30 Jun 2006 | 700 | 381 | 8 | 4,090 | - | 5,179 |
Own Holdings – Solvency
| H1 | H1 | Full year | |
|---|---|---|---|
| DKKm | 2007 | 2006 | 2006 |
| Own holdings: | |||
| Nominal portfolio of own holdings | 40 | 26 | 11 |
| Nominal portfolio of own holdings as % of share capital | 5.7 | 3.7 | 1.5 |
| Shares outstanding (number) | 66,023,252 | 67,429,115 | 68,926,051 |
| Holding of own shares (number) | 3,976,748 | 2,570,885 | 1,073,949 |
| Total share capital (number) | 70,000,000 | 70,000,000 | 70,000,000 |
| Average number of shares outstanding | 68,580,569 | 68,411,917 | 68,519,463 |
| Solvency (total capital) ratio and capital base (Tiers 1+2): | |||
| Solvency (total capital) ratio: | |||
| Solvency (total capital) ratio * | 12.6 | 10.4 | 11.8 |
| Core capital (Tier 1) ratio * | 9.3 | 7.3 | 9.0 |
| Core capital (Tier 1) ratio (excl hybrid core capital) * | 7.9 | 6.2 | 7.8 |
| Composition of capital and weighted items: | |||
| Shareholders' equity (Tier 1) | 6,218 | 5,179 | 6,349 |
| Profit for the period | - | (625) | - |
| Core capital (Tier 1) | 6,218 | 4,554 | 6,349 |
| Proposed dividend | - | - | 230 |
| Deferred tax assets | 6 | - | 6 |
| Core capital (Tier 1) after deductions | 6,212 | 4,554 | 6,113 |
| Hybrid core capital | 1,096 | 804 | 939 |
| Core capital (Tier 1) (including hybrid core capital) after | |||
| primary deductions | 7,308 | 5,358 | 7,052 |
| Other deductions | 181 | - | - |
| Core capital (Tier 1) (incl hybrid core capital) after deductions | 7,127 | 5,358 | 7,052 |
| Subordinated capital (Tier 2) (excl hybrid core capital) | 2,530 | 2,532 | 2,536 |
| Hybrid core capital | 206 | 136 | - |
| Capital base (Tiers 1+2) before deductions | 9,863 | 8,026 | 9,588 |
| Deductions in capital base (Tiers 1+2) | 236 | 389 | 344 |
| Capital base (Tiers 1+2) after deductions | 9,627 | 7,637 | 9,244 |
| Capital base requirement (solvency requirement 8%) | 6,113 | 5,868 | 6,290 |
| Weighted assets and off-balance sheet items | 63,468 | 64,162 | 69,023 |
| Weighted items with market risk | 7,300 | 9,185 | 9,597 |
| Weighted items with operational risk | 5,649 | - | - |
| Total weighted items | 76,417 | 73,347 | 78,620 |
* As of 30 September 2006 the solvency (total capital) ratio and core capital (Tier 1) ratio include profit for the period. Until 31 December 2006 the solvency (total capital) ratio and core capital (Tier 1) ratio were calculated in accordance with the former executive order on capital adequacy.
