The Spar Nord Bank Group s report for the first three quarters of 2002

Transcription

1 To the Copenhagen Stock Exchange and the Press 30 October 2002 Stock Exchange Announcement No. 14, 2002 Contact person: Keld Gammelgaard Phone The Spar Nord Bank Group s report for the first three quarters of 2002 Pre-tax profit of DKK 120.2m for the first three quarters Proposal for lifting the limitation on voting rights and ownership, plus the introduction of a model for appointing delegates 9.5% p.a. return on equity before tax for the nine-month period of 2002 DKK 332.1m in core earnings before losses and provisions versus DKK 344.2m in the first nine months of 2001 Losses and provisions amounted to DKK 233.9m versus DKK 142.8m in the same period the year before DKK 22.1m in earnings from investment portfolios versus DKK -6.4m in the same period last year Costs down 3.2% 0.7% growth in deposits, and loans and advances down 4.5% Core earnings are projected to hover around DKK m for the year as a whole. The result for the third quarter of the year conforms to projections. Compared with the second quarter of 2002, core earnings increased by 8.2% to DKK 43.6m, primarily spurred by the reduction in losses and provisions, down from DKK 61.3m in the second quarter of 2002 to DKK 49.0m in the third quarter of In the first nine months of 2002, the pre-tax profit amounted to DKK 120.2m, equal to a 9.5% annualized return on equity. After allowance for estimated tax, the profit comes to DKK 94.5m. Core earnings before losses and provisions amounted to DKK 332.1m for the first nine months versus DKK 344.2m in the same period last year. As was the case after the first six months, this decline is chiefly due to a downturn in loans and advances and a reduction in market value adjustments of capital holdings. In contrast, costs ended about DKK 20m lower than in the same period last year. Spar Nord Bank A/S Skelagervej 15 P. O. Box 162 DK-9100 Aalborg Denmark Reg. nr Phone Facsimile Telex spano dk Swift spno dk 22 Internet sparnord@sparnord.dk Page 1 of 7

2 Losses and provisions amounted to DKK m for the first nine months of 2002 versus DKK m in the same period last year. If losses and provisions are adjusted for the provision regarding the three IT-related commitments, an amount of approx. DKK 85m in the first quarter of 2002, the provisions are in line with the same period last year. Accordingly, total provisions amounted to DKK 791.7m, and aggregate nonperforming loans constituted DKK 463,8m. The downturn in loans and advances comes as a result of the general slowdown in loan demand and the previously mentioned redirection of strategy. In this connection, it should be noted that the number of commitments exceeding 10% of the Bank s equity capital was reduced from four at the end of the second quarter of 2002 to two at the end of the third quarter. There was a slight decline in deposits compared to the second quarter of This decline is attributable exclusively to fixed-term deposits. The rise in net interest income from the second to the third quarter of 2002 is attributable to an increase in the short-term bond portfolio with Trading & Financial Markets, and the fact that a major interest reversal on loans was carried out in the second quarter of The interest margin continues to be marginally declining. Despite the recession, net income from fees, charges and commissions showed satisfactory development, up from DKK 167.8m for the first nine months of 2001 to DKK 177.5m for the first nine months of This rise results particularly from the advance in mortgage loans handled through Totalkredit and DLR Kredit and sustained high sales of BankInvest products. The Group s solvency ratio has been calculated at 10.8%, up 0.2 percentage-point on the third quarter of Events: Limitation on voting rights and ownership At its meeting today, the Board of Directors of Spar Nord Bank decided to consult the shareholders by sending them a proposal for lifting the limitation on voting rights and ownership. The lifting should be effected concurrently with the introduction of a scheme for appointing delegates, pursuant to section 8a of the Danish Act on Commercial Banks and Savings Banks. This alteration of the Articles of Association will secure de facto influence for Spar Nord Bank s more than 80,000 shareholders in proportion to their respective shareholdings. This proposal stems from the work initiated by the Bank earlier this year based on the recommendations made by the Noerby Committee regarding Corporate Governance, an issue discussed in the 2001 Annual Report. Page 2 of 7

3 The key points of this proposal are the following: Shareholders holding less than 2,000 shares are to elect delegates for the Bank s Annual General Meeting at local shareholders meetings. The delegates then vote based on the combined share capital for the local shareholders. Shareholders holding 2,000 shares or more may each appoint their own delegates, who may vote in proportion to the share capital held by the shareholder appointing them. At the same time, a proposal is on the table to lift the current limitation on voting rights, viz. 1,000 votes, together with the 10% ownership limitation. This proposal meets a significant element in the Noerby Committee s recommendations regarding proportionality. At the same time, all shareholders will gain influence in proportion to their capital invested, and there will be no limitation as to ownership. Regardless of the possibility that small shareholders may assert their voting influence through delegates, all shareholders still have the right to attend the Annual General Meeting and address the meeting. In addition, the Bank intends to transmit the annual general meetings by video via the Internet. If the Bank s most important stakeholders back up the proposal, it will be introduced at the Annual General Meeting in March The Bank s shareholders may voice their opinion in a debate group to be opened on the Bank s website at The Bank s largest shareholder, the Spar Nord Foundation, which holds 31.4% of the share capital, backs the proposal and has simultaneously notified the Bank s Management that: "As long as the Bank presents its shareholders with a competitive yield, it is the Foundation s policy to defend the Bank s independence in dealings with the Bank s customers, employees and the community at large." DanFinans A/S As previously announced, Spar Nord Bank s wholly-owned subsidiary, Finans Nord A/S, has made an agreement with Roskilde Bank to acquire the bank s leasing company, DanFinans A/S, as of 1 November 2002 for an amount of DKK 48m. For Spar Nord Bank, this means a significant boosting of the leasing area. DanFinans A/S is expected to merge with Finans Nord A/S in the first half of The merged Finans Nord A/S will have a balance sheet total of DKK 3bn, thus strengthening its position as one of the leading leasing companies in Denmark within the core competence areas of transport, farming and contractor equipment, plus operational leasing of company cars. The acquisition is not expected to impact significantly on the consolidated profit for 2002, while the projected added pre-tax earnings during the next few years are expected to range around DKK 10m per annum. Page 3 of 7

