Sydbank’s 2015 Annual Report
Aabenraa, Denmark, 2016-02-24 08:27 CET (GLOBE NEWSWIRE) -- Improved credit quality, costs still under control as well as stable core income ensure a record dividend for Sydbank’s shareholders and a new share buyback programme of DKK 350m, bringing total distribution concerning 2015 to 100% of profit for the year after tax.
The result for 2015 is the best since 2007 and can be attributed to lower impairment charges as well as a tight rein on costs. The result enables Sydbank to distribute a record high dividend to the Bank’s shareholders while at the same time launching a new share buyback programme.
In connection with the financial statements, CEO Karen Frøsig comments:
- 2015 saw a high level of activity. We have implemented a large number of changes to develop the Bank’s profitability – for instance the introduction of our loyalty programme, Sydbank Favorit. At the same time it was a challenging year to run a bank given the negative interest rate environment and fierce competition. Therefore it is rewarding that in spite of this we have delivered the best result since 2007.
She elaborates:
- In 2015 we focused extensively on improving our credit quality since this, together with continued tight cost control, forms the cornerstone of ensuring high profitability and consequently a strong market position for Sydbank. Therefore it is satisfying that impairment charges for loans and advances were significantly reduced in 2015.
The targets in the plan to increase profitability to reduce costs (core earnings) by DKK 200m as well as to achieve a decline in impairment charges for bank loans and advances by the beginning of 2016 have been met. Achieving the target of improving core income by DKK 200m was hampered by the negative interest rate environment which was a consequence of the pressure on DKK in January 2015.
2015 highlights
- Core income remains unchanged.
- Trading income has gone up by 10%.
- Unchanged costs (core earnings) apart from the effect of the acquisition of Sydinvest Administration A/S.
- Impairment charges for loans and advances have declined by 55%.
- Core earnings have improved by DKK 364m to DKK 1,553m.
- Profit before tax rose to DKK 1,473m in 2015 compared to DKK 1,329m in 2014.
- Sydbank recorded a growth in loans and advances of DKK 5.8bn in 2015. Growth in deposits amounted to DKK 6.0bn during the same period.
- Return on shareholders’ equity before and after tax constitutes 13.0% and 10.1%, respectively, against 12.3% and 9.8% in 2014. Earnings per share has increased from DKK 14.3 to DKK 15.8.
Outlook for 2016
Limited economic growth is projected for the Danish economy in 2016.
Based on the level of interest rates at the beginning of 2016, core income is expected to remain unchanged as a result of the measures implemented and despite continued fierce competition.
Trading income is projected to remain unchanged relative to income in 2015 but is dependent on financial market developments.
In spite of the general pay rises agreed for the financial sector of 1.80% and a payroll tax increase of 1.40%, costs (core earnings) are expected to decrease as a result of the measures implemented and the discontinuation of payments to the deposit guarantee scheme.
Lower impairment charges are forecast for 2016. The uncertainty surrounding price developments in the agricultural sector may however affect impairment charges.
2016 Financial Calendar
The date of publication of the interim report for the first nine months of 2016 is changed from Tuesday 1 November 2016 to Wednesday 2 November 2016.
Additional information
Jørn Adam Møller, CFO, tel +45 74 37 24 00
Mikkel Friis-Thomsen, Head of Communications, tel +45 29 12 36 64
Karen Frøsig, CEO, Bjarne Larsen, Deputy Group Chief Executive, and Jørn Adam Møller, CFO, will present the 2015 Annual Report today at 10.00 (CET) at a teleconference. The teleconference will be held in Danish and may be attended via www.sydbank.dk/audiocast.
Attendees, please call by 09.55 (CET). Danish attendees are invited to call 70 22 35 00. International attendees are invited to call +44 (0) 207 57 21 187. Please quote the following code: 50582484#
Vedhæftede filer: