Jyske Bank A/s · OMXCOP:JYSK
Jyske Bank A/s — FY2012 Earnings Presentation
54 slides from Jyske Bank A/s's earnings presentation, 2013
Slide 1: Jyske Bank 2012
J) yske Bank 2012
Slide 2: Agenda
Agenda • Jyske Bank in brief • Headlines 2012 • Strategic issues • Jyske Banks performance 1968-2012 • Macro Economy & Danish Banking 2013 • Volumes • Capital Structure • Liquidity • 2012 in figures • Credit quality • Danish FSA • Fact Book 2
Slide 3: Jyske Bank in brief
Jyske Bank in brief 3
Slide 4: Jyske Bank focuses on core business
Jyske Bank in brief Jyske Bank focuses on core business Description Branch Network • Established and listed in 1967 • 2nd largest Danish bank by lending • Total lending of approx. DKK 119bn • 107 domestic branches • Approx 565,000 Approx. 565 000 domestic customers • Business focus is on Danish priv
Slide 5: Jyske Bank has a differentiation strategy
Jyske Bank in brief Jyske Bank has a differentiation strategy “Jyske Differences” • Jyske Bank wants to be Denmark’s most customer-oriented bank byy p providing g high g standard p personal financial advice and taking ga genuine interest in customers • The strategy is to position Jyske Bank as a vis
Slide 6: Headlines 2012
Headlines 2012 6
Slide 7: Headlines 2012
Headlines 2012 • ROE pre tax 6.1% – satisfactory – Strengthening the earnings capacity – Rate hikes on loans (total max. 1.25 pp) – Rate cuts on deposits (total max. 0.5 pp) • All time high solvency ratio (17.3%) and capital buffer (7.1 pp) – Rights issue in Q1 2012 • New FSA FSA-guidelines guidelin
Slide 8: Strategic issues
Strategic issues 8
Slide 9: Strategic issues
Strategic issues Acquisitions • Fjordbank Mors (Q4 2011) – Bank loans DKK 2bn, bank deposits DKK 3bn • Finans Nord, Easyfleet (Q4 2011) – Loans & contracts,, DKK 2bn • Spar Lolland (Q1 2013) – Bank loans DKK 7bn, bank deposits DKK 10bn, total assets DKK 13bn – Staff reduction and branch merge when o
Slide 10: Jyske Bank performance 1968-2012
Jyske Bank performance 1968-2012 10
Slide 11: Profit before tax and DPCA
Profit before tax and DPCA 1,600 18% 800 20% 1,400 16% 600 15% 14% 400 10% 1,200 DKKm DKKm 5% 12% 200 1,000 0% 10% 0 800 -5% 8% 200 -200 -10% 600 -400 6% -15% 400 4% -600 -20% 200 2% -800 -25% Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 0 0% 2008 2009 2010 201
Slide 12: Pre-tax profit (ROE on average equity)
Pre tax prof it Pre-tax (ROE on avg. equity) Average: 50% 110% 87% 19% 40% 30% 20% 10% 0% -10% -20% -30% 68 72 76 80 84 88 92 96 00 04 08 12 196 197 197 198 198 198 199 199 200 200 200 201 12
Slide 13: Macro Economy & Danish Banking 2013
Macro Economy & Danish Banking 2013 13
Slide 14: Growth postponed
Growth postponed 4.0 20 2.0 wth in % 0.0 Annual grow -2.0 -4.0 A -6.0 -8.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 GDP ann. growth JB - forecast 14
Slide 15: Retail sales
Retail sales 110 105 100 95 90 85 80 75 70 2007 2008 2009 2010 2011 2012 15
Slide 16: House prices
House prices 115 110 105 100 95 90 85 80 75 70 2006 2007 2008 2009 2010 2011 2012 Single-family houses Summer cottages Owner-occupied flats 16
Slide 17: Consumer confidence
Consumer confidence 15 10 5 0 -5 -10 -15 -20 2007 2008 2009 2010 2011 2012 2013 17
Slide 18: Confidence indicators
Confidence indicators 40 30 20 10 0 -10 -20 -30 -40 -50 50 -60 2005 2006 2007 2008 2009 2010 2011 2012 Manufacturing f Building ld andd construction Service 18
Slide 19: Danish economy 2010-2014
Danish economy 2010-2014 JB prognosis (growth in pct.) 2010 2011 2012 2013 2014 Private consumption 1.7 -0.5 0.5 0.7 1.5 Public consumption 0.4 -1.5 0.2 1.0 0.8 I Investments t t -2.4 24 29 2.9 17 1.7 08 0.8 35 3.5 Exports 3.0 6.5 1.8 2.2 3.3 Imports 32 3.2 56 5.6 31 3.1 24 2.4 35 3.5 GDP 1.6 1.1 -0
Slide 20: The Danish Market for Loans and Advances shrinking
