In This Article:
-
Net Profit Guidance: Upgraded to DKK5 billion to DKK5.3 billion from DKK4.7 billion to DKK5.1 billion.
-
Earnings Per Share: DKK21.7, the highest in 2024.
-
Return on Tangible Equity: 13.2% for Q3 and 14.2% for the last four quarters.
-
Cost/Income Ratio: 47%, below the 50% target.
-
CET 1 Ratio: 17.2%, above the target interval of 15% to 17%.
-
Net Profit for Q3: DKK1.4 billion, the best in 2024.
-
Loan Loss Reversal: 2 basis points in the quarter.
-
Cost Increase: Up 4% year-over-year, driven by salary increases and inclusion of PFA Bank.
Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Jyske Bank AS (FRA:JYS1) upgraded its 2024 net profit guidance to DKK5 billion to DKK5.3 billion, reflecting strong financial performance.
-
The bank achieved a return on tangible equity of 13.2% in Q3, with a cost/income ratio of 47%, indicating efficient operations.
-
There was a strong development in assets under management (AUM) driven by favorable financial markets and net inflow of new customers.
-
The bank's CET 1 ratio was at 17.2%, above the target interval, showcasing a strong capital position.
-
Strategic acquisitions, such as Handelsbanken and PFA Bank, have positively impacted return on equity and scaled core areas by approximately 20%.
Negative Points
-
There was muted demand for loans from large corporates and public entities, impacting loan volume growth.
-
Net interest income faced downward pressure due to lower market rates and central bank rates.
-
The bank's stock price fell by 10% following the earnings call, indicating potential investor concerns.
-
The bank anticipates a decrease in profitability due to expected lower interest rates in the short term.
-
There is uncertainty regarding the strategic direction of the mortgage business, with ongoing assessments needed to determine the best approach.
Q & A Highlights
Q: Are the financial targets set by Jyske Bank meant to be a floor or a goal to exceed? A: Birger Nielsen, CFO, clarified that the targets are not a floor but a goal to exceed. The bank aims for a double-digit return by 2028, striving for above 10%.
Q: How does Jyske Bank plan to manage profitability given the expected decrease in interest rates? A: Birger Nielsen, CFO, explained that while lower interest rates will impact profitability, the bank plans to mitigate this through cost control, technological investments, and growth in assets under management (AUM).
Q: Will increased efficiency from AI and IT investments lead to a reduction in employees? A: Lars Morch, CEO, stated that while the bank will grow profitably, it also plans to reduce costs and expects the number of full-time employees (FTEs) to be lower by 2028.