Danske Andelskassers Bank
Danske Andelskassers Bank A/S – Interim report 2013

Danske Andelskassers Bank 

28.08.2013 15:52
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Company announcement no. 10/2013

In H1 2013, Danske Andelskassers Bank A/S recorded a loss before tax of DKK
-81m against a loss before tax of DKK -75m in H1 2012. The loss is particularly
related to an impairment of a loan to one one of the bank's customers amounting
to DKK 45m and apart from this impairment the bank has experienced a positive
development in impairments. The impairment has no effect on the 
bank's excess solvency cover as the amount was incorporated in the solvency
requirement beforehand. 

The core earnings of Danske Andelskassers Bank are at a level below that of H1
2012. This is particularly due to a reduced loan portfolio through the year,
but it should be noticed, that the bank has experienced a slow but increasing
activity in its market areas as well as a stabilisation of the total loan sum
in Q2 2013. As many of the bank's customers have opportunities within e.g.
property and investment this will be a focus area of the quarters ahead as it
has been in previous quarters. Simultaneously the bank will continue the
ongoing adjustment of the expense level in the organisation. 

The bank has a solid deposit-loan gap and liquidity surplus cover of 171%
relative to the statutory requirement, and the bank also has an acceptable
solvency surplus cover of 2.9 percentage points. Danske Andelskassers Bank
maintains its core earnings outlook for 2013. 

The Board of Directors of Danske Andelskassers Bank A/S has on this day adopted
the financial statements for H1 2013. Danske Andelskassers Bank's loss before
tax amounted to DKK -81m in H1 2013 against DKK -75m in H1 2012. The net loss
for the year amounted to DKK -83m in H1 2013 against DKK -64m in H1 2012. 

The loss is particularly affected by two elements. The one element is
impairments amounting to DKK158m. The other element is a loan portfolio which
has been reduced with DKK 836m since H1 2012 and thereby naturally has lowered
the banks interest income as well. A common denominator is however that the
development through 2013 has been more positive. 

The impairment level in H1 2013 is particularly affected by an impairment of
DKK 45m relating to a single customer. The amount was incorporated in the
solvency requirement beforehand and the impairment has thus no effect on the
bank's excess solvency cover which stood at 2.9 percentage points as of 30 June
2013 compared to 2.4 percentage points as of 30 June 2012. Despite of the
impairment mentioned above the overall impairments of the bank are still on the
decline. This confirms the effect of the bank's initiatives in the credit area
and the bank expects the level of impairments to decline further in the periods
ahead. 

When comparing the overall loan portfolio as of 30 June 2013 with that of 30
June 2012 the total amount of the loans are particularly affected by a decline
through 2012 and the beginning of 2013 due to low economic activity in the
primary market areas of the bank as well as with the primary customer segments
of the bank. The level has however stabilised in Q2 2013 and the bank is
experiencing a slow but increasing activity in the market areas, even though a
real economic recovery still isn't visible. As many of the bank's customers
have opportunities within e.g. property and investment this will be a focus
area of the quarters ahead as it has been in previous quarters. 

As a consequence of the low economic activity and to strengthen the
organisation going forward, the bank merged branches and cut jobs in H1, which
affects the interim financial statements negatively, but will have a positive
effect on future financial statements. The bank expects to make similar
adjustments in the quarters ahead by e.g. making changes at the head office,
merging branches and cutting jobs in the entire organisation in order to adjust
the level of expenses to the market situation and earnings. 

The core earnings of the bank - profit/loss before tax excl. market value
adjustments, impairment and sector solution expenses - are DKK 97m in H1 2013
against DKK 123m in H1 2012. 

Highlights from the interim report
Highlights from the interim report are as follows (results for H1 2012 are
shown in brackets): 

  -- Loss before tax of DKK -81 m (DKK -75m)
  -- Core earnings of DKK 97m (DKK 123m)
  -- Impairment and losses of DKK 158m (DKK 166m)
  -- Market value adjustments of DKK -1m (DKK 20m)
  -- Staff costs and administrative expenses of DKK 253m (DKK 254m)
  -- Sector solution contributions of DKK 13m (DKK 10m)
  -- Deposits of DKK 9,287m (DKK 9,378m)
  -- Loans of DKK 7,345m (DKK 8,181m)
  -- Solvency ratio of 13.1% (14.6%) against a solvency requirement of 10.2%
     (12.2%), corresponding to a surplus cover of 2.9 percentage points (2.4
     percentage points)
  -- Core capital ratio of 13.1% (14.5%)
  -- Liquidity surplus cover relative to Section 152 of the Danish Financial
     Business Act (Lov om finansiel virksomhed) of 171% (183%)
  -- Equity of DKK 1,116m (DKK 1,311m).

