Newcap Holding
Stabile activity level compared to Q1 2008, but earnings are affected; focus remains on costs and long-term strengthening of earnings base
Capinordic A/S / Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer / publisher is solely responsible for the content of this announcement. ---------------------------------------------------------------------- Stabile activity level compared to Q1 2008, but earnings are affected; focus remains on costs and long-term strengthening of earnings base Interim financial report for the period ended 31 March 2009 - Q1: Net interest and fee income of DKK 48m (DKK 48m) - Q1: Negative EBTDA of DKK 28m (negative EBTDA of DKK 10m) - Q1: Pre-tax loss of DKK 39m (pre-tax loss of DKK 36m) - Q1: Recurring revenue/cost ratio 65% (80%) - Q1: AUM of DKK 16.1bn (DKK 20.3bn) Consolidated results - The Group maintained the same level of activity for Q1 2009 as for Q1 2008 despite the continued complex market conditions for the Group's Business Areas. - The business basis of the Group's Danish Banking activities were affected by the continued difficult market conditions and particularly the Private Banking division realised a lower level of activity in Q1. Within Investment Banking the Group noted a satisfactory level of activity. - The Q1 results were affected by the fact that the Group, as a strategic step in its launch of Capinordic Bank in Sweden, chose to offer attractive interest rates which had a negative effect on net interest income. Furthermore, the Q1 results were affected by negative value adjustments of the Group's own portfolio. - The Swedish market shows great interest in the Group's products, and the Group retains a high inflow of customers within the Business Areas Banking and Private Financial Services. The Group is focusing on offering new and more products to the Group's large customer base in the Swedish market. - During Q1 2009, the Group streamlined its organisation into three Business Areas and implemented a management team, particularly strengthening the Business Area of Asset Management with new profiles and a substantial knowledge capital. - The Group aims to continue to strengthen its recurring revenue and improve the relative ratio between recurring revenue and costs. Capinordic is therefore analysing the Group's Business Areas with a view to a resource allocation to and increased focus on those of the Group's business activities that achieve a satisfactory development. Capinordic's Business Areas Banking, negative EBTDA of DKK 26m (negative EBTDA of DKK 25m) - The Group's Banking division saw a lower level of activity in Q1 2009 and realised a decline in net interest and fee income of 29 per cent to DKK 16m (DKK 22m). - The lower level of activity is primarily related to Private Banking where both advisory fees and brokerage fees from trading activities were lower than in previous quarters. Results were further affected by negative value adjustments to the Group's own portfolio of DKK 8m (negative adjustments of DKK 5m). - The Group's Investment Banking noted a satisfactory level of activity in Q1 in relation to Corporate Finance. Within Investment Banking, the Group realised commission income of DKK 8m (DKK 1m) in Q1. - The cost level is strained by the costs of participating in the State Guarantee Scheme, while the cost cuts previously made will begin to take effect from mid-2009 and will have full impact in 2010. - The products of Capinordic Bank were well received in the Swedish market, where the Bank launched a deposit campaign in Q1. The campaign resulted in more than four thousand new customers in Q1. Asset Management, EBTDA of DKK 0m (negative EBTDA of DKK 1m) - The return on the assets under management was satisfactory, particularly in view of the extremely volatile markets. The return on most of the funds was better than their benchmark, and some of the funds are positioned at the very top of Morning Star within their respective categories. - The earnings base of Asset Management remains characterised by last year's large price drops in the financial markets, and the level of income is thus lower than in preceding quarters. In Q1, net interest and fee income of the Asset Management division amounted to DKK 12m (DKK 8m). - Capinordic has strengthened its knowledge capital and recruited several new profiles. The Group notes an increasing interest in its Asset Management products, which are expected to attract further management mandates and thereby provide the Group with a broader basis for its business. - Total assets under management (AUM) amounted to DKK 16.1bn and remained largely unchanged during Q1. Private Financial Services, EBTDA of DKK 4m (DKK 6m) - The Group maintained a high gross inflow of customer agreements to Private Financial Services. As previously communicated, the Group has launched several initiatives to improve the percentage of renewed agreements, and the Group now sees a clear effect of these initiatives. - Private Financial Services realised an increase in net interest and fee income of 18 per cent to DKK 20m(DKK 17m) for Q1. The rising level of activity is related to the acquisition of Factor Brokers AB in December 2008. - During Q1, the Group completed the merger between Monetar Pensionsförvältning AB and Nordisk Fondservice AB, which is expected to lead to various synergies and cost savings. Post-period events - Capinordic A/S held its Annual General Meeting on 21 April 2009. Two new members of the Supervisory Board were elected at the general meeting: Daniel Grossmann as a representative of the major shareholder Verlinvest s.a. and Lennart Andersson, who has in-depth knowledge of Capinordic's Swedish activities. Lars Öijer did not stand for re-election. Lasse Lindblad, CEO, says: From the beginning of the year, Capinordic expected earnings to be volatile, but of course it is not satisfactory to present a deficit for Q1. As a strategic step in our launch of Capinordic Bank in Sweden, we also chose to offer attractive interest rates which resulted in lower net interest income. On the other hand we saw an inflow of over four thousand new customers in our Swedish bank branch which will offer greater opportunities of cross-selling opportunities in the group. Our Danish Banking activities, and in particular the Private Banking division, are facing a number of challenges as a result of the market situation. On the other hand we maintained a satisfactory level of activity in our other Business Areas. We are therefore in the process of analysing the Group's Business Areas with a view to a strategic streamlining of the organisation and a resource allocation to those activities showing the greatest opportunities. Additional information: Lasse Lindblad CEO Mobile: +45 4094 0708 Tel.: +45 8816 3000 E-mail: ir@capinordic.com News Source: NASDAQ OMX 13.05.2009 Financial News transmitted by DGAP ---------------------------------------------------------------------- Language: English Issuer: Capinordic A/S Denmark Phone: Fax: E-mail: Internet: ISIN: DK0010212570 WKN: End of News DGAP News-Service ---------------------------------------------------------------------------
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