Annual Report 2023 - Seite 3

Stronger earnings and continued solid credit quality
Jyske Bank’s performance in 2023 was highly satisfactory. With net profit of DKK 5.9bn, corresponding to DKK 89.3 per share, 2023 was a historically good year for Jyske Bank with a return on equity of 14.4%.  

Earnings per share rose by 61% compared with the record-breaking year in 2022. The increase was boosted by 58% higher core income due to considerable growth in net interest income.

Net interest income was affected by the higher interest-rate level as well as the acquisition of Handelsbanken Denmark. In addition, developments in the financial markets and Jyske Bank’s positioning made highly positive contributions to value adjustments.

Net fee and commission income showed a minor advance compared with the previous year which was characterised by high loan and refinancing activity. Consequently, the acquisition of Handelsbanken Denmark offset a lower level of activity in 2023 as a result of the higher level of interest rates.

Core expenses rose by 25% compared to 2022. A steep increase had to be expected due to the acquisition of Handelsbanken Denmark which resulted in a rise in the number of employees and higher IT expenses. The increase was also supported by a higher number of employees relating to financial crime prevention as well as the acquisition of PFA Bank and sector-wide prescribed salary increases. In addition to core expenses, non-recurring costs of DKK 235m were paid relating to the integration of Handelsbanken Denmark and PFA Bank.

Loan impairment charges amounted to an expense of DKK 127m, corresponding to 0.02% of gross loans and guarantees. The credit quality remains solid with a low level of non-performing loans and the lowest level of actual write-offs for more than a decade. Moreover, post-model adjustments of DKK 1.9bn offers a good basis for countering the macroeconomic uncertainty in 2024.

After the acquisition of Handelsbanken Denmark, Jyske Bank has built up a stronger capital base and with a common equity tier 1 capital ratio at 16.9, Jyske Bank has a solid capital base. This paved the way for a resumption of distribution to shareholders with an extraordinary dividend of DKK 500m in December 2023 combined with the proposal by the Supervisory Board for an additional dividend at DKK 500m in connection with the coming annual general meeting.