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To OMX Nordic Exchange Copenhagen
29 September 2008
vestjyskBANK and Ringkjøbing Bank to merge
vestjyskBANK and Ringkjøbing Bank hereby announce that the Boards of Directors
and the Executive Boards of the two banks have recommended that the banks merge.
The merger will create one of Denmark's largest local banks with a solid
business foundation based on West Jutland virtues, sound business principles
coupled with a conservative credit policy, a well-balanced loan portfolio and a
strong focus on customer needs. The merged bank will carry on under the name
vestjyskBANK and will be domiciled in Lemvig, with an Executive Board consisting
of CEO Frank Kristensen and Managing Director Preben Knudsgaard. As a result of
the merger, the bank expects, in the long run, to realise cost synergies of
approximately DKK 75m p.a. - primarily through consolidation of overlapping
administrative functions. Hereafter, the new merged bank expects to have the
potential to attain core earnings at a level of DKK 600m.
The Boards of Directors in vestjyskBANK and Ringkjøbing Bank have unanimously
decided to recommend to the banks' General Meetings that a merger of the two
banks be completed, thereby creating the largest bank in West Jutland. The
merged bank will carry on under the name vestjyskBANK.
Subject to the necessary approval by the General Meetings, the merger will be
completed with effect from 1 January 2008, and, on the basis of the banks'
equity value on 30 September 2008, it is expected that shareholders will be
offered 10 shares in vestjyskBANK for every 4 shares in Ringkjøbing Bank. It is
expected that the final merger agreement will be made public on 29 October 2008,
upon which extraordinary General Meetings in Ringkjøbing Bank and vestjyskBANK
will be called with the purpose of ratifying the merger.
Background to the merger
Today, vestjyskBANK and Ringkjøbing Bank are healthy and well-consolidated banks
whose business foundations are built on a shared set of core values, a stringent
credit policy and a loan portfolio, characterised by being well-balanced and of
good quality. The banks are firmly established in the West Jutland area around
Ringkøbing, Lemvig and Holstebro, and in total serve more than 100,000 customers
all over Jutland via a number of branches in most major Jutland towns as well as
in Odense.
The object of the merger is to establish a profitable and strong bank based on
West Jutland virtues with continued operational focus on a conservative credit
policy and solid management of loan commitments. This will be a forward-looking
merger, anchored locally in West Jutland, with a horizontal organisational
structure, giving it the necessary presence to enable it to offer customers a
service that is based on solid commitment.
This means that the bank shall be among the most profitable financial
institutions in Denmark, as the merger will provide an opportunity for
realisation of both earning and cost synergies.
Chairman of the Board of Directors Anders Bech, vestjyskBANK, says: "It is with
great pleasure that we today present the plans for a merger between vestjyskBANK
and Ringkjøbing Bank. Both banks are founded on West Jutland values and on the
belief that it is people who create results. I am convinced that, together, we
are now creating a bank that ensures we can continue to work for the benefit of
shareholders, customers and employees, also in the future."
Business foundation for the new vestjyskBANK
With a branch network consisting of 17 vestjyskBANK branches and 10 Ringkjøbing
Bank branches, the new vestjyskBANK will comprise a total of 27 branches with no
significant geographical overlap.
The bank's customer base will - as far as both retail and corporate customers go
- be composed of an attractive portfolio of commitments. On the corporate side,
employees have particularly broad competences in the fields of financing small
to medium-sized businesses, fishery, agriculture, property, wind turbines, the
leisure industry and healthcare. Similarly, both banks are well known for having
specialist functions in the fields of housing, pensions and investment that will
benefit both retail and corporate customers.
Chairman of the Board of Directors Poul Hjulmand, Ringkjøbing Bank, says: "The
merger is the result of a positive year-long collegial dialog between
Ringkjøbing Bank and vestjyskBANK. It involves two banks with a stringent and
fundamentally sound credit culture which, when combined, will create a
distinctive, locally anchored bank that will be even better placed in its
endeavours to provide both its retail and corporate customers with solid,
committed advice. With the merger, a strong bank will be created which, by
virtue of its size and financial clout, will attain a solid position in the
financial market."
At a time when liquidity in the banking sector is very much in focus, it is
informed that the new bank has secured sufficient liquidity to guarantee its
operations.
With regard to the procurement of future liquidity, the difference between
deposits and loans has been taken into account. It is expected that this
difference will narrow in the coming years.
Headquarters, management and employees
The headquarters of the new vestjyskBANK will be located in Lemvig. For the
chairmanship of the new vestjyskBANK's Board of Directors, it has been
recommended that Anders Bech be installed as Chairman and Poul Hjulmand as Vice
Chairman. The Executive Board will consist of Frank Kristensen as CEO and Preben
Knudsgaard as Managing Director.
The bank anticipates being in a position to realise annual cost synergies in the
region of DKK 75m p.a. from 2010, primarily through consolidation of overlapping
administrative functions. As a consequence of the merger, it is anticipated that
the number of employees will be reduced by 60 to 80 persons. However, it is
intended that, as far as possible, these jobs will be shed through natural
wastage, which can be achieved, if resignation levels remain at the same level
as at present.
Press conference and further information about the merger
vestjyskBANK and Ringkjøbing Bank call a press conference today, 29 September,
at 11:00 a.m. at vestjyskBANK's headquarters, Torvet 4 in Lemvig. At the press
conference, Chairman of the Board of Directors Anders Bech and Managing Director
Frank Kristensen, vestjyskBANK, as well as Chairman of the Board of Directors
Poul Hjulmand and CEO Preben Knudsgaard, Ringkjøbing Bank, will explain the
merger in more detail.
For further information, please contact:
vestjyskBANK
Managing Director Frank Kristensen, tel. +45 96 63 21 01
Ringkjøbing Bank
CEO Preben Knudsgaard, tel. +45 99 75 32 01
Also, please refer to the companies' websites www.vestjyskbank.dk and
www.riba.dk.
