Interim Report - Q1 2009
Contents
Financial Review 3
Group Financial Highlights 3
Summary 4
Financial Review 6
Management Statement 10
Financial Statements - Sydbank Group
Income Statement 11
Statement of Comprehensive Income 11
Balance Sheet 12
Group Financial Highlights - Quarterly 13
Capital 14
Cash Flow Statement 16
Segment Statements 17
Notes 18
Supplementary Information 25
Group Financial Highlights
Q1 Q1 Index Full year
2009 2008 09/08 2008
Income statement (DKKm)
Core income excl trading income 822 704 117 3,066
Trading income 272 315 86 1,159
Total core income 1,094 1,019 107 4,225
Costs and depreciation 659 659 100 2,484
Core earnings before impairment 435 360 121 1,741
Impairment of loans and advances etc 270 (19) - 544
Core earnings 165 379 44 1,197
Profit/(Loss) on investment portfolios 72 (55) - (385)
Profit before non-recurring items 237 324 73 812
Non-recurring items, net - 198 - 162
Profit before contribution to the Danish Contingency Committee 237 522 45 974
Contribution to the Danish Contingency Committee 72 - - 163
Profit before tax 165 522 32 811
Tax 41 101 41 205
Profit for the period 124 421 29 606
Balance sheet highlights (DKKbn)
Loans and advances at amortised cost 78.2 81.3 96 82.5
Loans and advances at fair value 15.8 8.0 198 13.3
Deposits and other debt 73.5 70.1 105 75.0
Bonds issued at amortised cost 10.1 10.1 100 10.1
Subordinated capital (Tier 2) 4.2 4.2 100 4.2
Shareholders' equity (Tier 1) 7.2 6.8 106 7.1
Total assets 161.4 141.1 114 156.0
Financial ratios per share (DKK per share of DKK 10)
EPS Basic 2.0 6.6 9.5
EPS Diluted 2.0 6.6 9.5
Share price at end of period 71.5 171.8 64.3
Book value 114.0 107.5 112.5
Share price/book value 0.63 1.60 0.57
Average number of shares outstanding (in millions) 63.0 63.4 63.4
Other financial ratios and key figures
Solvency (total capital) ratio 15.0 14.3 14.7
Core capital (Tier 1) ratio 11.3 10.1 10.8
Profit before tax as % of average shareholders' equity 2.3 7.7 11.8
Profit after tax as % of average shareholders' equity 1.7 6.2 8.8
Income/cost ratio (DKK) 1.16 1.70 1.24
Interest rate risk 2.3 2.4 1.4
Foreign exchange position 1.5 5.6 11.4
Foreign exchange risk 0.0 0.0 0.0
Loans and advances relative to deposits * 1.0 1.1 1.0
Loans and advances relative to shareholders' equity * 10.8 12.0 11.6
Growth in loans and advances during the period * (5.2) 9.2 10.7
Excess cover relative to statutory liquidity requirements 66.6 78.5 89.4
Total large exposures 21.4 44.7 23.8
Accumulated impairment ratio 1.3 0.9 1.0
Impairment ratio for the period 0.27 (0.02) 0.60
Number of full-time staff at end of period 2,429 2,469 98 2,479
Financial ratios are prepared according to the “Recommendations & Financial
Ratios 2005” published by the Danish Society of Financial Analysts.
* Ratios calculated on the basis of loans and advances at amortised cost.
Summary
Profit for the first three months of 2009 is adversely impacted by the
financial crisis and by the decline in economic growth. In this light profit
before tax of DKK 165m is considered satisfactory. The result equals a return
of 9.2% p.a. on average shareholders' equity (Tier 1).
The income statement for Q1 2009 is characterised by:
• 17% increase in core income excl trading income
• 14% decline in trading income
• Unchanged costs (core earnings)
• Impairment of loans and advances of DKK 270m
• Profit on investment portfolios of DKK 72m
• Contribution of DKK 72m to the Danish Contingency Committee.
Income statement - Q1 (DKKm) 2009 2008
Core income excl trading income 822 704
Trading income 272 315
Total core income 1,094 1,019
Costs and depreciation 659 659
Core earnings before impairment 435 360
Impairment of loans and advances etc 270 (19)
Core earnings 165 379
Profit/(Loss) on investment portfolios 72 (55)
Profit before non-recurring items 237 324
Non-recurring items, net - 198
Profit before contribution to the Danish Contingency Committee 237 522
Contribution to the Danish Contingency Committee 72 -
Profit before tax 165 522
Tax 41 101
Profit for the period 124 421
Core earnings before impairment represent DKK 435m against DKK 360m for the
first three months of 2008. The increase of DKK 75m consists of a rise in core
income excl trading income of DKK 118m, a decline in trading income of DKK 43m
and unchanged costs (core earnings).
Core earnings before impairment are in line with our announcement in the 2008
Annual Report.
Impairment of loans and advances and amounts owed represents DKK 270m compared
with a reversal of impairment charges of DKK 19m in Q1 2008.
