2% PTP beat despite higher-than-expected restructuring costs Higher costs are of a one-off nature – no estimate revisions 18.2% adj. EPS CAGR for '22-'25e at '25e adj. P/E of 4.9x
2% pre-tax profit beat despite higher costs
Vestjysk reported Q1 pre-tax profit at 2% above ABGSCe, based on three main deviations from our estimates. On the positive side, market value adjustments at DKK 66m were 22% above ABGSCe and Q1 was another quarter of loan loss reversals of DKK 3m vs. our expectation of loan losses at DKK 4m. On the negative side, total costs at DKK 270m was 7% higher than we expected. The latter was driven by a larger-than-expected effect of Vestjysk's merger of corporate lending branches and related layoffs amounting to DKK 18m and larger depreciations on its properties with DKK 17m as one-offs. Net interest income was in line with ABGSCe at 13% growth q-o-q and the same goes for commission income even though loan transaction fees were well below our expectations but offset by higher-than-expected securities trading and other fees. Lending volumes held up nicely in the current market conditions at 1.3% growth q-o-q, while deposits decreased 1%. The CET1 ratio stood at 19.9% vs. ABGSCe at 20.3%.