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Vestjysk Bank

Vestjysk Bank

Danish regional bank

Vestjysk Bank has a market share in Denmark of ~2% after the merger with Den Jyske Sparekasse. Lending exposure is concentrated in mid-and southern Jutland while the branch network stretches from the west coast over the middle of Jutland to the east and south. The bank has ~650 employees. Exposure is tilted towards agriculture but this has now been reduced to around 13% of lending and guarantees.

A significant drop in loan loss provisions due to improved agri conditions has boosted net profits for Vestjysk in recent years, and if this continues, Vestjysk could return to announcing dividends for 2021. Vestjysk was recapitalisedby a group of investors in 2017 while EU restrictions were removed in April 2019. In January 2021, Vestjysk merged with Den Jyske Sparekasse, leading to a large synergy potential in the bank.

Regulatory risks and credit risk are the biggest risks in the Vestjysk investment case. New regulations such as Basel IV, MREL and IFRS 9 will be implemented over the coming years. As cattle farming and pig farming represents ~10% of Vestjysk’s total lending exposure, the future development in dairy prices and pig prices also present a high risk for the bank.

DKKm 2020 2021e 2022e
Total Income 887 1979 1519
Total operating costs -530 -1086 -875
Operating profit 328 911 624
EPS Adj 0,34 0,53 0,44
EPS adj growth (%) -6,5 57,2 -17,8
BVPS 3,45 4,01 4,45
NAVPS 3,45 3,92 4,36
DPS 0 0 0,23
ROE (%) 10,3 20,1 10,8
RONAV (%) 10,3 14,3 10,6
C/I (%) 58,9 60,8 58,3
Loan losses (%) 0,28 -0,02 0,12
CET1 ratio (%) 20,9 18,7 19,4
P/E Adj (x) 8,1 6,3 7,7
P/BV (x) 0,8 0,84 0,76
P/NAV (x) 0,8 0,86 0,77
Dividend yield (%) 0 0 6,7
DKKm 2020 2021e 2022e
Net interest income 486 821 854
Net commission income 326 581 589
Trading income 74 87 61
Insurance income 0 0 0
Other operating income 1 490 15
Total income 887 1979 1519
Personnel costs -307 -556 -541
Other operating costs -223 -530 -334
Total operating costs -530 -1086 -875
Profit before loan losses 357 893 644
Loan losses -29 4 -20
Investment portfolio 0 0 0
Other items 0 14 0
Operating profit 328 911 624
Tax -25 29 -62
Other items after tax 0 0 0
Net profit 303 940 562
Tax rate (%) -7,6 3,2 -10
EPS 0,34 0,76 0,46
Net Profit Adj 305 660 543
EPS Adj 0,34 0,53 0,44
Key balance sheet data 2020 0 0
Net lending 9332 16593 16925
Goodwill and intangibles 0 110 110
Total assets 23105 41226 41558
Shareholders equity 3090 4948 5491
Net asset value 3090 4839 5381
Capital adequacy 2020 0 0
Tier 1 Capital, excl.hybrids 2782 4299 4561
Tier 1 Capital, reported 2937 4600 4862
Capital base 3281 5197 5459
Risk exposure amount (BIS II) 13303 23045 23506
Asset quality 2020 0 0
Problem loans, gross 4229 5867 6043
Provisions for problem loans -2149 -2959 -2974
Problem loans, net 2080 2908 3070
Key figures N/A N/A N/A
Profitability 2020 2021 2022
Net interest margin (%) 2,1 2,6 2,1
ROE (%) 10,3 20,1 10,8
RONAV (%) 10,3 14,3 10,6
ROREA (%) 2,2 5,2 2,4
Cost efficiency 2020 0 0
Cost / income Core (%) 58,9 60,8 58,3
Costs / assets Core (%) 2,28 2,8 2,12
Financial position 2020 0 0
Net lending / deposits (%) 69,6 67,7 69
REA / assets (%) 57,6 55,9 56,6
Common equity tier 1 ratio (%) 20,9 18,7 19,4
Tier 1 ratio, reported (%) 22,1 20 20,7
Capital adequacy (%) 24,7 22,6 23,2
Equity ratio Core (%) 12 10,4 11
Asset quality 2019 0 0
Problem loans, gross / lending (%) 27 23,1 23,2
Problem loans, net / lending (%) 22,3 17,5 18,1
Provision ratio (%) 50,8 50,4 49,2
Loan losses, net / lending (%) 0,3 0 0,1

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Main shareholders - Vestjysk Bank

Main shareholders Share capital % Voting shares % Verified
A/S Arbejdernes Landsbank 72.7 % 72.7 % 9 Jul 2021
Lærernes Pension 1.4 % 1.4 % 30 Jun 2021
Novo Holdings A/S 0.9 % 0.9 % 26 Feb 2019
Maj Invest 0.5 % 0.5 % 31 Aug 2021
PFA Pension A/S 0.4 % 0.4 % 30 Jun 2021
Handelsbanken Fonder 0.2 % 0.2 % 30 Sep 2021
Danske Invest (DK) 0.2 % 0.2 % 31 Aug 2021
Claus E. Petersen 0.0 % 0.0 % 14 Jan 2021
Kim Duus 0.0 % 0.0 % 14 Jan 2021
Bolette Van Ingen Bro 0.0 % 0.0 % 14 Jan 2021
Source: Holdings by Modular Finance AB