Profit on investment portfolios amounts to DKK 72m, which is identical to an
expense of DKK 72m to the Danish Contingency Committee. Less a calculated tax
charge of DKK 41m, the Group's profit after tax stands at DKK 124m.
Profit for the period equals a return of 6.9% on average shareholders' equity
(Tier 1). Earnings per share stands at DKK 2.0 compared with DKK 6.6 in 2008.
Group balance sheet highlights in Q1 2009 compare to Q1 2008 as follows:
• 4% reduction in bank loans and advances to DKK 78.2bn
• 5% growth in deposits to DKK 73.5bn.
The Group's solvency (total capital) ratio stands at 15.0%, including a core
capital (Tier 1) ratio of 11.3%. The Group's internal capital target is still
set at DKK 9,900m, equal to 13.5% of risk-weighted items.
The Group's liquidity measured under the 15% and 10% statutory requirements
constitutes 27.6% and 16.7%, respectively, at end-Q1 2009.
The Group continues to project core earnings before impairment of loans and
advances in the region of DKK 1,600-1,900m in 2009 - unchanged compared with
the figure announced in the 2008 Annual Report.
Today Sydbank filed an application with the Danish Ministry of Economic and
Business Affairs for government capital injection of up to DKK 1.2bn by way of
hybrid core capital before the end of 2009. The Bank estimates that the
intended solvency and core capital ratios, following a government capital
injection of DKK 1.2bn, will be adequate and comfortable in view of the
financial crisis. The amount constitutes just over half of the maximum possible
injection of just over DKK 2.2bn.
Financial Review
Core income excl trading income
Total core income excl trading income grew by 17% to DKK 822m.
Group (DKKm) 2009 2008
Interest margins etc 699 587
Mortgage credit 48 48
Payment services 32 30
Remortgaging and loan fees 19 18
Other commission 17 15
Other operating income 7 6
Total 822 704
During Q1 2009, income from interest margins etc continued to show significant
robustness with an increase of DKK 112m to DKK 699m due to a rise in interest
margins and despite a 4% decline in bank loans and advances.
The remaining income components of core income excl trading income have gone up
by a total of 5% compared with Q1 2008.
Trading income
Total trading income fell by 14% - from DKK 315m in 2008 to DKK 272m in 2009 -
essentially ascribable to a smaller volume of asset management activities.
Group (DKKm) 2009 2008
Bonds 61 40
Shares 47 64
Foreign exchange 77 74
Money market 26 33
Asset management 61 104
Total 272 315
Costs and depreciation
The Group's total costs and depreciation recorded DKK 721m against DKK 768m in
2008. In 2009 DKK 59m can be ascribed to guarantee commission to the Danish
Contingency Committee and in 2008 DKK 107m can be ascribed to the integration
of bankTrelleborg.
Group (DKKm) 2009 2008
Staff costs 380 383
Other administrative expenses 251 344
Depreciation and impairment of property, plant and equipment 31 41
Other operating expenses 59 0
Total costs 721 768
Distributed as follows:
Costs, core earnings 659 659
Costs, investment portfolio earnings 3 2
Costs, integration of bankTrelleborg - 107
Costs, guarantee commission to the Danish Contingency Committee 59 -
Costs (core earnings) are unchanged in 2009 compared with one year ago. At
end-Q1 2009 the Group's staff numbered 2,429 (full-time equivalent) compared
with 2,469 at 31 March 2008. During the first three months of 2009 staffing was
reduced by 50.
Core earnings before impairment of loans and advances
Core earnings before impairment of loans and advances total DKK 435m - an
increase of DKK 75m or 21% compared with Q1 2008.
Impairment of loans and advances etc
Impairment of loans and advances constitutes DKK 270m compared with a reversal
of impairment charges of DKK 19m in 2008.
Core earnings
Core earnings represent DKK 165m compared with DKK 379m in 2008.
Investment portfolio earnings
Less funding charges and less related costs of DKK 3m, investment portfolios
generated a profit of DKK 72m (2008: loss of DKK 55m). The overall result is
adversely affected by an unrealised capital loss of DKK 30m on the Group's
portfolio of CDOs. The market value of the CDO portfolio represents DKK 40m as
of 31 March 2009. The Group does not reclassify securities as offered under IAS
39.
Contribution to the Danish Contingency Committee
Member contribution rates to the Danish Contingency Committee have been
determined. The Group's share for Q4 2008 represents 4% and 3.74% for 2009 and
2010.
Consequently guarantee commission of DKK 11m and the proportionate share of the
guarantee to the Danish Contingency Committee of DKK 6m which were expensed in
Q4 2008 were reversed in Q1 2009.
Guarantee commission and the provision for the guarantee to the Danish
Contingency Committee amount to DKK 70m and DKK 19m, respectively, in Q1 2009,
bringing net expenses to DKK 72m in Q1 2009.
