Ringkjoebing Landbobank A/S
Ringkjoebing Landbobank A/S
- ISIN: DK0060032068
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Nachricht vom 01.02.2012 | 08:33
Annual Report 2011, Ringkjoebing Landbobank A/S
Ringkjoebing Landbobank A/S / Annual Financial Report
01.02.2012 08:33
Dissemination of a UK Regulatory Announcement, transmitted by
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The issuer is solely responsible for the content of this announcement.
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Please visit www.landbobanken.com to download the Annual Report 2011 in pdf.
Disclaimer: >>The following is a translation of a Danish original document.
The
original Danish text shall be the governing text for all purposes and in case
of any discrepancy the Danish wording shall be applicable.<<
DEAR SHAREHOLDER
The year 2011 saw both upswings and downturns in the economy. The tone at the
beginning of the year was still optimistic in the belief that growth was
rising, but this development turned around again when the debt crisis in Europe
fl ared up before the summer holiday season, and doubts arose about the
stability of the euro. Major cutbacks in public budgets were thus implemented
throughout the year both in Denmark and abroad, which put a damper on growth
and stimulated an increase in private savings. We must also prepare ourselves
for a period of low growth rates in the economy in the years to come.
Against this background, we are well satisfi ed with the year's pre-tax profi t
of DKK 380 million, an increase of 12%. This profit equates to a 17% return on
the bank's equity. The bank's core earnings were DKK 390 million, at the top of
the range reported at the beginning of the year.
Notwithstanding the improvement in the bank's results, the share price fell by
18% after adjustment for the dividend which was paid. It is of course only a
minor consolation that this is a fine result in the context of the financial
sector as a whole, as the index for financial shares fell by 32% in Denmark.
The recommendation to the general meeting is that the dividend be increased to
DKK 13 per share and that we continue with a new buy-back programme for 100,000
shares.
The bank's rate of costs was 32%, meaning that we still retain our position as
the Danish bank with the lowest costs per krone earned. We are pleased with
this situation because it provides a high level of robustness in the bank's
results when times are uncertain. This will be cause for happiness among all
our interested parties.
Robustness, profi t and capital adequacy have again become important for our
customers and their choice of bank. We have noted this in the past year, when
we gained many new deposit customers. We are therefore well satisfi ed with the
bank's solid capitalisation. The bank's capital adequacy ratio is 21%, and this
must be viewed in relation to a statutory requirement of 8%, thus giving a
solvency cover of 268%. This high solvency and the bank's earnings mean that
Ringkjoebing Landbobank is one of Denmark's most solid banks, meaning that we
possess the strength required to support our customers and their sound
investments.
Ringkoebing Landbobank has not needed to draw on state capital or liquidity, and
we have therefore saved the interest costs associated with these support
schemes. These support schemes will be phased out in the years to come,
together with the introduction of a requirement that banks must have a greater
equity to support their operations. Our bank is already in place with respect
to these higher capital requirements, which we believe will give us a
competitive edge in the years to come, where we would like to increase our
market share even more.
The bank's result and our sound foundation are also attributable to our
competent employees, who have again done a fantastic job this year. Their
expertise, reliability, loyalty and fi ghting spirit are an unrivalled
combination.
The year 2012 is expected to be interesting. There will be a higher than normal
level of uncertainty concerning economic developments. We expect core earnings
in the range DKK 300-400 million, which must be adjusted by the result for the
trading portfolio and any costs payable to the Deposit Guarantee Fund.
Finally, we would like to thank our customers and shareholders for the high
level of support given to the bank.
Bent Naur John Bull Fisker
ANNUAL REPORT - HIGHLIGHTS
-- Increase of 12% in pre-tax profi t from DKK 338 million to DKK 380 million
-- The profi t is equivalent to a return on equity of 17% after payment of
dividend
-- The rate of costs was computed at 32.4%, still the lowest in the country
-- Substantial increase in deposits of 9% and a fall of 3% in loans, such that
there is now balance
-- Capital adequacy ratio of 21.4%, equivalent to cover of 268%
-- Core capital ratio of 19,8%
-- The bank's market value is DKK 3.3 billion
-- Highly satisfactory increase in customers in both branch network and
Private Banking
-- Payment of dividend of DKK 13 per share, equivalent to DKK 66 million
-- Recommendation to the general meeting that 100,000 bought back shares be
cancelled
-- Proposal for a new buy-up programme for 100,000 shares, equivalent to
approx. DKK 66 million
-- Expectations of core earnings for 2012 in the DKK 300-400 million range
-- The CEO Bent Naur will retire at the end of April 2012
FIVE YEAR SUMMARY
2011 2010 2009 2008 2007
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Main figures for the bank (million DKK)
Total core income 767 758 753 735 696
Total costs and depreciations -248 -240 -238 -239 -234
Core earnings before write-downs on 519 518 515 496 462
loans
Write-downs on loans etc. -129 -138 -159 -77 +11
Core earnings 390 380 356 419 473
Result for portfolio +1 +38 +56 -73 -18
Costs bank package I and Deposit -11 -80 -107 -28 0
Guarantee Fund
Profit before tax 380 338 305 318 455
Profit after tax 286 257 232 240 348
Shareholders' equity 2,483 2,312 2,056 1,785 1,779
Total capital base 2,818 2,943 2,747 2,458 2,110
Deposits 12,755 11,662 11,187 9,073 9,162
Loans 12,747 13,151 13,047 13,897 14,135
Balance sheet total 17,549 18,247 17,928 18,002 19,634
Guarantees 1,052 1,042 1,486 2,386 4,804
Key figures for the bank (per cent)
Pre-tax return on equity, beginning of 16.9 16.5 17.1 19.6 29.3
year
Return on equity after tax, beginning of 12.7 12.5 13.0 14.7 22.4
year
Rate of costs 32.4 31.6 31.6 32.4 33.7
Core capital ratio 19.8 18.6 16.6 13.0 11.2
Solvency ratio 21.4 22.4 20.2 16.3 13.0
Key figures per 5 DKK share (DKK)
Core earnings 79 75 71 83 94
Profit before tax 77 67 60 63 90
Profit after tax 58 51 46 48 69
Net asset value 489 459 408 354 353
Price, end of period 579 725 609 310 858
Dividend 13 12 0 0 30
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MANAGEMENT REPORT
Financial review
The bank's profit increased by 12% from DKK 338 million to DKK 380 million in
2011.
The result is equivalent to a return on equity of 17%, which is considered
highly satisfactory in light of the present economic situation in society.
The core earnings increased by 3% to DKK 390 million, which is at the top of
the range reported at the beginning of the year. The range was most recently
adjusted upwards in October 2011 to DKK 350-400 million.
Core income
The total core income was 1% higher in 2011, with an increase from DKK 758
million in 2010 to DKK 767 million in 2011.
Net interest income was DKK 607 million in 2011, an increase of 4% compared to
last year. An up-ward trend was seen during the year in the net interest
income, which derives from the increasing deposit fi gures and a increasing
interest margin. Like the rest of the fi nancial sector, the bank increased the
interest margin in 2011. The very low interest level is pulling in the opposite
direction as it results in a lower return on the bank's portfolio of securities
and cash resources.
4th qtr 3rd qtr 2nd qtr 1st qtr 4th qtr 3rd qtr 2nd qtr 1st qtr
Million DKK 2011 2011 2011 2011 2010 2010 2010 2010
Net interest income 163 154 150 140 139 144 150 150
Fees, commissions and foreign exchange earnings amounted to net DKK 152 million
in 2011 against net DKK 167 million in 2010, a fall of 9%. The year was
characterised by low trading and conversion activity within securities trading
and asset management, and the larger volumes therefore did not result in a
corresponding increase in income.
The activity on the housing market was also low, with fewer transactions and
conversions.
Net fees and commissions and foreign exchange income were derived as follows:
Million DKK 2011 2010
Asset management 50 52
Securities trading 19 26
Guarantee commissions 35 31
Foreign exchange income 18 23
Payment handling 17 17
Loan fees 6 8
Other fees and commissions 7 10
Total 152 167
Earnings from sector shares amounted to DKK 4 million in 2011 and is thus on a
par with last year. These earnings derive from DLR Kredit A/S, BankInvest
Holding A/S, SparInvest Holding A/S, EgnsInvest Holding A/S, Letpension Holding
A/S, Nets Holding A/S, Swift, Multidata Holding A/S, Vaerdipapircentralen A/S,
Bankernes Kontantservice A/S, PRAS A/S and Bankdata, and are typically an
expression of the changes in value in the companies.
Costs and depreciations
Total costs including depreciations on tangible assets amounted to DKK 248
million in 2011, 4% higher than last year. The rate of costs was computed at
32.4%, still the lowest in the country. A low rate of costs is especially
important in periods of difficult economic conditions as the bank's results are
thus very robust, which is also refl ected in the computation of the bank's
individual solvency requirement.
Write-downs on loans
Write-downs on loans showed a fall of 7% to net DKK 129 million in 2011 against
DKK 138 million last year. The write-downs are equivalent to 0.9% of the total
average of loans, write-downs, guarantees and provisions. The bank's customers
appear to be coping better with the weak economic conditions than the average
in Denmark. The present level of write-downs is considered satisfactory.
The bank's total account for write-downs and provisions amounted to DKK 650
million at the end of the year, equivalent to 4.5% of total loans and
guarantees. Actual writedowns on loans (including interest on the account for
write-downs) continue to be low at a mere DKK 43 million, such that the account
for write-downs and provisions increased by net DKK 85 million during the year.
The portfolio of loans with zeroed interest amounts to DKK 61 million,
equivalent to 0.43% of the bank's total loans and guarantees at the end of the
year. This is at the same level as last year.
Given the low growth in the Danish economy also in 2011, which is expected to
continue in 2012, the bank is satisfi ed with the conservative credit policy on
the basis of which the bank has always operated. As a natural part of the
economic cycle, the bank's losses are expected to remain at a relatively high
level in 2012, but with a continued slightly downward trend relative to the
previous three years. It is also still the bank's judgment that the credit
policy, the diversifi ed loans portfolio and the bank's location in Central and
West Jutland will have a positive effect on the bank compared to the general
level of losses in the banking sector as a whole.
Core earnings
Million DKK 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Total core income 767 758 753 735 696 609 511 417 368 328
Total costs etc. -248 -240 -238 -239 -234 -208 -190 -184 -163 -155
Core earnings before
write-downs on loans 519 518 515 496 462 401 321 233 205 173
Write-downs on loans -129 -138 -159 -77 +11 +69 +5 +4 -10 +6
Core earnings 390 380 356 419 473 470 326 237 195 179
Core earnings were DKK 390 million against last year's DKK 380 million, an
increase of 3%. Income in 2011 proved to be so stable that the expectations for
core earnings were adjusted upward to the DKK 350-400 million range in October
2011, and the final result is at the top of this range.
Result for portfolio
The result for the portfolio for 2011 was positive by DKK 1.5 million,
including funding costs for the portfolio.
The bank's holding of shares etc. at the end of the year amounted to DKK 249
million, DKK 12 million of which was in listed shares etc. while DKK 237
million was in sector shares etc. The bond portfolio amounted to DKK 2,756
million, and the great majority of the portfolio consists of AAA-rated Danish
mortgage credit bonds and bonds guaranteed by the Danish government, or
short-term bank bonds.
The total interest rate risk, computed as the impact on the result of a one
percentage point change in the interest level, was 0.7% of the bank's Tier 1
capital after deduction at the end of the year.
The bank's total market risk within exposure to interest rate risk, exposure in
listed shares etc. and foreign exchange exposure remains at a low level. The
bank's risk of losses calculated on the basis of a value-at-risk model
(computed with a 10-day horizon and 99% probability) was as follows in 2011:
Value at Risk Risk relative to equity
Risk in million DKK end of year in %
Highest risk of loss: 21.1 0.85%
Lowest risk of loss: 1.7 0.07%
Average risk of loss: 8.4 0.34%
The bank's policy remains to keep the market risk at a low level.
Profit after tax
The result after tax was DKK 286 million for the year against DKK 257 million
last year.
The result after tax is equivalent to a return on equity of 13% after payment
of dividend.
The balance sheet
The bank's balance sheet total at the end of the year stood at DKK 17,549
million against last year's DKK 18,247 million. Deposits increased by 9% from
DKK 11,662 million to DKK 12,755 million. The bank's loans decreased by 3% to
DKK 12,747 million. The underlying growth in new customers from the branch
network and within the niches Private Banking and wind turbine fi nancing
remains good. However, the changed consumption pattern with a higher savings
ratio and the general trend that many customers are deleveraging are generally
resulting in greater repayments on the bank's existing loans portfolio than
previously, and the entire growth in 2011 was therefore used to neutralise
these repayments.
The bank's portfolio of guarantees at the end of the year was DKK 1,052 million
against DKK 1,042 million in 2010.
Liquidity
The bank's liquidity is good, and since the banks loans and deposits are at the
same level, we made early repayments in the second half-year of 2011 of
long-term loans to the equivalent of DKK 1,063 million to optimise the bank's
liquidity. The excess solvency compared to the statutory requirements was 141%.
The bank's short-term funding with term to maturity of less than 12 months
amounts to only DKK 390 million, balanced by DKK 4.1 billion in short-term
money market placing, primarily in Danish banks and liquid securities.The bank
is thus not dependent on the short-term money market.
The bank's loans portfolio is more than fully fi nanced by deposits and the
bank's equity.
In addition, part of the German loans portfolio for wind turbines was refi
nanced >>backtoback<< with KfW Bankengruppe, and the DKK 808 million
in question
can thus be disregarded in terms of liquidity. The bank requires no fi nancing
for the coming year to meet the minimum requirement that it must always be able
to manage for up to 12 months without access to the fi nancial markets.
The bank's good liquidity is evident in the fi gure below, which shows the
liquidity buffer for the next 36 months.
The deposit guarantee scheme
Ringkjoebing Landbobank has a liability to the mandatory deposit guarantee
scheme in Denmark for rescuing Danish banks. The bank's share of these losses
is 0.6%. Amagerbanken, Fjordbank Mors and Max Bank went bankrupt in 2011, and
based on the latest available dividend rates, this cost the bank DKK 11.2
million.
Rating
Ringkjoebing Landbobank was rated for the fi rst time in May 2007 by the
international credit rating agency Moody's Investors Service. The bank's
ratings since the start are:
Moody's ratings:
Financial Long-term
strenght liquidity Outlook
22 May 2007 C+ A1 Stable
End 2007 C+ A1 Stable
End 2008 C+ A1 Stable
End 2009 C+ A1 Stable
End 2010 C+ A1 Negative
End 2011 C+ A3 Stable
The bank's rating was changed to C for fi nancial strength and A3 for long-term
liquidity during 2011. The amended rating came following the crashes of
Amagerbanken, Fjordbank Mors and Max Bank, and covered the entire fi nancial
sector. The rating was most recently confirmed in January 2012 with stable
outlook.
The supervisory diamond
The Danish Financial Supervisory Authority has prepared a set of rules with key
figures with which the bank must comply. The bank's key fi gures and the FSA's
limit values are given in the table below. The key values must be complied with
as of the end of December 2012. Ringkjoebing Landbobank was already in
compliance with all these values by a good margin at the end of 2011.
The supervisory diamond
Limmit values The bank's key fi gures
Stable funding < 1 0.8
Excess liquidity > 50 140.5
Major commitments < 125 41.7
Growth in loans < 20 -3.1
Exposure to the housing market < 25 11.4
Dividend and share buy-back programme
The bank's board of directors will recommend to the general meeting that
dividend of DKK 13 per share, equivalent to DKK 66 million, be paid for the
2011 fi nancial year.
Dividend of DKK 12 was paid in 2010. In addition, 100,000 shares at a value of
DKK 61 million were bought up during 2011, and a recommendation will be made to
the general meeting to cancel these shares to reduce the number of shares in
the bank from 5,040,000 to 4,940,000.
A proposal will also be made that a new buy-back programme be established for
2012 under which up to 100,000 shares can be bought up for the purpose of
cancelling them at a future general meeting. At the current price this
authorisation will reduce equity by DKK 66 million.
Capital
The bank's equity at the beginning of 2011 was DKK 2,312 million, to which must
be added the profi t for the period, and from which must be deducted dividend
paid and the value of the bought-back own shares, after which the equity at the
end of the year was DKK 2,483 million, an increase of 7%.
The bank's capital adequacy ratio (Tier 2) was computed at 21.4% at the end of
2011.
The core capital ratio (Tier 1) was computed at 19.8%.
Solvency cover 2011 2010 2009 2008 2007
Core capital ratio excl. hybrid core capital (%) 18.3 17.1 15.1 11.6 10.0
Core capital ratio (%) 19.8 18.6 16.6 13.0 11.2
Solvency ratio (%) 21.4 22.4 20.2 16.3 13.0
Individual solvency requirement (%) 8.0 8.0 8.0 8.0 8.0
Solvency cover 268% 280% 253% 204% 163%
Since 2007, the Danish fi nancial sector has been subject to a requirement that
a bank's capital adequacy ratio must be at least 8%, and this ratio must also
at a minimum comply with the required individual solvency requirement
calculated internally by the bank, which may be higher than the 8%. If the
calculated individual solvency requirement is less than 8%, a bank cannot,
however, be permitted at any time to use any such calculated lower fi gure. The
individual solvency requirement for Ringkjoebing Landbobank is calculated at
7.0% because of the bank's robust business model, and the ratio was thus
reported at 8%. The solency need is not revised. For further information on the
calculation of the individual solvency requirement of Ringkjoebing Landbobank,
please see the bank's website at www.landbobanken.dk.
The bank's shares
The bank's share capital at the end of 2011 was DKK 25.2 million in 5,040,000
nom. five kroner shares.
The bank's shares were listed on NASDAQ OMX Copenhagen at the beginning of the
year at 725. The share price fell during 2011 to 579 at the end of the year and
was 663 at 26 January 2012.
Including dividends, an investment in the bank's shares at the beginning of
2001 has increased eightfold. This means that an investment in the bank's
shares was the best bank share investment in Denmark in this period.
Increase in customers
The bank implemented several outreach initiatives towards new customers just
under two years ago. The basis was the fact that the bank has both the
liquidity and the capital to support growth, that we felt comfortable about the
bank's credit facilities, and that our cost structure is suitable for the
future. The biggest challenge in times of low growth in society is thus
creating growth in the bank's top line.
The bank's outreach initiatives will be intensified in 2012, among other things
by investing in spreading the bank's Private Banking platform even further.
A highly positive increase in customers is currently being seen in the branch
network and within the Private Banking segment, with transfer of deposits,
pension and securities customers.
The growth in lending has been swallowed up by repayments on the loans
portfolio. In the bank's judgment, we are, however, currently enhancing the
foundation for future earnings.
Expectations for earnings in 2012
The bank's core earnings for 2011 were DKK 390 million, which is at the top of
the upwardly adjusted DKK 350-400 million range.
Ringkjoebing Landbobank has a market share of about 50% in that part of western
Jutland in which its old branches are located. The bank also has
well-established branches in Herning, Holstebro and Viborg which are still
operating positively. The bank's plan is to retain and develop this section of
the customer portfolio with good and competitive products, focusing on employee
skills and advising customers of the options in a changeable fi nancial world.