Cash Flow Statement
| Cash equivalent positions end of period | 3,692 | 2,615 | 6,079 |
|---|---|---|---|
| Cash flows for the period | (2,387) | (4,700) | (1,236) |
| Cash equivalent positions beginning of period | 6,079 | 7,315 | 7,315 |
| Cash flows for the period | (2,387) | (4,700) | (1,236) |
| Cash flows from financing activities | (702) | 3,939 | 3,841 |
| Issue of bonds | (17) | 3,730 | 3,348 |
| Raising of subordinated capital (Tier 2) | 347 | 641 | 644 |
| Dividends | (230) | (220) | (220) |
| Purchase/sale of own holdings | (802) | (212) | 69 |
| Financing activities: | |||
| Cash flows from investing activities | (79) | (74) | (149) |
| Purchase/sale of property, plant and equipment | (31) | (74) | (146) |
| Purchase/sale of holdings in associates | (48) | 0 | (3) |
| Investing activities: | |||
| Cash flows from operating activities | (1,606) | (8,565) | (4,928) |
| Cash flows from working capital | (2,356) | (9,372) | (6,449) |
| Adjustment of non-cash operating income | (347) | (6) | (59) |
| Taxes paid | (80) | (53) | (471) |
| Operating activities: Pre-tax profit for the period |
1,177 | 866 | 2,051 |
| DKKm | 2007 | 2006 | 2006 |
| H1 | H1 | Full year | |
Segment Statements
| DKKm | Banking | Markets * | Treasury | Other | Total |
|---|---|---|---|---|---|
| Business segments H1 2007: | |||||
| Core income excl trading income | 1,117 | 14 | - | 104 | 1,235 |
| Trading income | 612 | 160 | - | - | 772 |
| Core income | 1,729 | 174 | - | 104 | 2,007 |
| Costs and depreciation | 782 | 45 | 7 | 288 | 1,122 |
| Impairment of loans and advances etc | (270) | - | - | - | (270) |
| Core earnings | 1,217 | 129 | (7) | (184) | 1,155 |
| Investment portfolio income | - | - | (27) | 3 | (24) |
| Profit before gain on sale of non-current assets | 1,217 | 129 | (34) | (181) | 1,131 |
| Gain on sale of non-current assets | 46 | - | - | - | 46 |
| Profit before tax | 1,263 | 129 | (34) | (181) | 1,177 |
| Business segments H1 2006: | |||||
| Core income excl trading income | 998 | 13 | - | 90 | 1,101 |
| Trading income | 571 | 134 | - | - | 705 |
| Core income | 1,569 | 147 | - | 90 | 1,806 |
| Costs and depreciation | 715 | 46 | 5 | 259 | 1,025 |
| Impairment of loans and advances etc | (22) | - | - | - | (22) |
| Core earnings | 876 | 101 | (5) | (169) | 803 |
| Investment portfolio income | - | - | 54 | 9 | 63 |
| Profit before gain on sale of non-current assets | 876 | 101 | 49 | (160) | 866 |
| Gain on sale of non-current assets | - | - | - | - | - |
| Profit before tax | 876 | 101 | 49 | (160) | 866 |
* Excluding Asset Management, which is included in Banking.
| Sydbank Group | Sydbank A/S | |||
|---|---|---|---|---|
| H1 | H1 | H1 | H1 | |
| DKKm | 2007 | 2006 | 2007 | 2006 |
| Note 1 | ||||
| Interest income/forward premium of: | ||||
| Amounts owed by credit institutions and central banks | 230 | 151 | 245 | 153 |
| Loans and advances and other amounts owed | 1,947 | 1,311 | 1,926 | 1,306 |
| Bonds | 183 | 129 | 183 | 129 |
| Total derivatives | 228 | 205 | 231 | 207 |
| comprising | ||||
| Foreign exchange contracts | 221 | 234 | 224 | 236 |
| Interest rate contracts | 7 | (29) | 7 | (29) |
| Other interest income | 2 | 1 | 2 | 1 |
| Total | 2,590 | 1,797 | 2,587 | 1,796 |
| Of which income from genuine purchase | ||||
| and resale transactions stated under: | ||||
| Amounts owed by credit institutions and central banks | 119 | 71 | 119 | 71 |
| Loans and advances and other amounts owed | 148 | 96 | 148 | 96 |
| Note 2 | ||||
| Interest expense to: | ||||
| Credit institutions and central banks | 374 | 273 | 378 | 277 |
| Deposits and other debt | 907 | 449 | 907 | 449 |
| Bonds issued | 200 | 116 | 200 | 116 |
| Subordinated capital (Tier 2) | 83 | 47 | 83 | 47 |
| Other interest expense | 2 | 1 | 2 | 1 |
| Total | 1,566 | 886 | 1,570 | 890 |
| Of which interest expense to genuine sale | ||||
| and repurchase transactions stated under: | ||||
| Amounts owed to credit institutions and central banks | 19 | 23 | 19 | 23 |
| Deposits and other debt | 7 | 7 | 7 | 7 |
| Sydbank Group | Sydbank A/S | |||
|---|---|---|---|---|
| H1 | H1 | H1 | H1 | |
| DKKm | 2007 | 2006 | 2007 | 2006 |
| Note 3 | ||||
| Fee and commission income: | ||||
| Securities trading and custody accounts | 521 | 533 | 499 | 519 |
| Payment services | 79 | 72 | 79 | 72 |
| Loan fees | 38 | 37 | 38 | 35 |
| Guarantee commission | 80 | 75 | 80 | 75 |
| Other fees and commission * | 34 | 40 | 32 | 35 |
| Total | 752 | 757 | 728 | 736 |
* The Sydbank Group's other fee and commission income has been reduced by DKK 6m in H1 2007
compared with H1 2006. The reduction is mainly ascribable to lower income from company administration
undertaken by the subsidiary DMK-Holding, which was sold in early 2007.