Subsidiaries
The subsidiary bank, Sydbank (Schweiz) AG, which conducts private banking
activities in St. Gallen, Switzerland, recorded a loss after tax of DKK 1m
(2008: loss of DKK 2m). Ejendomsselskabet recorded a loss after tax of DKK 1m
(2008: DKK 0m).
Profit for the period
Pre-tax profit amounts to DKK 165m. Less a calculated tax charge of DKK 41m
(2008: DKK 101m), profit for the period stands at DKK 124m compared with DKK
421m in 2008, the most significant difference being ascribable to a net income
of non-recurring items of DKK 198m in Q1 2008.
Return
Return on shareholders' equity (Tier 1) represents 6.9% p.a. against 25.0% p.a.
in 2008. Earnings per share decreased from DKK 6.6 to DKK 2.0.
Developments from Q4 2008 to Q1 2009
Total core income dropped by DKK 37m in Q1 2009 (Q4-08: DKK 1,131m), where
trading income decreased by DKK 29m (Q4-08: DKK 301m) and core income excl
trading income by DKK 8m (Q4-08: DKK 830m). Costs rose by DKK 42m (Q4-08: DKK
617m), which is a recurring seasonal adjustment.
During the same period, impairment of loans and advances etc went down by DKK
189m from DKK 459m, and investment portfolio earnings improved from a loss of
DKK 23m in Q4 2008 to a profit of DKK 72m in Q1 2009.
In Q1 2008, the Group recorded a net income from non-recurring items of DKK
198m; in contrast the Group recognised an expense of DKK 72m to the Danish
Contingency Committee in Q1 2009. After tax, profit for the first three months
amounts to DKK 124m compared with a loss of DKK 138m in Q4 2008.
Balance sheet
The Group's total assets made up DKK 161.4bn at end-Q1 2009 against DKK 156.0bn
at year-end 2008.
Assets (DKKbn) 31 Mar 2009 31 Dec 2008
Amounts owed by credit institutions etc 13.4 12.9
Loans and advances at fair value (reverse repo transactions) 15.8 13.3
Loans and advances at amortised cost (bank loans and advances) 78.2 82.5
Securities and holdings etc 35.4 28.3
Assets related to pooled plans 5.5 5.8
Other assets etc 13.1 13.2
Total 161.4 156.0
The Group's bank loans and advances total DKK 78.2bn - a decline of 5% compared
with year-end 2008 and 4% compared with Q1 2008.
Shareholders' equity and liabilities (DKKbn) 31 Mar 2009 31 Dec 2008
Amounts owed to credit institutions etc 45.3 38.9
Deposits and other debt 73.5 75.0
Deposits in pooled plans 5.5 5.8
Bonds issued 10.1 10.1
Other liabilities etc 15.5 14.8
Provisions 0.1 0.1
Subordinated capital (Tier 2) 4.2 4.2
Shareholders' equity (Tier 1) 7.2 7.1
Total 161.4 156.0
The Group's deposits make up DKK 73.5bn against DKK 75.0bn at end-2008.
Subordinated capital (Tier 2)
Subordinated capital (Tier 2) totals DKK 4,218m - unchanged compared with
year-end 2008.
The Bank has filed an application with the Danish Financial Supervisory
Authority for the prepayment of subordinated loan capital on the dates in
parentheses concerning the following loans: EUR 100m (29 June 2009), EUR 40m
(17 September 2009) and DKK 50m (29 October 2009), totalling DKK 1,093m.
As a result of an amendment to the Danish Financial Business Act in connection
with Bank Rescue Package II, hybrid core capital which is not subject to
conditions regarding interest rate increases may be included in the core
capital (Tier 1) in addition to the 15% requirement. Consequently the Group's
core capital (Tier 1) has risen by DKK 138m at end-Q1 2009 without affecting
the capital base (Tiers 1+2).
Shareholders' equity (Tier 1)
At end-Q1 2009, shareholders' equity constitutes DKK 7,239m - an increase of
DKK 151m since year-end 2008. The change comprises additions concerning profit
for the period of DKK 124m, net sale of own shares of DKK 37m and less tax
concerning equity items of DKK 10m.
Group solvency
At end-Q1 2009, the solvency (total capital) ratio stands at 15.0%, including a
core capital (Tier 1) ratio of 11.3 percentage points, compared with 14.7% and
10.8 percentage points, respectively, at year-end 2008. The core capital (Tier
1) ratio excluding hybrid core capital has risen from 9.3% to 9.7%.
Capital targets
Today, the Board of Directors adopted the Group's capital targets composed as
follows:
The Group's overall capital requirement is based on its assessment of the
statutory capital requirements and its aim to maintain the Aa3 rating. In
connection with the determination of the Group's capital targets the following
elements are considered:
• Expected statutory capital requirement
• Ratings target
• Projected developments in business volume and income
• Stress test scenarios.
The Group's capital management will remain subject to an internal capital
target whose determination will continue to be based on Pillar I. In addition,
the Group has a buffer capital to cover requirements under Pillar II and
fluctuations in Pillar I calculations etc. The Group will not change its
capital targets in connection with minor changes in assumptions.
