Jyske Bank A/S · OMXCOP:JYSK
Jyske Bank A/S — Investor Presentation (2013)
61 slides from Jyske Bank A/S's investor presentation, 2013
Slide 1: Jyske Bank 2013
Jyske Bank 2013
Slide 2: Agenda
Agenda • Jyske Bank in brief • Macro Economy & Danish Banking 2013-2015 • Focus in 2013 • Strategic Issues • Jyske Banks Performance 1968 1968-2013 2013 • Volumes • Capital Structure • Liquidity • 2013 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 131bn • 138 domestic branches • Approx 740,000 Approx. 740 000 customers • Business focus is on Danish private indiv
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: Macro Economy & Danish Banking 2013
Macro Economy & Danish Banking 2013 6
Slide 7: The Danish economy at a glance
The Danish economy at a glance Equal disposable incomes The basics OECD-ranking lowest Gini coefficient Citizens: 5.6 million ((2011)) Area: 43 43.098 098 sq km (0 (0.4 4 % of USA) 2. Denmark Currency: Kroner (fixed exchange rate policy to the 15. Germany euro) 31. USA A welfare state Among the rich
Slide 8: In 2013 the private sector remained in consolidation mode
In 2013 the private sector remained in consolidation mode The private sector saving (especially from …… and the private sector has been SME andd corporates)) h has been b record d high hi h reluctant l to borrow b since 2009 10,0 10,0 7,5 7,5 5,0 5,0 kr. kr. Bn. k Bn. k 2,5 2,5 00 0,0 00 0,0 -2,5 -2
Slide 9: The Danish economy is slowly coming out of recession
But the Danish economy is slowly coming out of recession In Denmark growth turned positive in Q2 and Q Q3,, and 2014 is expected p to be the best year since 2010….. Percent Percent Side 9/1
Slide 10: Improved sentiment underpins the recovery
Improved sentiment – both among consumers and in the business sector underpins the recovery Manufacturing confidence at 7 year high……….. 10
Slide 11: House prices increased during the past year
House prices increased during the past year House prices are up 1.9 % since the beginning of 2013 and prices on flats are up 6.2 %. 008=100 008=100 Index 20 Index 20 11
Slide 12: Bankruptcies in the SME sector are trending downwards
After years of suffering, banktrupcies in the SME sector are trending downwards 12
Slide 13: Household defaults are kept at a low level
With unemployment slightly declining, and low interest rateshousehold defaults are kept at a low level 25,0 25,0 20 0 20,0 20 0 20,0 Percent Percent 15,0 15,0 10 0 10,0 10 0 10,0 5,0 5,0 0,0 0,0 00 02 04 06 08 10 12 Denmark Sweden UK Euro area Norway Spain Source: Reuters EcoWin 13
Slide 14: Denmark has a healthy public sector economy
Denmark has a healthy public sector economy… Deficit is just below 3 2 % when excluding special pension 0 Sweden Germany repayment -2 2 Net saving,, % of GDP Fi l d Finland Belgium -4 France -6 6 Port gal Portugal UK -8 Ireland USA Greece Japan -10 10 Spain N -12 -14 14 25 50 75 100 125 150 175 200
Slide 15: Competitiveness has improved
Competitiveness has improved Danish competitiveness deteriorated dramatically during the booming years. Danish production sector has been under some pressure and still is, but conditions diti are slightly lightl better b tt due d to t a gradual g d l and d ongoing improvement. Source: Ministry for e
Slide 16: Overall the Danish economy is structurally strong
Overall the Danish economy is structurally strong Net assets against the rest of the world (2010) 125 125 100 100 75 75 Denmarks net assets 50 50 against the rest of the world are significantly 25 25 GDP GDP higher today : around 0 0 % of G % of G 40 % of GDP -25 -25 -50 -50 -75 -75 -100 -100 -125 1
Slide 17: Denmark is a AAA economy
… and Denmark is a AAA economy 8 8 7 7 6 6 5 5 4 4 3 3 2 2 1 1 0 0 jjan sep p majj jjan sep p majj jjan sep p majj jjan sep p 07 08 09 10 11 12 13 Denmark Germany Spain Italy Source: Reuters EcoWin 17
Slide 18: The outlook: growth is likely to stay up
The outlook: Growth is likely to stay up, overall the economy is strong • The economyy is likelyy to continue to show improvement p in 2014. The housing market is stronger, sentiment has improved, and there are also sttronger ”hard” figures. • However, due to possible continued private sector saving
Slide 19: Jyske Bank forecasts: The Danish economy 2011-2015
The Danish economy 2011-2015 2012 Real growth (%) DKKbn 2011 2012 2013* 2014* 2015* Consumer spending 896 -0.7 -0.1 0.5 0.6 1.4 Public spending 519 -1.4 0.4 0.3 1.0 0.5 Fixed gross investment 320 3.3 0.8 1.5 2.6 2.4 Inventory investment** -2 0.4 -0.3 0.4 0.0 0.0 Exports 1000 7.0 0.4 0.6 3.0 3.2 Impo
Slide 20: Market conditions
