Business

Spar Nord tightens its financial forecasts Copenhagen Stock Exchange: SPNO

Company announcement no. 18

Save Nord’s financial advice

Supported by positive developments on the financial markets in the second quarter of 2020, Spar Nord now forecasts basic earnings before depreciation for the whole of 2020 in a range of 800 to 1,050 million. The principle of after-tax profit, suspended since March, is now reintroduced at DKK 350-550 million.

In its 2019 annual report, Spar Nord guided the basic profit for the financial year 2020 before depreciation of 900 to 1,100 million DKK and a profit after tax of around 625 to 825 million DKK.

Due to the COVID-19 epidemic and the political decisions and the resulting economic consequences, Spar Nord decided on March 19 to temporarily suspend its financial guidelines.

Subsequently, when the first quarterly interim report was published, Spar Nord reintroduced the basic profit forecast before depreciation of DKK 700-1000 million, while maintaining the post-tax profit forecast suspension due to lingering uncertainty about impairment.

Supported by a positive development in the financial markets in the second quarter of 2020 combined with a satisfactory development in net interest and commission income as well as by the cost reduction measures described below, Spar Nord now expects a result of base before depreciation for the whole of 2020 in DKK Range 800 – 1,050 million.

Cost reduction initiatives

In response to increased pressure on revenues, Spar Nord implemented several initiatives during the second quarter aimed at reducing the Group’s salary and operating expenses.

For example, a voluntary departure program was introduced in June, under which a total of 49 employees agreed to resign by the end of 2020. Based on the recruitment and resignation already known to staff, Spar Nord plans to now employ around 1,510 FTE as of December 31, 2020, compared to 1,549 FTE as of December 31, 2019.

The severance benefits are expected to be approximately DKK 25 million, to be accrued in the second quarter of 2020.

In addition, thanks to active initiatives, Spar Nord has identified savings on other operating expenses (marketing, travel expenses, etc.) of approximately DKK 35 million compared to what was initially planned.

Update on impairment

The trend in write-downs was also satisfactory in the second quarter. The long-term credit consequences of the downturn in economic activity resulting from the COVID-19 crisis remain subject to great uncertainty, although only moderate credit losses have been recorded to date thanks to numerous credit plans. economic aid available.

Preliminary figures indicate that the depreciation will have an impact on the second quarter operating profit of DKK 58 million, which includes the total impairment losses related to COVID-19 in Q2 of around DKK 80 million, including DKK 30 million. DKK mark an increase in the COVID-19 relative management estimate for a total of DKK 255 million.

Depreciation for depreciation for the whole year should now be between 300 and 500 million DKK.

Redirection of net earnings

Based on the above factors, Spar Nord now forecasts net profit for the financial year 2020 of DKK 350-550 million.

The Spar Nords H1 interim report is expected to be released on August 13.

Please direct any questions regarding this press release to Lasse Nyby, Managing Director, at tel. +45 9634 4011, or Ole Madsen, Senior Vice President, Communication & Digital, tel. + 45 9634 4010.

Ole Madsen

Senior Vice President, Communication and Digital

No. 18. – Clarify expectations – United Kingdom

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