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2021-10-27

Ringkjøbing Landbobank’s quarterly report for the first three quarters of 2021

Nasdaq Copenhagen
London Stock Exchange
Euronext Dublin
Other stakeholders

27 October 2021


Ringkjøbing Landbobank’s quarterly report for the first three quarters of 2021

The bank delivers core earnings of DKK 1,121 million and profit before tax of DKK 1,105 million. The profit before tax is equivalent to a 17.6% p.a. return on equity.


Core earnings

(DKK million)Q1-Q3
2021
Q1-Q3
2020

2020
2019 2018
2017
Total core income1,7821,6132,1792,1162,0011,917
Total expenses and depreciation600576788805866845
Core earnings before impairment charges for loans1,1821,0371,3911,3111,1351,072
Impairment charges for loans etc.-61-185-223-100-43-70
Core earnings1,1218521,1681,2111,0921,002
Result for the portfolio etc.-4-24-9+49+77+84
Special costs1211151521722
Profit before tax1,1058171,1441,2459521,064


Highlights of the first three quarters of 2021

  • The profit before tax is DKK 1,105 million, equivalent to a 17.6% p.a. return on equity
  • Core income increases by 11% to DKK 1,782 million following nine months of high activity levels
  • Expenses increase by 4% to DKK 600 million
  • The rate of costs decreases to 33.7%
  • Continued increase in new customers results in growth of 9% in the bank’s loans compared to September 2020
  • The purchase of BIL Danmark was satisfactorily completed and implemented in the third quarter
  • Image and customer satisfaction are rated among the best in Voxmeter surveys
  • The results for the year are expected to be at the upper end of the upwardly adjusted ranges.


Yours sincerely

Ringkjøbing Landbobank

John Fisker


Management’s review

Core income

Interest
Net interest income was DKK 988 million in the first three quarters of 2021, compared to DKK 935 million in the same period in 2020, an increase of 6%. The bank is satisfied with this development.

The development is partly attributable to a 9% increase in lending compared to the end of September 2020 including the clients taken over from BIL Danmark, while the increase excluding them was 7%. The increase in lending is broadly based and relates to both niches and retail.

The interest margin was slightly lower in the third quarter compared to a year ago, although the bank lowered the threshold for negative interest on personal customers’ deposits to DKK 100,000 with effect from the beginning of January 2021. With effect from 1 July 2021, the bank lowered the interest rate on deposits from business customers. The interest margin on the bank’s loans has thus been under pressure.

The deposit interest rate for corporate customers will be lowered by 0.1 percentage points by early November 2021 and by early December 2021 also for private customers. This is due to the lowering of the interest rate by Denmark’s National Bank per 1. October 2021.


Fee, commission, and foreign exchange income
Fee, commission, and foreign exchange income amounted to DKK 657 million in the first three quarters of 2021, compared to DKK 569 million in the same period in 2020, an increase of 15%. The bank is highly satisfied with this development, and the increase reflects a very high level of activity – especially in the first quarter of the year. However, the general levels of activity in both the second and third quarters of 2021 continued at a higher level.

The bank’s focus on the private banking segment has had a positive effect on the “Securities trading”, “Asset management and custody accounts” and “Foreign exchange income” items in particular.

Due to the high levels of activity and the continued large increase in new customers, the item “Guarantee commission and mortgage credit commission etc.” also developed positively compared to the first three quarters of 2020. The item “Loan fees” also increased in 2021, although the respective activity level has been declining slightly during 2021.

Initiatives aimed at normalising the income from payment handling activities were announced with effect from 1 April 2021. These initiatives are reflected in the income from “Payment handling”, which has improved compared to the first three quarters of 2020.

The income from “Other fees and commission” developed positively compared to 2020. This is partly attributable to the bank’s focus on the p...

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