Vestjysk Bank’s Annual Report 2020

The Danish Financial Supervisory Authority

Nasdaq Copenhagen A/S


23 February 2021

2020 Highlights
Vestjysk Bank realised a profit after tax of DKK 303 million in 2020 and the realised profit was at the high end of the range of DKK 260-320 million. The performance was adversely affected by economic uncertainty caused by the coronavirus crisis and African swine fever in Germany. These factors impacted the Bank’s impairment provisions based on a management estimate. The Bank has increased the provisions I 2020 with DKK 180 million to total provisions of DKK 310 million in the form of a management estimate in response to the economic uncertainty, corresponding to 3.3% of the Bank’s net loans.

In the following, comparative figures for 2019 are affected by the Sparinvest transaction, on which Vestjysk Bank realised a profit of 142 million.

• Profit after tax of DKK 303 million, against DKK 478 million in 2019 (DKK 336 million ex. Sparinvest), for an annualised return on equity after tax of 9.8%.
• Core income of DKK 887 million, against DKK 1,055 million in 2019 (DKK 913 million ex. Sparinvest).
• Value adjustments of DKK 65 million, against DKK 185 million in 2019 (DKK 58 million ex. Sparinvest).
• A cost ratio of 59.8%, against 48.2% in 2019 (55.6% ex. Sparinvest)
• Core earnings before impairment of DKK 357 million, against DKK 547 million in 2019 (DKK 405 million ex. Sparinvest).
• Impairment of loans and receivables, etc. of DKK 29 million (2019: DKK 64 million). Impairment allowances on agriculture amounted to a net reversal.
• The Bank’s capital requirements totalled 12.8%, consisting of an individual solvency need of 10.3% and a general capital conservation buffer of 2.5%.
• The Bank’s total capital ratio was 24.7%. The excess cover was 11.9 percentage points, or DKK 1,574 million. Adjusted for capital required to cover the 1.9 percentage point MREL add-on at 31 December 2020, the excess cover was 10.0 percentage points, or DKK 1,303 million.

Merger with Den Jyske Sparekasse
In November 2020, the Bank announced plans of a merger with Den Jyske Sparekasse with Vestjysk Bank as the continuing bank.

After a number of challenging years, being in a position to seek a merger with another medium-sized bank marks an important step forward for Vestjysk Bank.

Shareholders finally approved the merger at the extraordinary general meetings held on 13 January 2021. The Danish Financial Supervisory Authority approved the merger on 14 January 2021. Following the merger, the bank is the eighth largest bank in Denmark in terms of business volume, which is expected to be in the region of DKK 130 billion going forward.