Jyske Bank A/s · OMXCOP:JYSK
Jyske Bank A/s — Q1 2020 Earnings Presentation
34 slides from Jyske Bank A/s's earnings presentation, May 5, 2020
Slide 1: Jyske Bank Q1 2020
CU JYSKE BANK Jyske Bank Q1 2020 5 May 2020
Slide 2: Q1 2020 highlights
Q1 2020 highlights The COVID-19 outbreak has led to significantly reduced activity levels in the Danish economy, COVID-19 outbreak particularly following the government-imposed shutdown from 12 March 2020. GDP is expected to decline by 3% to 10% in 2020, according to the Danish central bank. The Dan
Slide 3: Jyske Bank in brief
CU JYSKE BANK Jyske Bank in brief
Slide 4: Jyske Bank in brief
Jyske Bank in brief One of the largest financial Founded in 1967 by a merger of four local banks, some dating back to 1882, now a Danish SIFI institutions in Denmark with a total market share of approximately 12% following organic growth and successful M&A. Complementary segments The third largest b
Slide 5: Increasingly low risk business model
Increasingly low risk business model Risk of business model has been lowered Mortgage-like share of lending up 10pp since merger to 77% Increasing share of mortgage lending 100% 90% • Share of mortgage-like lending has increased 10pp to 77% (excl. repo) since merger with Jyske Realkredit in Q2 2014.
Slide 6: Higher share of mortgage lending improves resilience
Higher share of mortgage lending improves resilience Mortgage lending is relatively low risk, stable growth, margins Credit quality of mortgage lending significantly stronger (bp) Increases ability to withstand a new financial crisis 250 • Impairment charges have averaged 5bp for Danish mortgage cre
Slide 7: Shareholder yield in focus
Shareholder yield in focus Shareholders’ view Total payout ratio Book value per share has increased 37% since 2015, as the number of 140% shares outstanding was reduced 18%. 120% Earnings per share increased 11% from 2015 to 2019 despite lower 100% earnings. 80% Total payout ratio has increased in r
Slide 8: Financial highlights Q1 2020
Financial highlights Q1 2020
Slide 9: Financial highlights
Financial highlights Net profit DKK -780m and return on equity of -10.3% in Q1 2020 Income statement and key figures (DKKm) Net interest income down 5% y/y, primarily due to pressure on bank lending Q1'20 Q1'19 Index Q1'20 Q4'19 Index volumes and margins as well as higher funding costs. Net interest
Slide 10: Outlook 2020
Outlook 2020 Net interest income Expected to increase in coming quarters Core income Lower than 2019 level Expenses Flat vs. 2019 level excl. one-off effects (DKK -57m in 2019 and DKK 78m in 2020) Impairment charges Significantly higher than 2019 level Net profit DKK 0.0bn-1.5bn CET1 ratio 15%-17% f
Slide 11: Financial highlights: Business volumes
Financial highlights Business volumes
Slide 12: Business volumes
Business volumes Mortgage lending on the rise; bank lending and AuM down y/y Business volumes (DKKbn) Q1 2020 vs. Q1 2019: • Assets under management down by 1% y/y due to a negative market Mortgage loans (nominal) +3% development in Q1 2020. • Bank lending down 7%, partly due to divestment of Jyske
Slide 13: Total lending portfolio
Total lending portfolio 44% private clients/54% corporate clients/2% public (DKKbn) Balance of impairment charges by sector (DKKbn) Personal clients 44% 0.9% of loans, advances and guarantees Personal clients Real property 31% 0.6% Real property Finance and insurance 8% 1.9% Finance and insurance Ot
Slide 14: Mortgage portfolio
Mortgage portfolio Loans and advances at fair value by property category (DKKbn) 90-day mortgage arrears as % of lending by segment 0.7% Owner-occupied homes 34% of total lending and guarantees Subsidised housing 11% 0.6% Private rental properties 10% 0.5% Office and business properties 7% Cooperati
Slide 15: Financial highlights: Income statement
Financial highlights Income statement
Slide 16: Other net interest income down in Q1 2020
Other net interest income down in Q1 2020 Comments Net interest income Q1 2019 vs. Q1 2020 (DKKm) Q1 2020 vs. Q1 2019: Net interest income down 5% y/y 1,300 -5% y/y • Lending growth in mortgage and leasing activities counteracted by pressure on bank 1,290 lending volumes. 1,280 • Pressure on margins
Slide 17: Net fee income showing strong momentum
Net fee income showing strong momentum Comments Net fee and commission income Q1 2019 vs. Q1 2020 (DKKm) Q1 2020 vs. Q1 2019: Net fee income up 32% y/y 700 +32% y/y • Net fee income underpinned by elevated remortgaging activity in Q1 2020. 650 • Performance-related fee income rose to DKK 67m in Q1 2
