Sparekassen Sjælland-Fyn

Country:
Sector:
Market cap (m):
Denmark
Financials
DKK 1,546.37
Bloomberg:
Reuters:
Website:
SPKSJF DC
SPKSJF.CO
Share price (close):
DKK 89.00

Latest Reports

Commissioned Research: The fight against adverse sector trends is on
Q2 2019 pre-tax profit came in at DKK 67m, 7% below our estimate, mainly due to a DKK 16m miss on market value adjustments. Net commission income was also below our estimate (5%) but we understand that fees related to remortgaging will mainly come in Q3, while we had expected it to be more evenly distributed between Q2 and Q3. Costs surprised us positively by 3%, driven by a strong focus on cost cutting. The CET1-ratio was 11.9%, ~40 bp below our estimate owing to higher REA. Including H1 2019 profits the CET1 ratio would have been 60 bp higher. Mainly driven by the closing of three branches and the focus on cost cutting, we lift our 2020E-21E adjusted EPS by 4-5%. Our new fair value is DKK 74-98 (68-91).

Commissioned Research: Q2 2019 first impression - Cost cutting launched
Q2 2019 profit before loan losses came in at DKK 70m, DKK 11m (~14%) below our estimate. The miss was mainly driven by market value adjustments being DKK 16m weaker than expected. Net commission income was also 5% weaker than we had expected. On the positive side, net interest income came in at DKK 141m, 1% ahead of our estimate, despite lending growth of 1% q/q being in line with our estimate. Costs were the main positive in the Q2 2019 results, in our view, as they came in at DKK 199m, 3% better than our estimate. Furthermore, we note that the bank will close three of its eight branches in Copenhagen, representing an annual cost cut of DKK ~10m, according to the Q2 2019 report. The CET1 ratio was 11.9%, ~40 bp below our estimate, owing to risk weights being up slightly q/q. Marketing material commissioned by Sparekassen Sjælland-Fyn.

Commissioned Research: Probably not the last guidance upgrade for 2019
Ahead of its Q2 results on 9 August 2019, Sparekassen Sjælland-Fyn lifted its 2019 PTP guidance to DKK 215-240m. We find this too conservative and we estimate DKK 252m for 2019 PTP. The guidance upgrade did not reveal any concrete numbers, except for stating that core earnings before loan losses and market value adjustments were up ~41% y/y. Costs were also reported as declining. We find it likely that we have been too cautious with our fee income and costs estimates, while we stick to our NII estimates. We hence lift our 2019-21 adjusted EPS estimates by 3%. Our new Gordon growth model-based fair value range is DKK 68-91 (63-85). Marketing material commissioned by Sparekassen Sjælland-Fyn.

Commissioned Research: Another 2019 PTP guidance upgrade
Sparekassen Sjælland-Fyn has today upgraded its 2019 pre-tax profit guidance to DKK 215-240m (200-230m). At the time of Q1 2019 report, we continued to find the 2019 guidance very conservative, and we hence already estimate 2019 PTP of DKK 244m. The guidance upgrade was triggered by both higher core income and lower core costs than budgeted. Core earnings before loan losses and value adjustments for H1 2019 are up 41% y/y, according to Sparekassen Sjælland-Fyn. We had estimated 27% growth y/y. The bank also states that loan losses are in line with the original guidance, while market value adjustments are below. The full Q2 2019 report is scheduled to be published on 9 August 2019. Marketing material commissioned by Sparekassen Sjælland-Fyn.

Commissioned Research: Adverse sector trends killing the party
Q1 2019 profit before loan losses was DKK 87m, DKK 3m (3%) below our estimate. Among the disappointments, NII stood out as the most severe, with a miss of DKK 8m (5%), while market value adjustments were also DKK 4m below our estimate. On the positive side, fee income came in DKK 5m (4%) better than expected and operating income also beat our estimate by DKK 5m. Total costs were slightly better (DKK 1m) than our estimate. The CET1 ratio was 12.4%, 60 bp below our estimate due to higher REA. With weak NII owing to margin pressure, we lower our 2019E-21E adjusted EPS by 8-10%. Our new fair value range is DKK 63-85 (72-96). Marketing material commissioned by Sparekassen Sjælland-Fyn.

Analysts: Jakob Brink
Commissioned Research: Q1 2019 first impression: Very weak NII
Q1 2019 profit before loan losses came in at DKK 87m, DKK 3m (3%) below our estimate. The miss was mainly driven by DKK 8m (5%) weaker-than-expected NII, owing margin pressure on lending. Furthermore, both market value adjustments and loan losses disappointed in the quarter by DKK 4m each. This was partially offset by a DKK 5m (5%) beat on fee income. Other operating income was also strong in the quarter with a beat of DKK 5m. Total costs were roughly in line with expectations, DKK ~1m better than expected. – Marketing material commissioned by Sparekassen Sjælland-Fyn

Analysts: Jakob Brink
Commissioned Research: Strong start to the year already expected
We make only minor adjustments to our estimates ahead of the Q1 2019 results. With 2019 pre-tax profit guidance already lifted on 24 April, we expect limited surprises in connection with the Q1 2019 results. By lowering our 2019E-21E PTP by ~2% in connection with this report, we are still DKK 37m (16%) above the upper end of the 2019 PTP guidance range of DKK 200-230m. We find it likely that the revenue-optimising initiatives taken during the last eight months, starting with the fee hikes in September 2018, will continue to surprise positively. We narrow the Gordon growth model-based fair value range to DKK 72-96 (70-105). Marketing material commissioned by Sparekassen Sjælland-Fyn

