Vestjysk Bank’s Q1 2020 Quarterly Report

Nasdaq Copenhagen A/S


13 May 2020

Q1 2020 Highlights

Vestjysk Bank reported a profit after tax of DKK 57 million in Q1 2020. The reported profit was adversely affected by the impact of the Corona crisis on the financial markets as well as on impairment provisions. The Bank increased impairment provisions by DKK 50 million. The Bank has made a total impairment provision of DKK 100 million for economic uncertainty, corresponding to 1% of the Bank’s loans and advances.

• Profit after tax was DKK 57 million (Q1 2019: DKK 72 million), for an annualised return on equity after tax of 7.7%.
• Core income of DKK 198 million (Q1 2019: DKK 221 million).
• Negative market value adjustments of DKK 4 million (Q1 2019: positive value adjustments of DKK 20 million).
• Cost ratio of 63.7% (Q1 2019: 55.8%).
• Core earnings before impairment allowances of DKK 72 million (Q1 2019: DKK 98 million).
• Impairment of loans and receivables, etc. of DKK 12 million (Q1 2019: DKK 22 million). Impairment allowances on agriculture amounted to a net reversal for the quarter.
• The Bank’s capital requirements were 13.0%, consisting of an individual solvency need of 10.5%, a general capital conservation buffer of 2.5% and a countercyclical buffer of 0.0%. The MREL was phased in at 1.875%, added to the capital requirement. The individual solvency need includes DKK 50 million, or 0.37 of a percentage point, based on a management estimate of economic uncertainty.
• The Bank’s total capital ratio was 22.1, implying an excess cover of 9.1 percentage points or DKK 1,230 million.
• The Bank’s MREL ratio was 22.1. This taken into account, the excess cover was 7.2 percentage points, or DKK 975 million.

Preliminary impact of the Corona crisis on Vestjysk Bank
Like the rest of Denmark, the Bank has been impacted by the official lockdown of our society since 12 March 2020. The vast majority of the Bank’s employees have been working from home, and the Bank’s branches were closed for business until 27 April 2020. During this period, the Bank was able to maintain a reasonable level of operations, and the level of customer activity has been normal.

The Bank’s advisers have proactively contacted all business customers to arrange how the Bank can help them through the Corona crisis and to advise them on how to apply the rescue packages provided by the Danish government and parliament. To date, the crisis has not directly impacted the Bank’s lending or impairment allowances to any significant extent. This is expected to change over time, however, if the crisis persists through the coming months.