Additional customers are expected to be gained in 2012 for the bank's branches
in central and western Jutland as a result of the long-term recruitment
initiatives and the consolidation in the sector.
The activities in the bank's Distance Customer department and niche concepts,
including the branch in Holte, are together also expected to continue to
develop positively in the forthcoming year despite large repayments on the
loans portfolio. The focus will be on servicing of the bank's current customers
and further developing of the portfolio within wind turbine fi nancing, medical
practitioners and affl uent customers.
The expectations for the core earnings for 2012 are in the DKK 300-400 million
range.
To this must be added the result of the bank's trading portfolio and possible
expenses for the deposit guarantee scheme.
Changes in management
Bent Naur has decided to retire at the end of April 2012 on the occasion of his
sixty-fifth birthday. Bent Naur has been CEO of the bank since 1987.
The board of directors has appointed John Bull Fisker as the new CEO as of 1
May 2012.
John Bull Fisker is 47 years old and has been an employee of the bank since
1995. John Bull Fisker has been a member of the board of management since 1999.
Joern Nielsen has been appointed assistant manager of the bank as of 1 March
2012. Joern Nielsen is 39 years old and has been an employee of the bank since
1993. Joern Nielsen was appointed credit controller in 1998 and credit manager
in 2009.
Events after the end of the financial year
From the date of the balance sheet to date, no circumstances have arisen to
change the assessment of the bank's annual report for 2011.
Capital structure
The bank's management has determined a general goal for the bank's capital,
under which the bank will have a solidly based capital structure compared with
both equivalent and bigger banks.
It is also a goal that the bank will have adequate capital in the long term for
future growth, and that there will be adequate capital to cover any regular fl
uctuations in the risks which the bank has assumed.
The bank's capital ratios at the end of December 2011 were as follows:
Capital ratios
- Core capital ratio excl. hybrid core capital 18.3%
- Core capital ratio 19.8%
- Solvency ratio 21.4%
With respect to the calculation of the bank's Tier 1 capital, capital base and
core capital ratio excluding hybrid Tier 1 capital, core capital ratio and
capital adequacy ratio at the end of 2011, reference is made to the calculation
of solvency requirement on page 45.
The above capitalisation makes Ringkjoebing Landbobank one of the country's best
capitalised banks. The bank's goal is to retain this ranking in 2012. The
bank's judgment is that this can be done on the basis of the expected result
for 2012.
Given the solid capital position, the bank has not taken up the subordinate
state capital made available under bank package II. The bank has not
participated in any bank packages since bank package I expired on 30 September
2010.
The bank's board of directors will recommend to the general meeting that a
dividend of DKK 13 per share be paid for the 2011 fi nancial year, equivalent
to DKK 66 million. The dividend paid in 2010 was DKK 12. A hundred thousand
shares were also bought in 2011 to a value of DKK 61 million. The
recommendation to the general meeting is that these shares be cancelled,
reducing the number of shares in the bank from 5,040,000 to 4,940,000.
Establishment of a new buy-back programme for 2012 will also be proposed, under
which up to 100,000 shares can be bought with the object of cancellation at a
subsequent general meeting. At the market price, this will authorisation will
reduce the bank's equity by DKK 66 million.
The maturity structure for the external subordinate capital taken up by the
bank is given in the following summary.
Subordinated debt - maturity structure
Subordinated loan capital
- Nominal EUR 27 million taken up on 30 June 2008, thirteen-year term -
maturity 30
June 2021, with the option of early redemption from 30 June 2018, subject to
approval by the Danish Financial Supervisory Authority.
Hybrid core capital
- Nominal DKK 200 million taken up on 2 March 2005, indefi nite term, with the
option of early redemption from 2 March 2015, subject to approval by the Danish
Financial Supervisory Authority.
The bank uses the solvency rules for the calculation and statement of weighted
items with credit and counterparty risk, market risk and operational risk
implemented in 2007.
Reference is made to the summary below for further information on the methods
used by the bank concerning the various risk types.
Capital adequacy computation
The bank has adopted the following methods regarding the capital adequacy
computation:
- Credit risk outside the trading portfolio Standardised Approach
- Counterparty risk Mark-to-Market Method
- Credit risk reducing method - financial collaterals Comprehensive Method
- Market risk Standardised Approach
- Operational risk Basic Indicator Method
As will be evident from the above, the bank uses the standard method for
calculation of its credit risk and therewith the risk-weighted items. Fixed
solvency weightings are used in this method. The method thus means that the
bank has not had the same capital adequacy down-weighting as those banks which
use one of the advanced methods.
Conversely, neither does the bank experience increasing solvency weightings in
periods of declining economic conditions. Relative to the advanced methods, the
standard method thus means that there is signifi cantly greater robustness in
the calculated capital percentages and less volatility in the risk-weighted
items.
Ringkjoebing Landbobank also focuses on its own internally calculated individual
solvency requirement, defi ned as an adequate capital base as a percentage of
the bank's risk-weighted items. The adequate capital base is assessed on the
basis of an internal model and calculated as the amount which is appropriate to
cover the bank's current and future risks.
The individual solvency need was calculated at 7.0%, refl ecting the bank's
solid earnings, low credit risk and modest market risks. The calculated
adequate capital base is regularly reassessed and reported to the Danish
Financial Supervisory Authority. The individual solvency need was reported to
the FSA at 8% as the individual need, which the bank calculated at below 8%,
may not be less than 8% under Section 124(4) of the Act on Financial
Activities. The FSA most recently reviewed the bank's calculation of its
individual solvency need in spring 2011. Reference is made to Ringkjoebing
Landbobank's website, www.landbobanken.dk, for further details of the
calculation of the bank's individual solvency need.
Although there is a minimum solvency requirement of 8% which the bank must use,
the bank still has a signifi cant excess solvency as indicated in the summary
below.
Solvency cover
2011 2010 2009 2008 2007
Solvency ratio (%) 21.4 22.4 20.2 16.3 13.0
Individual solvency requirement (%) 8.0 8.0 8.0 8.0 8.0
Excess solvency (%) 13.4 14.4 12.2 8.3 5.0
Solvency cover 268% 280% 253% 204% 163%
Finally, it may be concluded that throughout 2011, Ringkjoebing Landbobank has
met both external and internal capital adequacy requirements, and the actual
capital base has always been signifi cantly in excess of that required.
Risks and risk management
Ringkjoebing Landbobank is exposed to various types of risk in its operation:
credit risk, market risk, liquidity risk and operational risk. The credit risk
is defi ned as the risk that payment obligations to the bank are not judged to
be recoverable because of either lack of ability or lack of willingness to make
payment at the agreed time.
The market risk is defi ned as the risk that the market value of the bank's
assets and liabilities will change because of changes in market conditions. The
bank's total market risk covers interest risks, currency risks, share risks and
property risks.
The liquidity risk is defi ned as the risk that the bank's payment obligations
will not be able to be honoured under the bank's existing liquidity.
Finally, the operational risk is defi ned as the risk that there will be either
direct or indirect financial losses because of errors in internal processes and
systems, human error, or because of external events.
The bank's general policy on the assumption of risk is that the bank only
assumes risks which are in accord with the business principles under which the
bank is operated, and which the bank has the expertise to manage.
The general policy for the management and monitoring of the various risks is
that there are both central management and central monitoring as well as
reporting to the bank's management and board of directors. The management and
the control and reporting functions are separate, and the tasks are performed
by different central staff at the bank.
The bank also has a risk manager who monitors the bank's risks and reports as
necessary. With the implementation of the Basel II rules in Danish law on
capital adequacy requirements, Danish banks were also required to publish
certain information on risk (in popular parlance also called Column 3
information). Some of the required information on risk is given in this annual
report, but reference is made to the bank's website at www.landbobanken.dk for
a full overview of the information which the bank must provide.
The various risk types are described in more detail below.
Credit risks loans
Ringkjoebing Landbobank has developed over the last 10-15 years to its present
status as primarily a regional bank in Central and West Jutland and a niche
bank within selected areas.
This development has been a part of the bank's strategy, and the bank's
management notes with approval that the bank has achieved a signifi cantly
diversifi ed loans portfolio, including a considerable spread in terms of
branches and geography.
Ringkjoebing Landbobank generally assumes risks on the basis of a credit policy,
the specifi ed aim of which is that there must be a well-balanced relationship
between risks assumed and the return achieved by the bank, that the bank's
losses must be at an acceptable level relative to the Danish financial sector,
and fi nally that losses must be able to be accommodated within the bank's
results, even in extreme situations.
The gearing of loans relative to the bank's subordinate capital is a factor of
approximately five, and the bank's goal is that the results are realised with a
smaller or the same credit gearing as that of the country's major banks. In
historical terms the bank has always had a healthy and conservative credit
policy, and focus will remain on an effective management and monitoring of the
bank's total loans portfolio via the bank's central credit department.
Apart from the normal following up and management of credit in the bank's
central credit department, where all major commitments are regularly reviewed
and managed, the bank further developed its credit assessment models in 2011
for use in assessment of the quality of its exposure. Statistical models are
used in the case of private and small business customers, while there is an
expert model for major business customers. The statistical models include 7-10
different factors, including information on the customer's assets and a
quantity of behavioural data. The expert model for business customers is based
on information on the customer's creditworthiness and earning capacity.
The bank's assessment on the basis of these models is that the quality of the
credit for those loans which have not been written down is unchanged relative
to 2010. The bank is, however, aware of the risks which the current market
situation holds for the bank's customers, including, to a high degree, the
challenge posed by a weak property market and potentially rising interest rates
to the bank's private customers. The bank's customers are, however, judged to
be relatively less vulnerable to these challenges, among other reasons because
of a relatively low real estate burden in the bank's core area.
Actual net losses In DKK 1,000 Loans with Write-downs
Actual suspended on loans and Percentage Percentage
Actual net losses calculation provisions for Total loans and loss before loss
after
Year net losses after interest of interest guarantees guarantees etc. interest
*) interest *)
1987 -6,696 304 10,544 75,000 1,358,464 -0.49% 0.02%
1988 -14,205 -5,205 4,522 93,900 1,408,830 -1.01% -0.37%
1989 -18,302 -5,302 13,107 117,270 1,468,206 -1.25% -0.36%
1990 -15,867 -1,867 47,182 147,800 1,555,647 -1.02% -0.12%
1991 -11,429 3,571 47,626 170,000 1,805,506 -0.63% 0.20%
1992 -32,928 -14,928 43,325 177,900 1,933,081 -1.70% -0.77%
1993 -27,875 -6,875 30,964 208,700 1,893,098 -1.47% -0.36%
1994 -14,554 4,446 33,889 223,500 1,938,572 -0.75% 0.23%
1995 -10,806 10,194 27,292 238,800 2,058,561 -0.52% 0.50%
1996 -19,802 -1,802 18,404 233,400 2,588,028 -0.77% -0.07%
1997 -31,412 -12,412 39,846 236,600 3,261,429 -0.96% -0.38%
1998 -2,914 18,086 4,905 263,600 3,752,602 -0.08% 0.48%
1999 -442 21,558 18,595 290,450 5,148,190 -0.01% 0.42%
2000 -405 27,595 12,843 316,750 5,377,749 -0.01% 0.51%
2001 -8,038 20,962 14,222 331,950 6,113,523 -0.13% 0.34%
2002 -8,470 20,530 26,290 382,850 7,655,112 -0.11% 0.27%
2003 -22,741 2,259 23,412 394,850 8,497,124 -0.27% 0.03%
2004 -14,554 9,446 18,875 404,855 11,523,143 -0.13% 0.08%
2005 -22,908 192 35,796 357,000 15,522,264 -0.15% 0.00%
2006 -13,531 7,028 20,578 295,000 17,858,787 -0.08% 0.04%
2007 -15,264 4,888 13,190 289,097 19,227,573 -0.08% 0.03%
2008 -34,789 -10,237 22,110 356,083 16,475,975 -0.21% -0.06%
2009 -73,767 -47,658 62,649 467,025 14,890,027 -0.50% -0.32%
2010 -69,428 -40,207 66,237 565,035 14,758,234 -0.47% -0.27%
2011 -78,813 -43,073 61,419 649,856 14,448,638 -0.55% -0.30%
25-year average (1987-2011) -0.53% -0.01%
10-year average (2002-2011) -0.25% -0.05%
*) Actual net losses relative to total loans, guarantees, write-downs on loans
and provisions for guarantees.
Explanation: The percentage losses were computed as the actual net losses for
the year before and after interest on the written-down part of loans as a
percentage of total loans, guarantees and write-downs on loans and provisions
for guarantees. A minus sign before a percentage loss indicates a loss, while a
positive percentage loss means that the interest on the written-down part of
loans was greater than the actual net losses for the year. All the above fi
gures are exclusive amounts regarding the national bank package I etc.
RISKS AND RISK MANAGEMENT
The above table documents the bank's healthy credit policy. As will be evident,
the bank's average percentage loss after interest over the last 25 years
(1987-2011) has been negative by 0.01%, with -0.77% (1992) as the highest
percentage loss and +0.51% (2000) as the most positive fi gure. The average
percentage loss before interest over the last 25 years is -0.53%, with -1.70%
(1992) the highest percentage and -0.01% (1999 and 2000) the lowest. Over the
last 10 years (2002-2011), the average percentage loss after interest was
negative by 0.05% and before interest it was -0.25%.
The bank's regional operations are run partly via branches in the bank's
original core area in West Jutland and partly via branches in the three big
Central and West Jutland cities of Herning, Holstebro and Viborg.
The most important niches within the bank's niche division are the fi nancing
of medical practitioners' purchases of private practices, a Private Banking
department covering affl uent private clients, and the fi nancing of securities
and loans for the fi nancing of wind turbines. Wind turbines are fi nanced for
Danish fi nal investors' purchases of wind turbines erected in Denmark, Germany
and France.
An important common denominator for the niche loans is that the bank attempts
to obtain a fi rst priority mortgage, and therewith a satisfactory security in
the mortgaged assets, which is an important past of the bank's business
philosophy.
Concentration of credit
As will be evident from the summary below, total major commitments are
calculated at 41.7%. This fi gure includes two commitments with sound fi
nancial institutions which were discharged in 2012. Excluding these
commitments, the key fi gure for total major commitments is 11.8%, which is one
commercial commitment which is covered and which has a sound credit quality.
Concentration of credit
2011 2010 2009 2008 2007
Total large exposures 41.7% 10.2% 0.0% 12.1% 38.3%
Explanation: The Danish Financial Supervisory Authority key fi gure >>Total
large exposures<<.
Geographic spread of the bank's loans and guarantee portfolio As the fi gure
indicates, both the regional and niche sectors have provided a signifi cant
geographic spread of the bank's loans and guarantee portfolio.
The loans made via the bank's niche sector have also helped to ensure a
considerable diversifi cation in the bank's loans portfolio, which is thus not
correlated with economic conditions to the same extent as it would be if the
bank were run as a purely regional bank.
Credit risk on fi nancial counterparties
The bank's trading in securities, foreign currency and derivatives, its loans
to other banks, its possession of bonds and its processing of payments expose
it to fi nancial counterparties, and therewith a credit risk, including a
settlement risk. The settlement risk is the risk that the bank will not receive
payment or securities in connection with the settlement of securities and/or
currency transactions corresponding to the securities and/or payments which the
bank has settled and delivered.
The bank's board of directors grants lines of credit with respect to credit
risk and settlement risk on fi nancial counterparties. When granting lines of
credit, account is taken of the individual counterparty's risk profi le,
rating, size and fi nancial circumstances, and there is regular follow-up on
the lines of credit granted.
The bank's policy is to keep the credit risk on fi nancial counterparties at a
balanced level relative to the bank's size, and to deal with credit
institutions of sound quality.
Explanation: Distribution of the bank's loans and guarantee portfolio before
write-downs and provisions by customer addresses.
PA G E 2 2 R I N G K J OE B I N G L A N D B O B A N K A / S
Affi liation to CLS
The bank is affi liated with CLS an international clearing and settlement
system which
currently handles transactions in 17 currencies including Danish kroner. This
has enabled
the bank to reduce its credit risk on fi nancial counterparties signifi cantly.
The central
element in the CLS procedure is thus that the settlement of the two sides in a
currency
transaction occurs simultaneously in the so-called Payment versus Payment (PvP)
system.
In a CLS currency transaction, the parties hand over only the currency sold if
they
simultaneously receive the currency purchased. A further central element in the
CLS
settlement is that the participating parties' payments to CLS are made on a net
basis
and spread over three smaller payments. This provides a signifi cant reduction
in the
liquidity required by the participating parties.
Claims on central banks and credit institutions
One of the two major items in the credit risk on fi nancial counterparties is
receivables in central
banks and credit institutions. The bank has assumed only moderate risks on this
item, and of the
total receivables in central banks and credit institutions, 52% is thus due
within three months.
The bond portfolio
The second of the two major items concerning the credit risk on fi nancial
counterparties
is the bank's bond portfolio.
As will be evident from the fi gure below, neither has the bank assumed signifi
cant risks in
this item, and by far the greater part of the bond portfolio consists of
AAA-rated Danish
mortgage credit bonds, bonds guaranteed by the Danish state or short-term bank
bonds.
The bank's bond portfolio does not contain any exposure to southern European
countries.
RISKS AND RISK MANAGEMENT
A2/A
37%
Bonds distributed by rating classes
Aa1/AA+
1%
Baa1/BBB+
1%
Baa2/BBB
Exp. 2012 4%
21 %
Exp. 2013
9 %
Baa3/BBB-
1%
Exp. 2014
and later
7 %
Aaa/AAA
52%
Not rated
4%
Explanation: The bond portfolio distributed by rating classes. Ratings from the
credit rating bureaus Moody's Investors Service and
Standard & Poor's were used in the specifi cation.
A N N U A L R E P O R T 2 0 1 1 PA G E 2 3
Market risks
The bank's basic policy with respect to market risks is that the bank wishes to
keep such
risks at a low level. The bank has determined a concrete framework for each
type of
market risk, and the risk assessment includes the objective that there must be
a sensible
and balanced relationship between risk and return.
The bank uses derivatives to cover and manage the various market risk types to
the
extent to which the bank wishes to reduce the extent of, or eliminate, the
market risks
which the bank has assumed. To supplement the more traditional measures of
market
risk, the bank has a mathematical/statistical model to compute market risks.
The model
is used to compute Value at Risk (VaR), which is regularly reported to the
bank's management.
VaR is a measure of risk which describes the bank's risk under normal market
conditions.
An isolated VaR is calculated for interest rate, foreign exchange and listed
share
positions, and a total VaR is also calculated for all of the bank's market
risks consisting of
interest rate, foreign exchange and listed share positions. This possibility of
calculating
a total VaR for the bank's market risks is one of the major advantages of the
VaR model
compared with more traditional measures of risk. The reader is referred to the
following
section >>Value at Risk<< for the specifi c results etc. under the VaR
model.
