Jyske Bank A/S

Q2 earnings per share was DKK 22, versus DKK 17 in Q1, and up 12% year on year. For the first half, EPS was DKK 39, the same as the first half of last year. Net interest income was almost on par with last year and up 2% quarter on quarter; fee income was up 6% year on year; value adjustments benefited from significant spread tightening in Danish mortgage bonds; and loan impairment charges were 0 basis points. Return on tangible equity was above the bank’s 10% threshold, and the cost/income ratio was 47%. On volumes, AUM rose 9%, deposits grew 1%, bank lending 1%, mortgage lending 1% and leasing 2% in the quarter. Full-year EPS guidance remains DKK 71 to DKK 85, unchanged, and management said it likely will end in the upper half of that range.

Lars Morch emphasized business momentum, market share gains in mortgage lending, and better customer satisfaction as key drivers of the quarter. He highlighted the new mortgage product as a strong launch that is bringing in both existing and new-to-bank customers, and said the bank is seeing net positive inflow of personal clients. He also said competitive pressure in corporate lending had eased somewhat and that the bank is comfortable prioritizing credit quality and long-term relationships over low-margin volume.

Birger Nielsen said Q2 benefited from a supportive environment, slightly higher interest and money market rates, strong customer quality and good activity. He noted NII was up 2% quarter on quarter and almost flat year on year, fee income rose 6%, costs excluding one-offs were at index 99, and impairment charges ended at 0 basis points. He also cited AUM up 9%, deposits up 1%, bank lending up 1%, mortgage lending up 1% and leasing up 2%, while saying the full-year DKK 71 to DKK 85 EPS range is still intact. On NII sensitivity, he repeated that it is around DKK 700 million for 100 basis points, and said short-term pass-through on deposits has been limited so far but should fade over time.

Analysts focused on NII sensitivity, whether management should raise full-year guidance, credit quality into Q3, competition in corporate lending and the outlook for costs. Management said the DKK 700 million NII sensitivity for 100 basis points still applies, but deposit beta assumptions mean the benefit should decline as more hikes are passed through. On guidance, management said it did not revise the DKK 71 to DKK 85 EPS range because Q2 trading income was unusually strong and there is still uncertainty, though they likely expect to end in the upper half. On credit, management said the book is in good shape, Stage 3 exposures are at a record low, and they are not seeing pressure from customers or agri exposures.