-20% -15% -10% 10% 15% -5% 0% 5% 200812 200902 200904 200906 200908 200910 200912 201002 201004 201006 201008 Corporates 201010 201012 201102 201104 201106 Households 201108 201110 201112 201202 201204 Corporates and private individuals 201206 201208 201210 201212 The Danish Market for Loans and Adv
Slide 21: Market conditions
Market conditions • Shrinking volumes also in 2013 • Earnings capacity close to maximum; further growth via higher volumes • Capital shortage in some banks due to maturing Tier II capital instruments • More stringent assessment of solvency requirement (Pillar I+) can lead to lower capital buffers in
Slide 22: Volumes
Volumes 22
Slide 23: Bank loans and deposits
Bank loans and deposits 140 120 120 100 DKKbn DKKbn 100 80 80 60 60 40 40 20 20 0 Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 0 2008 2009 2010 2011 2012 Bank loans Bank deposits Bank loans Bank deposits -2.4% y/y in 2012 Spar Lolland +6.7% +6 7% 23
Slide 24: Capital Structure
Capital Structure 24
Slide 25: Capital structure
Capital structure • Core Tier 1 above 12% • Optimize risk and maximize earnings • Exploit the market to buy portfolios with an acceptable risk 20 20 18 18 16 16 pct pct 14 14 12 12 10 10 8 8 6 6 4 4 2 2 0 008 008 008 008 009 009 009 009 010 010 010 010 011 011 011 011 012 012 012 012 0 Q120 Q220 Q32
Slide 26: Liquidity
Liquidity 26
Slide 27: Liquidity position and run-off
Liquidity position and run-off 50 45 40 35 30 DKKbn 25 20 15 10 5 0 31.12.2012 27
Slide 28: Senior unsecured funding strategy
Senior unsecured funding strategy Jyske will be a rare but regular issuer on the EMTN market Funding plans will depend on developments in the balance sheet (funding gap) – and integrated part of policy is to maintain a deposit/loan ratio in the region of 90 -100 % -but: • Integrated part of funding
Slide 29: 2012 in figures
2012 in figures 29
Slide 30: Net Interest Income
Net Interest Income 5,000 1,200 4,500 1,150 DKKm DKKm 4,000 3,500 1,100 3 000 3,000 2,500 1,050 2,000 1,500 1,000 1 000 1,000 500 950 0 2008 2009 2010 2011 2012 30
Slide 31: Return/risk-trade off
Return/risk-trade off 110 5% 120 6% 108 100 5% 4% DKKbn DKKbn 106 80 4% 104 3% 60 3% 102 2% 40 2% 100 20 1% 1% 98 0 0% Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 96 0% 2008 2009 2010 2011 2012 Risk weighted assets NII/RWA (rhs) Risk weighted assets NII/RWA (r
Slide 32: Fee and commision income
Fee and commision income 1,800 600 1,600 500 DKKm DKKm 1,400 400 1,200 1 000 1,000 300 800 200 600 100 400 200 0 Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 0 2008 2009 2010 2011 2012 1,000 900 800 DKKm 700 600 500 400 300 200 100 0 Securities trading Money tr
Slide 33: Net interest and fee income
Net interest and fee income 7,000 1,800 1,600 6,000 25% 26% 1,400 32% 26% 24% 28% DKKm DKKm 21% 22% 27% 23% 23% 22% 22% 5,000 23% 23% 1,200 31% 37% 1,000 4,000 800 75% 74% 76% 3,000 74% 79% 78% 600 72% 77% 78% 68% 77% 78% 69% 77% 77% 73% 400 2,000 63% 200 1,000 0 Q12010 Q22010 Q32010 Q42010 Q12011 Q
Slide 34: Value adjustments
Value adjustments 900 200 800 100 DKKm DKKm 700 600 0 500 100 -100 400 300 -200 200 -300 100 0 -400 Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 -100 2008 2009 2010 2011 2012 400 300 DKKm 200 100 0 -100 -200 -300 -400 34 Bonds Shares, etc. Currency Derivatives
Slide 35: Gross earnings
Gross earnings 6,700 2,000 1,800 6,600 1,600 DKKm DKKm 6,500 1,400 6,400 1,200 1,000 6,300 800 6,200 600 400 6,100 200 6,000 0 5,900 2008 2009 2010 2011 2012 35
Slide 36: Operating expenses and employees
Operating expenses and employees 5,000 4,100 1,600 3,950 4,500 1,400 3,900 4,000 3,850 4,000 1,200 3,800 3,900 DKKm DKKm 3,500 1,000 3,750 3,000 3,800 3,700 800 2,500 , 3,700 , 3,650 600 3 600 3,600 2,000 3,600 3,550 400 1,500 3,500 3,500 200 3,450 1,000 3,400 0 3,400 500 Q12010 Q22010 Q32010 Q42010
Slide 37: Core earnings before loan impairment charges