At 31 March 2009, risk-weighted items total DKK 73.6bn. The necessary solvency
(total capital) ratio stands at 8.0%, equal to DKK 5.9bn. The Group's internal
capital target is unchanged at DKK 9.9bn, currently equal to 13.5%. The buffer
capital represents DKK 4.0bn. The difference between the internal capital
target and the capital base (Tiers 1+2) of DKK 11.0bn is represented by free
capital.
(DKKm) 31 Mar 2009
Minimum capital - 8.0% 5,887
Buffer capital 4,013
Internal capital target - currently 13.5% 9,900
Free capital 1,128
Capital base - currently 15.0% 11,028
In connection with the continued repayment of supplementary capital (Tier 2),
it is aimed that:
• Core capital (Tier 1) (excl hybrid core capital) will represent 70-80% of the
capital base
• Hybrid core capital will account for around 20-30% of core capital.
The capital targets will continue to be adjusted whenever required and at least
once a year.
Outlook for 2009
The Group's bank loans and advances are projected to decline moderately.
The Group projects core earnings before impairment of loans and advances in the
region of DKK 1,600-1,900m in 2009 - unchanged compared with the figure
announced in the 2008 Annual Report.
It is expected that guarantee commission to the Danish Contingency Committee
will be reduced by DKK 20m to DKK 280m compared with previous expectations. To
this must be added the Bank's share of the Committee's payment to cover any
further loss of the Winding-Up Company.
Government capital injection
On 3 February 2009 the Danish parliament passed a bill according to which
Danish credit institutions complying with the statutory solvency requirements
may apply to the government for the injection of hybrid core capital not later
than 30 June 2009.
Today Sydbank filed an application with the Danish Ministry of Economic and
Business Affairs for government capital injection of up to DKK 1.2bn by way of
hybrid core capital before the end of 2009. The Bank estimates that the
intended solvency and core capital ratios, following a government capital
injection of DKK 1.2bn, will be adequate and comfortable in view of the
financial crisis. The amount constitutes just over half of the maximum possible
injection of just over DKK 2.2bn.
Management Statement
Today we have reviewed and approved the Interim Report - Q1 2009 of Sydbank A/S.
The consolidated interim financial statements for Q1 2009 have been prepared in
accordance with the International Financial Reporting Standards as approved by
the EU. Furthermore, the Interim Report has been prepared in compliance with
additional Danish disclosure requirements for interim reports of listed
financial companies. The Interim Report has not been audited or reviewed.
We consider the accounting policies applied to be appropriate and the Interim
Report gives a true and fair view of the Group's assets, shareholders' equity
and liabilities and financial position at 31 March 2009 and of the results of
the Group's operations and consolidated cash flows for the accounting period 1
January - 31 March 2009 as well as a description of the most significant risks
and elements of uncertainty which may affect the Group.
Aabenraa, 28 April 2009
Group Executive Management
Carsten Andersen Karen Frøsig
(Group Chief Executive)
Preben L. Hansen Allan Nørholm
Board of Directors
Kresten Philipsen Anders Thoustrup Svend Erik Busk
(Chairman) (Vice-Chairman)
Otto Christensen Peder Damgaard Harry Max Friedrichsen
Peter Gæmelke Hanni Toosbuy Kasprzak Per Olesen
Sven Rosenmeyer Paulsen Jan Uldahl-Jensen Margrethe Weber
Income Statement - Sydbank Group
Q1 Q1 Full year
DKKm Note 2009 2008 2008
Interest income 2 1,789 1,654 7,457
Interest expense 3 967 1,033 4,692
Net interest income 822 621 2,765
Dividends on shares 8 7 31
Fee and commission income 4 254 337 1,256
Fee and commission expense 35 44 172
Net interest and fee income 1,049 921 3,880
Market value adjustments 5 94 220 115
Other operating income 7 125 143
Staff costs and administrative expenses 6 631 727 2,449
Depreciation and impairment of property, plant and equipment 31 41 187
Other operating expenses 59 0 86
Impairment of loans and advances etc 8 282 (19) 622
Profit on holdings in associates 18 5 17
Profit on assets temporarily acquired 0 0 0
Profit before tax 165 522 811
Tax 41 101 205
Profit for the period 124 421 606
EPS Basic for the period (DKK) * 2.0 6.6 9.5
EPS Diluted for the period (DKK) * 2.0 6.6 9.5
Dividend per share (DKK) - - -
* Based on average number of shares outstanding, see page 14.
