Q3 income 6% below our ABGSCe due to lower NCI...
... but loan loss reversals and better costs save the day
We fine-tune estimates, share trading at '24e P/E 6.6x.
7% core earnings beat, driven by loan loss reversals
Vestjysk reported Q3 pre-tax profit 1% below ABGSCe based on three main deviations from our estimates. On the positive side, total costs of DKK 228m were 4% below ABGSCe and Q3 was another quarter of loan loss provision reversals, at DKK 45m vs. our expectation of DKK 4m in loan losses. The management overlay is unchanged q-o-q at DKK 400m to account for uncertainties in the macro environment, and this constitutes a buffer to lending of 230bp. On the negative side, fees at DKK 145m were 19% below our expectations, driven by lower loan transaction fees. Net interest income was in line with ABGSCe at 8% growth q-o-q. Lending volumes grew by 1.2% q-o-q, while deposits increased 0.1%. The CET1 ratio was 21.0% vs. ABGSCe at 21.4%.