4 Outlook for 2002 Core earnings are expected to hover around DKK m for the year as a whole, which is more accurate compared with the previously announced projected core earnings of DKK m. Please direct any queries you may have to Lasse Nyby, Chief Executive Officer, who can be reached on tel Sincerely yours, Spar Nord Bank Poul Lauritsen Chairman of the Supervisory Board Lasse Nyby Chief Executive Officer Page 4 of 7

5 Other comments on the quarterly accounts: Earnings from investment portfolios Earnings from investment portfolios amounted to DKK 22.1m versus the loss on the securities portfolio of DKK 6.4m in the same period last year. Considering market developments, this performance is satisfactory. The Bank has recorded a capital loss on shares, but also gains on bonds. DKK million Interest Dividends Market value adjustments Total income from investment portfolios Operating costs Earnings from investment portfolios Net profit The net profit amounted to DKK 94.5m after estimated tax of DKK 25.7m, equal to a 7.5% p.a. return on equity. Balance sheet and capital matters The balance sheet total dropped from DKK 29,999m at end-september 2001 to DKK 29,247m at end-september The reduction in the balance sheet total has boosted the core capital ratio from 7.5 to 7.6, while the solvency ratio has increased from 10.6 to The decrease in the solvency ratio from 11.1 in the second quarter of 2002 to 10.8 in the third quarter of 2002 is primarily due to an increase in the stake in DLR Kredit. Holdings of Spar Nord Bank shares by the Board of Directors and the Board of Management 12 June 21 Oct Niels Ole Arndt Henrik Hougaard 1,810 1,810 Erling Kjær 1,038 1,115 Poul Lauritsen 4,764 4,764 Mogens Ove Madsen 0 0 Ove Ravn Per Søndergaard 2,646 2,646 Michael Budolfsen Ole Skov Birthe Kiel Jensen Lasse Nyby John Lundsgaard 1,060 1,060 Lars Møller Note: The holdings include all shares held by all members of the household. Management incentive scheme In addition, the members of the Board of Management participate in the Management Incentive Scheme. Each member has an option to buy 22,000 shares. The options may be exercised in four sixweek periods after the announcement of the full-year and semi-annual financial statements, the first time in The exercise price has been fixed based on the weighted average market price at the time of issue, plus an annual advance return to existing shareholders of 11% p.a. The exercise price has been calculated at DKK 325 per share of nom. DKK 100. Page 5 of 7

6 Key figures - the Spar Nord Bank Group Exerpts from the profit and loss account 3Q 4Q 1Q 2Q 3Q DKK million Net interest income... Net income from fees, charges and commissions Dividends on shares, etc.... Market-value adjustments *... Other ordinary income... Market-value adjustment of capital holdings... Core income... Salaries, etc... Other administrative expenses... Depreciation and writedowns... Core earnings before losses and provisions... Losses and provisions... Core earnings... Erhvervsinvest Nord... Earnings from investment portfolios... Profit before tax... Estimated tax... Profit after tax Balance sheet - DKK million Total assets... Deposits... Loans and advances... Guarantees.... Shareholders' equity **... Subordinated loan capital... 29,999 28,989 28,666 29,087 29,247 16,101 15,535 16,733 16,868 16,219 16,437 16,460 15,881 15,546 15,701 2,967 3,209 3,098 3,207 3,477 1,833 1,692 1,706 1,744 1,776 1, Key figures and ratios Return on equity before tax **... Return on equity after tax **... Cost share of core income... Cost share of core income incl. losses and provisions... Losses and loan loss provisions, pct.... Solvency ratio, pct.... Core capital ratio, pct The Spar Nord Bank share Earnings before tax, per share... Official price, end of period... Net asset value (NAV), incl. profit for the period Share price/net asset value * An adjustment has been made for capital gains on own shares bought to cover the Bank s Management Incentive Scheme. Payroll costs have also been adjusted. ** The shareholders' equity at the beginning of the year is used to calculate the return on equity. Side 6 af 7

7 Key figures - the Spar Nord Bank Group Exerpts from the profit and loss account DKK million Net interest income... Net income from fees, charges and commissions... Dividends on shares, etc.... Market-value adjustments *... Other ordinary income... Market-value adjustment of capital holdings... Core income... Salaries, etc.... Other administrative expenses... Depreciation and writedowns... Core earnings before losses and provisions... Losses and provisions... Core earnings... Erhvervsinvest Nord... Earnings from investment portfolios... Profit before tax... Estimated tax... Profit after tax Q 1-3Q Change in per cent Balance sheet - DKK million Total assets... Deposits... Loans and advances... Guarantees... Shareholders' equity **... Subordinated loan capital... 29,999 29, ,101 16, ,437 15, ,967 3, ,833 1, , Key figures and ratios Return on equity before tax **... Return on equity after tax **... Cost share of core income... Cost share of core income (incl. losses and provisions)... Losses and loan loss provisions, pct... Solvency ratio, pct... Core capital ratio, pct The Spar Nord Bank share Earnings before tax, per share... Official price, end of period... Net asset value (NAV), incl. profit for the period... Share price/net asset value... * An adjustment has been made for capital gains on own shares bought to cover the Bank s Management Incentive Scheme. Payroll costs have also been adjusted. ** The shareholders' equity at the beginning of the year is used to calculate the return on equity Page 7 of 7