Annual Report 2012 - The Nykredit Realkredit Group

2/7/2013 1:30 AM EST

Nykredit Realkredit A/S
Annual report/ annual accounts

Annual Report 2012 - The Nykredit Realkredit Group


  -- The Nykredit Realkredit Group recorded a profit before tax of DKK 3,205m
     against DKK 1,338m in 2011



  -- Core income from business operations grew by 11% to DKK 10,200m against DKK
     9,188m in 2011
     -- Gross new mortgage lending rose by 39% to DKK 218bn against DKK 157bn in
        2011
     -- Nominal mortgage lending and bank lending went up DKK 35bn to DKK
        1,159bn in 2012
     -- Personal and commercial lending increased by DKK 22bn and DKK 13bn,
        respectively
  -- Value adjustment of derivatives was a charge of DKK 1,067m against a charge
     of DKK 632m in 2011
  -- Operating costs, depreciation and amortisation excluding special value
     adjustments rose by 1% to DKK 5,776m
     -- Costs as a percentage of core income from business operations declined
        to 56.6% from 62.1% in 2011
  -- Impairment losses on loans and advances were DKK 2,149m, equal to 0.18%
     -- Impairment losses on mortgage lending were DKK 1,592m, equal to 0.14%,
        against DKK 1,026m in 2011
     -- Impairment losses on bank lending were DKK 557m, equal to 0.59%, against
        DKK 388m in 2011
  -- Core income from securities came to DKK 212m against DKK 644m in 2011 due
     to a lower risk-free interest rate
  -- Investment portfolio income grew from DKK 179m to DKK 2,444m in 2012
     -- Investment portfolio income notably derived from spread tightening
        relating to high-rated mortgage bonds.



The Nykredit Realkredit Group                                         
Selected financial information                                        
----------------------------------------------------------------------
----------------------------------------------------------------------
                                                  2012   2011  Change,
DKK million                                                          %
Core income from business operations            10,200  9,188       11
Operating costs, depreciation and amortisation   5,776  5,709        1
Core earnings before impairment losses           3,375  3,035       11
Impairment losses on loans and advances          2,149  1,414       52
Core earnings after impairment losses            1,226  1,621      -24
Investment portfolio income                      2,444    179        -
Profit before tax                                3,205  1,338      140
Core Tier 1 capital ratio, %                      15.8   13.9         
----------------------------------------------------------------------


Peter Engberg Jensen, Group Chief Executive, commented:

Nykredit's profit before tax of DKK 3.2bn reflects a stable and robust
performance with higher income from business activities and not least high
investment portfolio income. 2012 cost levels were stable and losses as
expected. However, overall results were affected by the Danish economy which
was characterised by low interest rates and growth. 

In order to meet the significant demands for higher capital levels in the
financial sector, total earnings must be continuously increased in coming
years. The need for higher earnings will rise further if Nykredit is to
continue recent years' lending growth. Nykredit has increased lending by DKK
160bn, equal to 4% a year, since 2008, whereas aggregate lending in the rest of
the Danish financial sector has declined by DKK 250bn in the same period. 


Contacts
Peter Engberg Jensen, Group Chief Executive, or Nels Petersen, Head of
Corporate Communications, tel +45 44 55 14 70 or +45 20 22 22 72