Interest rate risk
The bank's loan and deposit business and accounts with credit institutions are
mostly
entered into on a variable basis. The bank's fi xed interest fi nancial assets
and liabilities
are monitored continuously, and hedging transactions are entered into as needed
with a
consequent reduction of the interest rate risk.
Ringkjoebing Landbobank's policy is to maintain a low interest rate risk, and
the bank
thus does not assume high levels of exposure to movements in interest rates.
The bank's interest rate risk is monitored and managed daily by the bank's
securities department,
and the bank's service and support department controls maintenance of the
limits for assumption of interest rate risk, and reports to the bank's board of
directors
and management.
PA G E 2 4 R I N G K J OE B I N G L A N D B O B A N K A / S
As will be evident from the fi gure, the bank has maintained a low interest
risk over the
last fi ve years in accordance with the bank's policy for this type of risk.
Foreign exchange risk
The bank's principal currency is the Danish krone, but the bank has also
entered into
loan and deposit arrangements in other currencies.
The bank's policy is to maintain a minimal foreign exchange risk, and the bank
thus
reduces ongoing positions in foreign currencies via hedging.
The bank's positions in foreign exchange are managed daily by the foreign
department,
while the bank's service and support department monitors maintenance of lines
and
reports to the board of directors and management.
As in previous years, the bank's foreign exchange risk in 2011 was at an
insignifi cant
level.
RISKS AND RISK MANAGEMENT
5
6
Interest rate risk
3
4
rcent
1
2
Per
0
jun-06
dec-06
jun-07
dec-07
jun-08
dec-08
jun-09
dec-09
jun-10
dec-10
jun-11
dec-11
Explanation: The interest rate risk shows the effect on the result as a
percentage of the core capital after deductions of one percentage
point change in the interest level.
A N N U A L R E P O R T 2 0 1 1 PA G E 2 5
Share risk
The bank co-owns various sector companies via equity interests in DLR Kredit
A/S, PRAS
A/S, BankInvest Holding A/S, SparInvest Holding A/S, EgnsInvest Holding A/S,
Letpension
Holding A/S, Nets Holding A/S, Swift, Multidata Holding A/S, Vaerdipapircentralen
A/S, Bankernes Kontantservice A/S and Bankdata.
These holdings are comparable with the wholly owned subsidiaries of major
banks, and
the equity interests are thus not deemed to be a part of the bank's share risk.
The bank
also holds a small portfolio of listed shares.
The bank's policy is to maintain a low share risk. The daily management of the
bank's
share portfolio is undertaken by the securities department, while monitoring of
the lines
and reporting to management and the board of directors are performed by the
service
and support department.
The bank's holding of listed shares etc. was DKK 12 million at the end of 2011
against
DKK 25 million at the end of 2010. The holding of sector shares and ownership
interests
was DKK 237 million at the end of 2011 against DKK 232 million at the end of
2010.
As will be evident from the fi gure below, the bank's share exposure (excluding
sector
shares and ownership interests) as a percentage of the bank's equity has been
modest,
thus documenting the bank's objective of maintaining a low share risk.
7
8
Share exposure
4
5
6
rcent
1
2
3
Per
0
dec-06
dec-07
dec-08
dec-09
dec-10
dec-11
Explanation: The share exposure is computed as the bank's holding of shares
(excluding sector shares and other holdings) as a
percentage of the shareholders' equity.
PA G E 2 6 R I N G K J OE B I N G L A N D B O B A N K A / S
RISKS AND RISK MANAGEMENT
Property risk
The bank primarily wishes to possess only properties for use in banking
operations, and
also to maintain minimal property risks.
The bank's portfolio of both domicile and investment properties is thus quite
modest
relative to the bank's balance sheet total.
Value at Risk
The bank's total Value at Risk at the end of 2011 was DKK 13.2 million. This
sum is an
expression of the maximum loss in a statistical perspective which the bank
could risk
losing with 99% probability if all market positions were retained unchanged for
a period
of 10 days.
VaR summary
In DKK million
Average Min. Max. End of year
Risk VaR fi gure VaR fi gure* VaR fi gure* VaR fi gure
Interest 8.2 0.3 21.5 13.5
Foreign currency 0.4 0.2 0.4 0.3
Share 4.0 2.8 3.3 2.1
Diversifi cation -4.2 -1.6 -4.1 -2.7
Total VaR fi gure 8.4 1.7 21.1 13.2
* Determined by the total VaR fi gure
It is clear from the table that the bank's total VaR index varied during 2011
from DKK
1.7 million to DKK 21.1 million. On average, the VaR index was DKK 8.4 million,
a minor
increase relative to the previous year.
The reader is referred to note 41 on page 69 for the VaR fi gures for the years
2009-
2011.
The model in brief
The model is a parametric VaR model based on a historical analysis of the
covariation
(correlations) between the prices of various fi nancial assets etc., including
different share
indices, various offi cial interest rates and interest swap rates, and
different exchange
rate indices. By combining the historical knowledge of the covariation on the
fi nancial
markets with the bank's current positions, the model can calculate a risk of
loss for a
forthcoming ten-day period. All of the bank's interest rate positions, foreign
currency
positions and listed share positions etc. are included in the calculation,
while positions
in sector shares and unlisted ownership interests are not included. The model
is unchanged
relative to last year
A N N U A L R E P O R T 2 0 1 1 PA G E 2 7
Back tests and stress tests
So-called back tests are made to document that the VaR model provides a
sensible picture
of the bank's risk. The test compares the calculated loss under the model with
the
losses which the bank would actually have suffered if the positions in question
had been
retained for a ten-day period. A number of stress tests are also carried out to
indicate
the bank's risk of loss in abnormal market situations. Back tests of the model
were performed
throughout the year with satisfactory results.
Liquidity risk
In general with respect to the bank's liquidity management, it is the bank's
objective not
to have uncovered net funding requirements and not to be dependent on the
shortterm
money market. It is thus the bank's objective that it must not be affected by a
total
shutdown of the money market for a period of 12 months.
The bank's loan portfolio is funded primarily via four different sources,
namely the
bank's deposits, by taking up long-term loans with other credit institutions,
via issued
bonds, and fi nally via the subordinated debts taken up by the bank and the
bank's
equity.
The bank's deposit base consists primarily of core deposits and deposits from
customers
with a long-term relationship with the bank.
Ringkjoebing Landbobank has also entered long-term bilateral loan agreements with
European banks. It should, however, be noted that the funding situation is such
that the
bank is not dependent on the institutions in a single country or on individual
institutions.
PA G E 2 8 R I N G K J OE B I N G L A N D B O B A N K A / S
As will be evident from the above fi gure, the bank's short-term funding (term
to maturity
under one year) is supported by certifi cates of deposit with the Danish
National Bank,
short-term loans to other Danish banks, the bank's holding of liquid
securities, and via
agreements on committed credit facilities with other banks. The committed
credit facilities
have been entered into for long-term periods and are not normally used in
everyday
business. It should be noted that the excess liquidity cover at the end of 2011
was DKK
3.7 billion, whereas the equivalent fi gures at the end of 2010 and 2009 were
DKK 3.3
billion and 3.8 billion respectively.
An EUR 2 billion EMTN bond programme was established by the bank in 2008 to
ensure
diversifi cation in the funding area. The bank used the programme for the fi
rst time in
2010 and issued bonds to a total of DKK 220 million. The bank also used the
programme
in 2011 and issued bonds tot a total of DKK 200 million. The programme thus
helps
to provide alternative funding sources for the bank.
Deposits and other
debts
Distribution of funding
73%
Other liabilities
Issued bonds - term to
maturity over 1 year
Debt to credit
1% 2% institutions term to
Total capital base
- maturity over 1 year
Debt to credit
institutions - term to
maturity under 1 year
5%
17% 2%
In DKK 1,000
The short-term funding (term to maturity under 1 year):
Issued bonds - term to maturity under 1 year 2,955
Debt to credit institutions and central banks - term to maturity under 1 year
387,431
Total 390,386
is covered as follows:
Cash in hand etc. 33,935
Deposits on demand with central banks - certifi cates of deposit 186,989
Claims on credit institutions - term to maturity under 1 year 536,453
Listed bonds and listed shares etc. at current value 3,220,451
Committed credits facilities (not drawn) - term to maturity over 1 year 74,342
Total 4,052,170
Excess cover 3,661,784
RISKS AND RISK MANAGEMENT
A N N U A L R E P O R T 2 0 1 1 PA G E 2 9
Operational risk
The capital adequacy rules require the banks to quantify and include an amount
for
operational risks when computing their capital adequacy.
The bank uses the so-called basic indicator method, where calculation of an
average of
the last three fi nancial years' net income is used to quantify an amount which
is added
to the risk-weighted items in order to cover the bank's operational risks. The
bank
regularly produces reports on the losses and events which are judged to be
attributable
to operational risks. An assessment is made on the basis of the reports of
whether procedures
etc. can be adjusted and improved in order to avoid or minimise any operational
risks, and the bank's procedures are also regularly reviewed and assessed by
the bank's
internal and external auditors.
An important area in assessment of the bank's operational risks is IT. The
bank's IT
organisation and management regularly assess IT security, including with
respect to
prepared IT emergency plans, and requirements and levels for accessibility and
stability
for the IT systems and data used by the bank are then set. These requirements
apply to
both the bank's internal IT organisation and its external IT supplier Bankdata,
which the
bank owns together with a number of other banks.
PA G E 3 0 R I N G K J OE B I N G L A N D B O B A N K A / S
CORPORATE GOVERNANCE
Corporate governance
Good corporate governance in Ringkjoebing Landbobank concerns the objectives
which
govern the bank's management and the general principles and structures
governing the
interplay with the bank's primary interested parties: the bank's shareholders
and customers,
the bank's management and employees and the local areas in which the bank has
branches.
Since 2002, the bank's management has taken an active approach to the
recommendations
issued on corporate governance, and the bank's attitude to corporate governance
has been minuted in the annual reports since that year. In preparing the 2011
annual
report, the bank's board of directors and management reassessed the bank's
position
with respect to the individual recommendations, including the updated
recommendations
from 2011. In general, the bank's management supports the activities involved in
good corporate governance, and the bank's board of directors and management have
elected to adopt almost all of the recommendations thereon, but in individual
areas the
bank's management has elected either not to follow the recommendations or only
to
follow them in part. The bank advises that election periods and procedures for
members
of the shareholders' committee and the board of directors are believed to be
appropriate.
The bank currently follows 74 of the 79 recommendations.
The detailed statement on management in the annual report required under current
accounting rules is published on the bank's website at
www.landbobanken.dk/godselskabsledelse.
This statement also indicates how the bank's management has acted
on the supplementary recommendations on corporate governance etc. issued by the
Danish Bankers Association.
The reader is referred to pages 79 and 80 for information on the board of
directors'
other managerial activities.
A N N U A L R E P O R T 2 0 1 1 PA G E 3 1
STATUTORY STATEMENT ON SOCIAL RESPONSIBILITY
Statutory statement on social responsibility
Ringkjoebing Landbobank has always been strongly anchored throughout its long
history
in the local communities where it is represented, and the bank has seen it as
an entirely
natural part of its business base to support local development. The bank has
also,
via management's implementation of and attitude to the recommendations for good
corporate governance, focused on those matters which govern the interplay with
the
bank's primary interested parties, namely its shareholders and customers, its
management
and employees and the local areas in which the bank's branches are situated.
The bank's policy on social responsibility is based on a wish to run a
responsible and
value-creating bank which consciously works to create the best possible results
for shareholders,
customers, employees, the local community, the environment and the bank
itself.
For the bank, it is a matter of being an active partner in the local and
regional associations
and sporting life in the towns and areas in which the bank's branches are
situated.
The bank does this via numerous sponsorships both at the elite level, but
especially at
the broad general level so that as many people as possible benefi t from the
support
which the bank provides to various associations every year.
The bank's local and regional commitment is a cornerstone in our business
philosophy
and one of the reasons why the bank has been able to retain its position as a
local and
locally known partner to many of the area's businesses and private families,
but also for
the bank's customers throughout Denmark.
With respect to its employees, the bank also takes its social responsibility
seriously. Initiatives
within employee skills development and training as well as activities which
promote
health and wellbeing are some of the reasons why Ringkjoebing Landbobank is
considered
an attractive place to work. Over the years, the bank has thus had many
employees
who have celebrated both their twenty-fi fth and their fortieth anniversaries
with the
bank. The bank also assumes a considerable level of responsibility in
connection with
the education of new trainees. In 2011, there was particular focus on the
development
of employees' expertise in the area of consultancy on pensions. Via its
partnership with
Letpension, the bank has access to a number of attractive pension products
which, in
combination with well-qualifi ed employees, make it possible to offer a product
which is
tailored to the individual customer's needs. This service has been
well-received by the
bank's customers, and in 2012 the bank expects to continue its training
activities in the
area of pensions.
Ringkjoebing Landbobank is also focused on the environment. The bank thus tries
to limit
the energy consumption associated with its operations, and there is focus on
environmentally
correct recycling of the waste products which the bank's operations generate.
We also maintain a focus on the reorganisation of activities from paper to
IT-based procedures,
which also helps to reduce the bank's total environmental impact.
A common feature of the bank's initiatives within the area of social
responsibility is
that they must help to emphasise Ringkjoebing Landbobank's position as an
ethical and
sustainable company to the bank's interested parties - to its shareholders,
customers and
employees and to the surrounding world.
The bank's website www.landbobanken.dk provides a more detailed account of the
bank's social responsibility, including the policies in the area.
PA G E 3 2 R I N G K J OE B I N G L A N D B O B A N K A / S
Statutory statement on management
The board of directors and the shareholders' committee
The bank's shareholders' committee consists of 27 members who are elected for
terms
of four years. The bank's board of directors consists of eight members, six
elected by
shareholders and two elected by employees. The bank's management is not on the
board of directors, but it attends board meetings. The board is elected by the
shareholders'
committee and its membership is comprised to ensure a broad range of expertise
and conformity with a special expertise profi le determined by the board
itself. Board
members are elected for four years at a time. In accordance with the
recommendation
of the committee on good corporate governance, at least half the members of the
board of directors must be independent.
Members of the board of directors and the shareholders' committee are required
to
resign from the shareholders' committee at the latest at the fi rst annual
general meeting
after they reach the age of 67.
Committee of the board of directors
The bank's board of directors has appointed an audit committee whose task is to
monitor and check accounting and auditing matters and to make preparations for
the
board's handling of matters related to accounting and auditing.
The committee consists of three members, one of whom possesses legal qualifi
cations
within auditing and accounts, and is also independent. Other committees,
including the
remuneration committee, comprise the full baord.
Evaluation etc.
The board of directors makes an annual evaluation of its activities and the
working
relationship between itself and management. Each board member fi lls in a form,
and
the completed evaluation forms are then discussed by the bank's board of
directors and
management. The board of directors holds 10-12 meetings a year.
Remuneration policy
The remuneration policy for management and the board of directors of Ringkjoebing
Landbobank is that the bank's management is paid remuneration which is both in
line
with the market and refl ects the management's achievements for the bank. It
has also
been decided that the remuneration paid to management and the board of directors
should be a fi xed amount without any form of incentive component. Other
risk-takers
and staff in control functions are also not paid variable portions of their
remuneration
outside the framework of collective agreements.
Supplementary information on members of management, including other
managerial activities
Reference is made to pages 79-81 of this annual report for supplementary
information
on the bank's management, including information on their other managerial
activities.
STATUTORY STATEMENT ON MANAGEMENT
A N N U A L R E P O R T 2 0 1 1 PA G E 3 3
INFORMATION ON LISTED COMPANIES
Information on listed companies
The bank advises as follows in accordance with Section 133a of the regulation
on fi nancial
reports for credit institutions etc.:
The bank's share capital on 31 December 2011 was DKK 25.2 million in 5,040,000
shares of nom. DKK 5.
The bank has only one share class, and the entire share capital, thus including
all shares,
is listed on the NASDAQ OMX Copenhagen. There are no limitations on the shares'
negotiability.
ATP, Hilleroed has advised that they own more than 5% of the bank's share
capital.
The following rule applies to the right to vote:
Each share of up to nom. DKK 500 carries the right to one vote. Shareholdings
above
this level carry a total of two votes, which is the highest number of votes a
shareholder
may have when the shares are listed in the company's register of shareholders,
or when
the shareholder has reported and documented his or her right.
The members of the bank's board of directors elected by shareholders are
elected from
among the members of the bank's shareholders' committee. The following rule
applies
to changes to the bank's articles of association:
Any decision to change the articles of association is only valid if the
proposal is approved
by at least two thirds of both votes cast and the share capital with voting
rights represented
at the meeting.
The board of directors has the following authority to issue shares (specifi ed
in the articles
of association):
Following consultation with the shareholders' committee, the board of directors
is authorised
to increase the share capital by nom. DKK 14,210,980 to nom. DKK 39,410,980
in one or more rounds. This authority applies until 23 February 2015.
The board of directors has the following authority to acquire the bank's own
shares:
The annual general meeting of 23 February 2011 has authorised the board of
directors
- until the next annual general meeting - to permit the bank to acquire its own
shares in
accordance with current law to a total nominal value of 10% of the bank's share
capital,
such that the shares can be acquired at current list price +/- 10%.
PA G E 3 4 R I N G K J OE B I N G L A N D B O B A N K A / S
A N N U A L R E P O R T 2 0 1 1 PA G E 3 5
Page
36 Management's statement
37 Auditors' reports
40 Profi t and loss account
40 Proposed distribution of profi t
41 Core earnings
42 Balance sheet
44 Statement of shareholders' equity
45 Capital adequacy computation
46 Cash fl ow statement
47 Accounting policies
51 Notes to the annual report
74 Five year main fi gures
76 Five year key fi gures
S TATEMENT, R E P O R T S A N D A C C O U N T S
PA G E 3 6 R I N G K J OE B I N G L A N D B O B A N K A / S
MANAGEMENT'S STATEMENT
Statement by management and the board of directors
The board of directors and management have today considered and approved the
annual fi nancial
statements of Ringkjoebing Landbobank A/S for the fi nancial year 1 January - 31
December 2011,
including management report, profi t and loss account and statement of total
gains and losses, core
earnings, balance sheet, statement of equity, statement of capital adequacy,
cash fl ow statement, accounting
policies, notes and management statement.
The annual fi nancial statements were prepared in accordance with the
provisions of the Danish Act on
Financial Activities and further Danish requirements on listed fi nancial
companies concerning disclosure.
We consider the accounting policies to be appropriate and the accounting
estimates made to
be responsible, such that the annual report provides a true and fair view of
the bank's assets, liabilities
and fi nancial position as of 31 December 2011 and of the result of the bank's
activities and cash fl ows
for the fi nancial year 1 January - 31 December 2011. We also believe that the
management report etc.
contain a true and fair review of the developments in the bank's activities and
fi nancial circumstances,
and a description of the most important risks and uncertainty factors which
could affect the bank.
The annual fi nancial statements are recommended to the general meeting for
approval.
