1 January – 30 June 2014 Michael Rasmussen, Group Chief Executive, comments on Nykredit's interim report: We have just reported satisfactory financial results matching our expectations. The parameters within our control are headed in the right direction relative to the course we have set: Core income from business operations has improved by 8%, and costs have de-clined markedly. We maintain our upward revision of the full-year results. We are headed in the right direction, but can do even better. The core of our new strategy is improved earnings through a stronger focus on Danish homeowners and a closer business relationship with Totalkredit's partner banks. We have expanded our range of joint products to include new home finance options for our customers. Coupled with robust ratings and capitalisation, these are the most important elements in continuing our strong competitive leverage. We were the first to introduce 2.5% loans in Denmark, and within the next month we will launch a new variable-rate loan. In addition, our customers have historically good opportunities for locking in loan rates for a short or long period. The favourable refinancing opportunities coincide with a need for longer-dated funding requirements in line with the requirements of credit rating agencies and regulatory authorities. We will support this process, adjusting our price structure and providing attractive refinancing options. Our prices will continue to be highly competitive. The Nykredit Realkredit Group recorded a pre-tax profit of DKK 1,719m
- The Nykredit Realkredit Group recorded a pre-tax profit of DKK 1,719m against DKK 1,309m, excluding reclassification of profit from the sale of strategic equities of DKK 697m in H1/2013
- Core income from business operations rose by 8% to DKK 5,569m relative to H1/2013
- Operating costs were down by 12% to DKK 2,542m on H1/2013
- The cost:income ratio was 45.6% compared with 55.8% in H1/2013
- Value adjustment of interest rate swaps totalled a charge of DKK 435m, of which DKK 362m was an effect of interest rate falls. Value adjustment came to a credit of DKK 50m in H1/2013
- Impairment losses on loans and advances were DKK 1,049m, or 0.08%.
| Nykredit Realkredit Group Financial highlights | ||||
| DKK million | H1/2014 | H1/2013 | Change, % | FY 2013 |
| Core income from business operations | 5,569 | 5,157 | 8 | 10,439 |
| Total core income | 4,981 | 5,037 | -1 | 9,298 |
| Operating costs, depreciation and amortisation, excluding special value adjustments | 2,542 | 2,876 | -12 | 5,829 |
| Core earnings before impairment losses | 2,403 | 2,162 | 11 | 3,251 |
| Impairment losses on mortgage lending | 1,010 | 763 | 32 | 2,415 |
| Impairment losses on bank lending | 39 | 166 | -77 | 349 |
| Investment portfolio income, excl reclassification of profit from the sale of strategic equities | 602 | 302 | 99 | 1,190 |
| Profit before tax, excl reclassification of profit from the sale of strategic equities | 1,719 | 1,309 | 31 | 1,217 |
| Profit before tax | 1,719 | 2,006 | -14 | 1,914 |
| Common Equity Tier 1 (CET1) capital ratio (previously core Tier 1 capital ratio) | 15.7 | 16.6 | 15.8 |
Contacts: Michael Rasmussen, Group Chief Executive, Søren Holm, Group Managing Director, or Corporate Communications, tel +45 44 55 14 72 / +45 20 46 16 65
