Skjern Bank (SKJE) Q4 2023 earnings summary

Executive summary

• Record 2023 profit before tax of DKK 344.1m, up 80.0% YoY; core earnings reached DKK 335.9m, up 43.8%.

• Net interest and fee income rose 28.0% to DKK 593.5m; positive exchange adjustments of DKK 47.2m contrasted with negative DKK 30.8m in 2022.

• Return on equity was 24.0% before tax and 17.9% after tax; proposed dividend of DKK 48.2m, or 18.7% of profit after tax.

Financial highlights

• Net interest income rose 58.6% to DKK 403.3m; fee and commission income fell 10.1% to DKK 188.6m, mainly from fewer housing transactions and mortgage conversions.

• Net income was DKK 258.0m versus DKK 150.2m in 2022; reported EPS was DKK 26.2 per DKK 20 share.

• Staff and administration expenses increased 9.2% to DKK 255.5m, reflecting 15 net hires, wage increases and branch expansion.

• Impairment charges were DKK 27.6m, or 0.4% of loans and guarantees, versus DKK 2.7m in 2022.

Outlook and guidance

• 2024 profit before tax is expected at DKK 270–300m and core earnings at DKK 310–330m; modestly higher impairment is expected.

• Lending growth is expected to moderate to 1–3% in 2024, while total business volume is expected to increase and deposit growth is targeted to exceed lending growth.

• Profit after tax in 2024 will reflect the corporate tax rate increase from 25.2% to 26%.

• Leasing volume exceeded DKK 205m at year-end and is expected to grow in 2024; overall earnings are forecast to be strong on moderate business-volume growth.