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4 SYDBANK / 2021 Annual Report
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Preface Solid growth in lending and earnings The Sydbank Group’s 2021 financial statements show a profit before tax of DKK 1,764m compared to DKK 1,021m in 2020. The increase of DKK 743m is primarily attributable to a net reversal of impairment charges of DKK 415m, high customer activity and the acquisition of Alm. Brand Bank. Profit before tax equals a return of 14.1% p.a. on average equity. Profit for the year represents DKK 1,411m against DKK 799m in 2020, equal to a return on average equity of 11.2% after tax. At the beginning of 2021 profit after tax was projected to be in the range of DKK 850-1,150m. CEO Karen Frøsig comments on the year’s results: – It is good news that after another unusual year of covid we can deliver an impressive growth in lending of DKK 6.8bn, equal to 11.3%. On top of this good credit quality allows us to reverse impairment charges of DKK 415m in 2021. Karen Frøsig comments on the transition to the new strategy: – It is positive that as we embark on the new strategy – Growing our business – we have a sound foundation where we are attracting new good customers from every significant seg- ment on the back of the campaign “Denmark’s Corporate Bank” and are thus creating the basis for growth in earnings and business volume. Board chairman Lars Mikkelgaard-Jensen comments: – The Bank’s strong capital position and satisfactory earnings enable us to distribute DKK 1,131m, equal to approx 80% of profit for 2021. 50% of profit will be distributed as dividend and the rest via a new share buyback programme of DKK 425m. Following distribution the Bank will continue to be well capitalised. Outlook for 2022 • Growth is projected in the Danish economy in 2022. • Core income is expected to be higher than in 2021. • Costs (core earnings) are projected to be lower than in 2021. • Impairment charges for 2022 are forecast to be at a low level. • Non-recurring costs are expected to be in the range of DKK 50-60m. This is an investment in the future and concerns the automation of housing loan processes and an investment in the bank/insurance partnership. • Profit after tax is expected to be in the range of DKK 1,150-1,450m. • The outlook for 2022 is subject to uncertainty and depends on financial market develop- ments and macroeconomic factors. 2021 highlights • A 20% increase in total income • A rise in costs (core earnings) of 15% • Impairment charges for loans and advances represent an income of DKK 415m • Non-recurring items etc represent an expense of DKK 180m • Increase in profit for the year of DKK 612m to DKK 1,411m • Bank loans and advances of DKK 67.0bn • Deposits of DKK 93.9bn • A capital ratio of 22.8%, including a CET1 ratio of 17.9% • A proposed dividend of DKK 12.00 per share • New share buyback programme of DKK 425m to be initiated.