In H1 2006 income from company administration in the subsidiary DMK-Holding represented DKK 7m.
Note 4
Market value adjustments:
| Total | 268 | 299 | 264 | 296 |
|---|---|---|---|---|
| Strategic portfolio | 48 | 34 | 48 | 34 |
| Trading portfolio | 220 | 265 | 216 | 262 |
| Total | 268 | 299 | 264 | 296 |
| Other assets/liabilities | (3) | 0 | (3) | 0 |
| Deposits in pooled plans | (10) | (170) | (10) | (170) |
| Assets related to pooled plans | 10 | 170 | 10 | 170 |
| Total derivatives | 87 | 149 | 86 | 148 |
| Foreign exchange | 277 | 75 | 274 | 73 |
| Investment property | 8 | - | 8 | - |
| Shares etc | (49) | 128 | (49) | 128 |
| Bonds | (52) | (54) | (52) | (54) |
| Other loans and advances and amounts owed at fair value | 0 | 1 | 0 | 1 |
Note 5
Other operating income:
| Total | 22 | 10 | 9 | 9 |
|---|---|---|---|---|
| Other operating income | 4 | 3 | 3 | 3 |
| Profit on sale of property and equipment | 12 | 0 | 0 | 0 |
| Rent – real property | 6 | 7 | 6 | 6 |
| Sydbank Group | Sydbank A/S | |||
|---|---|---|---|---|
| H1 | H1 | H1 | H1 | |
| DKKm | 2007 | 2006 | 2007 | 2006 |
| Note 6 | ||||
| Staff costs and administrative expenses: | ||||
| Salaries and emoluments to: | ||||
| Group Executive Management | 9 | 7 | 9 | 7 |
| Board of Directors | 1 | 1 | 1 | 1 |
| Shareholders' Committee | 1 | 1 | 1 | 1 |
| Total | 11 | 9 | 11 | 9 |
| Staff costs: | ||||
| Wages and salaries | 522 | 488 | 511 | 478 |
| Pensions | 52 | 50 | 51 | 49 |
| Social security contributions (incl payroll tax) | 54 | 48 | 53 | 47 |
| Total | 628 | 586 | 615 | 574 |
| Other administrative expenses: | ||||
| IT | 212 | 177 | 210 | 176 |
| Rent etc | 54 | 53 | 57 | 55 |
| Marketing and entertainment expenses | 42 | 38 | 40 | 36 |
| Other expenses | 119 | 119 | 114 | 114 |
| Total | 427 | 387 | 421 | 381 |
| Total | 1,066 | 982 | 1,047 | 964 |
| Note 7 | ||||
| Staff: |
| Average number of staff (full-time equivalent) | 2,259 | 2,186 | 2,229 | 2,158 |
|---|---|---|---|---|
| Sydbank Group | Sydbank A/S | |||
|---|---|---|---|---|
| H1 | H1 | H1 | H1 | |
| DKKm | 2007 | 2006 | 2007 | 2006 |
| Note 8 | ||||
| Individual impairment of loans and advances and provisions for guarantees: | ||||
| Impairment and provisions beginning of period | 1,262 | 1,407 | 1,262 | 1,407 |
| Exchange rate adjustment | 0 | 0 | 0 | 0 |
| Impairment and provisions during the year | 410 | 520 | 410 | 520 |
| Reversal of impairment and provisions made in previous years | 581 | 515 | 581 | 515 |
| Write-offs covered by impairment and provisions | 36 | 18 | 36 | 18 |
| Impairment and provisions end of period | 1,055 | 1,394 | 1,055 | 1,394 |
| Collective impairment of loans and advances and provisions for guarantees: | ||||
| Impairment and provisions beginning of period | 195 | 162 | 195 | 162 |
| Impairment and provisions during the year | 2 | 27 | 2 | 27 |
| Reversal of impairment and provisions made in previous years | 52 | 5 | 52 | 5 |
| Impairment and provisions end of period | 145 | 184 | 145 | 184 |
| Impairment and provisions end of period: | ||||
| Individual impairment and provisions | 1,055 | 1,394 | 1,055 | 1,394 |
| Collective impairment and provisions | 145 | 184 | 145 | 184 |
| Impairment and provisions end of period | 1,200 | 1,578 | 1,200 | 1,578 |
| Impairment of loans and advances recognised in the income statement: |
||||
| Impairment and provisions | (257) | (10) | (257) | (10) |