Statement of Comprehensive Income - Sydbank Group
Profit for the period 124 421 606
Other comprehensive income:
Translation of foreign entities (3) 12 23
Hedge of net investment in foreign entities 3 (12) (23)
Other comprehensive income after tax 0 0 0
Comprehensive income after tax 124 421 606
Balance Sheet - Sydbank Group
Q1 Q1 Full year
DKKm Note 2009 2008 2008
Assets
Cash and balances on demand at central banks 1,309 1,252 752
Amounts owed by credit institutions and central banks 12,056 14,836 12,165
Loans and advances at fair value 15,845 7,998 13,282
Loans and advances at amortised cost 78,203 81,327 82,476
Bonds at fair value 33,842 18,869 26,749
Shares etc 1,330 1,280 1,315
Holdings in associates etc 249 206 232
Assets related to pooled plans 5,543 6,500 5,777
Intangible assets 14 16 15
Total land and buildings 1,021 879 1,009
investment property 9 9 8
owner-occupied property 1,012 870 1,001
Other property, plant and equipment 144 120 158
Current tax assets 247 94 186
Deferred tax assets 10 24 10
Assets in temporary possession 5 15 5
Other assets 11,543 7,587 11,796
Prepayments 58 55 48
Total assets 161,419 141,058 155,975
Shareholders' equity and liabilities
Amounts owed to credit institutions and central banks 45,336 29,469 38,889
Deposits and other debt 73,513 70,078 75,007
Deposits in pooled plans 5,543 6,500 5,777
Bonds issued at amortised cost 10,094 10,077 10,096
Current tax liabilities 10 48 13
Other liabilities 15,321 13,665 14,764
Deferred income 12 85 19
Total liabilities 149,829 129,922 144,565
Provisions 9 133 119 103
Subordinated capital (Tier 2) 4,218 4,222 4,219
Shareholders' equity (Tier 1):
Share capital 675 675 675
Revaluation reserves 91 91 91
Other reserves:
Reserves according to articles of association 411 375 411
Other reserves 20 8 20
Retained earnings 6,042 5,646 5,891
Total shareholders' equity (Tier 1) 7,239 6,795 7,088
Total shareholders' equity and liabilities 161,419 141,058 155,975
Group Financial Highlights - Quarterly
Q1 Q4 Q3 Q2 Q1 Full year
2009 2008 2008 2008 2008 2008
Income statement (DKKm)
Core income excl trading income 822 830 754 778 704 3,066
Trading income 272 301 223 320 315 1,159
Total core income 1,094 1,131 977 1,098 1,019 4,225
Costs and depreciation 659 617 591 617 659 2,484
Core earnings before impairment 435 514 386 481 360 1,741
Impairment of loans and advances etc 270 459 98 6 (19) 544
Core earnings 165 55 288 475 379 1,197
Profit/(Loss) on investment portfolios 72 (23) (170) (137) (55) (385)
Profit before non-recurring items 237 32 118 338 324 812
Non-recurring items, net - (18) (16) (2) 198 162
Profit before contribution to
the Danish Contingency Committee 237 14 102 336 522 974
Contribution to Danish Contingency Committee 72 163 0 0 0 163
Profit before tax 165 (149) 102 336 522 811
Tax 41 (11) 26 89 101 205
Profit for the period 124 (138) 76 247 421 606
Balance sheet highlights (DKKbn)
Loans and advances at amortised cost 78.2 82.5 81.8 82.5 81.3 82.5
Loans and advances at fair value 15.8 13.3 10.2 11.5 8.0 13.3
Deposits and other debt 73.5 75.0 63.4 67.6 70.1 75.0
Bonds issued at amortised cost 10.1 10.1 10.1 10.1 10.1 10.1
Subordinated capital (Tier 2) 4.2 4.2 4.2 4.2 4.2 4.2
Shareholders' equity (Tier 1) 7.2 7.1 7.2 7.1 6.8 7.1
Total assets 161.4 156.0 143.5 149.8 141.1 156.0
Financial ratios per share (DKK per share of DKK 10)
EPS Basic 2.0 (2.2) 1.2 3.9 6.6 9.5
EPS Diluted 2.0 (2.2) 1.2 3.9 6.6 9.5
Share price at end of period 71.5 64.3 156.3 180.5 171.8 64.3
Book value 114.0 112.5 113.3 112.0 107.5 112.5
Share price/book value 0.63 0.57 1.38 1.61 1.60 0.57
Avg number of shares outstanding (in millions) 63.0 63.2 63.7 63.5 63.4 63.4
Other financial ratios and key figures
Solvency (total capital) ratio 15.0 14.7 15.5 14.8 14.3 14.7
Core capital (Tier 1) ratio 11.3 10.8 11.2 10.7 10.1 10.8
Profit before tax as % of avg shareholders' equity 2.3 (2.1) 1.4 4.8 7.7 11.8
Profit after tax as % of avg shareholders' equity 1.7 (1.9) 1.1 3.5 6.2 8.8
Income/cost ratio (DKK) 1.16 0.88 1.14 1.53 1.70 1.24
Interest rate risk 2.3 1.4 1.0 3.0 2.4 1.4
Foreign exchange position 1.5 11.4 9.7 12.9 5.6 11.4
Foreign exchange risk 0.0 0.0 0.0 0.0 0.0 0.0
Loans and advances relative to deposits * 1.0 1.0 1.2 1.1 1.1 1.0
Loans and advances relative to shareholders' equity
* 10.8 11.6 11.4 11.6 12.0 11.6
Growth in loans and advances during the period * (5.2) 0.8 (0.9) 1.5 9.2 10.7
Excess cover relative to statutory liquidity requirements
66.6 89.4 56.2 69.7 78.5 89.4
Total large exposures 21.4 23.8 53.3 39.5 44.7 23.8
Accumulated impairment ratio 1.3 1.0 0.9 0.8 0.9 1.0
Impairment ratio for the period 0.27 0.50 0.10 0.01 (0.02) 0.60
Number of full-time staff at end of period 2,429 2,479 2,487 2,457 2,469 2,479
Financial ratios are prepared according to the "Recommendations & Financial
Ratios 2005" published by the Danish Society of Financial Analysts.