Ringkoebing, 1 February 2012
Board of managers:
Bent Naur John Bull Fisker
Executive General Manager General Manager
Ringkoebing, 1 February 2011
Board of directors:
Jens Lykke Kjeldsen Gravers Kjaergaard
Chairman Deputy Chairman
Gert Asmussen Inge Sandgrav Bak
Keld Hansen Martin Krogh Pedersen
Bo Bennedsgaard Gitte E. S. Vigsoe
Employee board member Employee board member
A N N U A L R E P O R T 2 0 1 1 PA G E 3 7
A U D I T O R S ' R E P O R T S
Internal auditor's declarations
To the shareholders of Ringkjoebing Landbobank A/S
Certifi cation of the annual fi nancial statements
I have audited the annual fi nancial statements of Ringkjoebing Landbobank A/S
for the fi nancial year 1
January - 31 December 2011, including profi t and loss account and statement of
total gains and losses,
core earnings, balance sheet, statement of equity, statement of capital
adequacy, cash fl ow statement
and notes, including accounting policies. The annual fi nancial statements were
prepared pursuant to
the Danish Act on Financial Activities. The management report, which was not
covered by the audit,
was prepared in accordance with Danish disclosure requirements for listed fi
nancial companies.
The audit
The audit was performed pursuant to the Danish Financial Supervisory
Authority's statutory order on
the performance of audits in fi nancial companies etc. and international
auditing standards, which require
that the audit be planned and performed in order to achieve a high degree of
assurance that the
fi nancial statements do not contain material misstatements.
The audit was performed in accordance with the division of work agreed with the
external auditors, and
it included assessment of established procedures and internal controls,
including the risk management
established by management, which is aimed at reporting procedures and material
business risks. On the
basis of signifi cance and risk, I have checked the basis for amounts and other
information in the annual
fi nancial statements by random sampling. The audit also included an assessment
of whether management's
choice of accounting policies is appropriate, whether management's accounting
estimates are
reasonable, and the total presentation of the fi nancial statements.
I participated in the audit of the major and risky areas, and my opinion is
that the proof obtained provided
an adequate and appropriate basis for my conclusion.
The audit did not give occasion for the expression of any reservations.
Conclusion
In my opinion, the established procedures and internal controls, including the
risk management
established by management for the bank's reporting processes and major business
risks, are functioning
satisfactorily.
I also believe that the annual fi nancial statements provide a true and fair
picture of the bank's assets,
liabilities and fi nancial position as of 31 December 2011 and of the result of
the bank's activities in the
fi nancial year 1 January - 31 December 2011 in accordance with the Act on
Financial Activities.
Statement on management report
I have examined the management report in accordance with the Act on Financial
Activities. I did not
take any further action in addition to the audit of the annual fi nancial
statements which was performed.
My opinion on this basis is that the information in the management report is in
agreement with the
fi nancial statements.
Ringkoebing, 1 February 2012
Henrik Haugaard
Chief auditor
PA G E 3 8 R I N G K J OE B I N G L A N D B O B A N K A / S
A U D I T O R ' S R E P O R T S
The independent auditor's declaration
To the shareholders of Ringkjoebing Landbobank A/S
Endorsement of the annual fi nancial statements
We have audited the fi nancial statements for Ringkjoebing Landbobank A/S for
the fi nancial year 1 January
- 31 December 2011, which include the profi t and loss account and the
statement of total gains
and losses, core earnings, balance sheet, statement of equity, statement of
capital adequacy, cash fl ow
statement and notes, including accounting policies. The annual fi nancial
statements were prepared in
accordance with the Danish Act on Financial Activities. The directors' report,
which is not covered by
the audit, was prepared in accordance with Danish requirements applying to
listed fi nancial companies.
Management's responsibility for the annual fi nancial statements
Management is responsible for preparing annual fi nancial statements which
provide a true and fair picture
in accordance with the Danish Act on Financial Activities. Management is also
responsible for the
internal checks which management considers necessary for the preparation of
annual fi nancial statements
without material misstatements whether these are attributable to fraud or error.
The auditor's responsibility
Our responsibility is to express a conclusion on the annual fi nancial
statements on the basis of our
audit. We have performed our audit in accordance with international auditing
standards and additional
requirements under Danish accounting legislation. These standards specify that
we comply with ethical
requirements and that we plan and perform the audit in order to gain a high
degree of assurance that
the fi nancial statements do not contain material misstatements.
An audit covers actions intended to provide proof of the amounts and the
information specifi ed in the
fi nancial statements. The chosen actions depend on the auditor's assessment,
including the assessment
of risk of material misstatements in the fi nancial statements whether these
are attributable to fraud
or error. In the assessment of risk, the auditor considers internal controls of
relevance to the bank's
preparation of fi nancial statements which provide a true and fair picture. The
object is to design actions
which are appropriate in the circumstances, but not to express a conclusion on
the effectiveness of the
bank's internal controls. An audit also covers expressing an opinion on whether
the accounting policies
used by management are appropriate, whether the estimates made by management
are reasonable,
and an assessment of the total presentation of the fi nancial statements.
In our opinion, the evidence we obtained for our audit provided an adequate and
appropriate basis for
our conclusion.
The audit has not given occasion for the expression of any reservations.
A N N U A L R E P O R T 2 0 1 1 PA G E 3 9
Conclusion
In our opinion, the annual fi nancial statements provide a true and fair
picture of the company's assets,
liabilities and fi nancial position as of 31 December 2011 and the result of
the company's activities for
the fi nancial year 1 January - 31 December 2011 in accordance with the Act on
Financial Activities.
Statement on the management report
We have read the management report in accordance with the Act on Financial
Activities. We have not
performed any further actions in addition to our audit of the annual fi nancial
statements. We believe on
this basis that the information in the management report is in accordance with
the fi nancial statements.
Ringkoebing, 1 February 2012
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
Ole Blinkenberg Alex Nyholm
State-authorised State-authorised
public accountant public accountant
PA G E 4 0 R I N G K J OE B I N G L A N D B O B A N K A / S
Note 2011 2010
no. DKK 1,000 DKK 1,000
1 Interest receivable 858,257 836,339
2 Interest payable 245,291 241,954
Net income from interest 612,966 594,385
3 Dividend on capital shares etc. 1,111 1,219
4 Income from fees and commissions 158,303 170,389
4 Fees and commissions paid 24,312 25,996
Net income from interest and fees 748,068 739,997
5 Value adjustments 16,386 +52,159
Other operating income 4,535 3,893
6,7,9 Staff and administration costs 244,068 236,374
10 Amortisation, depreciation and write-downs on
intangible and tangible assets 4,375 3,219
Other operating costs
Miscellaneous other operating costs 381 195
Costs bank package I and Deposit Guarantee Fund 11,178 46,590
Write-downs on loans and debtors etc.
14 Write-downs on loans and other debtors -128,799 -138,217
15 Write-downs on national bank package I etc. 0 -33,152
Result of capital shares in associated companies +11 +14
Profi t before tax 380,199 338,316
11 Tax 94,128 81,443
Profi t after tax 286,071 256,873
Other comprehensive income 0 0
Comprehensive income after tax 286,071 256,873
P R O F I T A N D L O S S A C C O U N T
2011 2010
DKK 1,000 DKK 1,000
Profi t after tax 286,071 256,873
Total amount available for distribution 286,071 256,873
Dividend 65,520 60,480
Other purposes 500 500
Transferred to reserve for net revaluation
under the intrinsic value method +11 +14
Appropriation to own funds 220,040 195,879
Total distribution of the amount available 286,071 256,873
P R O P O S E D D I S T R I B U T I O N O F P R O F I T
A N N U A L R E P O R T 2 0 1 1 PA G E 4 1
CORE EARNINGS
2011 2010
DKK 1,000 DKK 1,000
Net income from interest 606,576 583,398
Net income from fees and provisions excl. commission 115,200 118,145
Income from sector shares 4,437 3,931
Foreign exchange income 17,914 22,440
Other operating income etc. 4,535 3,893
Total core income excl. trade income 748,662 731,807
Trade income 18,791 26,248
Total core income 767,453 758,055
Staff and administration costs 244,068 236,374
Amortisations, depreciations and write-downs on intangible
and tangible assets 4,375 3,219
Other operating costs 381 195
Total costs etc. 248,824 239,788
Core earnings before write-downs on loans 518,629 518,267
Write-downs on loans and other debtors -128,799 -138,217
Core earnings 389,830 380,050
Result for portfolio +1,547 +38,008
Costs bank package I and Deposit Guarantee Fund 11,178 79,742
Profi t before tax 380,199 338,316
Tax 94,128 81,443
Profi t after tax 286,071 256,873
PA G E 4 2 R I N G K J OE B I N G L A N D B O B A N K A / S
BALANCE
Note End Dec. 2011 End Dec. 2010
no. DKK 1,000 DKK 1,000
Assets
Cash in hand and claims at call on central banks 33,935 59,597
12 Claims on credit institutions and central banks
Claims at notice on central banks 186,989 1,329,844
Money market operations and bilateral loans - term to
maturity under 1 year 536,453 1,063,528
Bilateral loans - term to maturity over 1 year 590,876 261,335
13,14,16 Loans and other debtors at amortised cost price 12,746,560 13,151,216
Loans and other debtors at amortised cost price 11,938,197 12,326,328
Wind turbine loans with direct funding 808,363 824,888
17 Bonds at current value 2,755,912 1,546,282
18 Shares etc. 249,054 257,253
Capital shares in associated companies 538 527
19 Land and buildings total 74,722 75,662
Investment properties 6,681 7,261
Domicile properties 68,041 68,401
20 Other tangible assets 4,893 4,430
Actual tax assets 12,255 20,827
Temporary assets 1,382 150
21 Other assets 348,567 469,600
Periodic-defi ned items 6,887 6,953
Total assets 17,549,023 18,247,204
B A L A N C E S H E E T
A N N U A L R E P O R T 2 0 1 1 PA G E 4 3
Note End Dec. 2011 End Dec. 2010
no. DKK 1,000 DKK 1,000
Liabilities and equity
22 Debt to credit institutions and central banks
Debt to central banks 0 0
Money market operations and bilateral credits - term to
maturity under 1 year 285,028 636,326
Bilateral credits - term to maturity over 1 year 148,684 1,170,976
Bilateral credits from the KfW Bankengruppe 808,363 824,888
23 Deposits and other debts 12,755,415 11,661,654
24 Issued bonds at amortised cost price 338,958 337,617
25 Other liabilities 301,813 592,871
Periodic-defi ned items 183 282
Total debt 14,638,444 15.224.614
26 Provisions for pensions and similar liabilities 5,146 5,858
27 Provisions for deferred tax 4,789 3,929
14 Provisions for losses on guarantees 5,038 1,383
Other provisions for liabilities 0 2,077
Total provisions for liabilities 14,973 13,247
28 Subordinated loan capital 198,014 488,882
28 Hybrid core capital 214,472 208,117
28 Total subordinated debt 412,486 696,999
29 Share capital 25,200 25,200
Reserve for net revaluation under the intrinsic value method 187 176
Proposed dividend etc. 66,020 60,980
Profi t carried forward 2,391,713 2,225,988
Total shareholders' equity 2,483,120 2,312,344
Total liabilities and equity 17,549,023 18.247.204
31 Contingent liabilities etc.
PA G E 4 4 R I N G K J OE B I N G L A N D B O B A N K A / S
STATEMENT OF SHAREHOLDERS' EQUITY
Reserve for
net revaluation
under
the intrin- Proposed Profi t Total
Share sic value dividend carried shareholders'
DKK 1,000 capital method etc. forward equity
2010
Shareholders' equity at the end
of the previous fi nancial year 25,200 162 0 2,030,411 2,055,773
Dividend etc. paid 0
Dividend received on own shares 0
Shareholders' equity after
allocation of dividend etc. 25,200 162 0 2,030,411 2,055,773
Purchase and sale of own shares -3,595 -3,595
Other shareholders' equity items 3,293 3,293
Profi t for the fi nancial year 14 60,980 195,879 256,873
Shareholders' equity on the
balance sheet date 25,200 176 60,980 2,225,988 2,312,344
2011
Shareholders' equity at the end
of the previous fi nancial year 25,200 176 60,980 2,225,988 2,312,344
Dividend etc. paid -60,980 -60,980
Dividend received on own shares 168 168
Shareholders' equity after
allocation of dividend etc. 25,200 176 0 2,226,156 2,251,532
Purchase and sale of own shares -58,391 -58,391
Other shareholders' equity items 3,908 3,908
Profi t for the fi nancial year 11 66,020 220,040 286,071
Shareholders' equity on the
balance sheet date 25,200 187 66,020 2,391,713 2,483,120
A N N U A L R E P O R T 2 0 1 1 PA G E 4 5
C A P I TAL ADEQUACY COMPUTATION
End Dec. 2011 End Dec. 2010
DKK 1,000 DKK 1,000
Calculated pursuant to the Executive order on Capital Adequacy
issued by the Danish Financial Supervisory Authority.
Weighted items with credit and counterpart risks 11,041,407 11,110,261
Market risk 750,457 714,897
Operational risk 1,396,138 1,322,788
Total risk-weighted items 13,188,002 13,147,946
Share capital 25,200 25,200
Reserve for net revaluation under the intrinsic value method 187 176
Profi t carried forward 2,457,733 2,286,968
Core capital 2,483,120 2,312,344
Proposed dividend etc. -66,020 -60,980
Addition to/deduction from the core capital -187 -176
Core capital after deductions 2,416,913 2,251,188
Hybrid core capital 200,000 200,000
Core capital after deductions incl. hybrid core capital 2,616,913 2,451,188
Subordinated loan capital 200,723 491,575
Addition to/deduction from the capital base 187 176
Capital base after deductions 2,817,823 2,942,939
Core capital ratio excl. hybrid core capital (%) 18.3 17.1
Core capital ratio (%) 19.8 18.6
Solvency ratio (%) 21.4 22.4
Capital base requirements under Section 124 (2,1) of the
Danish Financial Business Act 1,055,040 1,051,836
PA G E 4 6 R I N G K J OE B I N G L A N D B O B A N K A / S
C A S H F L O W S TATEMENT
2011 2010
DKK 1,000 DKK 1,000
Operation activities
Profi t for the fi nancial year 286,071 256,873
Amortisations, depreciations and write-downs
on intangible and tangible assets 4,375 3,219
Write-downs on loans and debtors etc. 164,539 167,438
Items not affecting liquidity -279,386 3,666
Adjusted result of operations 175,599 431,196
Changes in operating capital
Claims on and debt to credit institutions etc., net -1,478,199 151,754
Loans and other debtors at amortised cost price 240,117 -271,442
Securities, not liquid and pledged 100,393 -135,101
Deposits and other debts 1,093,761 474,184
Issued bonds at amortised cost price 1,341 -219,720
Other assets and liabilities, net -161,852 2,485
Cash fl ows from operating activities -28,840 433,356
Investment activities
Intangible and tangible assets -4,268 -3,608
Cash fl ows from investment activities -4,268 -3,608
Financing activities
Paid dividend, net -60,812 0
Own shares etc. -58,391 -3,595
Cash fl ows from fi nancing activities -119,203 -3,595
Total effect on liquidity for the year -152,311 426,153
Cash and cash equivalents, beginning of year 2,812,677 2,386,524
Cash and cash equivalents, end of year 2,660,366 2,812,677
Cash and cash equivalents, end of year specifi ed thus:
Cash in hand and claims at call on central banks 33,935 59,597
Claims on credit institutions and central banks 204,899 1,633,372
Securities, unpledged 2,421.532 1,119,708
Total cash and cash equivalents, end of year 2,660,366 2,812,677
The cash fl ow statement cannot be derived from this annual report, and the
statement has also been adapted
to the special statement of accounts etc. for banks.
A N N U A L R E P O R T 2 0 1 1 PA G E 4 7
A C C O U N T I N G P O L I C I E S
Accounting policies
Basis for preparing the annual report
General
The annual report is prepared in accordance with the provisions of the Danish
Financial Business Act
and the applicable Executive Order on Financial Reports for Credit Institutions
and Investment Companies
etc. The annual report is also prepared in accordance with the disclosure
requirements of NASDAQ
OMX Copenhagen (Copenhagen Stock Exchange), to the extent to which the Danish
Financial Business
Act, the Executive Order on Financial Reports for Credit Institutions and
Investment Companies etc.
or other Executive Orders from the Danish Financial Supervisory Authority do
not specify a different
practice.
The annual report is presented in DKK rounded to the nearest 1,000 kroner.
The accounting policies are unchanged relative to last year.
Inclusion and measuring - general
Assets are included in the balance sheet when it is probable that future fi
nancial advantages will accrue
to the bank and the value can be measured reliably. Liabilities are included in
the balance sheet, when
they are probable, and that they can be measured reliably.
Income is included in the profi t and loss account in step with its earning.
Costs paid to achieve the income
for the year are included in the profi t and loss account, and value
adjustments made to fi nancial assets,
fi nancial liabilities and derivative fi nancial instruments are also included
in the profi t and loss account.
Regarding the criteria for inclusion and the basis of measurement we refer to
the following sections.
Accounting estimates
In computing the book value of certain assets and liabilities, an estimate has
been made of how future
events will affect the value of the assets and liabilities on the balance sheet
date.
The estimates made are based on assumptions which management judges to be
responsible, but which
are not certain. The fi nal actual results may thus deviate from the estimates
as the bank is subject to
risks and uncertainties which can affect the results.
The most important estimates concern write-downs on loans and debtors,
computation of current
values for unlisted fi nancial instruments, and provisions for liabilities. The
most important estimates on
write-downs on loans and debtors are associated with quantifi cation of the
risk that no future payments
will be received.
Foreign currency
Assets and liabilities in foreign currency are converted to Danish kroner at
the closing exchange rate for
the currency on balance sheet date, corresponding to the rate published by the
Central Bank of Denmark.
Income and expenses are converted continuously at the exchange rate on the
transaction date.
Financial instruments - general
In general, the bank measures fi nancial assets and liabilities at current
value on fi rst inclusion. Measuring
is subsequently made at current value unless otherwise specifi cally emerges
from the following sections
on the individual accounts items. The bank uses the date of payment as the date
of entry for fi nancial
instruments.
Derivative fi nancial instruments
Forward transactions, interest rate swaps and other derivative fi nancial
instruments are included at current
value on balance sheet date.
Hedging transactions which, under the terms of the Danish Financial Supervisory
Authority's Executive
Order on Financial Reports for Credit Institutions and Investment Companies
etc. are regarded as hedging
at current value for accounting purposes are included at current value on the
balance sheet date
with respect to both the hedging instrument and the hedged part of the fi
nancial instrument.
All value adjustments concerning derivative fi nancial instruments and items
subject to hedging for accounting
purposes are entered under the item >>Value adjustments<< in the profi
t and loss
account.
PA G E 4 8 R I N G K J OE B I N G L A N D B O B A N K A / S
The profi t and loss account
Interest income
Interest income is included on the basis of the effective interest method,
under which interest income
also includes the allocated portion of establishment fees etc. which are
considered to be a part of the
effective interest on the loan.
On loans which in full or in part have been written down, the interest income
relating to the writtendown
part is entered under the item >>Write-downs on loans and debtors
etc.<<.