| Write-offs not covered by impairment and provisions | 13 | 15 | 13 | 15 |
| Recovered from debt previously written off | 26 | 27 | 26 | 27 |
| Impairment of loans and advances etc | (270) | (22) | (270) | (22) |
| Note 9 | ||||
| Profit on holdings in associates and subsidiaries: | ||||
| Profit on holdings in associates etc | 6 | 1 | 6 | 1 |
| Profit on holdings in subsidiaries | 25 | - | 51 | 9 |
| Total | 31 | 1 | 57 | 10 |
| DKKm Note 10 Effective tax rate: |
30 Jun 2007 |
31 Dec 2006 |
30 Jun 2007 |
31 Dec 2006 |
|---|---|---|---|---|
| Current tax rate of the Sydbank Group | 25.0 | 28.0 | 25.0 | 28.0 |
| Adjustment of deferred tax due to changed corporation tax rate | (1.0) | - | (1.0) | - |
| Permanent differences | (0.5) | 0.0 | (0.5 | 0.0 |
| Adjustment of tax of previous years | 0.0 | (0.1) | 0.0 | (0.1) |
| Effective tax rate | 23.5 | 27.9 | 23.5 | 27.9 |
| Note 11 | ||||
| Amounts owed by credit institutions and central banks: | ||||
| Amounts owed at notice by central banks | 929 | 2,433 | 929 | 2,433 |
| Amounts owed by credit institutions | 11,863 | 13,275 | 12,731 | 13,926 |
| Total | 12,792 | 15,708 | 13,660 | 16,359 |
| Note 12 | ||||
| Other assets: | ||||
| Positive market value of derivatives etc | 4,649 | 2,710 | 4,649 | 2,710 |
| Sundry debtors | 252 | 286 | 239 | 268 |
| Interest and commission receivable | 567 | 378 | 567 | 379 |
| Other assets | 0 | 5 | 0 | 5 |
| Total | 5,468 | 3,379 | 5,455 | 3,362 |
| Note 13 | ||||
| Deposits and other debt: | ||||
| On demand | 37,107 | 33,039 | 36,801 | 32,940 |
| At notice | 680 | 744 | 680 | 744 |
| Time deposits | 15,429 | 12,737 | 15,429 | 12,737 |
| Special categories of deposits | 3,854 | 3,471 | 3,854 | 3,471 |
| Total | 57,070 | 49,991 | 56,764 | 49,892 |
| Sydbank Group | Sydbank A/S | |||
|---|---|---|---|---|
| 30 Jun | 31 Dec | 30 Jun | 31 Dec | |
| DKKm | 2007 | 2006 | 2007 | 2006 |
| Note 14 | ||||
| Other liabilities: | ||||
| Negative market value of derivatives etc | 1,426 | 2,165 | 1,426 | 2,165 |
| Sundry creditors | 9,407 | 9,020 | 9,389 | 9,003 |
| Interest and commission etc payable | 631 | 237 | 629 | 231 |
| Other liabilities | 0 | 11 | 0 | 0 |
| Total | 11,464 | 11,433 | 11,444 | 11,399 |
| Note 15 | ||||
| Provisions: | ||||
| Provisions for pensions and similar obligations | 2 | 2 | 2 | 2 |
| Provisions for deferred tax | 99 | 110 | 99 | 110 |
| Provisions for guarantees | 77 | 198 | 77 | 198 |
| Other provisions | 33 | 36 | 33 | 36 |
| Total | 211 | 346 | 211 | 346 |
Note 16
Subordinated capital (Tier 2):
| Interest rate | Nominal (m) | Maturity | ||||||
|---|---|---|---|---|---|---|---|---|
| Floating | Bond loan | EUR | 100 | 29.06.12 | 744 | 746 | 744 | 746 |
| Floating | Bond loan | EUR | 40 | 17.09.12 | 298 | 298 | 298 | 298 |
| Floating | Bond loan | EUR | 100 | 21.10.13 | 743 | 746 | 743 | 746 |
| Floating | Bond loan | EUR | 100 | 04.04.15 | 743 | 746 | 743 | 746 |
| Total supplementary capital | 2,528 | 2,536 | 2,528 | 2,536 | ||||
| Floating | Bond loan | EUR | 100 * | Perpetual | 736 | 380 | 736 | 380 |
| Floating | Bond loan | EUR | 75 | Perpetual | 558 | 559 | 558 | 559 |
| Total hybrid capital | 1,294 | 939 | 1,294 | 939 | ||||
| Total | 3,822 | 3,475 | 3,822 | 3,475 |
* EUR 51m as at 31 December 2006
| Sydbank Group | Sydbank A/S | |||
|---|---|---|---|---|
| 30 Jun | 31 Dec | 30 Jun | 31 Dec | |
| DKKm | 2007 | 2006 | 2007 | 2006 |
| Note 17 | ||||
