Net profit beat despite higher costs and lower fee income
Vestjysk reported Q3 net profit at DKK 123m, +30% vs ABGSC, driven by significantly higher-than-expected loan loss reversals and exploitation of Vestjysk’s deferred tax assets. Profit before loan losses came in 12% below ABGSCe due to total income -2% vs. ABGSCe and higher-than-expected operating costs. On the income side net interest income was in line with ABGSC at a 7% growth q-o-q while commission income came in 3% below ABGSC and 4% down q-o-q due to lower securities trading income and flat income from payment services q-o-q. Lending growth at 0.2% q-o-q was significantly lower than our expectation of ~2% growth. On capital, the CET1 ratio stood at 16.9% vs. ABGSCe at 16.3% due to significantly lower REA driven by lower market and credit risk. When assessing the deviations in the report we expect the stock to trade negative today.
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