Danske Andelskassers Bank has a solid deposit surplus, a good liquidity surplus
cover and an acceptable solvency surplus cover. 

The bank is therefore well equipped for meeting the needs and wishes of its
customers, and in the next quarters the bank will work to strengthen the bank
further thereby being able to deliver even better solutions to the customers. 

Danske Andelskassers Bank maintains its outlook for 2013 as stated in the
interim report of 15 May 2013. The bank thus expects core earnings in the
region of DKK 160-190m. 

Comment on charge for breaking the Danish Securities Trading Act
As published in company announcement no. 8/2013 as of 7 August 2013 (in Danish
only) and company announcement no. 9/2013 as of 22 August 2013 (in Danish
only), Danske Andelskassers Bank and one of the bank's leading employees (who
are not a part of the Board of Executives or the Board of Directors) has been
charged with price manipulation pursuant to Section 39 of the Danish Securities
Trading Act (Værdipapirhandelsloven). 

The bank denies the charge on the present basis and is cooperating fully with
the authorities to resolve the matter, as it is the bank's wish that the matter
is resolved as soon as possible. 

If there is any kind of development in this matter that requires e.g. further
comments or the publication of a company announcement the bank will do so in
accordance with present laws. 

Comment on newspaper articles
During the summer of 2013, Danske Andelskassers Bank was the subject of a
number of articles in the Danish newspaper Morgenavisen Jyllands-Posten which
focused negatively on the bank's share issue in June 2011, among other things. 

As a result, the Danish Financial Supervisory Authority launched an inquiry
into the points raised and the bank has also launched its own internal inquiry,
the results of which will form part of the bank's dialogue with the Authority.
The bank is cooperating fully with the authorities to resolve the matter as
well and wish for a clarification as soon as possible. 

Danske Andelskassers Bank is of the view that the articles were generally
characterised by misunderstandings, omissions and lack of proportionality, but
the articles nevertheless pointed out various errors and inexpediencies
warranting an inquiry. 

As the Danish Financial Supervisory Authority has not yet finished its inquiry,
the bank does not want to comment further on the matters raised, nor does it
want to comment on any liability for damages or its potential impact on
results. 

Comments on the interim report
CEO of Danske Andelskassers Bank, Jan Pedersen, says about the interim report:

'The results are not satisfactory. It is satisfactory however that our loan
total has stabilised which is testimony to a growing activity in the local
areas as well as a great effort from the bank's employees who have worked hard
to secure that no customers missed out on opportunities because they weren't
aware of them.' 

'In recent years we have reduced our expenses significantly while
simultaneously strengthening the organisation in many areas. As a result of the
facts that a real economic recovery still being sometime into the future, that
the ways customers are using banks are changing and that the entire financial
sector are transforming our expenses are however still at an unacceptable high
level. We will thus cut jobs, make changes at the head office, combine branches
and make other changes in the near future. This is unfortunate but it is
necessary as well to secure that we're still able to deliver good and valuable
solutions to our customers.' 

Further information
For further information, please contact Jan Pedersen, CEO, Danske Andelskassers
Bank, via 

Martin Rask Pedersen, Communications Director
Tel.: +45 87 99 30 33

This company announcement contains certain forward-looking statements,
including statements on Danske Andelskassers Bank's activities. Such statements
are based on information, assumptions and assessments deemed reasonable by
Danske Andelskassers Bank. The forward-looking statements comprise known and
unknown risks, uncertainties and other significant matters which may result in
Danske Andelskassers Bank's actual results, development or performance or the
performance of the sector as a whole deviating significantly from the future
results, development or performance expressed or implied in the forward-looking
statements. If one or more of these risk or uncertainty factors are triggered,
or if the underlying assumption turns out to be incorrect, Danske Andelskassers
Bank's actual financial position or operating profit/loss may deviate
significantly from the expressed assumptions, assessments, estimates or
outlook.
News Source: NASDAQ OMX



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Language:     English
Company:      Danske Andelskassers Bank
              
               
              Denmark
Phone:        
Fax:          
E-mail:       
Internet:     
ISIN:         DK0060299063
WKN:          
 
End of Announcement                             DGAP News-Service
 
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