| Guarantees and other contingent liabilities: | ||||
| Guarantees: | ||||
| Financial guarantees | 4,067 | 3,622 | 4,150 | 3,595 |
| Mortgage finance guarantees | 665 | 6,281 | 665 | 6,281 |
| Registration and remortgaging guarantees | 3,544 | 3,529 | 3,544 | 3,529 |
| Other guarantees | 1,449 | 1,448 | 1,449 | 1,448 |
| Total | 9,725 | 14,880 | 9,808 | 14,853 |
| Other contingent liabilities: | ||||
| Irrevocable credit commitments | 207 | 237 | 207 | 237 |
| Other liabilities * | 99 | 74 | 25 | 136 |
| Total | 306 | 311 | 232 | 373 |
| * Including intragroup liabilities in relation to rented premises | - | - | 74 | 70 |
Note 18
This half-year:
After the expiry of the half-year, no matters of significant impact on the financial position of the Sydbank Group have occurred.
| Sydbank Group | Sydbank A/S | |||||
|---|---|---|---|---|---|---|
| 30 Jun | 31 Dec | 30 Jun | 31 Dec | |||
| DKKm | 2007 | 2006 | 2007 | 2006 | ||
| Note 19 | ||||||
| Genuine sale and repurchase transactions and genuine purchase and resale transactions: |
||||||
| Of the below asset items genuine purchase and resale transactions amount to: |
||||||
| Amounts owed by credit institutions and central banks | 7,301 | 7,690 | 7,301 | 7,690 | ||
| Loans and advances at fair value | 7,974 | 7,671 | 7,974 | 7,671 | ||
| Of the below liability items genuine sale and repurchase transactions amount to: |
||||||
| Amounts owed to credit institutions and central banks | 795 | 1,679 | 795 | 1,679 | ||
| Deposits and other debt | 614 | 618 | 614 | 618 | ||
| Assets sold as part of genuine sale and repurchase transactions Asset: |
||||||
| Bonds at fair value | 1,396 | 2,255 | 1,396 | 2,255 |
Note 20
Large shareholders:
Nykredit owns more than 5% of the Bank's share capital.
Note 21
Security:
As of 30 June 2007 the Bank had deposited securities at a market value of DKK 10,588m with Danish and foreign exchanges and clearing centres etc in connection with margin calls and securities settlements etc.
| Sydbank Group | Sydbank A/S | ||||
|---|---|---|---|---|---|
| 30 Jun | 31 Dec | 30 Jun | 31 Dec | ||
| DKKm | 2007 | 2006 | 2007 | 2006 |
Note 22
Fair value hedging of interest rate risks (macro hedge):
Sydbank adopts a cash flow model for managing interest rate risk on all positions other than Danish callable mortgage credit bonds. The model is updated daily with all the Bank's positions. These are distributed into portfolios according to responsibility and product.
One of these portfolios consists of the Bank's positions in fixed-rate loans and advances, fixed-rate deposits, and related hedging transactions. To ensure interest rate risk management of this portfolio, the model generates a synthetic cash flow to describe the Bank's risk position in selected interest rate scenarios.
The Bank's basis for concluding hedging transactions – primarily interest rate swaps – is thus a synthetic net cash flow, based on the actual cash flow of loans and advances, deposits and previously concluded hedging transactions in the relevant portfolio. The aim is to keep the interest rate risk in this portfolio at a minimum as the Bank wishes to place its interest rate risk in other portfolios containing bonds and other cash equivalent positions.
In connection with the preparation of interim and annual reports the rules on macro hedge are applied, which aim to ensure symmetry between income and expense in the financial statements.
