Jyske Bank (JYSK) Carnegie roadshow presentation summary

Q3 financial performance

• Q3 net profit DKK 706m; annualised ROE 7.6%.

• Q3 core profit before loan impairment charges DKK 887m, up 5% YoY; Q1–3 total DKK 2,909m, up 33% YoY.

• Q3 net interest income declined 1% YoY; positive deposit repricing effects were more than offset by lower bond income.

• Q3 net fee and commission income rose 28% YoY, supported by higher assets under management, strong activity and fee changes.

• Q3 core expenses increased 1% YoY; loan impairment charges were DKK -36m despite a DKK 185m increase in management’s estimate.

Income initiatives and efficiency

• Core profit before loan losses increased 46% over two years; high financial and property-market activity supported an upgraded 2021 outlook.

• Further private and corporate deposit rate reductions in Q4 are expected to add DKK 0.1bn p.a. to income.

• Fee changes lifted sustainable fee income run-rate by more than DKK 0.1bn p.a.; initiatives included repricing services and raising full-service client thresholds.

• Cost/income ratio reached below 60%, with cost control supporting income initiatives.

Credit and outlook

• Management’s loan-loss estimate increased DKK 330m in Q2 and Q3 and DKK 1bn versus end-2019; Q3 impairment charges were DKK -36m.

• 2021 outlook: bank lending and nominal mortgage lending to increase; loan impairment charge reversals expected, previously forecast at approximately zero.

• 2021 net profit outlook raised to DKK 3.0–3.1bn from DKK 2.6–2.9bn.

• Capital guidance for the coming years: CET1 ratio 15%–17% and capital ratio 20%–22%.