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Third party research

Vestjysk Bank: Huge beat driven by LLP reversals - ABG

Vestjysk Bank

This is a third party research report and does not necessarily reflect our views or values

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Q2: Income and costs in line, while write-backs fuelled beat
2023e raised on the huge write-back of loan loss provisions...
...but '24e-'25e unchanged, trading at '24e adj. P/E of 5.9x


25% pre-tax profit beat mainly due to loan loss reversals

Vestjysk reported Q2 pre-tax profit 25% above ABGSCe based on three main deviations from our estimates. On the positive side, market value adjustments of DKK 45m were 29% above ABGSCe and Q2 was another quarter of loan loss provision (LLP) reversals, at DKK 65m vs. our expectation of loan losses of DKK 4m. The management overlay is unchanged q-o-q at DKK 400m to account for uncertainties in the macro environment. On the negative side, fees at DKK 150m were 8% below our expectations, driven by lower loan transaction fees. Net interest income was in line with ABGSCe at 12% growth q-o-q. Lending volumes were impressive given the current market, at 4% growth q-o-q, while deposits decreased 0.7%. The CET1 ratio stood at 20.7% vs. ABGSCe at 20.3%.