Symmetry is achieved by making a hedge adjustment corresponding to the part of the market value adjustment of derivatives which concerns future periods. This hedge adjustment is recorded under "Other liabilities" and represents DKK 33m as at 30 June 2007.
| Loans and advances: | ||||
|---|---|---|---|---|
| Carrying amount | 1,789 | 1,901 | 1,789 | 1,901 |
| Deposits: | ||||
| Carrying amount | 1,026 | 1,231 | 1,026 | 1,231 |
| The following derivatives hedge the above: | ||||
| Forward Rate Agreements: | ||||
| Principal | 85 | 36 | 85 | 36 |
| Fair value | 0 | (1) | 0 | (1) |
| Swaps: | ||||
| Principal | 1,031 | 1,901 | 1,031 | 1,901 |
| Fair value | 15 | (5) | 15 | (5) |
| According to | |||
|---|---|---|---|
| 2006 Interim Report | Change | Adjusted | |
| Sydbank A/S Sydleasing Sydbank A/S | |||
| 30 Jun | 30 Jun | 30 Jun | |
| DKKm | 2006 | 2006 | 2006 |
| Note 23 | |||
| Impact of merger between Sydleasing A/S and Sydbank A/S: | |||
| Income statement: | |||
| Net interest income | 876 | 30 | 906 |
| Net fee income etc | 627 | 3 | 629 |
| Other operating income | 304 | 1 | 305 |
| Operating expenses etc | 987 | 20 | 1,006 |
| Impairment of loans and advances etc | (23) | 1 | (22) |
| Profit on holdings in associates and subsidiaries | 23 | (13) | 10 |
| Profit before tax | 866 | - | 866 |
| According to | |||
| 2006 Interim Report | Change | Adjusted | |
| Sydbank A/S Sydleasing Sydbank A/S | |||
| 31 Dec | 31 Dec | 31 Dec | |
| DKKm | 2006 | 2006 | 2006 |
| Balance sheet: | |||
| Loans and advances at amortised cost | 64,523 | 197 | 64,720 |
| Other asset items | 49,858 | 57 | 49,915 |
| Total assets | 114,381 | 254 | 114,635 |
| Total liabilities | 104,316 | 149 | 104,465 |
| Provisions | 241 | 105 | 346 |
| Subordinated capital (Tier 2) | 3,475 | - | 3,475 |
| Shareholders' equity (Tier 1) | 6,349 | - | 6,349 |
| Total shareholders' equity and liabilities | 114,381 | 254 | 114,635 |
| Sydbank Group | |||||||
|---|---|---|---|---|---|---|---|
| H1 | H1 | Full year | |||||
| DKKm | 2007 | 2006 | 2006 | ||||
| Note 24 | |||||||
| Core income: | |||||||
| Core income excl trading income: | |||||||
| Interest margins etc | 988 | 870 | 1,821 | ||||
| Mortgage credit | 101 | 84 | 173 | ||||
| Payment services | 65 | 62 | 132 | ||||
| Remortgaging and loan fees | 40 | 31 | 63 | ||||
| Other commission | 31 | 44 | 84 | ||||
| Other operating income | 10 | 10 | 25 | ||||
| Total | 1,235 | 1,101 | 2,298 | ||||
| Trading income: | |||||||
| Bonds | 97 | 90 | 182 | ||||
| Shares | 238 | 264 | 448 | ||||
| Foreign exchange | 122 | 126 | 220 | ||||
| Money market | 43 | 33 | 79 | ||||
| Asset Management | 272 | 192 | 390 | ||||
| Total | 772 | 705 | 1,319 |
Group Financial Highlights – Half-yearly
| H1 | H1 | H1 | H1 | H1 | Full year | |
|---|---|---|---|---|---|---|
| 2007 | 2006 | 2005 | 2004 | 2003 | 2006 | |
| Income statement (DKKm) | ||||||
| Core income excl trading income | 1,235 | 1,101 | 962 | 962 | 959 | 2,298 |
| Trading income | 772 | 705 | 528 | 376 | 320 | 1,319 |
| Total core income | 2,007 | 1,806 | 1,490 | 1,338 | 1,279 | 3,617 |
| Costs and depreciation | 1,116 | 1,020 | 925 | 867 | 812 | 2,030 |
