Q4'22 pre-tax profit +2% vs. ABGSCe Positive signs on trading income and costs '23e-'24e 6% div. yield at '24e adj. P/E of 4.8x
Trading income was the only real surprise
Vestjysk delivered pre-tax profit 2% above our estimate with the main deviation found in trading income, which came in at DKK 51m vs. ABGSCe at DKK 26m, driven solely by the favourable development in Q4 and not repatriation of the reported losses in Q1-Q3 (set for 2024-25 with the maturity of the largest positions). Regarding costs, personnel costs was 5% lower than our estimates due to: 1) a stronger-than-expected decrease from the disposal of the three branches at the beginning of October, and 2) lower realised holiday allowance having an effect on Q4 figures. The lower personnel costs bodes well for 2023e, but was offset in Q4 by operating costs 12% higher than our ests., driven by higher IT-costs related to the withdrawal of the three branches on the data platform. Asset quality remained strong, with the accumulated impairments still amounting to 10% of bank lending.