Income from fees and commissions, net
Fees and commissions relating to loans and receivables are recognized as part
of the carrying amount of
loans and receivables and are recognized in the profi t and loss account over
the term of the loans and
receivables as part of the effective interest rate on the loans as interest
income, as referred to in the above
section >>Interest income<<. Commissions relating to garantees are
carried to
income over the term of the
garantees. Income generated upon performing a given transaction, including
securities and custodianship
fees plus payment handling fees, are recognised as income when the transaction
has been performed.
Staff and administration costs
Staff and administration costs comprise among other things salaries, pension
costs, IT-costs, etc.
Write-downs on loans and debtors etc.
This item includes losses and write-downs on loans and other debtors and losses
and provisions on guarantees.
The item also includes losses and write-downs on claims on credit institutions
and losses and
provisions on the national bank package I.
Tax
Tax on the profi t for the year is booked as a cost in the profi t and loss
account.
Net deferred tax is calculated on the items which cover the delay in accounting
and booking of taxable
income and expenses at the tax rate applicable on the balance sheet date.
Core earnings
The core earnings provide a statement of the bank's income and costs. In total,
the core earnings contain
the same items as the profi t and loss account but with a different degree of
specifi cation.
The balance sheet
Claims on credit institutions and central banks
The fi rst inclusion is made at current value plus transactions costs, less
establishment fees etc., and
subsequent measurement is at amortised cost price, but reference is made to the
section >>Derivative
fi nancial instruments<< with respect to hedging for accounting purposes.
Loans and other debtors
The fi rst inclusion is made at current value plus transaction costs, less
establishment fees etc., and
subsequent measurement is at amortised cost price. Establishment fees etc.
which are comparable with
ongoing interest payments, and are thus deemed to be an integral part of the
effective interest on the
loan, are accrued over the life of the individual loan.
If an objective indication of impairment is found on an individually assessed
loan, a write-down is made
to cover the bank's loss on the basis of expected future payments series based
on an assessment of the
most likely outcome.
With respect to loans and receivables which have not been written down
individually, a group-wise assessment
is made of whether there is an objective indication of impairment in value for
the group.
This group-wise assessment is made on groups of loans and debtors with uniform
characteristics with
respect to credit risk. 12 groups are used, one of public clients, one of
private clients and 10 of business
clients, the latter further grouped by sector.
The group-wise assessment is made on the basis of a segmentation model
developed by the Association
of Local Banks, Savings Banks and Cooperative Savings Banks in Denmark, which
undertakes the ongoing
maintenance and development. The segmentation model sets the relationship in
the individual groups
between losses suffered and a number of signifi cant explanatory macroeconomic
variables via a linear
regression analysis. The explanatory macroeconomic variables include
unemployment, house prices,
interest rates, number of bankruptcies/forced auctions etc.
A C C O U N T I N G P O L I C I E S
A N N U A L R E P O R T 2 0 1 1 PA G E 4 9
The macroeconomic segmentation model is initially calculated on the basis of
loss data for the entire
banking sector. The bank has therefore made an assessment of whether the model
estimates refl ect the
credit risk for the bank's own loan portfolio.
This assessment has resulted in an adaptation of the estimates under the model
to the bank's own
circumstances, under which the adapted estimates form the basis for calculation
of the group writedowns.
The adjusted estimates were further corrected to take account of the changed
economic
conditions. For each group of loans and debtors, there is an estimate which
expresses the percentage
decrease in value associated with a given group of loans and debtors on the
balance sheet date. A
comparison of the individual loan's current risk of loss with the loan's
original risk of loss and its risk of
loss at the beginning of the current accounting period provides the individual
loan's contribution to
the group write-downs. The write-down is calculated as the difference between
the book value and the
discounted value of the expected future payments.
With respect to hedging for accounting purposes reference is made to section
>>Derivative fi nancial
instruments<<.
Changes in write-downs which have been made are adjusted in the profi t and
loss account under the
item >>Write-downs on loans and debtors etc.<<.
Bonds and shares
Securities which are listed on a stock exchange are included at current value,
determined on the basis
of the closing price on balance sheet date.
Unlisted securities are also included at current value, computed on the basis
of what the price would
be in a transaction between independent parties. The management takes an active
approach to the
calculation of this market value.
All ongoing value adjustments to listed and unlisted securities are entered in
operations under the item
>>Value adjustments<<.
Capital shares in associated companies
Capital shares in associated companies are entered in the balance sheet under
the intrinsic value method.
Land and buildings
Land and buildings cover the two items >>Investment properties<< and
>>Domicile
properties<<. The properties
which house the bank's branches are included under domicile properties, while
other properties
are considered to be investment properties.
Investment properties are included in the balance sheet at current value,
computed under the yield
method. Ongoing changes in value concerning investment properties are included
in the profi t and loss
account.
Domicile properties are included in the balance sheet at reassessed value,
which is the current value
computed on the basis of the yield method less cumulative depreciation and any
loss due to impairment.
Depreciation is calculated on the basis of expected useful life, which is 50
years, on the basis of depreciation
computed as cost price less scrap value. Depreciations and losses due to
impairment are included in the profi
t and loss account, while increases in the reassessed value are included
directly on the shareholders' equity
under the item >>Provisions for revaluation<< unless the increase
corresponds to
a reduction in value which
was previously included in the profi t and loss account.
Other tangible assets
Other tangible assets including operating equipment are included in the balance
sheet at cost price less
cumulative depreciation and write-downs for any loss due to impairment.
Depreciations are calculated
on the basis of the assets' expected lives, which are 1-5 years, on the basis
of depreciation computed
as cost price less scrap value. Depreciations and losses due to impairment are
included in the profi t and
loss account.
Temporary assets
Temporary assets comprise assets taken over as a result of the unwinding of
customer engagements, the
intention being to sell off the assets as soon as possible. Assets taken over
are recognized at fair value
upon taking them over and subsequently measured at estimated realizable value.
Other assets
Other assets include interest and commissions receivable as well as the
positive market value of derivative
fi nancial instruments.
PA G E 5 0 R I N G K J OE B I N G L A N D B O B A N K A / S
Tax
Actual tax assets and actual tax liabilities are recognized in the balance
sheet as tax calculated on the
taxable income for the year, adjusted for tax paid on account.
A deferred tax liability is allocated under the item >>Provisions for
deferred
tax<< and if a deferred tax asset
is booked under the item >>Deferred tax assets<< following a cautious
assessment
of the asset's value.
Debt to credit institutions and central banks / Deposits and other debts /
Issued bonds at amortised
cost price / Subordinated debt
Measurement is at amortised cost price, but reference is made to the section
>>Derivative fi nancial instruments
<< with respect to hedging for accounting purposes.
Other liabilities
Other liabilities include interest and commissions payable and the negative
marked value of derivative
fi nancial instruments.
Provisions for liabilities
Provisions for liabilities include mainly provisions for pensions, deferred tax
and losses on guarantees. A
provision is recognized in respect of a guarantee or an irrevocable credit
commitment if it is likely that
the guarantee or the credit commitment will be exercised and the amount of the
commitment can be
reliably determined. Provisions are based on Management's best estimate of the
amount of the commitments.
In measuring provisions for liabilities, discounting to net present value is
made where deemed
material.
Various informations
Contingent liabilities/guarantees
The bank's outstanding guarantees are given in the notes under the item
>>Contingent liabilities<<. If it is
considered likely that an outstanding guarantee will incur a loss to the bank,
the liability is given under
the item >>Provisions for losses on guarantees<< and booked under
costs in the
profi t and loss account
under the item >>Write-downs on loans and debtors etc.<<
Cash fl ow statement
The cash fl ow statement is presented in accordance with the indirect method on
the basis of the result
for the year, adjusted for non-liquid items.
The statement shows net changes in the balance sheet, and on some points it
will therefore not provide
the full picture of the actual cash fl ows.
The cash fl ows from the operating activity are computed as the result for the
year, adjusted for nonliquid
items and changes in operating capital. Cash fl ows from the investment
activity cover purchases
and sale of fi xed assets etc. Cash fl ows from the fi nancing activity cover
movements and allocations in
subordinated debt and in shareholders' equity.
Liquid assets cover cash in hand, claims at call on the Central Bank of
Denmark, fully secured and liquid
claims at call on banks, unpledged certifi cates of deposit issued by the
Central Bank of Denmark, and
secure and easily saleable listed unpledged securities, under Section 152 of
the Danish Financial Business
Act.
Information and key fi gures
>>Total capital base<< on page 3 under >>Main fi gures for the
bank<< is computed
as the banks capital base
after deductions.
The >>Pre-tax return on equity at the beginning of the year<<, and the
>>Return on
equity after tax at the
beginning of the year<< as given on page 3 under >>Key fi gures for
the bank<<
were calculated after deduction
of dividend etc., net.
>>Key fi gures per DKK 5 share<< on page 3 were calculated on the
basis of 2011:
4,940,000 shares and
2007 to 2010: 5,040,000 shares.
All calculations etc. concerning write-downs on pages 3, 8, 19 and 20 were made
exclusive of amounts
under the national bank package I etc.
With effect from 2008, the bank changed the calculation of the key fi gure
>>Rate of costs<<. The key
fi gure is now calculated as >>Total costs etc.<< (including
depreciation on
tangible fi xed assets) divided
by >>Total core income<< multiplied by 100. The comparative fi gures
on the pages
3 and 7 have been
adjusted for the change method of calculation.
It is noted, that the individual solvency requirement (reported at page 12, 13
and 16) not is audited.
A C C O U N T I N G P O L I C I E S
A N N U A L R E P O R T 2 0 1 1 PA G E 5 1
1 Interest receivable
Claims on credit institutions and central banks 38,712 37,150
Loans and other debtors 775,891 748,211
Loans - interest concerning the written-down part of loans -35,740 -29,221
Bonds 58,993 47,905
Total derivatives fi nancial instruments, 20,069 31,080
of which
Currency contracts 9,205 13,537
Interest-rate contracts 10,864 17,543
Other interest receivable 332 1,214
Total interest receivable 858,257 836,339
2 Interest payable
Credit institutions and central banks 44,311 45,468
Deposits and other debts 169,174 146,978
Issued bonds 12,887 21,252
Subordinated debt 18,605 28,049
Other interest payable 314 207
Total interest payable 245,291 241,954
3 Dividend on capital shares etc.
Shares 1,111 1,219
Total dividend on capital shares etc. 1,111 1,219
4 Fees and commissions
Gross income from fees and commissions
Securities trading 24,117 34,812
Asset management 53,997 56,624
Payment handling 19,679 19,170
Loan fees 7,817 9,985
Guarantee commissions 34,898 31,270
Other fees and commissions 17,795 18,528
Total gross income from fees and commissions 158,303 170,389
Fees and commissions paid
Securities trading 5,326 8,564
Asset management 4,110 4,556
Payment handling 2,061 2,354
Loan fees 1,765 2,257
Other fees and commissions 11,050 8,265
Total fees and commissions paid 24,312 25,996
Net income from fees and commissions
Securities trading 18,791 26,248
Asset management 49,887 52,068
Payment handling 17,618 16,816
Loan fees 6,052 7,728
Guarantee commissions 34,898 31,270
Other fees and commissions 6,745 10,263
Total net income from fees and commissions 133,991 144,393
Foreign exchange income 17,914 22,440
Total net income from fees, commissions and
foreign exchange income 151,905 166,833
Note 2011 2010
no. DKK 1,000 DKK 1,000
N O T E S T O T H E A N N U A L R E P O R T
PA G E 5 2 R I N G K J OE B I N G L A N D B O B A N K A / S
5 Value adjustments
Loans and other debtors at current value* 6,746 4,336
Bonds 2,619 34,044
Shares etc. -4,956 2,702
Shares in sector companies etc. 3,680 2,853
Investment properties -579 0
Foreign exchange income 17,914 22,440
Total derivative fi nancial instruments, -10,050 -11,334
of which
Interest-rate contracts -10,050 -11,333
Share contracts 0 -1
Issued bonds -744 -965
Other liabilities 1,756 -1,917
Total value adjustments 16,386 52,159
* Cf. note 36.
6 Staff and administration costs
Payments to board of managers,
board of directors and shareholders' committee
Board of managers*/**:
Bent Naur:
Fixed payment 3.963 3.751
John Fisker:
Fixed payment 3.274 3.195
Reserved provisions for pensions 0 -919
Total payment 7.237 6.027
Board of directors***:
Jens Lykke Kjeldsen, chairman 242 236
Gravers Kjaergaard, deputy chairman 162 158
Gert Asmussen 125 121
Keld Hansen 125 121
Martin Krogh Pedersen 83 0
Inge Sandgrav Bak 83 0
Bo Bennedsgaard 125 121
Gitte E. S. Vigsoe 104 0
Soeren Nielsen 0 71
Vederlag i alt 1,049 828
Shareholders committee:
Total payment 336 331
Total 8,622 7.186
Staff costs
Salaries 111,030 109,878
Pensions 11,522 11,320
Social security expenses 900 790
Costs depending on number of staff 14,719 11,962
Total 138,171 133,950
Other administration costs 97,275 95,238
Total staff and administration costs 244,068 236,374
* Management does not receive variable payment.
** The management has a company car.
*** The board of directors' fee is fi xed.
N O T E S T O T H E A N N U A L R E P O R T
Note 2011 2010
no. DKK 1,000 DKK 1,000
A N N U A L R E P O R T 2 0 1 1 PA G E 5 3
7 Number of employees
Average number of employees during the fi nancial year
converted into full-time employees 252 254
8 Incentive programmes
The bank has no incentive programmes.
9 Fee to the auditor elected by the general meeting
Statutory audit 603 597
Other declarations with security 27 0
Advice on tax 19 24
Other services 13 88
Total fee to the auditor elected by the general meeting 662 709
It is noted, that the bank also has an internal auditor
10 Amortisations, depreciations and write-downs on intangible
and tangible assets
Tangible assets
Domicile properties, depreciations 1,353 533
Other tangible assets, depreciations 3,022 2,686
Total amortisations, depreciations and write-downs on
intangible and tangible assets 4,375 3,219
11 Tax
Tax calculated on the years profi t 93,159 83,055
Adjustment of deferred tax 860 -1,159
Adjustment of tax calculated for previous years 109 -453
Total tax 94,128 81,443
Effective tax rate (%):
The current tax rate of the bank 25.0 25.0
Adjustment of tax on non-liable income and non-deductible
costs etc. -0.5 -0.8
Adjustment of tax calculated for previous years 0.0 -0.1
Total effective tax rate 24.5 24.1
End Dec. 2011 End Dec. 2010
DKK 1,000 DKK 1,000
12 Claims on credit institutions and central banks
Claims at call 17,910 303,528
Up to and including 3 months 661,989 1,429,844
More than 3 months and up to and including 1 year 43,543 660,000
More than 1 year and up to and including 5 years 590,876 261,335
More than 5 years 0 0
Total claims on credit institutions and central banks 1,314,318 2,654,707
Distributed as follows:
Claims at notice on central banks 186,989 1,329,844
Claims on credit institutions 1,127,329 1,324,863
1,314,318 2,654,707
13 Loans and other debtors at amortised cost price
At call 2,689,793 3,528,048
Up to and including 3 months 476,999 585,341
More than 3 months and up to and including 1 year 2,016,455 1,961,971
More than 1 year and up to and including 5 years 3,666,432 4,065,526
More than 5 years 3,896,881 3,010,330
Total loans and other debtors at amortised cost price 12,746,560 13,151,216
Note 2011 2010
no. DKK 1,000 DKK 1,000
PA G E 5 4 R I N G K J OE B I N G L A N D B O B A N K A / S
14 Write-downs on loans and other debtors and provisions
for losses on guarantees
Individual write-downs
Cumulative individual write-downs on loans and other debtors
at the end of the previous fi nancial year 532,441 424,517
Write-downs/value adjustments during the year 205,130 289,432
Reverse entry - write-downs made in previous fi nancial years -110,870 -120,381
Booked losses covered by write-downs -49,349 -61,127
Cumulative individual write-downs on loans and
other debtors on the balance sheet date 577,352 532,441
Group write-downs
Cumulative group write-downs on loans and other debtors
at the end of the previous fi nancial year 31,211 41,132
Write-downs/value adjustments during the year 36,255 0
Reverse entry - write-downs made in previous fi nancial years 0 -9,921
Cumulative group write-downs on loans and
other debtors on the balance sheet date 67,466 31,211
Total cumulative write-downs on loans and other debtors
on the balance sheet date 644,818 563,652
Provisions for losses on guarantees
Cumulative individual provisions for losses on guarantees at
the end of the previous fi nancial year 1,383 1,376
Provisions/value adjustments during the year 4,605 1,000
Reverse entry - provisions made in previous fi nancial years -885 -993
Booked losses covered by write-downs -65 0
Cumulative individual provisions for losses on guarantees
on the balance sheet date 5,038 1,383
Total cumulative write-downs on loans and other debtors and
provisions for losses on guarantees on the balance sheet date 649,856 565,035
It is noted that no write-downs were made on outstanding claims on credit
institutions and other receivables at the end of 2011.
The above fi gures in this note therefore do not include any such write-downs.
15 Provisions national bank package I etc.
Cumulative individual provisions at the end of the previous
fi nancial year 0 45,101
Provisions/value adjustments during the year 0 33,152
Final payment - transferred to other liabilities 0 -78,253
Cumulative individual provisions on the balance sheet date 0 0
It is noted that the item in the profi t and loss account in 2010 primarily
concerns write-downs made on the national bank package I.
16 Suspended calculation of interest
Loans and other debtors with suspended calculation of
interest on the balance sheet date 61,419 66,237
N O T E S T O T H E A N N U A L R E P O R T
Note End Dec. 2011 End Dec. 20109
no. DKK 1,000 DKK 1,000
A N N U A L R E P O R T 2 0 1 1 PA G E 5 5
17 Bonds at current value
Listed on the stock exchange 2,755,912 1,546,282
Total bonds at current value 2,755,912 1,546,282
18 Shares etc.
Listed on NASDAQ OMX Copenhagen 12,033 25,267
Unlisted shares at current value 1,460 1,490
Sector shares at current value 214,583 209,086
Other holdings 20,978 21,410
Total shares etc. 249,054 257,253
Sector shares are distributed as follows:
Asset management and pension
BankInvest Holding A/S 27,924 22,409
EgnsInvest Holding A/S 115 42
Letpension Holding A/S 3,748 3,748
SparInvest Holding A/S 3,688 5,945
Sector infrastructure
Multidata Holding A/S 2,748 2,748
Nets Holding A/S 12,791 12,367
Swift 25 23
Vaerdipapircentralen A/S 1,145 1,145
Bankernes Kontantservice A/S 426 426
Mortgage credit
DLR Kredit A/S 124,933 123,907
PRAS A/S 37,040 36,326
Total sector shares 214,583 209,086
19 Land and buildings
Investment properties
Current value at the end of the previous fi nancial year 7,261 7,261
Acquisitions during the year, including improvements 0 0
Disposals during the year 0 0
Value adjustments to current value for the year -580 0
Current value on the balance sheet date 6,681 7,261
Domicile properties
Reassessed value at the end of the previous fi nancial year 68,401 69,328
Acquisitions during the year, including improvements 993 236
Disposals during the year 0 -1,487
Depreciations for the year -553 -533
Value adjustments to current value for the year -800 0
Reverse entry of previous years' write-downs during the year and
reverse entry of total depreciations and write-downs on assets
which were sold or taken out of operation during the year 0 857
Total reassessed value on the balance sheet date 68,041 68,401
When measuring investment and domicile properties a rate of return between 6%
and 8% is used.