Core earnings g before loan impairment p charges g 3,500 800 700 3,000 DKKm DKKm 600 2,500 500 2,000 400 1,500 300 200 1,000 100 500 0 0 2008 2009 2010 2011 2012 37
Slide 38: Loan impairment charges
Loan impairment charges 3,000 1,000 900 2,500 800 DKKm DKKm 700 2,000 600 500 1,500 400 300 1,000 200 100 500 0 0 2008 2009 2010 2011 2012 38
Slide 39: Core earnings
Core earnings 1,800 600 1,600 400 DKKm DKKm 1,400 200 1,200 0 1,000 -200 800 -400 600 400 -600 200 -800 0 2008 2009 2010 2011 2012 39
Slide 40: Earnings from investment portfolios
Earnings from investment portfolios 700 250 600 200 DKKm DKKm 500 400 150 300 100 200 50 100 0 0 Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 -100 2008 2009 2010 2011 2012 40
Slide 41: Credit quality
Credit quality 41
Slide 42: Loans and advances split by sector
Loans and advances split by sector Loan impairment Balance of loan charges and Jyske Bank A/S impairment charges provisions for Loans, advances and and provisions for guarantees for the guarantees guarantees year Losses for the year Loans, advances and guarantees as well as loan impairment charges a
Slide 43: Loans and advances split by sector
Loans and advances split by sector Balanceof Balance of loan Balanceof Balance of loan impairment impairment Loanimpairment Jyske Bank A/S charges and charges and Loss for the charges for the Loans, advances provisions for Loans, advances provisions for period/loans, period/loans, and guarantees gua
Slide 44: Large exposures
Large exposures per cent of capital base 70% 60% 50% 40% 30% 20% 10% 0% 2008 2009 2010 2011 2012 44
Slide 45: Balance of loan impairment charges
Balance of loan impairment charges 5,000 5,000 4,500 4,500 4,000 4,000 DKKm DKKm 3,500 3,500 3,000 3,000 2,500 2,500 2,000 2,000 1,500 1,500 1,000 1,000 500 500 0 Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 0 2008 2009 2010 2011 2012 Balance of loan impairment
Slide 46: Balance of loan impairment charges
Balance of loan impairment charges per centt off loans l and d advances d 4.0% 4.0% 3.5% 3.5% 3.0% 3.0% 2.5% 2.5% 2.0% 2.0% 1.5% 1.5% 1.0% 1.0% 0 5% 0.5% 0.5% 0.0% Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 0.0% 2008 2009 2010 2011 2012 46
Slide 47: Exposures by credit rating
Exposures by credit rating Corporates Retail 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 31.12.2011 31.12.2012 31.12.2011 31.12.2012 47
Slide 48: Danish FSA
Danish FSA • Reports in 2011 and 2012 • New stringent guidelines for impairments 48
Slide 49: Danish FSA reports 2011 and 2012
Danish FSA reports 2011 and 2012 SME customers and IRB setup • Decision making material satisfactory • No ground for changing impairment charges • IRB models satisfactory IT inspection • Principles and policies meet required demands Market Risk and Compliance • Management of market risk satisfactory
Slide 50: New stringent guidelines for impairments
New stringent guidelines for impairments • Focus real estate portfolios and agriculture • More stringent impairment principles (net exposures, asset values) • Customers interest rate swaps at fair value • One off effect Q2 2012: – Impairments DKK 543m – Value adjustments DKK 357m • Higher volatility
Slide 51: Fact Book
Fact Book 51
Slide 52: Profit/loss
Profit/loss 2012 2011 The The Earnings Guaran Earnings Guaran on -tee Re- on -tee Re- Core investment Fund Fund, classifi Core investment Fund Fund, classifi DKKm earnings portfolios etc. -cation Total earnings portfolios etc. -cation Total Net interest income 4,471 408 0 0 4,879 4,410 332 0 0 4,742
Slide 53: Core earnings
Core earnings Core earnings and pre pre-tax tax profit Index d DKKm Q4 2012 Q4 2011 12/11 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Net interest income 1,067 1,186 90 1,067 1,121 1,135 1,148 1,186 Dividends, etc. 0 0 - 0 0 17 3 0 Net fee and commission income 504 387 130 504 392 351 405 387 Net intere
Slide 54: Questions
Questions 54