* Ratios calculated on the basis of loans and advances at amortised cost.
Capital - Sydbank Group
Reserve for
net revalua-
Reserves tion acc to
Share Revaluation acc to art of equity Retained Proposed
DKKm capital reserves association method earnings dividend etc Total
Shareholders' equity at 1 Jan 2009 675 91 411 20 5,891 - 7,088
Changes in equity in 2009:
Purchase of own shares - - - - (273) - (273)
Sale of own shares - - - - 310 - 310
Tax on equity items - - - - (10) - (10)
Comprehensive income for the period - - - - 124 - 124
Total changes in equity - - - - 151 - 151
Shareholders' equity at 31 Mar 2009 675 91 411 20 6,042 - 7,239
Shareholders' equity at 1 Jan 2008 675 91 399 11 5,298 223 6,697
Changes in equity in 2008:
Purchase of own shares - - - - (1,303) - (1,303)
Sale of own shares - - - - 1,122 - 1,122
Adjusted purchase price bankTrelleborg - - - - (5) - (5)
Employee shares - - - - 18 - 18
Adopted dividend etc - - - - - (223) (223)
Tax on equity items - - - - 52 - 52
Dividends, own shares - - - - 16 - 16
Comprehensive income for the period - - - - 421 - 421
Total changes in equity - - - - 321 (223) 98
Shareholders' equity at 31 Mar 2008 675 91 399 11 5,619 - 6,795
The Sydbank share Q1 2009 Q1 2008 Full year 2008
Share capital (DKK) 675,000,000 675,000,000 675,000,000
Shares issued at end of period (number) 67,500,000 67,500,000 67,500,000
Shares outstanding at end of period (number) 63,455,402 63,219,826 64,034,059
Average number of shares outstanding 63,015,301 63,446,424 66,741,416
Capital - Sydbank Group
Q1 Q1 Full year
DKKm 2009 2008 2008
Solvency:
Shareholders' equity (Tier 1) 7,239 6,795 7,088
Revaluation reserves (91) (91) (91)
Intangible assets and capitalised tax assets (25) (39) (26)
Core capital (excl hybrid core capital) 7,123 6,665 6,971
Hybrid core capital 1,388 1,176 1,230
50% of holdings > 10% (99) (101) (98)
50% of total holdings etc > 10% (33) (63) (34)
50% of difference between expected losses and
accounting value adjustments and accounting provisions (42) -
-
Core capital 8,337 7,677 8,069
Subordinated loan capital (Tier 2) 2,839 2,928 2,839
Revaluation reserves 91 91 91
Hybrid core capital - 129 158
Difference between expected losses and impairment charges - 258 26
Capital base before deductions 11,267 11,083 11,183
50% of holdings > 10% (99) (101) (98)
50% of total holdings etc > 10% (33) (63) (34)
50% of difference between expected losses and
accounting value adjustments and accounting provisions (42) -
-
Holdings in associates (65) (59) (62)
Capital base (Tiers 1+2) after deductions 11,028 10,860 10,989
Credit risk 59,839 61,532 60,616
Market risk 7,212 7,787 7,261
Operational risk 6,537 6,715 6,731
Risk-weighted items 73,588 76,034 74,608
Capital requirement under Pillar I 5,887 6,083 5,968
Pillar II and transitional rules - 1,027 711
Capital requirement 5,887 7,110 6,679
Core capital (Tier 1) ratio (excl hybrid core capital) 9.7 8.8 9.3
Core capital (Tier 1) ratio 11.3 10.1 10.8
Solvency (total capital) ratio 15.0 14.3 14.7
Cash Flow Statement - Sydbank Group
Q1 Q1 Full year
DKKm 2009 2008 2008
Operating activities:
Pre-tax profit for the period 165 522 811
Taxes paid (109) (88) (128)
Adjustment of non-cash operating items 326 (50) 731
Cash flows from working capital 93 344 (85)
Cash flows from operating activities 475 728 1,329
Investing activities:
Purchase and sale of holdings in associates 0 0 (22)
Purchase and sale of intangible assets - (15) (16)
Purchase and sale of property, plant and equipment (27) (71) (370)
Cash flows from investing activities (27) (86) (408)
Financing activities:
Purchase and sale of own holdings 28 (101) 8
Dividend - (223) (223)
Raising of subordinated capital (Tier 2) (1) 394 390
Issue of bonds (2) 1 20
Cash flows from financing activities 25 71 195
Cash flows for the period 473 713 1,116
Cash equivalent positions at 1 Jan 6,200 5,084 5,084
Cash flows for the period 473 713 1,116
Cash equivalent positions at end of period 6,673 5,797 6,200
Segment Statements - Sydbank Group
DKKm Banking Markets Treasury Other Total
Business segments Q1 2009:
Core income excl trading income 849 (27) - - 822
Trading income 143 129 - - 272
Core income 992 102 - - 1,094
Costs and depreciation 560 85 3 14 662
Impairment of loans and advances etc 270 (1) - - 269
Core earnings 162 18 (3) (14) 163