No external experts were involved in the valuation of investment and domicile
properties.
Note End Dec. 2011 End Dec. 2010
no. DKK 1,000 DKK 1,000
PA G E 5 6 R I N G K J OE B I N G L A N D B O B A N K A / S
N O T E S T O T H E A N N U A L R E P O R T
20 Other tangible assets
Cost price
Cost price at the end of the previous fi nancial year
without depreciations and write-downs 28,399 29,826
Acquisitions during the year, including improvements 3,557 4,172
Disposals during the year -3,132 -5,599
Total cost price on the balance sheet date 28,824 28,399
Write-downs and depreciations
Write-downs and depreciations at the end of the previous
fi nancial year 23,969 26,771
Write-downs for the year 0 0
Depreciations for the year 3,022 2,686
Reverse entry of previous years' write-downs during the year and
reverse entry of total depreciations and write-downs on assets
which were sold or taken out of operation during the year -3,060 -5,488
Total depreciations and write-downs on the balance sheet date 23,931 23,969
Total other tangible assets on the balance sheet date 4,893 4,430
21 Other assets
Interest and commissions receivable 58,383 42,493
Positive market value of derivative fi nancial instruments 267,853 395,882
Miscellaneous receivables and other assets 22,331 31,225
Total other assets 348,567 469,600
22 Debt to credit institutions and central banks
Debt payable on demand 210,686 520,010
Up to and including 3 months 26,619 27,169
More than 3 months and up to and including 1 year 150,127 184,789
More than 1 year and up to and including 5 years 583,111 1,570,313
More than 5 years 271,532 329,909
Total debt to credit institutions and central banks 1,242,075 2,632,190
Distributed as follows:
Debt to central banks 0 0
Debt to credit institutions 1,242,075 2,632,190
1,242,075 2,632,190
The bank has undrawn long-term committed revolving credit
facilities equivalent to:
Term to maturity under 1 year 100,000 596,352
Term to maturity over 1 year 74,342 174,544
Total 174,342 770,896
Note End Dec. 2011 End Dec. 2010
no. DKK 1,000 DKK 1,000
A N N U A L R E P O R T 2 0 1 1 PA G E 5 7
23 Deposits and other debts
On demand* 6,372,268 5,755,406
Deposits and other debts at notice:
Up to and including 3 months 2,166,283 2,058,207
More than 3 months and up to and including 1 year 1,175,194 832,457
More than 1 year and up to and including 5 years 1,561,041 1,600,801
More than 5 years 1,480,629 1,414,783
Total deposits and other debts 12,755,415 11,661,654
Distributed as follows:
On demand 5,822,693 5,582,938
At notice 146,889 131,139
Time deposits 3,740,496 2,925,948
Long-term deposit agreements 1,805,129 1,860,570
Special types of deposits* 1,240,208 1,161,059
12,755,415 11,661,654
* Special types of deposits are entered under the item >>On demand<<
pending payment, while in the specifi cation of the different types of deposits,
the sum is instead included under >>Special types of deposits<<.
24 Issued bonds at amortised cost price
On demand 0 0
Up to and including 3 months 2,955 0
More than 3 months and up to and including 1 year 0 0
More than 1 year and up to and including 5 years 336,003 337,617
More than 5 years 0 0
Total issued bonds at amortised cost price 338,958 337,617
Distributed as follows:
Issues in Danish kroner
Nom. DKK 220 million 220,000 220,000
Issues in Norwegian kroner
Nom. NOK 100 million 95,880 95,340
Regulation at amortised cost price and adjustment to
current value of issues in Norwegian kroner 9,241 8,440
Other issues 13,837 13,837
338,958 337,617
25 Other liabilities
Interest and commissions payable 56,166 55,967
Negative market value of derivative fi nancial instruments 159,683 378,188
Micellaneous payables and other liabilities 85,964 158,716
Total other liabilities 301,813 592,871
26 Provisions for pensions and similar liabilities
The provisions concern conditional pension commitments to
current members of the board of managers and a pension commitment
to a former member of the board of managers from a
merged bank. 5,146 5,858
27 Provisions for deferred tax
The calc. provisions for defer. tax relates to the balance sheet items:
Loans and other debtors -1,446 -1,395
Securities 2,568 2,868
Tangible assets -644 -914
Provisions for liabilities -1,287 -1,984
Other assets/liabilities 5,598 5,354
Total provisions for deferred tax 4,789 3,929
Deferred tax is calculated at (%) 25.0 25.0
Note End Dec. 2011 End Dec. 2010
no. DKK 1,000 DKK 1,000
PA G E 5 8 R I N G K J OE B I N G L A N D B O B A N K A / S
N O T E S T O T H E A N N U A L R E P O R T
28 Subordinated debt
Possible
Interest early
rate Cur- Due redemption
Type (%) rency Mill. date date
Subordinated loan capital
Bond loan*/**** 3.995 DKK 300 - - 0 300,000
Bilateral agreement** Floating EUR 27 30 June 2021 30 June 2018 200,723 201,269
Total subordinated loan capital 200,723 501,269
Hybrid core capital
Bond loan***/**** 4.795 DKK 200 Indefi nite 2 March 2015 200,000 200,000
Total hybrid core capital 200,000 200,000
Subordinated debt included in the calculation
of the capital base (before deduction of own holding) 400,723 701,269
Regulation at amortised cost price and adjustment to current value 11,763 5,424
Own holding of subordinated loan capital 0 -9,694
Total subordinated debt 412,486 696,999
* The loan has been terminated on 9 February 2011.
Interest - 2011: tDKK 1,251 / 2010: tDKK 11,703
** The interest rate will change on 30 June 2018 to a quarterly variable rate
equivalent to the
EURIBOR rate for a term of three months plus 3.50% p.a.
Interest - 2011: tDKK 7,634 / 2010: tDKK 6,598
*** The interest rate will change on 2 March 2015 to a quarterly variable
coupon rate equivalent to the
CIBOR rate published by the Central Bank of Denmark for a term of three months
plus 2.16% p.a.
Interest - 2011: tDKK 9,720 / 2010: tDKK 9,748
**** Admitted for listing on NASDAQ OMX Copenhagen.
29 Share capital
Number of shares at DKK 5 each:
Beginning of year 5,040,000 5,040,000
End of year 5,040,000 5,040,000
Reserved for subsequent cancellation 100,000 0
Share capital 25,200 25,200
The whole share capital has been admitted for listing on
NASDAQ OMX Copenhagen.
30 Own capital shares
Own capital shares included in the balance sheet at 0 0
The market value is 58,395 6,900
Number of own shares:
Beginning of year 9,517 8,572
Purchase of own shares during the year 263,030 319,220
Sale of own shares during the year -171,692 -318,275
End of year 100,855 9,517
Nominal value of holding of own shares, end of year 504 48
Own shares' proportion of share capital end of year (%):
Beginning of year 0.2 0.2
Purchase of own shares during the year 5.2 6.3
Sale of own shares during the year -3.4 -6.3
End of year 2.0 0.2
Total purchase price for shares acquired during the year 226,968 197,924
Total sales price for shares sold during the year 168,577 194,329
The transactions for the year in own shares were made on the basis of the
bank's ordinary trading with shares.
Note End Dec. 2011 End Dec. 2010
no. DKK 1,000 DKK 1,000
A N N U A L R E P O R T 2 0 1 1 PA G E 5 9
End Dec. 2011 End Dec. 2010
DKK 1,000 DKK 1,000
31 Contingent liabilities etc.
Contingent liabilities
Finance guarantees 653,353 668,504
Guarantees for foreign loans 5,576 8,602
Guarantees against losses on mortgage credit loans 50,138 44,098
Guarantees against losses Totalkredit 118,540 112,585
Registration and conversion guarantees 55,361 82,614
Sector guarantees 39,413 37,290
Other contingent liabilities 129,841 88,290
Total contingent liabilities 1,052,222 1,041,983
32 Assets furnished as security
First mortgage loans were provided for German wind turbine
projects. The loans are funded directly by KfW Bankengruppe,
to which security in the associated loans has been provided.
Each reduction of the fi rst mortgage loans is deducted directly
from the funding at the KfW Bankengruppe. 808,363 824,888
As security for clearing and any debt, the bank has pledged
securities from its holding to the Central Bank of Denmark
to a total market price of 269,005 468,198
33 Legal proceedings, etc.
The bank is not party to any legal proceedings that are estimated to result in
major losses and in
that way to a substantial change of the accounts.
34 Related parties
Related parties are among others the bank's board of directors and board of
managers, managerial
employees and their relatives. Ringkjoebing Landbobank advises that it has no
related parties
with a controlling infl uence on the bank (defi ned as >20% ownership).
There were no transactions during the year with the board of directors and
board of managers
or managerial employees apart from the payment of salaries and compensation
etc., stock
exchange business and the provision of loans and guarantees.
It is also noted that all of the transactions performed in 2011 and 2010 with
related parties,
including credit facilities, were carried out on market terms or a cost-cover
basis.
Two new members joined the board of directors in 2011, making a total eight
members.
Information on the remuneration made to the board of directors and board of
managers is
given in note 6.
Information on the size of loans, mortgages, sureties and guarantees provided
to members of the
bank's board of directors and board of managers and the security received is
given in this note. The
information in the note covers these parties' personal engagements and those of
their relatives.
Information on the shareholdings held by the board of directors and board of
managers is given
in this note.
The amount of loans issued to and mortgages, sureties or
guarantees issued for the members
of the bank's: Interest rates 2011
Board of managers (Mastercard) 250 250
Board of directors, incl. elected by the staff 2.1%-6.9% 29,510 8,696
All engagements are performed under market terms,
including both interest and guarantee commission rates.
Security pledged from members of the bank's:
Board of managers 0 0
Board of directors, incl. elected by the staff 1,206 1,086
Note End Dec. 2011 End Dec. 2010
no. DKK 1,000 DKK 1,000
PA G E 6 0 R I N G K J OE B I N G L A N D B O B A N K A / S
34 Related parties - continued
The board of directors' and the board of managers' shareholdings*
in Ringkjoebing Landbobank at the end of the year
The board of directors:
Jens Lykke Kjeldsen 5,815 5,415
Gravers Kjaergaard 6,663 6,663
Gert Asmussen 4,528 4,028
Keld Hansen 16,636 15,636
Inge Sandgrav Bak 2,488 2,488
Martin Krogh Pedersen 6,501 6,501
Bo Bennedsgaard 530 427
Gitte E. S. Vigsoe 30 28
The board of managers:
Bent Naur 16,944 16,492
John Fisker 15,192 14,740
* Stated in accordance with the rules on insiders.
35 Current value of fi nancial instruments
Financial instruments are measured in the balance sheet at either current value
or amortised cost
price (with consideration to risk cover that fulfi l the conditions applying to
hedging).
The current value is the amount at which a fi nancial asset can be sold or the
amount at which a
fi nancial liability can be redeemed between agreed independent parties. The
current values of
fi nancial assets and liabilities valued on active markets are calculated on
the basis of observed
market prices on the balance sheet date. The current values of fi nancial
instruments which are
not valued on active markets are calculated on the basis of generally
recognised methods of
valuation.
Shares etc. and derivative fi nancial instruments are measured in the accounts
at market value
such that included book values correspond to current values.
The write-downs on loans are assessed such that they correspond to changes in
credit quality.
The difference from current value is assessed as fees and commissions received,
costs incurred in
lending activities, and, for fi xed-interest loans, the value adjustment which
is independent of the
interest level and which can be calculated by comparing the actual market
interest rate with the
nominal rate applying to the loans.
The current value of claims on credit institutions and central banks is
determined under the
same method as for loans, but the bank has not currently made any write-downs
on claims on
credit institutions and central banks.
Issued bonds and subordinated debt are measured at amortised cost price. The
difference between
book and current values is calculated on the basis of prices on the market for
own listed
issues.
For variable-interest fi nancial liabilities in the form of deposits and debts
to credit institutions
measured at amortised cost price, it is estimated that the book value
corresponds to the current
value.
For fi xed-interest fi nancial liabilities in the form of deposits and debts to
credit institutions
measured at amortised cost price, the difference from current values is
estimated to be the value
adjustment which is independent of interest level.
Note End Dec. 2011 End Dec. 2010
no. Number of shares Number of shares
N O T E S T O T H E A N N U A L R E P O R T
A N N U A L R E P O R T 2 0 1 1 PA G E 6 1
End Dec. 2011 End Dec. 2010
DKK 1,000 DKK 1,000
Note End Dec. 2011 End Dec. 2010
no. Book value Current value Book value Current value
DKK 1,000 DKK 1,000 DKK 1,000 DKK 1,000
35 Current value of fi nancial instruments
- continued
Financial assets
Cash in hand+claims at call on central banks 33,935 33,935 59,597 59,597
Claims on credit institut. and central banks* 1,318,375 1,318,376 2,657,193
2,657,231
Loans and other debtors at amort. cost price* 12,777,305 12,828,656 13,180,721
13,222,857
Bonds at current value* 2,774,316 2,774,316 1,556,233 1,556,233
Shares etc. 249,592 249,592 257,780 257,780
Derivative fi nancial instruments 267,853 267,853 395,882 395,882
Total fi nancial assets 17,421,376 17,472,728 18,107,406 18,149,580
Financial liabilities
Debt to credit institutions and central banks* 1,243,364 1,242,551 2,634,219
2,635,136
Deposits and other debts* 12,798,121 12,835,712 11,690,377 11,702,381
Issued bonds at amortised cost price*/** 343,374 334,133 342,522 342,667
Derivative fi nancial instruments 159,683 159,683 378,188 378,188
Subordinated debt*/** 420,519 396,256 715,380 706,516
Total fi nancial liabilities 14,965,061 14,968,335 15,760,686 15,764,888
* The item includes calculated interest on the balance sheet date. The
calculated interest in the balance sheet is included
under the items >>Other assets<< and >>Other
liabilities<<.
** Using the most recently listed transaction price before the balance sheet
date, irrespective of the liquidity in the
security in question.
36 Hedging
The following are hedged:
Fixed interest claim on a credit institution, fi xed interest loans,
fi xed interest deposits, issued bonds at amortised cost price,
fi xed interest subordinated loan capital, fl oating interest subordinated
loan capital and fi xed interest hybrid core capital
Risk cover:
Interest rate risk and foreign exchange risk
Book values:
Claim on a credit institution 30,077 29,197
Loans 54,291 67,182
Deposits 306,726 314,635
Issued bonds at amortised cost price 105,121 103,925
Subordinated loan capital 198,014 489,040
Hybrid core capital 214,472 208,116
Cover is thus:
Interest and currency swaps - total synthetic principal 808,971 1,157,457
Total current value 22,355 24,714
37 Risks and risk management
As described in the section on risk >>Risks and risk management<< in
the
management report
contained in the annual report, Ringkjoebing Landbobank is exposed to various
types of risk. See
the section on risks on pages 18-29 of the management report for a description
of fi nancial risks
and policies and objectives for their management.
The following notes to the annual report contain some additional information
and a more detailed
description of the bank's credit and market risks.
PA G E 6 2 R I N G K J OE B I N G L A N D B O B A N K A / S
38 Credit risk
Maximum credit exposure classifi ed by balance sheet and
off-balance sheet items
Balance sheet items
Cash in hand and claims at call on central banks 33,935 59,597
Claims on credit institutions and central banks 1,314,318 2,654,707
Loans and other debtors at amortised cost price 12,746,560 13,151,216
Bonds at current value 2,755,912 1,546,282
Shares etc. 249,054 257,253
Capital shares in associated companies 538 527
Other assets, including derivative fi nancial instruments 360,822 490,427
17,461,139 18,160,009
Off-balance sheet items
Guarantees (contingent liabilities) 1,052,222 1,041,983
1,052,222 1,041,983
Maximum credit exposure excluding unutilsed credit facilities 18,513,361
19,201,992
Unutilised credit facilities 3.338.861 3,054,065
Total maximum credit exposure 21.852.222 22,256,057
A more detailed division of the items >>Loans and other
outstanding debts at amortised cost price<<, >>Guarantees<<
and >>Unutilised credit facilities<< are given below. There is also
a classifi cation covering only the items >>Loans made and other
outstandings at amortised cost price<< and >>Guarantees<<.
Loans, guarantees and unutilised credit facilities by sector
Loans and guarantees in percent, end of year,
classifi ed by sector/business
Public authorities 0.0 0.0
Business
Agriculture, hunting and forestry
Cattle farming etc. 3.2 3.7
Pig farming etc. 2.8 2.7
Other agriculture, hunting and forestry 4.6 4.6
Fishing 1.5 1.4
Mink production 1.2 1.4
Industry and raw materials extraction 2.9 3.0
Energy supply - Demnark* 6.8 16.3
Energy supply - foreign 12.6 -
Building and construction 1.6 1.9
Trade 4.7 4.2
Transport, hotels and restaurants 1.9 2.2
Information and communication 0.2 0.2
Financing and insurance 7.3 7.7
Real estate 10.1 8.8
Other business 8.0 8.1
Total business 69.4 66.2
Private 30.6 33.8
Total 100.0 100.0
N O T E S T O T H E A N N U A L R E P O R T
End Dec. 2011 End Dec. 2010
Per cent Per cent
Note End Dec. 2011 End Dec. 2010
no. DKK 1,000 DKK 1,000
A N N U A L R E P O R T 2 0 1 1 PA G E 6 3
38 Credit risk - continued
Loans and guarantees by sectors
Loans and guarantees in percent, end of year,
by sector/business
Public authorities 0.0 0.0
Business
Agriculture, hunting and forestry
Cattle farming etc. 3.5 4.0
Pig farming etc. 2.9 2.8
Other agriculture, hunting and forestry 4.4 4.4
Fishing 1.7 1.5
Mink production 1.3 1.4
Industry and raw materials extraction 2.9 2.8
Energy supply - Demnark* 7.6 18.6
Energy supply - foreign 14.2 -
Building and construction 1.5 1.8
Trade 3.9 3.6
Transport, hotels and restaurants 2.1 2.4
Information and communication 0.2 0.2
Financing and insurance 7.0 8.1
Real estate 11.4 9.4
Other business 7.3 7.3
Total business 71.9 68.3
Private 28.1 31.7
Total 100.0 100.0
* The item >>Energy supply<< is divided into Denmark and foreign for
2011. In the
comparative fi gures for 2010,
the bank's entire commitment is given under Energy supply - Denmark, but it
should be noted that a substantial
quantity of this concerns foreign countries.
The classifi cation by business was made on the basis of Statistics Denmark's
sector codes etc.