| Core earnings before impairment | 891 | 786 | 565 | 471 | 467 | 1,587 |
| Impairment of loans and advances etc | (270) | (22) | 49 | 148 | 149 | (171) |
| Core earnings | 1,161 | 808 | 516 | 323 | 318 | 1,758 |
| Profit/(Loss) on investment portfolios | (30) | 58 | 75 | 74 | 136 | 173 |
| Profit before gain on sale of non-current assets | 1,131 | 866 | 591 | 397 | 454 | 1,931 |
| Gain on sale of non-current assets | 46 | - | - | - | - | 120 |
| Profit before tax | 1,177 | 866 | 591 | 397 | 454 | 2,051 |
| Tax | 276 | 241 | 171 | 121 | 153 | 537 |
| Profit after tax | 901 | 625 | 420 | 276 | 301 | 1,514 |
| Balance sheet highlights (DKKbn) Loans and advances at amortised cost |
68.9 | 61.1 | 47.5 | 37.5 | 34.7 | 65.5 |
| Loans and advances at fair value | 8.0 | 7.2 | 7.9 | 6.3 | 4.7 | 7.7 |
| Deposits and other debt | 57.1 | 46.0 | 42.2 | 37.1 | 35.5 | 50.0 |
| Bonds issued at amortised cost | 10.0 | 10.4 | 1.9 | 1.9 | 1.9 | 10.0 |
| Subordinated capital (Tier 2) | 3.8 | 3.5 | 2.1 | 1.3 | 1.5 | 3.5 |
| Shareholders' equity (Tier 1) | 6.2 | 5.2 | 4.5 | 4.1 | 4.1 | 6.3 |
| Total assets | 121.1 | 107.5 | 88.6 | 69.0 | 69.8 | 114.8 |
| Financial ratios per share (DKK per share of DKK 10) | ||||||
| EPS Basic | 13.1 | 9.1 | 6.1 | 3.6 | 4.1 | 22.1 |
| EPS Diluted | 13.1 | 9.1 | 6.1 | 3.6 | 4.1 | 22.1 |
| Share price end of period | 264.0 | 193.5 | 137.8 | 89.5 | 68.7 | 270.0 |
| Book value | 94.2 | 76.8 | 66.0 | 58.1 | 54.9 | 92.1 |
| Share price/book value | 2.80 | 2.52 | 2.09 | 1.54 | 1.25 | 2.93 |
| Average number of shares outstanding (millions) | 68.6 | 68.4 | 68.6 | 70.8 | 73.6 | 68.5 |
| Other financial ratios and key figures | ||||||
| Solvency (total capital) ratio ** | 12.6 | 10.4 | 10.0 | 10.1 | 10.5 | 11.8 |
| Core capital (Tier 1) ratio ** | 9.3 | 7.3 | 7.8 | 8.1 | 7.9 | 9.0 |
| Pre-tax profit as % of avg shareholders' equity | 18.7 | 17.0 | 13.2 | 9.7 | 11.4 | 36.2 |
| Post-tax profit as % of avg shareholders' equity | 14.3 | 12.3 | 9.4 | 6.8 | 7.6 | 26.7 |
| Income/cost ratio (DKK) | 2.38 | 1.86 | 1.60 | 1.39 | 1.47 | 2.10 |
| Interest rate risk | 0.3 | 2.2 | 3.4 | 2.4 | 5.3 | 2.0 |
| Foreign exchange position | 16.1 | 10.9 | 12.0 | 5.3 | 15.7 | 10.3 |
| Foreign exchange risk | 0.2 | 0.1 | 0.1 | 0.0 | 0.1 | 0.1 |
| Loans and advances relative to deposits * | 1.1 | 1.2 | 1.0 | 0.9 | 1.0 | 1.2 |
| Loans and advances relative to shareholders' equity * | 11.1 | 11.8 | 10.5 | 9.2 | 8.4 | 10.3 |
| Growth in loans and advances during the period * | 5.2 | 14.1 | 13.7 | 7.5 | 2.3 | 22.4 |
| Excess cover relative to statutory liquidity requirements | 48.4 | 38.8 | 74.9 | 152.0 | 88.7 | 74.0 |
| Total large exposures | 29.5 | 64.9 | 102.2 | 79.1 | 99.9 | 34.7 |
| Accumulated impairment ratio | 1.4 | 1.9 | 2.2 | 2.7 | 2.8 | 1.6 |
| Impairment ratio for the period | (0.31) | (0.03) | 0.07 | 0.27 | 0.30 | (0.19) |
| Number of full-time staff end of period | 2,237 | 2,172 | 2,092 | 2,024 | 1,979 | 2,190 |
Financial ratios prepared according to "Recommendations & Financial Ratios 2005" published by the Danish Society of Financial Analysts. * Ratios calculated on the basis of loans and advances at amortised cost.