Market conditions • Volumes continue to shrink in 2014 • Competitive environment: margin pressure on loans • Growing Net Interest Income only via M&A activities • Significant increase in deposit/loans ratio in most banks • Capital shortage in some banks due to maturing Tier II capital instruments an
Slide 21: Focus in 2013
Focus in 2013 21
Slide 22: Focus in 2013
Focus in 2013 • ROE pre tax t 14.7% 14 7% - satisfactory ti f t – 14.3%, 15.9%, 12.2% and 13.9 respectively in Q1, Q2, Q3 and Q4 • Growth in Net Interest Income of 3% due to acquisition q • Growth in fees and commissions of 5% (performance related fees) • C t in Costs i alignment li t with ith 4 – 4
Slide 23: Strategic issues
Strategic issues 23
Slide 24: Strategic issues: Spar Lolland, sale of subsidiary, home loans
Strategic issues Acquisition of Spar Lolland • Bank loans DKK 6.3bn, bank deposits DKK 9.5bn, total assets DKK 13bn • Long term earnings fully in line with earnings from other branches • Integration according to plan – All branch relocations in place – First phase of cost cuts implemented in Q1 2013
Slide 25: Strategic issues: capital and liquidity
Strategic issues Capital • Solvency ratio 16.0% • Capital buffer 6.2 percentage points • Core Tier 1 15.3% • Capital p target g - Core Tier I miniumum 12% is unchangedg • CRD IV insignificant effect due to higher risk weighted assets and higher capital base • Jyske Bank expected to become a systemic
Slide 26: Jyske Bank performance 1968-2013
Jyske Bank performance 1968-2013 26
Slide 27: Profit before tax and Guarantee Fund
Profit before tax and Guarantee Fund 3,000 16% 800 20% 14% 600 15% 2,500 10% 400 DKKm DKKm 12% 5% 2,000 200 10% 0% 0 1,500 8% -5% 5% -200 -10% 6% -400 1,000 -15% 4% -600 -20% 500 2% -800 -25% Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 0 0% 2009 2010 2011 2012
Slide 28: ROE on opening equity 1968-2013
ROE on opening equity – 1968-2013 Pre-tax profit Average: (ROE on open. equity) 22% 61% 166% 145% 40% 30% 20% 10% 0% -10% 10% -20% -30% 968 971 974 977 980 983 986 989 992 995 998 001 004 007 010 013 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 28
Slide 29: Volumes
Volumes 29
Slide 30: Bank loans and deposits
Bank loans and deposits 140 140 120 120 n DKKbn DKKbn n 100 100 80 80 60 60 40 40 20 20 0 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 0 2009 2010 2011 2012 2013 Q Q Q Q Q Q Q Q Q Q Q Q Bank loans Bank deposits Bank loans Bank deposits Bank B k loans: l 4.9% y/
Slide 31: Capital Structure
Capital Structure 31
Slide 32: Capital structure
Capital structure • Core Tier 1 target: 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 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 0 2
Slide 33: Liquidity
Liquidity 33
Slide 34: Liquidity position and run-off
D DKKbn 0 10 20 30 40 50 60 Start of peeriod 1 month onths 2 mo 3 mo onths 4 mo onths 5 mo onths 6 mo onths 7 mo onths 8 mo onths 31.12.2013 9 mo onths Liquidity position and run-off 10 mo onths 11 mo onths 12 mo onths 15 mo onths 18 mo onths 21 mo onths 24 mo onths 34
Slide 35: Senior unsecured funding strategy
Senior unsecured funding strategy Jyske will remain 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 95 % -but: • Integrated part of funding s
Slide 36: 2013 in figures
2013 in figures 36
Slide 37: Net Interest Income
Net Interest Income Spar Lolland: Q1 DKK 26 Q1: 26m Q2: DKK 118m Q3: DKK 22m Q4: DKK 51m 4,700 1,300 4,600 1,250 DKKm DKKm 4,500 1,200 D D 4,400 1,150 4,300 1,100 4,200 1,050 4,100 1,000 4,000 950 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 3,900 2
Slide 38: Return/risk trade-off
Return/risk-trade off 114 5.0% 140 6% 112 120 5% 110 DKKbn DKKbn 100 108 4% 106 80 3% 104 4.5% 60 102 2% 40 100 1% 20 98 96 0 0% Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 94 4.0% 2009 2010 2011 2012 2013 Risk weighted assets NII/RWA (rhs) Risk weighted asset
Slide 39: Fee and commission income
Fee and commision income 2,000 600 1,800 500 DKKm DKKm 1,600 1,400 400 1,200 300 1,000 800 200 600 100 400 200 0 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 0 2009 2010 2011 2012 2013 1,200 1,000 DKKm 800 600 400 Performance 200 related fees 0 Securities tradi
Slide 40: Net interest and fee income
Net interest and fee income 7,000 1,800 1,600 25% 6,000 31% 25% 26% 1,400 28% 24% 32% 26% 24% 27% DKKm DKKm 22% 27% 23% 22% 5,000 23% 23% 1,200 23% 1,000 4,000 800 75% 75% 74% 69% 76% 76% 3,000 74% 72% 78% 600 77% 78% 68% 77% 77% 73% 73% 400 2,000 77% 200 1,000 0 Q12011 Q22011 Q32011 Q42011 Q12012 Q
Slide 41: Value adjustments