Comments on distribution by business
Ringkjoebing Landbobank has historically always operated on the basis of a
conservative credit
policy. The bank's judgment is that this is refl ected in the quality of the
credit in the bank's
loans, which is generally judged to be high. The bank's customers' ability to
repay is generally
good, and in combination with the bank's robust security cover on many
commitments, the
result is a low credit risk.
Private customers account for a total of 28.1% of Ringkjoebing Landbobank's
total loans and
guarantees. Most of these customers are in the bank's core area in Central and
West Jutland and
they are characteristically good credit risks. This is partly due to a
moderately negative trend in
prices for real estate and the associated proportion of income spent on
housing, which is lower
than in East Jutland and the capital city area. The primary security received
from private customers
is real estate (private homes).
The bank has a well-diversifi ed agricultural portfolio with 2.9% of the total
loans and guarantees
on pig farmers, 3.5% on cattle and 4.4% on others.
The economic conditions for agriculture as a whole remain diffi cult, and
although the bank's
farming customers have relatively less debt than in the agriculture sector as a
whole, the situation
is diffi cult. However, the returns from agriculture at the beginning of 2012
have generally
improved relative to the previous year.
In general, however, the return from farming remains weak, and the bank has
allocated considerable
provisions for write-downs on this sector.
Note End Dec. 2011 End Dec. 2010
no. DKK 1,000 DKK 1,000
PA G E 6 4 R I N G K J OE B I N G L A N D B O B A N K A / S
N O T E S T O T H E A N N U A L R E P O R T
38 Credit risk - continued
The security consists primarily of a mortgage in the farm (land, buildings and
other production
apparatus) and secondarily of assignment of subsidy and other accounts etc.
Loans for energy supply comprise a total of 21.8%, and energy is thus the
sector with the highest
proportion of the bank's loans. Most of the exposure in this group is the fi
nancing of wind
turbines, which has been a core area of specialisation in the bank for more
than 20 years. Exposure
within energy supply abroad is very predominantly to wind turbines erected in
Germany.
The bank's concept for the fi nancing of wind turbines is based on fi rst
mortgage fi nancing.
The concept includes a legal and commercial due diligence, which provides a
high degree of
security. Fixed prices on the German market provide further security that the
bank's commitment
can be honoured. Losses suffered by the bank in this sector have been minimal,
and the
fi nancial crisis has confi rmed that the risk in this sector is limited. The
security is primarily a fi rst
mortgage in the wind turbine and assignment of electricity payments and any
subsidy.
Real estate accounts for a total of 11.4% of the bank's loan and guarantee
debtors. This is a relatively
modest proportion compared with other banks, refl ecting the bank's prudent
approach to
this sector. The loan and the securities can be divided mainly into the
following groups:
1) Loans with fi rst priority mortgage in property (the majority of the loans)
2) Loans with second priority mortgage in property and a strong tenant with an
irrevocable
lease.
In the case of second priority fi nancing, the bank places weight on the
debtor's ability to repay
the debt before expiration of the lease.
Both types of loan have demonstrated their strength during the fi nancial
crisis, and the bank is
comfortable with this.
Financing and insurance account for a total of 7.0% of the bank's loan and
guarantee debtors
and they include the bank's concept for the mortgaging of securities. The
primary security in
the concept consists of listed securities. The concept has defi nitely shown
its strength in the
particularly volatile periods on the fi nancial markets which the fi nancial
crisis has caused.
Description of securities
Ringkjoebing Landbobank wishes as far as possible to reduce the risk in
connection with business
transactions entered into with the bank's customers by taking security in the
form of a mortgage
in physical assets, securities, bank deposits etc. and receiving pledges,
guarantees and letters
of subordination. The most frequently used securities are mortgages in real
estate and wind
turbines, and negotiable securities.
The bank continuously monitors the value of securities received. The bank takes
a conservative
approach to the valuation of the mortgage value of securities received. A
deduction is thus
always made from the value to cover the risk on realisation, costs etc.
Note
no.
A N N U A L R E P O R T 2 0 1 1 PA G E 6 5
38 Credit risk - continued
2011
Nominal securities by sector and
business for commitments which
have not been written down
Public authorities 0 3,445 0 3,445
Business:
Agriculture, forestry and fi shing 271,178 1,263,812 455,128 1,990,118
Industry and raw materials extraction 45,443 75,814 232,302 353,560
Energy supply 69,991 501,561 1,957,750 2,529,302
Building and construction 9,780 104,304 111,423 225,507
Trade 56,909 204,426 146,766 408,100
Transport, hotels and restaurants 68,165 71,053 182,959 322,177
Information and communication 2,767 11,280 5,213 19,260
Financing and insurance 751,015 390,014 19,196 1,160,225
Real estate 120,791 1,290,412 2,424 1,433,625
Other business 460,337 592,821 112,471 1,165,628
Total business 1,856,377 4,505,496 3.245,631 9,607,504
Private 745,870 2,720,083 268,890 3,734,844
Total 2,602,247 7,229,024 3,514,521 13,345,793
2010
Nominal securities by sector and
business for commitments which
have not been written down
Public authorities 0 3,195 0 3,195
Business:
Agriculture, forestry and fi shing 301,567 1,267,613 465,130 2,034,310
Industry and raw materials extraction 25,616 77,919 224,624 328,159
Energy supply 52,485 543,977 1,957,750 2,554,212
Building and construction 29,320 137,182 108,518 275,021
Trade 80,353 198,474 150,927 429,755
Transport, hotels and restaurants 34,660 78,780 236,282 349,721
Information and communication 5,391 9,783 3,706 18,880
Financing and insurance 712,704 381,490 20,139 1,114,333
Real estate 121,215 1,232,718 13,871 1,367,804
Other business 401,841 443,125 108,624 953,590
Total business 1,765,152 4,371,061 3,289,572 9,425,785
Private 927,755 2,764,759 266,560 3,959,073
Total 2,692,907 7,139,015 3,556,132 13,388,054
The nominal collateral values are not necessarily indicative of the actual
collateral value.
Note
no.
Securities
and cash Real estate Movable Total
DKK 1.000 DKK 1.000 DKK 1.000 DKK 1.000
Securities
and cash Real estate Movable Total
DKK 1.000 DKK 1.000 DKK 1.000 DKK 1.000
PA G E 6 6 R I N G K J OE B I N G L A N D B O B A N K A / S
N O T E S T O T H E A N N U A L R E P O R T
Note
no.
38 Credit risk - continued
The quality of loans and guarantees which are neither in arrears nor written
down
The bank has a credit rating on a large number of customers. In the case of
private and small
business customers, the rating is based on statistical models (based on the
probability of default),
while there is an expert model for major businesses.
There are 7-10 different factors in the statistical models, including
information on the customer's
assets and a quantity of behavioural data. These data are selected from among a
large number
of possible factors as these factors best describe defaults on previous
commitments.
The expert model for business customers is based on information on the
customer's creditworthiness
and earning ability. The model consists of a general model used for the group
as a
whole plus three variants of the model which are specially adapted to exposure
to wind turbines,
agriculture and properties.
Within loans and guarantees which are neither in arrears nor written down, 91%
of the commitments
are rated. The fi gure below indicates that 62% of the rated exposure has a
high credit
quality.
The unrated commitments account for over DKK 1.1 billion. This group consists
mainly of business
customers and it covers a wide range of sectors. Agriculture is a smaller
proportion of this
group than in the bank's classifi cation of sectors as a whole, and the credit
risk on the group is
judged to be modest.
The further development of the bank's models during 2011 makes a direct
comparison with
2010 diffi cult. The bank's assessment is, however, that the quality of credit
for that part of the
loan which has not been written down is unchanged relative to 2010.
7 000
8.000
Distribution of loans and guarantees
without write-downs or arrears
,
7,221
4 000
5.000
6.000
7.000
DKK
,
,
,
3,418
1 000
2.000
3.000
4.000
Million D
,
,
,
940
1,158
0
1.000
High Medium Low Not classified
Credit quality
,
A N N U A L R E P O R T 2 0 1 1 PA G E 6 7
38 Credit risk - continued
Distribution by time from the due date
for loans in arrears
Public authorities 10 0 10
Business:
Agriculture, forestry and fi shing 14,733 87 14,820
Industry and raw materials extraction 1,067 66 1,133
Energy supply 1,338 3 1,341
Building and construction 851 372 1,223
Trade 1,483 150 1,633
Transport, hotels and restaurants 827 66 893
Information and communication 570 26 596
Financing and insurance 265 1 266
Real estate 15,595 158 15,753
Other business 3,738 295 4,033
Total business 40,477 1,224 41,701
Private 23,009 2,289 25,298
Total 2011 63,486 3,513 66,999
Total 2010 14,712 1,329 16,041
Under Over
90 days 90 days Total
DKK 1.000 DKK 1.000 DKK 1.000
Note
no.
PA G E 6 8 R I N G K J OE B I N G L A N D B O B A N K A / S
38 Credit risk - continued
The value of loans where individual write-downs have been made
Credit exposure by reason
for write-down
Public authorities 0 0 0 0 0 0
Business:
Agriculture, forestry and fi shing 112,335 196,921 44,537 44,201 397,994 275,556
Industry and raw materials
extraction 5,272 5,700 795 59 11,826 6,872
Energy supply 643 0 0 0 643 405
Building and construction 9,316 5,169 1,260 4,019 19,764 18,466
Trade 15,417 12,641 1,846 368 30,272 18,996
Transport, hotels and restaurants 14,982 2,872 1,031 7,531 26,416 17,777
Information and communication 159 1,196 32 0 1,387 1,057
Financing and insurance 15,321 28,761 7,817 6,970 58,869 33,261
Real estate 17,952 4,858 0 11,081 33,891 19,823
Other business 51,185 21,574 1,406 13,579 87,744 47,590
Total business 242,582 279,692 58,724 87,808 668,806 439,803
Private 100,088 94,442 40,577 10,573 245,680 142,587
Total credit exposure 2011 342,670 374,134 99,301 98,381 914,486
Total credit exposure 2010 398,407 212,541 116,892 128,352 856,192
2011
Individual write-downs 219,842 224,671 78,541 59,336 582,390
Security values for commitments
which have been written down 63,604 71,807 25,139 24,158 184,709
2010
Individual write-downs 233,696 124,662 79,310 96,156 533,824
Security values for commitments
which have been written down 58,992 40,819 18,093 21,182 139,087
The bank is particularly focused on covering the risk on commitments which have
been written down.
Under the bank's credit policy, these commitments must be covered to the
greatest possible extent
by securities. When determining the need for a write-down, the value of
securities is included at the
prudently expected net realisation value. The bank only includes the ability to
make payments over and
above the value of securities to a modest extent when determining the need for
a write-down.
Major Total Individual
fi nancial Breach Relaxation Probable credit write--
diffi culties of contract of terms bankruptcy exposure downs
DKK 1.000 DKK 1.000 DKK 1.000 DKK 1.000 DKK 1.000 DKK 1.000
Major
fi nancial Breach Relaxation Probablediffi
culties of contract of terms bankruptcy Total
DKK 1.000 DKK 1.000 DKK 1.000 DKK 1.000 DKK 1.000
N O T E S T O T H E A N N U A L R E P O R T
Note
no.
A N N U A L R E P O R T 2 0 1 1 PA G E 6 9
38 Credit risk - continued
Loans and other debtors with an objective indication of
impairment included in the balance sheet at a book value
greater than zero
Individual written-down loans
Balance for loans and other debtors before write-downs 835,803 856,192
Write-downs -503,286 -501,768
Balance for loans and other debtors after write-downs 332,517 354,424
Group written-down loans
Balance for loans and other debtors before write-downs 12,143,747 12,449,771
Write-downs 67,466 -31,211
Balance for loans and other debtors after write-downs 12,076,281 12,418,560
Credit risk on derivative fi nancial instruments
Positive market value (by counterpart risk) after netting
Counterpart riskweight 20% 203,886 246,344
Counterpart riskweight 75% 78,344 90,711
Counterpart riskweight 100% 106,426 171,530
Counterpart riskweight 150% 0 2,633
Total counterpart riskweight 388,656 511,218
39 Foreign exchange risk
Total assets in foreign currency 6,473,073 7,679,708
Total liabilities in foreign currency 3,189,031 4,632,581
Foreign exchange indicator 1 23,602 12,262
Foreign exchange indicator 1 in %
of core capital after deductions (%) 0.9 0.5
Foreign exchange indicator 2 586 259
Foreign exchange indicator 2 in %
of core capital after deductions (%) 0.0 0.0
40 Interest rate risk
Total interest rate risk 17,530 2,664
Total interest rate risk (%) 0.7 0.1
Interest rate risk by the foreign currencies:
DKK 17,097 11,127
EUR 3,941 -7,746
NOK -3,437 0
CHF -261 -829
USD 193 123
SEK 8 0
JPY 0 -9
Other currencies -11 -2
Total 17,530 2,664
Note End Dec. 2011 End Dec. 2010
no. DKK 1,000 DKK 1,000
PA G E 7 0 R I N G K J OE B I N G L A N D B O B A N K A / S
41 Value at Risk/Market risk
Ringkjoebing Landbobank uses a Value at Risk (VaR) model as a sensitivity
analysis for market
risks. The model is a parametric VaR model based on a historic analysis of the
covariation (the
correlations) between the prices of various fi nancial assets etc. The model
combines the historical
knowledge of the covariation on the fi nancial markets with the bank's current
positions,
and on this basis calculates the risk of losses for a forthcoming ten-day
period. The calculation
includes the bank's positions with respect to interest, foreign currencies and
listed shares, while
positions in sector shares and unlisted capital shares are not included. The
calculated VaR thus
indicates the bank's sensitivity to losses on the basis of its positions. The
model is used as one of
a number of tools in the bank's management of market risks.
Reference is made to pages 26-27 of this annual report for further description
of the model etc.
DKK million
Average Minimum Maximum End of year
Year/Risk VaR-fi gure VaR-fi gure* VaR-fi gure* VaR-fi gure
2011
Interest 8.2 0.3 21.5 13.5
Foreign currency 0.4 0.2 0.4 0.3
Share 4.0 2.8 3.3 2.1
Diversifi cation -4.2 -1.6 -4.1 -2.7
Total VaR-fi gure 8.4 1.7 21.1 13.2
2010
Interest 7.7 0.7 17.6 3.8
Foreign currency 1.0 0.3 0.2 0.5
Share 3.3 3.1 2.8 2.4
Diversifi cation -4.1 -1.6 -3.8 -2.5
Total VaR-fi gure 7.9 2.5 16.8 4.2
2009
Interest 17.4 4.8 27.8 11.6
Foreign currency 0.5 0.2 0.3 0.1
Share 5.3 3.2 5.9 6.2
Diversifi cation -5.7 -2.7 -7.1 -5.9
Total VaR-fi gure 17.5 5.5 26.9 12.0
* Determined by the total VaR-fi gure.
Sensitivity analysis of sector shares
Sector shares cf. note 18 214,583
Effect of a 10% price change on the resul 21,458
N O T E S T O T H E A N N U A L R E P O R T
Note
no.
A N N U A L R E P O R T 2 0 1 1 PA G E 7 1
42 Derivative fi nancial instruments
By residual maturity
DKK 1,000 Over 3 month
Up to 3 month and up to 1 year
Net Net
Nominal market Nominal market
value value value value
Foreign-exchange contracts
Spot, purchase 48,090 -27
Spot, sale 41,733 -12
Forward transactions/futures, purchase 2,684,513 41,521 171,526 15,348
Forward transactions/futures, sale 6,494,835 10,251 171,533 3,573
Swaps 33,377 63
Options, purchase
Options, sale
Interest-rate contracts
Spot, purchase 214,579 712
Spot, sale 63,956 -603
Forward transactions/futures, purchase 10,763 219
Forward transactions/futures, sale 33,022 -360
Swaps 430,207 1,983
Options, purchase 27,135 148 71,855 1,760
Options, sale 27,135 -148 71,855 -1,760
Share contracts
Spot, purchase 13,249 702
Spot, sale 12,704 -708
Over 1 year
and up to 5 years Over 5 years
Net Net
Nominal market Nominal market
value value value value
Foreign-exchange contracts
Spot, purchase
Spot, sale
Forward transactions/futures, purchase
Forward transactions/futures, sale
Swaps 247,784 16,751 219,533 -116
Options, purchase
Options, sale
Interest-rate contracts
Spot, purchase
Spot, sale
Forward transactions/futures, purchase
Forward transactions/futures, sale
Swaps 1,394,828 -9,921 772,364 12,724
Options, purchase 109,843 3,693 257,244 9,110
Options, sale 109,843 -3,693 257,244 -9,110
Note
no.
PA G E 7 2 R I N G K J OE B I N G L A N D B O B A N K A / S
Derivative fi nancial instruments - continued
DKK 1,000 Total net
Total nominal value market value
2011 2010 2011 2010
Foreign-exchange contracts
Spot, purchase 48,090 9,746 -27 -5
Spot, sale 41,733 25,323 -12 125
Forward transactions/futures, purchase 2,856,039 3,629,512 56,869 78,308
Forward transactions/futures, sale 6,666,368 7,353,402 13,824 -93,685
Swaps 500,694 973,953 16,698 31,876
Options, purchase
Options, sale
Interest-rate contracts
Spot, purchase 214,579 265,589 712 -243
Spot, sale 63,956 135,768 -603 -476
Forward transactions/futures, purchase 10,763 36,420 219 295
Forward transactions/futures, sale 33,022 24,938 -360 -238
Swaps 2,597,399 2,233,991 3,886 1,733
Options, purchase 466,077 928,642 14,711 14,820
Options, sale 466,077 928,642 -14,711 -14,820
Share contracts
Spot, purchase 13,249 22,863 702 -154
Spot, sale 12,704 22,426 -708 158
Net market value, total 91,200 17,694
Market value Average market value
Positive Negative Positive Negative
2011 2010 2011 2010 2011 2010 2011 2010
Foreign-exchange contracts
Spot, purchase 63 2 90 7 323 217 4,329 1,411
Spot, sale 83 127 95 2 450 312 479 509
Forward transactions/
futures, purchase 63,253 132,059 6,384 53,751 52,194 103,295 62,825 57,359
Forward transactions/
futures, sale 52,693 71,606 38,869 165,291 130,140 71,681 63,283 104,221
Swaps 43,498 78,815 26,800 46,939 50,275 62,711 35,833 53,692
Options, purchase
Options, sale
Interest-rate contracts
Spot, purchase 1,051 104 339 347 598 256 369 520
Spot, sale 133 7 736 483 205 147 612 140
Forward transactions/
futures, purchase 219 295 109 112 8
Forward transactions/
futures, sale 360 238 25 2 340 67
Swaps 91,293 97,166 87,407 95,433 71,042 99,431 79,150 104,659
Options, purchase 14,711 14,820 13,558 21,152
Options, sale 14,711 14,820 13,558 21,175
Share contracts
Spot, purchase 774 362 72 516 1,145 841 396 254
Spot, sale 82 519 790 361 395 299 3,889 689
Total 267,853 395,882 176,653 378,188 320,459 360,456 265,071 344,696
Provision of security under
CSA agreement 0 0 -16,970 0
Total other shares/
other liabilities 267,853 395,882 159,683 378,188
All contracts of derivative fi nancial instruments are non-guanteed contracts.
