Jyske Bank: Good Results, Curve Has Already Tightened

Jyske Bank (JYSK DC) 4Q23 results are ahead of consensus and with good credit quality metrics. Its EUR curve has tightened quite meaningfully (up to 20bp) YTD so there’s already good expectations built-in ahead of today’s good news. AT1 & T2 issues are imminent, too.

• Key credit metrics: the credit loss ratio was 1bp and non-performers rose 3bp (to 113bp at Sep-23) but are still lower than Dec-22 (117bp). CET1 is 20bp higher (at 16.9%, consensus was looking for 17.0%) but these are all still good numbers in absolute terms. Bank sees DKK6bn of AT1/T2 issues in 1Q24.
• Revenues beat expectations (DKK4.1bn vs. 3.9bn consensus), costs were marginally above, and credit losses remain very low in absolute terms. This meant pre-tax beat by 7% and net profit was a similar amount above expectations.
• Outlook: net income is expected at DKK4.3-5.1bn (consensus is around 5bn, so already at the top end of the range) and EPS is seen below current consensus of DKK78 (target: 64-76). Dividends were restarted in Dec-23 and a target of 30% payout is being set from here.

Conf call is 1010 London time at: https://jyskebank.com/investorrelations