Vestjysk Bank's Q1 2018 Quarterly Report

Nasdaq Copenhagen A/S


16 May 2018


Vestjysk Bank's Q1 2018 Quarterly Report

Q1 2018 Highlights
Vestjysk Bank realised a profit after tax of DKK 71 million in Q1 2018. The Bank’s core operations are sound and core earnings of DKK 114 million before impairment are considered satisfactory. Impairment losses, and not least impairment losses relating to the Bank’s agricultural customers are at a lower level than they were in Q1 2017. However, the overall level of impairment losses is still relatively high. The Bank’s profit after tax in Q1 2018 is considered satisfactory under the given circumstances.

Summary of Vestjysk Bank's results in Q1 2018:

• Profit after tax of DKK 71 million (Q1 2017: DKK 55 million), equaling a return on equity after tax of 11.8 per cent.
• Core income of DKK 232 million kroner (DKK 245 million in Q1 2017).
• Cost ratio of 50.6 (Q1 2017: 51.1).
• Core earnings before impairment of DKK 114 million (Q1 2017: DKK 120 million).
• Impairment of loans and receivables, etc. of DKK 41 million (Q1 2017: DKK 61 million).
• The total capital ratio stood at 17.7 per cent and the aggregate capital requirement at 12.0 per cent, corresponding to excess coverage of 5.7 percentage points or DKK 840 million. The Bank’s individual solvency need was 10.1 per cent, and at 1 January 2018 the capital conservation buffer was increased by 0.625 of a percentage point to a total of 1.875 percentage point, resulting in a combined capital requirement of 12.0 per cent.
• At 31 March 2018 the Bank’s LCR was 210 per cent, compared with a requirement of 100 per cent.
• Implementation of the new IFRS 9 rules at 1 January 2018 has resulted in additional impairment losses of DKK 225 million. The impact net of tax is recognised directly in the Bank’s equity at 1 January 2018, which is thus reduced by DKK 207 million, equal to 9.0 percent of shareholders’ equity.
• The Bank has decided not to apply the European Commission’s transitional arrangement for partial recognition of the IFRS 9 impairment rules in total capital. The DKK 207 million adverse effect of the impairment rules under IFRS 9 will thus have full effect on the Bank’s capital ratios at 1 January 2018.

Outlook for 2018 maintained
Given an unchanged economic climate and an overall decrease in impairment losses, the Bank's total business volume is expected to have the capacity to generate a profit after tax of around DKK 175-250 million. This expectation is based on an assumption of an unchanged economic climate. If the downward trend in settlement prices of pork and milk continues to be prolonged or becomes further aggravated, the Bank's significant exposure to agriculture may entail an increase in impairment losses relative to Management's current estimates for 2018.

Please address any enquiries regarding the present announcement to Jan Ulsø Madsen, CEO, at tel. +45 96 63 21 04.


Vestjysk Bank A/S

Vagn Thorsager                               Jan Ulsø Madsen
Chairman                                        CEO



Vestjysk Bank A/S
Torvet 4-5
7620 Lemvig
Denmark
Phone +45 96 63 20 00

CVR no. 34631328
www.vestjyskbank.dk

Attachments

• Company announcement - Vestjysk Bank Q1 2018 Quarterly Report
• Vestjysk Bank Q1 2018 Quarterly Report