Profit/(Loss) on investment portfolios - - 76 (2) 74
Profit before non-recurring items 162 18 73 (16) 237
Non-recurring items, net - - - - -
Profit before contribution to
the Danish Contingency Committee 162 18 73 (16) 237
Contribution to the Danish Contingency Committee - - - 72 72
Profit before tax 162 18 73 (88) 165
Notes - Sydbank Group
Note 1
Accounting policies:
The Interim Report has been prepared in accordance with IAS 34 “Interim
Financial Reporting” as approved by the EU and in compliance with additional
Danish disclosure requirements for interim reports. As a result of the use of
IAS 34, the presentation is less complete compared with the presentation of an
annual report and the measurement principles are in compliance with IFRS.
With the exception of the below, the accounting policies are consistent with
those adopted in the 2008 Annual Report, to which reference is made.
The 2008 Annual Report provides a comprehensive description of the accounting
policies applied.
As from 1 January 2009, the Group has implemented IAS 1 (Revised 2007)
“Presentation of Financial Statements”, IAS 23 (Revised 2007) “Borrowing
Costs”, and IFRS 8 “Operating Segments”.
The implementation of the new reporting standards has not had any impact on
recognition or measurement. IAS 1 and IFRS 8 have resulted in changes only in
the notes and format. Any comparative figures in the notes have been restated.
IAS 1 has changed the presentation of the primary statements. The Group has
decided to present two statements: an income statement and a statement of
comprehensive income which shows profit for the period and the elements of
other comprehensive income.
The measurement of certain assets and liabilities requires managerial estimates
as to how future events will affect the value of such assets and liabilities.
The significant estimates made by the management in the use of the Group's
accounting policies and the inherent considerable uncertainty of such estimates
used in the preparation of the condensed interim report are identical to those
used in the preparation of the annual report as at 31 December 2008.
The Group's significant risks and the external elements which may impact the
Group are described in detail in the 2008 Annual Report.
Notes - Sydbank Group
Q1 Q1 Full year
DKKm 2009 2008 2008
Note 2
Interest income/forward premium of:
Amounts owed by credit institutions and central banks 86 179 628
Loans and advances and other amounts owed 1,258 1,250 5,525
Bonds 330 108 750
Total derivatives 111 111 519
comprising
Foreign exchange contracts 116 127 531
Interest rate contracts (5) (16) (12)
Other interest income 4 6 35
Total 1,789 1,654 7,457
Of which income from genuine purchase and
resale transactions stated under:
Amounts owed by credit institutions and central banks 13 80 264
Loans and advances and other amounts owed 132 87 445
Note 3
Interest expense to:
Credit institutions and central banks 278 214 1,224
Deposits and other debt 563 645 2,737
Bonds issued 84 119 492
Subordinated capital (Tier 2) 42 54 232
Other interest expense 0 1 7
Total 967 1,033 4,692
Of which expense to genuine sale and
repurchase transactions stated under:
Amounts owed to credit institutions and central banks 10 7 52
Deposits and other debt 4 2 15
Notes - Sydbank Group
Q1 Q1 Full year
DKKm 2009 2008 2008
Note 4
Fee and commission income:
Securities trading and custody accounts 132 210 751
Payment services 40 40 166
Loan fees 18 17 72
Guarantee commission 21 25 96
Other fees and commission 43 45 171
Total 254 337 1,256
Note 5
Market value adjustments:
Other loans and advances and amounts owed at fair value 11 (1) 6
Bonds 161 68 139
Shares etc (37) 26 (151)
Investment property - - 0
Foreign exchange 76 15 250
Total derivatives (117) 112 (129)
Assets related to pooled plans (79) (332) (1,281)
Deposits in pooled plans 79 332 1,281
Other assets/liabilities 0 0 0
Total 94 220 115
Trading portfolio 90 203 65
Equity investments 4 17 50
Total 94 220 115
Notes - Sydbank Group
Q1 Q1 Full year
DKKm 2009 2008 2008
Note 6
Staff costs and administrative expenses:
Salaries and emoluments to:
Group Executive Management:
Salaries 3 8 15
Pensions 0 0 2
Board of Directors 1 1 3
Shareholders' Committee 1 1 2
Total 5 10 22
Staff costs:
Wages and salaries 317 315 1,199
Pensions 36 29 125
Social security contributions 2 2 8
Payroll tax etc 20 27 98
