Sydbank interim report – First half of 2021
Company announcement n ° 12/2021
25 August 2021
Sydbank interim report – First half of 2021
Earnings up 20%
1H 2021 – highlights
- A profit of DKK 645 million equates to a return on equity of 10.4% per annum after tax.
- The basic income of DKK 2,193 million is 20% higher than the same period in 2020.
- The costs (basic income) are 16% higher compared to the same period in 2020 and amount to DKK 1647 million.
- Depreciation charges on loans and advances represent proceeds of DKK 206 million against a charge of DKK 42 million in the same period in 2020.
- Bank loans and advances represent DKK 61.4 billion, an increase of DKK 1.2 billion in the first half of 2021.
- Total credit intermediation stands at DKK 168.9 billion, an increase of DKK 3.3 billion in the first half of 2021.
- The CET1 ratio is down 1.1 percentage points compared to the end of 2020 and stands at 17.7% excluding profit for the period.
We are leading a number of initiatives to strengthen:
- Position of Sydbank – the investment bank of Denmark – significant increase in brand awareness
- our income – via new general conditions for business deposits
- our customer focus – through a change in the organization of Sydbank
- our machine room – we will simplify processes for Sydbank advisers.
The investment bank of Denmark – increased awareness
Our focused efforts to showcase Sydbank’s strengths and skills in the business arena have yielded measurable results:
- A significant awareness
- Lots of positive responses to the campaign
- Influx of new customers
- Increase in business volume with existing customers.
The next stage of the campaign will focus on value creation and specific customer benefits. Sydbank – the corporate bank of Denmark.
Adjusted terms and conditions for business deposits
Sydbank’s excess deposits set a new record as of June 30, 2021. We will adjust the interest rate on corporate client deposit accounts from minus 0.75% to minus 0.95%, which is in line with the ‘evolution of market.
Change in the organization of Sydbank
Sydbank will strengthen its position in the Private Banking and Retail Client segments. As a result, the Retail Clients & Private Banking division will be split into 2 divisions. We will therefore have a division for each of the customer segments: Corporate, Private Banking and Retail. This aims to clarify more fully the skills, strengths and value propositions of the bank for the individual client.
In addition, customer areas will be more anchored within the Group’s General Management. This will ensure greater customer focus across the Bank, starting at the senior management level of the group.
We will simplify processes for Sydbank advisors
We will continue to strengthen the Bank’s machine room. The digitization and automation of tasks will be further accelerated through the introduction of a new portal for handling individual client files. We are continually working to deliver faster and improve quality, to create easier and simpler processes for our employees, and to build a more profitable machine room for the benefit of the Bank’s shareholders.
CEO Karen Frøsig comments on Sydbank’s 1H result:
- Profit growth of 20% is strong and results from the measures put in place, including the acquisition of Alm. Brand Bank which accounts for half of profit growth.
The Chairman of the Board of Directors, Lars Mikkelgaard-Jensen, on the capital situation of Sydbank:
- We have acted very responsibly in canceling the dividend payout announced to our shareholders last year. I hope and expect authorities to clear the canceled distribution later this year.
Outlook for 2021
- Growth is projected in the Danish economy in 2021 and is expected to exceed negative growth in 2020.
- Total sales are expected to increase significantly following the acquisition of Alm. Brand Bank and measures put in place with regard to deposits and commissions.
- Costs (base profits) are expected to increase due to the Alm acquisition. Brand bank.
- Depreciation charges for 2021 are expected to represent a net reversal of around DKK 250 million.
- One-time costs are expected to be in the range of DKK 100-150 million. The item includes the costs linked to “A stronger bank”, the costs of setting up a banking / insurance partnership as well as the costs linked to the integration of Alm. Brand bank.
- Profit after tax is expected to be in the range of DKK 1,150 to 1,350 million.
- The outlook is subject to uncertainty and depends, among other things, on developments in financial markets and macroeconomic factors.
Jørn Adam Møller, Group Deputy Managing Director, tel. +45 74 37 20 30
Louise Lillelund Degn-Ovesen, Executive Vice President, tel +45 61 20 48 04
FM 12 United Kingdom
Interim report – First semester 2021