Value adjustments 800 200 700 100 DKKm DKKm 600 0 500 400 -100 100 300 -200 200 -300 100 0 -400 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 -100 2009 2010 2011 2012 2013 400 300 Interest rate DKKm 200 100 hedging/customers 0 Q2 2012: DKK -357m -100 -200 2013:
Slide 42: Gross earnings
Gross earnings 7,600 2,500 7,400 7,200 2,000 DKKm DKKm 7,000 6,800 1,500 6,600 6,400 1,000 6,200 6,000 500 5,800 5,600 0 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 5,400 2009 2010 2011 2012 2013 42
Slide 43: Operating expenses and employees
Operating expenses and employees 5,000 3,900 1,600 3,900 4,500 3,850 1,400 3,850 4,000 3,800 3,800 1,200 DKKm DKKm 3,750 3,500 3,750 1,000 3,700 3,000 3,700 800 3,650 2,500 , 3,650 , 3,600 600 2,000 3,600 3,550 400 1,500 3,550 3,500 200 3,450 1,000 3,500 0 3,400 500 3,450 Q12011 Q22011 Q32011 Q42011
Slide 44: Loan impairment charges
Loan impairment charges 3,000 1,000 900 2,500 800 DKKm DKKm 700 D D 2,000 600 500 1,500 400 300 1 000 1,000 200 100 500 0 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 0 2009 2010 2011 2012 2013 To be viewed in connection with discounts relating to a
Slide 45: Core earnings before loan impairment charges
Core earnings before loan impairment charges 3,500 1,000 900 3,000 800 DKKm DKKm 2,500 700 600 2,000 500 400 1,500 300 1,000 200 100 500 0 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 0 2009 2010 2011 2012 2013 45
Slide 46: Core earnings
Core earnings 2,500 800 600 DKKm DKKm 2,000 400 200 1 500 1,500 0 -200 1,000 -400 500 -600 600 -800 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 0 2009 2010 2011 2012 2013 46
Slide 47: Earnings from investment portfolios
Earnings from investment portfolios 700 250 600 200 DKKm DKKm 500 150 400 100 300 200 50 100 0 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 0 2009 2010 2011 2012 2013 47
Slide 48: Credit quality
Credit quality 48
Slide 49: Loan impairment charges and losses
Loan impairment charges and losses 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 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 0 2009 2010 2011 2012 2013 Loan impairment charges and provisions for guarantees Losses Loan
Slide 50: Loans and advances split by sector
Loans and advances split by sector Balance of loan impairment charges and Loans, advances and provisions for Loanimpairment charges Jyske Bank A/S guarantees guarantees for the period Loss for the period Loans, advancesandguaranteesaswell Loans advances and guarantees as well asloan as loan impairme
Slide 51: Loans and advances split by sector
Loans and advances split by sector Balance of loan Balance of loan Loanimpairment impairment charges impairment charges Loss for the charges for the Jyske Bank A/S Loans, advances and provisions for Loans, advances and provisions for period/loans, period/loans, and guarantees guarantees and guarante
Slide 52: Large exposures
Large exposures per centt off capital it l base b 35% 30% 25% 20% 15% 10% 5% 0% 2009 2010 2011 2012 2013 Jyske Bank large exposures: > 10% : 1 (l (large D Danish i h financial fi i l institution) i tit ti ) 7.5-10%: 1 52 5-7.5%: 4
Slide 53: 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 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 0 2009 2010 2011 2012 2013 Balance of loan impairment
Slide 54: Balance of loan impairment charges
Balance of loan impairment charges Per cent of loans and advances Per cent of loans and advances 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% Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 0.0% 2009 2010 2011 2012 2013
Slide 55: 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 31.12.2012 31.12.2013 31.12.2012 31.12.2013 55
Slide 56: Danish FSA
Danish FSA • Reports in 2011, 2012 and 2013 • New stringent guidelines for impairments 56
Slide 57: Danish FSA reports 2011, 2012 and 2013
Danish FSA reports 2011, 2012 and 2013 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 • g Management of market risk sati
Slide 58: Fact Book
Fact Book 58
Slide 59: Core earnings
Core earnings Profit for the period Q4 Q3 Q2 Q1 DKKm 2013 20 3 2012 20 2 Index 13/12 3/ 2 2013 2013 2013 2013 Net interest income 4,655 4,471 104 1,147 1,141 1,258 1,109 Dividends, etc. 41 20 205 6 1 21 13 Net fee and commission income 1,731 1,652 105 505 367 424 435 Net interest and fee income 6,42
Slide 60: Profit/loss
Profit/loss 2013 2012 Earnings on Earnings on Core investment The Guaran- Re-classifi- Core investment The Guaran- Re-classifi- DKKm earnings portfolios tee Fund, etc. cation Total earnings portfolios tee Fund, etc. cation Total Net interest income 4,655 363 0 0 5,018 4,471 408 0 0 4,879 Dividends,
Slide 61: Questions
Questions 61