AL Sydbank (ALSYDB) Q2 2024 earnings summary

Executive summary

• Profit after tax reached DKK 1,624m in H1 2024, up 9% year-over-year, with a return on equity (ROE) of 22.4% p.a.

• Core income increased by 8% to DKK 3,646m, driven by higher interest rates and increased lending and deposits.

• Bank loans and advances grew by DKK 4.7bn (6%) in H1 2024, mainly from corporate clients.

• Share buybacks totaled DKK 435m by end-Q2 within a DKK 1,200m program.

• Acquisition of Coop Bank A/S completed on 1 July 2024 for DKK 345m, expected to boost business volume.

Financial highlights

• Total income increased by 6% to DKK 3,799m in H1 2024.

• Net interest income rose by 7% year-over-year; payment services up 20%; asset management up 22%.

• Costs (core earnings) rose by 4% to DKK 1,659m, and impairment charges amounted to DKK 24m.

• Earnings per share (EPS) reached 29.5, up from 26.0 in H1 2023.

• Cost/income ratio improved to 43.7% from 44.8% in H1 2023.

Outlook and guidance

• Profit after tax for 2024 is projected in the range of DKK 2,800-3,100m, revised up from previous guidance.

• Forecast assumes a 0.50pp reduction in Danmarks Nationalbank's deposit rate.

• Outlook is subject to financial market and macroeconomic uncertainties, especially regarding impairment charges.