** As of 30 September 2006 the solvency (total capital) ratio and core capital (Tier 1) ratio include profit for the period. Until 31 December 2006 the solvency (total capital) ratio and core capital (Tier 1) ratio were calculated in accordance with the former executive order on capital adequacy.
Sydbank A/S Financial Highlights
| H1 | H1 | H1 | H1 | H1 | |
|---|---|---|---|---|---|
| 2007 | 2006 | 2005 | 2004 | 2003 | |
| Income statement (DKKm) | |||||
| Income statement highlights (DKKm) | |||||
| Net interest and fee income | 1,678 | 1,535 | 1,306 | 1,246 | 1,247 |
| Market value adjustments | 264 | 296 | 230 | 137 | 147 |
| Staff costs and administrative expenses | 1,047 | 964 | 877 | 825 | 763 |
| Impairment of loans and advances etc | (270) | (22) | 50 | 148 | 149 |
| Profit on holdings in associates and subsidiaries | 57 | 10 | 10 | 12 | 4 |
| Profit after tax | 901 | 625 | 420 | 276 | 301 |
| Balance sheet highlights (DKKbn) | |||||
| Loans and advances | 75.9 | 67.8 | 55.4 | 43.9 | 39.6 |
| Shareholders' equity (Tier 1) | 6.2 | 5.2 | 4.5 | 4.1 | 4.1 |
| Total assets | 121.1 | 107.4 | 88.5 | 69.1 | 69.8 |
| Financial ratios per share (DKK per share of DKK 10) | |||||
| EPS | 12.9 | 8.9 | 6.0 | 3.7 | 4.0 |
| Book value | 88.8 | 74.0 | 64.8 | 56.1 | 54.9 |
| Dividend per share | 3.0 | 3.0 | 3.0 | 2.0 | 1.5 |
| Share price/profit for the period per share | 20.5 | 21.7 | 23.0 | 23.9 | 17.1 |
| Share price/book value | 2.97 | 2.62 | 2.13 | 1.60 | 1.25 |
| Other financial ratios and key figures | |||||
| Solvency (total capital) ratio * | 12.7 | 10.1 | 10.0 | 10.1 | 10.5 |
| Core capital (Tier 1) ratio * | 9.4 | 7.1 | 7.9 | 8.1 | 7.9 |
| Pre-tax profit as % of avg shareholders' equity | 18.7 | 17.0 | 13.2 | 8.8 | 11.4 |
| Post-tax profit as % of avg shareholders' equity | 14.3 | 12.3 | 9.4 | 6.1 | 7.6 |
| Income/cost ratio (DKK) | 2.42 | 1.88 | 1.61 | 1.39 | 1.48 |
| Interest rate risk | 0.3 | 2.2 | 3.4 | 2.4 | 5.3 |
| Foreign exchange position | 16.1 | 10.9 | 12.0 | 5.3 | 15.7 |
| Foreign exchange risk | 0.2 | 0.1 | 0.1 | 0.0 | 0.1 |
| Loans and advances relative to deposits | 1.2 | 1.3 | 1.2 | 1.1 | 1.2 |
| Loans and advances relative to shareholders' equity | 12.2 | 13.1 | 12.2 | 10.1 | 9.6 |
| Growth in loans and advances during the period | 5.2 | 12.0 | 16.4 | 10.5 | 2.2 |
| Excess cover relative to statutory liquidity requirements | 55.5 | 41.6 | 74.7 | 151.6 | 88.6 |
| Total large exposures | 29.5 | 64.9 | 102.2 | 79.1 | 99.9 |
| Impairment ratio for the period | (0.3) | 0.0 | 0.1 | 0.3 | 0.3 |
Financial ratios have been determined by the Danish FSA's executive order on financial reporting of credit institutions and brokerage firms etc.
The Bank has changed its accounting policies as of 2005.
* As of 30 September 2006 the solvency (total capital) ratio and core capital (Tier 1) ratio include profit for the period. Until 31 December 2006 the solvency (total capital) ratio and core capital (Tier 1) ratio were calculated in accordance with the former executive order on capital adequacy.