Realkredit Danmark reports net profit of DKK 3,233 million for the first nine months of 2019
Realkredit Danmark today published its interim report for the first nine months of 2019.
Carsten Nøddebo, CEO, comments on the financial results:
“The third quarter was characterised by record-high remortgaging activity. Customers remortgaged loans with a total value of DKK 58 billion with Realkredit Danmark and achieved considerable savings on their mortgage interest payments. Since interest rates are expected to remain low, we expect the coming period also to offer favourable remortgaging opportunities. Total income was higher in the first three quarters of 2019 than in the year-earlier period. Net profit is down, however, as a result of loan impairment charges being made in the first nine months of 2019. In the same period in 2018, we had a net reversal.”
Highlights are shown below:
- The Realkredit Danmark Group recorded a net profit of DKK 3,233 million in the first nine months of 2019, against DKK 3,521 million in the first nine months of 2018. The profit was affected by higher loan impairments.
- Impairments amounted to a charge of DKK 294 million in the first nine months of 2019, against an income of DKK 215 million in the first nine months of 2018. This development was due to an update and specification of the statistical loss models used to calculate expected credit losses. Underlying credit quality remained strong with low delinquencies and good collateral.
- In a market with all-time low interest rate levels, borrowers have remortgaged to an extent never seen before. Loans with a total value of DKK 185 billion were remortgaged across all mortgage credit institutions in the third quarter, of which amount Realkredit Danmark loans accounted for DKK 58 billion. We expect the high remortgaging activity to continue in the months to come as interest rates levels are expected to stay low. The effect on earnings at Realkredit Danmark has been modest, however.
- In the first nine months of 2019, borrower demand centred on fixed-rate loans and FlexLån® loans with 5-year refinancing intervals, and customers are increasingly making repayments on their loans. This resulted in a small decline in administration margin income.
- For the first time ever, Realkredit Danmark is now offering its customers 15-year and 20-year mortgage loans with a coupon of 0.0%. Customers with Flexlån® loans with interest resetting every five years are currently offered a negative interest rate of around -0.30%.
- In April, Realkredit Danmark launched green funding for commercial property, and to date, Realkredit Danmark has disbursed RD Cibor6® Green loans with a total value of DKK 815 million.
- Realkredit Danmark expects net profit for 2019 to be at a lower level than in 2018.
Read Interim report for the first nine months of 2019
Contact: Carsten Nøddebo, CEO, tel. +45 45 13 20 82.