Analysts: Jakob Brink
Commissioned Research: 2019 pre-tax profit guidance upgraded
Sparekassen Sjælland-Fyn has this morning upgraded its 2019 pre-tax profit guidance to DKK 200-230m (180-210m). At the time of Q4 2018 report, we found the guidance very conservative, and we hence already estimate 2019 PTP of DKK 269m. The guidance upgrade was triggered by both higher core income and lower core costs than budgeted, and core earnings before loan losses and value adjustments for Q1 2019 are hence 30% above the bank's own guidance, according Sparekassen Sjælland-Fyn. The bank also states that loan losses and value adjustments are in line with the original guidance. The full Q1 2019 report is scheduled to be published on 9 May 2019. Marketing material commissioned by Sparekassen Sjælland-Fyn .

Analysts: Jakob Brink
Commissioned Research: 2019 guidance looks conservative
Sparekassen Sjælland-Fyn's Q4 profit before loan losses was DKK 25m, DKK 5m (18%) below our estimate. This was negatively impacted by costs of DKK 218m, which were DKK 11m (5%) above our estimate. On the positive side, net interest income came in at DKK 142m, DKK 8m (6%) ahead of our estimate. Loan losses were also DKK 7m better than expected. Both fee income and market value adjustments were as we had expected. The proposed 2018 DPS was DKK 2.5; we had expected DKK 2.07. Sparekassen Sjælland-Fyn guides for 2019 pre-tax profit of DKK 180-210m, which looks conservative, in our view; we estimate DKK 269m. We lower 2019E-21E EPS by 5-6% to reflect lower NCI, dividends and market value adjustments. Our new fair value range is DKK 70-105 (76-115). Marketing material commissioned by Sparekassen Sjælland-Fyn.

Analysts: Jakob Brink
Commissioned Research: Q4 2018 first impression: Better NII, weaker costs
Q4 2018 profit before loan losses was DKK 25m (DKK 5m weaker than our estimate). Net interest income was the main positive, exceeding our estimate by 6%, owing to higher income from bonds and better-than-expected lending and deposit margins. However, costs were DKK 11m higher than our estimate, driven by "one-off" costs of DKK ~17m related to marketing, IT and severance pay. The proposed 2018 DPS of DKK 2.5 was better than our estimate of DKK 2.07. The 2019 pre-tax profit guidance of DKK 190-210m is very conservative, in our view; we estimate DKK 291m. – Marketing material commissioned by Sparekassen Sjælland-Fyn

Analysts: Jakob Brink

Equity analysts

Senior Analyst, Sector Coordinator
Analyst

Key persons

CEO: Lars Petersson

CFO: Jens Trane

Chairman: Thomas Kullegaard

Numbers
Nordea
DKKm
2015
2016
2017
2018
2019E
2020E
2021E
EPS (rep.)
0.00
12.23
15.41
8.53
12.43
14.20
15.25
EPS (adj.)
n.a.
8.29
13.00
5.89
11.06
12.21
13.12
DPS
3.00
3.05
0.00
2.50
3.11
3.55
3.81
NII growth
-8.0%
-17.8%
-1.8%
-1.9%
12.6%
3.8%
3.4%
Staff costs growth
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Total expenses growth
5.1%
3.9%
5.0%
7.6%
-2.7%
0.4%
1.2%
Operating profit growth
-22.2%
1.7%
57.5%
-42.4%
97.4%
10.6%
7.4%
Net profit to equity growth
-19.8%
-25.2%
56.8%
-39.6%
87.7%
10.5%
7.4%
Loans to the public growth
-2.2%
7.3%
11.5%
4.2%
3.6%
4.0%
3.0%
BIS III CT1-ratio
10.0%
9.9%
10.7%
13.0%
12.5%
13.0%
13.6%
BIS II Trans. T2-ratio
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Leverage ratio
7.9%
7.9%
8.5%
9.6%
9.6%
10.1%
10.7%
Nordea Markets estimates published on Aug 12, 2019
Source: Company data, Nordea estimates
Per share data and multiples
Nordea
DKK and %
2015
2016
2017
2018
2019E
2020E
2021E
P/E
n.a.
8.7
7.4
9.4
7.2
6.3
5.8
P/E (adj.)
n.a.
12.8
8.7
13.6
8.0
7.3
6.8
P/BV
0.00
0.67
0.67
0.52
0.54
0.50
0.47
P/TBV
0.0
0.7
0.7
0.5
0.6
0.5
0.5
Dividend yield
3.1%
2.9%
0.0%
3.1%
3.5%
4.0%
4.3%
RoE (adj.)
8.1%
5.4%
7.9%
4.2%
6.9%
7.1%
7.1%
RoTBV (adj.)
8.9%
5.9%
8.5%
4.4%
7.2%
7.4%
7.4%
C/I (adj.)
-71.0%
-74.8%
-75.3%
-86.4%
-74.6%
-71.7%
-70.3%
NII-margin (adj.)
6.1%
4.9%
4.4%
4.0%
4.3%
4.3%
4.3%
Payout ratio
n.a.
24.9%
0.0%
29.3%
25.0%
25.0%
25.0%
LLR /Impaired loans
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
LL-ratio
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Nordea Markets estimates published on Aug 12, 2019
Source: Company data, Nordea estimates

Source: Thomson Reuters