World News: 07:30 GMT Wednesday 15th May 2019. [Vestjysk Bank A/S via Globe Newswire via SPi World News]
Nasdaq Copenhagen A/S
15 May 2019
Vestjysk Bank realised a profit after tax of DKK 72 million in Q1 2019. The Bank has produced earnings before impairment of DKK 98 million in Q1 2019. Impairment losses were generally at a lower level than in Q1 2018, and in light of the severe financial challenges of the agricultural sector, the Bank’s overall profit after tax for Q1 2019 is considered satisfactory.
As detailed in our company announcement of 1 March 2019, a conditional agreement was entered into for the sale of 75 per cent of Sparinvest Holdings SE to the Nykredit Group. Vestjysk Bank owns 10.6 per cent of the shares in Sparinvest. If the conditions for the transaction are satisfied and the sale completed, this will generate extraordinary tax-exempt income of approx. DKK 135.0 million and a dividend payment of approx. DKK 17.6 million for the Bank. This is expected to result in an upgrade of the profit guidance for 2019 by DKK 135 million to a range of DKK 360-410 million. The profit guidance is not being upgraded yet, as there is some uncertainty with respect to the conditions for the completion of the sale which have not yet been satisfied.
The guidance is based on an assumption of an unchanged economic climate. Currently, however, there is some uncertainty as to the global economic outlook and, in particular the settlement price trend for agricultural products. Any decline in these could impact the Bank’s impairment losses.
In 2017, the European Commission delivered its decision on the state aid previously received by Vestjysk Bank. The Commission approved the state aid subject to certain terms, which included the implementation of the overall solution announced by the Bank in the company announcement of 12 June 2017 and the Bank’s compliance with a number of conditions. The restructuring period during which the Bank was required to comply with the restrictions laid down by the Commission was set to end on 31 December 2018, provided that Vestjysk Bank’s return on equity after tax for 2018 was, as a minimum, within the range of 7-11 percent. As detailed in the company announcement of 21 February 2019, the return on equity after tax for 2018 was 12.1 per cent, and in the company announcement of 8 April 2019, it was reported that the Commission had no further comments, and the state aid case had consequently been closed.
As the Bank has not incorporated any Commission restrictions in 2019, the approval does not give rise to any amendment of the Bank's strategy or outlook for 2019.
The Danish Financial Supervisory Authority has at May 6th, on the basis of its market surveillance of trade in agricultural properties, adjusted the hectare prices for cultivated agricultural land. There is a downward revision of prices in Northwest Jutland from DKK 150,000 per hectare to DKK 135,000 per hectare, with effect from May 2019. In the quarterly report for the first quarter of 2019, the bank has incorporated its expected effect.
Please address any enquiries regarding the present announcement to Jan Ulsø Madsen, CEO, at tel. +45 96 63 21 04.
Kim Duus Jan Ulsø Madsen
Vestjysk Bank A/S
CVR-nr. 34 63 13 28
Globe Newswire: 07:30 GMT Wednesday 15th May 2019
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