Total 375 373 1,430
Other administrative expenses:
IT (including withdrawal and conversion in 2008) 116 201 563
Rent etc 31 40 160
Marketing and entertainment expenses 20 22 88
Other expenses 84 81 186
Total 251 344 997
Total 631 727 2,449
Note 7
Staff:
Average number of staff (full-time equivalent) 2,501 2,456 2,504
Notes - Sydbank Group
Q1 Q1 Full year
DKKm 2009 2008 2008
Note 8
Impairment of loans and advances recognised in the income statement:
Impairment and provisions 264 (10) 167
Write-offs 25 6 499
Recovered from debt previously written off 7 15 44
Impairment of loans and advances etc 282 (19) 622
Impairment and provisions at end of period:
Individual impairment and provisions 1,143 721 954
Collective impairment and provisions 173 165 152
Impairment and provisions at end of period 1,316 886 1,106
Individual impairment of loans and advances and provisions for guarantees:
Impairment and provisions at 1 Jan 954 738 738
Exchange rate adjustment (1) 3 5
Impairment and provisions during the period 256 (6) 216
Other movements - - 86
Write-offs covered by impairment and provisions 66 14 91
Impairment and provisions at end of period 1,143 721 954
Individual impairment of loans and advances 1,063 693 888
Individual provisions for guarantees 80 28 66
Impairment and provisions at end of period 1,143 721 954
Collective impairment of loans and advances and provisions for guarantees:
Impairment and provisions at 1 Jan 152 157 157
Impairment and provisions during the period 21 8 (5)
Impairment and provisions at end of period 173 165 152
Sum of loans and advances and amounts owed
subject to collective impairment and provisions 16,104 12,984 14,286
Collective impairment and provisions 173 165 152
Loans and advances and amounts owed after collective impairment and
provisions 15,931 12,819 14,134
Individual impairment of loans and advances subject to
objective evidence of impairment:
Balance before impairment of individually assessed loans and
advances 2,254 1,370 1,959
Impairment of individually assessed loans and advances 1,063 693 888
Balance after impairment of individually assessed loans and
advances 1,191 677 1,071
Note 9
Provisions:
Provisions for pensions and similar obligations 4 4 4
Provisions for deferred tax 25 24 24
Provisions for guarantees 80 59 66
Other provisions 24 32 9
Total 133 119 103
Notes - Sydbank Group
Q1 Q1 Full year
DKKm 2009 2008 2008
Note 10
Contingent liabilities and other obligating agreements:
Contingent liabilities:
Financial guarantees 2,611 5,547 3,050
Mortgage finance guarantees 1,015 1,996 979
Registration and remortgaging guarantees 3,248 3,222 3,239
Loss guarantee/guarantee 691 - 871
Other contingent liabilities 1,426 1,656 1,436
Total 8,991 12,421 9,575
Other obligating agreements:
Irrevocable credit commitments - 223 5
Other liabilities 56 110 74
Total 56 333 79
Note 11
This quarter:
After the expiry of the quarter, no matters of significant impact on the
financial position of the Sydbank Group have occurred.
Note 12
Collateral:
As of 31 March 2009, the Group had deposited securities at a market value of
DKK 31,159m with Danish and foreign
exchanges and clearing centres etc in connection with margin calls and
securities settlements etc.
Notes - Sydbank Group
Q1 Q1 Full year
DKKm 2009 2008 2008
Note 13
Core income:
Core income excl trading income:
Interest margins etc 699 587 2,610
Mortgage credit 48 48 176
Payment services 32 30 136
Remortgaging and loan fees 19 18 73
Other commission 17 15 48
Other operating income 7 6 23
Total 822 704 3,066
Trading income:
Bonds 61 40 156
Shares 47 64 193
Foreign exchange 77 74 311
Money market 26 33 124
Asset management 61 104 375
Total 272 315 1,159
Supplementary Information
Financial Calendar
In 2009 the Group's financial statements will be released as follows:
- Interim Report - First Half 2009
18 August 2009
- Interim Report - Q1-Q3 2009
27 October 2009
Sydbank contacts
Carsten Andersen, Group Chief Executive
Tel +45 74 36 20 00
Mogens Sandbæk, CFO
Tel +45 74 36 24 00
Jakob Aakjær, Head of Executive Secretariat
Tel +45 74 36 20 05
Address
Sydbank A/S
Peberlyk 4
6200 Aabenraa
Denmark
Tel +45 74 36 36 36
CVR No DK 12626509
Relevant links
www.sydbank.dk
www.sydbank.com
For further information reference is made to Sydbank's 2008 Annual Report at
www.sydbank.com/sydbankcom/about/ir/finreports.
