Q1-Q3 Interim Report 2020 - Nykredit Realkredit Group

To Nasdaq Copenhagen A/S and the press

4 November 2020

Nykredit today announces Q1-Q3 Interim Reports 2020 of:
Nykredit A/S, CVR no 12 71 92 48
Nykredit Realkredit A/S, CVR no 12 71 92 80

Michael Rasmussen, Group Chief Executive, comments on the Q1-Q3 Interim Report 2020:

– The results presented today are highly satisfactory and exceed our expectations earlier this year. It appears that we must learn to live with covid-19 for some time to come, but until now the housing market and large parts of the Danish business sector have steered well through the crisis. At the same time, we continue to record strong business growth.

– Lending and customer satisfaction are on the rise, and both Nykredit Bank and Totalkredit are seeing customer growth. In particular, lending to business customers has increased considerably thanks to our continued commitment to supporting Danish business and industry.

– We are welcoming new customers from urban as well as rural districts. This year Totalkredit has recorded lending growth in all 98 municipalities across the country. This illustrates that Nykredit together with its partner banks in the Totalkredit alliance is a lender to homeowners and business all over Denmark, including the more sparsely populated areas.

– Backed by a three-digit million amount from Nykredit's majority shareholder, Forenet Kredit, both Nykredit Bank and Totalkredit have recently launched new initiatives, which will make it easier and more affordable for our customers to make green choices. Especially our green car loan, which makes it much cheaper to finance an eco-friendly car, got a great reception from our customers. Since our launch a month ago, every third car loan granted by Nykredit Bank has been for an electric car or plug-in hybrid car. Before the launch – for the first nine months of the year – this was true for only every eight car loan.

Highlights from the Q1-Q3 Interim Report 2020:

• Business profit and profit before tax for Q1-Q3/2020 were DKK 3,970 million and DKK 4,020 million, respectively, which is satisfactory and shows good momentum in the underlying business as demonstrated by increased net interest and wealth management income. Recent years' strong inflow of customers continued in the first three quarters of 2020 with customer and lending growth in bank as well as mortgage lending.

• Thanks to underlying business growth and the prospect of lower-than-expected impairment charges, we raised our guidance for business profit and profit before tax for 2020 from DKK 4.0-5.0 billion to DKK 5.5-6.0 billion on 15 October. In addition, the positive tone in financial markets also favourably impacted our investment portfolio income and derivatives portfolios. Our guidance is subject to higher-than-usual uncertainty as a result of covid-19.

• Totalkredit's lending at nominal value has increased by 9% since 30 September 2019 to currently DKK 786.3 billion.

• Nykredit Bank's lending* has grown by 11% since 30 September 2019 to currently DKK 77.3 billion.

• Assets under management have increased by DKK 5.5 billion (2%) since 30 September 2019 and totalled DKK 332.4 billion at 30 September 2020.

• Nykredit maintains a very strong capital position with a Common Equity Tier 1 (CET1) capital ratio of 19.3%.

			DKK million
Nykredit Group	Q1-Q3/	Q1-Q3/
	2020	2019	Change
Net interest income	7,280	6,929	351
Net fee income	1,754	2,008	-254
Wealth management income	1,446	1,116	330
Net interest from capitalisation	(307)	(262)	-44
Net income relating to customer benefits programmes	(154)	(122)	-32
Trading, investment portfolio and other income	231	1,164	-934
Income	10,250	10,833	-583
Costs	4,294	3,811	-484
Business profit before impairment charges	5,955	7,022	-1,066
Impairment charges for loans and advances	1,985	665	-1,321
Business profit	3,970	6,357	-2,387
Legacy derivatives	52	(597)	649
Badwill, impairment of goodwill and amortisation of customer relationships	(2)	-	-2
Profit before tax for the period	4,020	5,760	-1,740
Tax	641	914	-273
Profit for the period	3,378	4,846	-1,468

Contact

For further comments, please contact Nykredit Press Relations at tel +45 20 37 28 69.

* Including secured homeowner loans transferred to Totalkredit

Attachment

• Nykredit_Realkredit_Group_Q3_20_2020-11-04_EN