Jyske Bank A/S Ord

Hi, everyone. Thank you for joining us on Jyske Bank's conference call for the financial results for the third quarter of 2024, as well as a strategy update. This is Simon Haubart from Investor Relations speaking. With me, I have Jyske Bank's CEO Lars Mørk and CFO Bjørn Nielsen. Lars and Bjørn will walk you through our prepared remarks. Afterwards, we'll open up for questions. I will now hand over to Lars.

Thank you, Simon, and thank you for meeting up and taking the time to dive into the meeting here today. We have been looking forward to share our Q3 and strategy update with you. We'll start immediately in order to use the time efficiently. Earlier this month, we upgraded the guidance for 2024. Now the net profit is upgraded to 5 to 5.3 billion Danish from between 4.7 to 5.1. This means an earning per share between 75% and 80%. Further, we have updated our strategy with increasing underlying profitability to mitigate lower short-term interest rates. Then for 2028, we have financial targets announced. It will be a double-digit return with the lower anticipated interest rates and we will be below the 50% cost income ratio bank, and we will accumulate more than 40% of current market capitalization in excess capital. So, Bjorn, will you walk us through the financials of Q3 and outlook, please?

Yes, thank you, Lars. We continue to do and deliver good operating performance here in Q3, despite decreasing rates. and especially driven and underpinned by higher AUM and favorable financial markets. Looking at Q3 at a glance, you can see that we delivered return on tangible equity of 13.2%, and the last four quarters, 14.2%. Cost-income ratio was at 47, well below 50, and we saw reversal of loan losses of two basis points in the quarter. CT1 ratio was at 17.2 and also above our target interval of 15 to 17. And finally, earnings per share at 21.7 kroner, the highest in 2024. Looking at the right-hand side and talking about volumes, you can see there's been moderate demand for loans in the quarter, but there's been a strong development in AUM. driven primarily by stronger markets, but also net inflow of new customers. On the bank volume side, we have seen slightly lower demand from large corporates and public entities with low margins, but also a transfer of mortgage-like loans from the bank to the market institution. Looking at the P&L, We saw downward pressure on NII as expected, lower due to lower market rates and lower central bank rates, and also the full quarter effect from an NPS issuance in June. The fee commissioning income came out strong, primarily driven by the VAM, as I just mentioned. Looking at the cost, we were up 4% over the year driven by salary increases and the inclusion of PFA Bank. And it all sums together to a net profit of 1.4 billion, the best in 24. Looking at the guidance, as Lars alluded to, 5 to 5.3 billion, up from the 4.7 to 5.1 here on the 11th of October. And the second change we've made, relates to loan impairments, where we now state a low level in 24, as we saw in 23, due to the reversal here in the third quarter. And that is my short remarks on the Q3 financials.