Slide 18: Turbulent financial markets had significant negative impact
Turbulent financial markets had significant negative impact Comments Value adjustments (DKKm) Value adjustments down DKK 365m q/q 300 -306m y/y • DKK 245m lower value adjustments from strategic balance and risk 250 management’s liquidity portfolio of DKK ~42bn primarily mortgage bonds. 200 • Value a
Slide 19: Continued reduction of headcount
Continued reduction of headcount Comments Expenses Q1 2019 vs. Q1 2020 (DKKm) 1,400 Q1 2020 vs. Q1 2019: Expenses up 5% y/y +5% y/y • Negative one-off expense of DKK 78m, relating to the sale of Jyske Bank 1,350 (Gibraltar) Ltd. in Q1 2020. Expenses down 1% y/y adjusted for this. • Number of full-ti
Slide 20: Impairment charges increased due to COVID-19 outbreak
Impairment charges increased due to COVID-19 outbreak Comments Cost of risk (bp) Impairment charges up DKK 1,067m q/q 100 +81bp y/y • Cost of risk up 85bp q/q in Q1 2020 due to higher management’s estimate. Individual 80 loan impairment charges amounted to approx. DKK 0 in Q1 2020. • Management’s es
Slide 21: Business segments
Business segments Comments Profit before tax by segment (DKKm) All segments negatively affected by a higher in management’s estimate for impairment 1,500 charges relating to potential adverse economic effects of the outbreak of COVID-19. -229% y/y Banking activities: Profit before tax down DKK 1,116
Slide 22: Financial highlights: Capital and liquidity
Financial highlights Capital and liquidity
Slide 23: Solid capital position
Solid capital position Comments Capital ratio Capital ratio of 21.5% and CET1 ratio of 16.7% Q1 2020 vs. targets of 20-22% and 15-17% for 25% the next 2-3 years, respectively • Negative earnings partly counteracted by sale of DLR kredit shares and discontinued share 20% repurchase programme as well
Slide 24: Funding and liquidity
Funding and liquidity Comments Maturity/call-date profile (DKKbn) Liquidity management 12 • Jyske Bank monitors the need for new capital and liquidity issues on an ongoing basis, taking regulatory and market-related circumstances into consideration. 10 • Preferred senior debt issued before 2018 with
Slide 25: Sustainability
CU JYSKE BANK Sustainability
Slide 26: Sustainability is ingrained in Jyske Bank's vision
Sustainability Sustainability is ingrained in Jyske Bank’s vision “We have an ambition of running our business responsibly and in a way that promotes sustainability.” – Jyske Bank’s vision: To make a difference. Reorganisation furthers Investor Relations, CSR activities, and the Sustainability progr
Slide 27: History of Jyske Bank
CU JYSKE BANK History of Jyske Bank
Slide 28: One of the largest financial institutions in Denmark
One of the largest financial institutions in Denmark Banking activities cover advisory services relating to traditional financial solutions targeting personal Nationwide presence and private banking clients as well as corporate clients and also trading and investment activities Jyske Bank targeting
Slide 29: Financial results and key figures
Jyske Bank Financial results and key figures Loans and Profit before tax Shareholders' Total assets Year Net profit (DKKm) Return on equity advances Deposits (DKKbn) Number of FTEs (DKKm) equity (DKKm) (DKKbn) (DKKbn) 1997 584 443 4,772 9.6% 36.6 41.5 63.1 2,671 1998 710 511 5,173 10.3% 39.7 43.8 76
Slide 30: Macroeconomics
CU JYSKE BANK Macroeconomics
Slide 31: Macroeconomics
Macroeconomics Real gross domestic product (index 2010, y/y) Inflation rate (HICP, y/y) 6% 6% 4% 5% 2% 4% 0% 3% -2% 2% -4% 1% -6% 0% -8% -1% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Slide 32: Macroeconomics
Macroeconomics Real estate prices, Denmark (y/y) House prices to disposable income 30% 140 25% 20% 130 15% 120 10% 5% 110 0% -5% 100 -10% -15% 90 -20% 80 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2
Slide 33: Forecast: Danish economy 2017-2021
Forecast Financial results and key figures DKKbn Real growth (%) Danish economy 2017-2021 2019 2017 2018 2019 2020 2021 Consumer spending 1,077 1.6 2.6 1.9 -2.8 4.5 Public spending 557 1.0 0.4 0.6 -7.8 7.1 Fixed gross investment 514 3.0 5.4 2.9 -3.9 4.0 Inventory investment* 11 -0.1 0.3 -0.4 0.0 0.0
Slide 34: Disclaimer
Disclaimer This presentation and the information contained therein is furnished and has been prepared solely for information purposes by Jyske Bank A/S. It is furnished for your private information with the express understanding, which recipient acknowledges, that it is not an offer, recommendation