N O T E S T O T H E A N N U A L R E P O R T
PA G E 7 4 R I N G K J OE B I N G L A N D B O B A N K A / S
F I V E Y E A R M A I N F I G U R E S
Summary DKK 1,000 2011 2010 2009 2008 2007
Profi t and loss account
Interest receivable 858,257 836,339 993,756 1,221,165 1,031,830
Interest payable 245,291 241,954 377,728 669,149 570,690
Net income from interest 612,966 594,385 616,028 552,016 461,140
Dividend on capital shares etc. 1,111 1,219 3,243 1,491 2,386
Income from fees and commissions 158,303 170,389 149,628 176,118 225,353
Fees and commissions paid 24,312 25,996 23,823 28,464 35,599
Net income from interest and fees 748,068 739,997 745,076 701,161 653,280
Value adjustments +16,386 +52,159 +58,130 -43,577 +17,965
Other operating income 4,535 3,893 5,351 4,863 7,443
Staff and administration costs 244,068 236,374 235,604 236,056 229,755
Amortisations, depreciations and
write-downs on intangible and
tangible assets 4,375 3,219 2,424 2,420 4,647
Other operating costs 381 195 56 86 16
Costs bank package I and
Deposit Guarantee Fund 11,178 46,590 55,785 16,148 0
Write-downs on loans -128,799 -138,217 -158,600 -77,223 +10,791
Write-downs on national
bank package I etc. 0 -33,152 -51,173 -12,016 0
Result of capital shares in associated
companies +11 +14 -59 -5 -11
Profi t before tax 380,199 338,316 304,856 318,493 455,050
Tax 94,128 81,443 72,775 78,495 106,730
Profi t after tax 286,071 256,873 232,081 239,998 348,320
A N N U A L R E P O R T 2 0 1 1 PA G E 7 5
Summary DKK 1,000 End 2011 End 2010 End 2009 End 2008 End 2007
Balance sheet
Assets
Cash in hand and claims on credit
institutions and central banks 1,348,253 2,714,304 2,534,722 2,087,959 4,337,064
Loans and other debtors at
amortised cost price 12,746,560 13,151,216 13,047,212 13,897,101 14,134,637
Securities 3,005,504 1,804,062 1,936,663 1,553,741 914,421
Tangible assets 79,615 80,092 79,644 77,730 75,126
Other assets 369,091 497,530 329,715 385,222 172,480
Total assets 17,549,023 18,247,204 17,927,956 18,001,753 19,633,728
Liabilities and equity
Debt to credit institutions and
central banks
Term to maturity under 1 year 285,028 636,326 699,732 2,077,112 4,307,206
Term to maturity over 1 year 957,047 1,995,864 2,294,991 3,224,050 3,132,755
Deposits and other debts 12,755,415 11,661,654 11,187,470 9,072,875 9,161,775
Issued bonds 338,958 337,617 557,337 478,341 474,287
Other liabilities 301,996 593,153 365,021 652,505 285,348
Provisions for liabilities 14,973 13,247 72,238 21,096 19,933
Subordinated debt 412,486 696,999 695,394 690,984 473,863
Share capital 25,200 25,200 25,200 25,200 26,200
Reserves 2,457,920 2,287,144 2,030,573 1,759,590 1,752,361
Total shareholders' equity 2,483,120 2,312,344 2,055,773 1,784,790 1,778,561
Total liabilities and equity 17,549,023 18,247,204 17,927,956 18,001,753
19,633,728
Contingent liabilities etc.
Contingent liabilities 1,052,222 1,041,983 1,485,676 2,386,213 4,803,839
Binding agreements 0 0 0 0 3,995
Total contingent liabilities etc. 1,052,222 1,041,983 1,485,676 2,386,213
4,807,834
PA G E 7 6 R I N G K J OE B I N G L A N D B O B A N K A / S
2011 2010 2009 2008 2007
Solvency:
Solvency ratio % 21.4 22.4 20.2 16.3 13.0
Core capital ratio % 19.8 18.6 16.6 13.0 11.2
Earnings:
Pre-tax return on equity % 15.9 15.5 15.9 17.9 26.1
Return on equity after tax % 11.9 11.8 12.1 13.5 20.0
Income/cost ratio DKK 1.98 1.74 1.61 1.93 3.04
Market risk:
Interest rate risk % 0.7 0.1 0.6 1.2 1.0
Foreign exchange position % 0.9 0.5 3.4 5.6 2.1
Foreign exchange risk % 0.0 0.0 0.1 0.0 0.0
Liquidity risk:
Excess cover relative to statutory
liquidity requirements % 140.5 231.8 205.6 139.1 161.4
Loans and write-downs thereon
relative to deposits % 105.0 117.6 120.8 157.1 157.4
Credit risk:
Loans relative to shareholders' equity 5.1 5.7 6.3 7.8 7.9
Growth in loans for the year % -3.1 0.8 -6.1 -1.7 10.8
Total large exposures % 41.7 10.2 0.0 12.1 38.3
Cumulative write-down percentage % 4.5 3.8 3.1 2.1 1.5
Write-down percentage for the year % 0.89 0.94 1.16 0.48 -0.06
Proportion of debtors at reduced interest % 0.4 0.4 0.4 0.1 0.1
Share return:
Profi t for the year after tax per share*/*** DKK 1,146.6 1,019.3 921.0 933.8
1,324.4
Book value per share*/** DKK 10,055 9,193 8,172 7,382 7,053
Dividend per share* DKK 262 240 0 0 600
Share price relative to profi t for
the year per share*/*** 10.1 14.2 13.2 6.6 13.0
Share price relative to book value per share*/** 1.15 1.58 1.49 0.84 2.43
* Calculated on the basis of a denomination of DKK 100 per share.
** Calculated on the basis of number of shares outstanding at the end of the
year.
*** Calculated on the basis of the average number of shares. The average number
of shares is calculated
as a simple average of the shares at the beginning of the year and at the end
of the year.
F I V E Y E A R K E Y F I G U R E S
A N N U A L R E P O R T 2 0 1 1 PA G E 7 7
Defi nitions of the offi cial key fi gures/ratios from the Danish Financial
Supervisory Authority
Solvency ratio
Capital base after deductions in per cent of total risk weighted assets.
Core capital ratio
Core capital after deductions (incl. hybrid core capital) in per cent of total
risk weighted assets.
Pre-tax return on equity
Profi t before tax in per cent of average shareholders' equity. The average
shareholders' equity is calculated as a
simple average of the shareholders' equity at the beginning of the year and at
the end of the year.
Return on equity after tax
Profi t after tax in per cent of average shareholders' equity. The average
shareholders' equity is calculated as a
simple average of the shareholders' equity at the beginning of the year and at
the end of the year.
Income/cost ratio
Net income from interest and fees, value adjustments, other operating income
and result of capital shares in
associated companies in per cent of staff and administration costs,
amortisation, depreciation and write-downs
on intangible and tangible assets, other operating costs and write-downs on
loans and debtors etc.
Interest rate risk
Interest rate risk in per cent of core capital after deductions (incl. hybrid
core capital).
Foreign exchange position
Foreign exchange indicator 1 in per cent of core capital after deductions
(incl. hybrid core capital).
Foreign exchange risk
Foreign exchange indicator 2 in per cent of core capital after deductions
(incl. hybrid core capital).
Excess coverage relative to statutory liquidity requirements
Cash in hand, demand deposits with the Danish National Bank, fully secured and
liquid on-demand credit
balance in credit institutions and insurance companies, unencumbered certifi
cates of deposit issued by the
Danish National Bank, secure readily negotiable listed unencumbered securities,
loan framework in the Danish
National Bank against security in sector shares valid for the time being with
30 days notice of termination. The
total of all elements measured in percent relative to 10% of the reduced debt
and guarantee liabilities.
Loans and write-downs thereon relative to deposits
Loans + write-downs thereon in per cent of deposits.
Loans relative to shareholders' equity
Loans/shareholders' equity.
Growth in loans for the year
Growth in loans from the beginning of the year to the end of the year, in per
cent.
Total large exposures
The total sum of large exposures in per cent of the capital base after
deductions.
Cumulative write-down percentage
Write-downs on loans and provisions for losses on guarantees in per cent of
loans + write-downs on loans +
guarantees + provisions for losses for guarantees.
Write-down percentage for the year
Write-downs etc. for the year in per cent of loans + write-downs on loans +
guarantees + provision for losses
on guarantees.
Proportion of debtors at reduced interest
Proportion of debtors at reduced interest before write-downs etc. in per cent
of loans + write-downs on loans
+ guarantees + provision for losses on guarantees.
Profi t for the year after tax per share*/***
Profi t for the year after tax/average number of shares.
Book valve per share*/**
Shareholders' equity/share capital excl. own shares.
Dividend per share*
Proposed dividend/share capital.
Share price relative to profi t for the year per share*/***
Share price/profi t for the year per share.
Share price relative to book value per share*/**
Share price/book value per share.
*/**/***: See page 74.
PA G E 7 8 R I N G K J OE B I N G L A N D B O B A N K A / S
A N N U A L R E P O R T 2 0 1 1 PA G E 7 9
Page
80 Shareholders' committee
81 Board of directors
83 Board of managers
84 Company information
85 Stock exchange announcements
85 Financial calendar
86 The bank's branches etc.
OTHER INFORMATION
PA G E 8 0 R I N G K J OE B I N G L A N D B O B A N K A / S
SHAREHOLDERS' COMMITTEE
Shareholders' committee
Jens Moeller Nielsen, manager, Ringkoebing, - born 1956
chairman of the shareholders' committee
Else Kirkegaard Hansen, senior master, Ringkoebing, - born 1954
deputy chairman of the shareholders' committee
Hejne F. Andersen, industrialist, Ringkoebing - born 1954
Jens Arnth-Jensen, manager, Holte - born 1948
Gert Asmussen, printer, Tarm - born 1950*
Inge Sandgrav Bak, fi nancial manager, Ringkoebing - born 1960*
Claus H. Christensen, farmer, Lem - born 1961
Claus Dalgaard, manager, Ringkoebing - born 1962
Per Dam, accountant, Ulfborg - born 1952
Ole K. Erlandsen, butcher, Herning - born 1962
Keld Hansen, grocer, Soendervig - born 1948*
Niels Ole Hansen, manager, Ringkoebing - born 1951
Tonny Hansen, college principal, Ringkoebing - born 1958
Leif Haubjerg, farmer, No - born 1959
Erik Jensen, haulage contractor, Skjern - born 1965
Niels Esper Kamp, farmer, Stadil - born 1957
Jens Lykke Kjeldsen, timber merchant, Ringkoebing - born 1950*
Niels Kjeldtoft, teacher, Spjald - born 1945
Gravers Kjaergaard, farmer, Groenbjerg - born 1952*
Lars Moeller, municipal chief executive, Holstebro - born 1957
Martin Krogh Pedersen, manager, Ringkoebing - born 1967*
Ole Christian Pedersen, manager, Vostrup - born 1950
Kristian Skannerup, industrialist, Tim - born 1959
Joergen Kolle Soerensen, car dealer, Hvide Sande - born 1970
Johan Chr. OEllgaard, industrialist, Stauning - born 1947
Anne-Marie Sannerum, manager, Billund - born 1968
* Member of the board of directors
A N N U A L R E P O R T 2 0 1 1 PA G E 8 1
Board of directors
Jens Lykke Kjeldsen, timber merchant, Ringkoebing, chairman of the board of
directors - born 1950
Member of the bank's auditing committee
Member of the board of directors since 1995
End of current term of election to the board of directors: 2012
Other managerial activities - member of the board of management of:
A/S Henry Kjeldsen
A/S Miljoepark Vest
Aktieselskabet af 1. august 1989
Asta og Henry Kjeldsens Familiefond
Danbuy A.m.b.A.
Henry Kjeldsen, Ringkoebing Toemmerhandel A/S
VT Hallen A/S
Gravers Kjaergaard, farmer, Groenbjerg, deputy chairman of the board of directors
- born 1952
Member of the bank's auditing committee
Member of the board of directors since 2002
End of current term of election to the board of directors: 2013
No other managerial activities
Gert Asmussen, printer, Tarm - born 1950
Chairman of the bank's auditing committee
Member of the board of directors since 2002
End of current term of election to the board of directors: 2014
Other managerial activities - member of the board of management of:
A. Rasmussens Bogtrykkeri ApS
Gert Asmussen Holding A/S
Gullanders Bogtrykkeri A/S
Tarm Bogtryk A/S
Tarm Elvaerk Net A/S
Tarm Ugeblad ApS
TB Anlaeg ApS
Vestjysk Rotation A/S
Vinderup Invest ApS
Keld Hansen, grocer, Soendervig - born 1948
Member of the board of directors since 2002
End of current term of election to the board of directors: 2014
Other managerial activities - member of the board of management of:
A/S Miljoepark Vest
Beach Bowl A/S
Investeringsselskabet Soendervig ApS
Norddan-Soendervig ApS
Soendervig Ejendomsselskab ApS
Soendervig Holding ApS
Soendervig Supermarked ApS
B O A R D O F D I R E C T O R S
PA G E 8 2 R I N G K J OE B I N G L A N D B O B A N K A / S
Board of directors - continued
Inge Sandgrav Bak, fi nancial manager, Ringkoebing - born 1960
Member of the board of directors since 2011
End of current term of election to the board of directors: 2015
Other managerial activities - member of the board of management of:
JSB International A/S
JSB Rindum A/S
JSB Composite (Zhuozhou) Co., Ltd.
Martin Krogh Pedersen, manager, Ringkoeing - born 1967
Member of the board of directors since 2011
End of current term of election to the board of directors: 2015
Other managerial activities - member of the board of management of:
K. P. Holding A/S and one 100% owned subsidiary
Mhkp Holding ApS and three 100% owned subsidiary
PF Management Holding ApS and two 100% owned subsidiary
Techo A/S
Vestjysk Udvikling A/S
Bo Bennedsgaard, IT consultant, Holstebro, elected by the employees - born 1972
Member of the board of directors since 2007
End of current term of election to the board of directors: 2015
No other managerial activities
Gitte Elisa Sigersmunda Hoegholm Vigsoe, Sagsbehandler, Holstebro, elected by the
employees -
born 1976
Member of the board of directors since 2011
End of current term of election to the board of directors: 2015
No other managerial activities
B O A R D O F D I R E C T O R S
A N N U A L R E P O R T 2 0 1 1 PA G E 8 3
BOARD OF MANAGERS
Board of managers
Bent Naur, executive general manager - born 1947
Member of the board of managers since 1987
Member of the boards of directors of:
Bankdata, Fredericia
Det Private Beredskab, Koebenhavn
Lokale Pengeinstitutter, Koebenhavn
JN Data A/S, Silkeborg
Nykredit Holding A/S, Koebenhavn
PRAS A/S, Koebenhavn
Totalkredit A/S, Koebenhavn
Totalkredit Realkreditfond, Koebenhavn
John Bull Fisker, general manager - born 1964
Member of the board of managers since 1999
Member of the boards of directors of:
BI Holding A/S, Koebenhavn
BI Asset Management Fondsmaeglerselskab A/S, Koebenhavn
BankInvest Private Equity A/S, Koebenhavn
Letpension A/S, Koebenhavn
Member of the customer board of:
PFA Pension A/S, Copenhagen
PA G E 8 4 R I N G K J OE B I N G L A N D B O B A N K A / S
COMPANY INFORMATION
Ringkjoebing Landbobank Aktieselskab
Torvet 1
DK-6950 Ringkoebing
Denmark
Founded: 1886
Phone: +45 9732 1166
Telefax: +45 9732 1800
E-mail: post@landbobanken.dk
Website: www.landbobanken.com
CVR-no.: 37 53 68 14
Bank registration number in Denmark: 7670
SWIFT/BIC: RINGDK22
Share capital
Ringkjoebing Landbobank's share capital is DKK 25.2 million in 5,040,000 shares
of DKK 5.
Ownership
Ringkjoebing Landbobank is owned by approx. 17,660 shareholders.
We report as required by Section 28a of the Danish Companies Act that ATP,
Hilleroed,
has advised that they own more than 5% of the bank's share capital.
A N N U A L R E P O R T 2 0 1 1 PA G E 8 5
Stock exchange announcements 2011
Review of Ringkjoebing Landbobank's announcements to NASDAQ OMX Copenhagen
and others in 2011 in compliance with Section 27b of the Danish Securities
Trading Act:
04 January 2011 Notifi cation of early redemption of subordinate loan capital
27 Januar 2011 Notice convening the annual general meeting
the 23 February 2011
02 February 2011 Announcement of the anual accounts 2010
02 February 2011 Annual report 2010
02 February 2011 Agenda for the annual general meeting
07 February 2011 Exposure to Amagerbanken
24 February 2011 Minutes of the annual generel meeting the 23 February 2011
24 April 2011 Quarterly report 1st quarter 2011
28 April 2011 Newly elected for the board of directors
03 August 2011 Interim report for the 1st half 2011
29 September 2011 Financial calender
26 October 2011 Quarterly report 1st-3rd quarter 2011
15 December 2011 Updated fi nancial calender
Announcements regarding insiders' transactions with the Ringkjoebing Landbobank
share from executive employees and their closely related do not emerge from the
above
review.
All the announcements from the bank to NASDAQ OMX Copenhagen and others can
be seen on the website: www.landbobanken.com.
STOCK EXCHANGE ANNOUNCEMENTS
F I N A N C I A L C A L E N D A R
Financial calendar 2012
The fi nancial calendar for the upcoming publications is as follows:
01 February 2012 Announcement of the annual accounts for 2011
29 February 2012 General meeting
25 April 2012 Quarterly report, 1st quarter 2012
08 August 2012 Interim report 2012
24 October 2012 Quarterly report, 1st-3rd quarters 2012
PA G E 8 6 R I N G K J OE B I N G L A N D B O B A N K A / S
T H E B A N K ' S B R A N C H E S E T C .
Head offi ce:
Ringkoebing
Branches:
Herning
Investcenter Herning
Holstebro
Investcenter Holte
Hvide Sande
Lem
Spjald
Tarm
Thorsminde
Tim
Ulfborg
Viborg
Vildbjerg
A N N U A L R E P O R T 2 0 1 1 PA G E 8 7
Bent Naur
Executive general manager
Ole Bjerregaard Pedersen
Financial manager
Joergen Hoejgaard
Foreign manager
Sten Erlandsen
Head of treasury
Joern Nielsen
Credit manager
John Bull Fisker
General manager
Click on, or paste the following link into your web browser, to view the
associated documents
https://newsclient.omxgroup.com/cds/DisclosureAttachmentServlet?messageAttachmentId=3
76127
News Source: NASDAQ OMX
01.02.2012 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
---------------------------------------------------------------------------
Language: English
Company: Ringkjoebing Landbobank A/S
Dänemark
Phone:
Fax:
E-mail:
Internet:
ISIN: DK0060032068
Category Code: ACS
LSE Ticker: 0FTC
Sequence Number: 977
Time of Receipt: Feb 01, 2012 08:33:05
End of Announcement DGAP News-Service
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