ANNUAL REPORT 2021
RINGKJØBING LANDBOBANK A/S ANNUAL REPORT 2021
ANNUAL REPORT 2021 PAGE 1
CONTENTS
Page
2 Dear shareholder
3 Annual report – highlights
3 Mainandkeygures
Management’s review:
6 Financial review
24 Capital structure
30 Risks and risk management
43 Corporate governance etc.
53 Corporate social responsibility
Statement and reports:
56 Management statement
57 Auditors’ reports
Financial statements:
64 Statements of income and comprehensive income
64 Proposeddistributionofprot
65 Core earnings
66 Balance sheet
68 Statement of changes in equity
69 Statement of capital
71 Overview of notes
72 Notes
112 Five-yearmaingures
114 Five-yearkeygures
Other information:
118 Shareholders’ committee
120 Board of directors
132 General management
134 Company information
135 Shareholder relations
136 Company announcements
138 Financial calendar
141 The bank’s branches
Disclaimer:
This document is a translation of an original document in Danish. The original Danish text shall be the governing text for all purposes and in
case of any discrepancy the Danish wording shall be applicable.
PAGE 2 RINGKJØBING LANDBOBANK A/S
DEAR SHAREHOLDER
2021 was a unique year for Ringkjøbing Landbobank with a record increase in new custom-
ersresultingina34%increaseinprotbeforetaxtoDKK1,538millionandan18%return
on equity.
Our image and a high level of customer satisfaction formed the basis in 2021 for growth of
14%inthebank’sloans,10%indepositsand35%incustomers’fundsincustodyaccounts.
This is a highly satisfactory expansion of the bank’s foundation. It leads us to hope that 2022
will also be a good year for the bank.
All of this resulted in an increase of 12% in the bank’s income and an increase of 4% in ex-
penses.Wewerethereforeabletoreducethebank’srateofcostsfrom36%to34%,whichis
concreteconrmationthatourbusinessmodelisfunctioningasplanned.
In2021,wepurchasedtheDanishactivitiesoftheLuxembourg-basedBanqueInternationale
à Luxembourg S.A. This has strengthened the bank’s private banking activities in Aarhus and
Holte.
The stock market responded positively to the bank’s development. The increase in the bank’s
sharepriceandthedividendpaidresultedinapositivereturnof60%.InDecember2021,the
bank’s share was included in the European Stoxx Europe 600 index.
Distributionof77%ofthenetprotfortheyearisrecommendedtothegeneralmeeting.This
will be effected through a dividend of DKK 7 per share and share buy-back programmes of
DKK 738 million.
In recent years we have worked to make our bank more sustainable and this year we publish
the bank’s third ESG report. In the report we provide a status of the work of modifying our
products to make them more sustainable and complying with the reporting requirements for
bothinvestmentsandloans.Wealsodescribeoursupportofandworkwithmorethan1,400
associations,clubsandevents,whichisveryimportanttous.
We would like to thank our highly skilled employees who have made an extraordinary effort
inayearwhenwehaveagainallhadtobeveryexibleinvariouswaysasaresultofthe
coronaviruspandemic.Theexpertise,loyaltyandindomitablespiritofouremployeesarean
unsurpassed combination.
We believe that we will learn to live with the coronavirus in 2022 and that society will come
closer to normalisation. Serving our existing customers and continuing the increase in new
customer relationships by winning additional market share will be our principal tasks. We
expectprotbeforetaxtobeintherangeDKK1,300-1,650million.
Finallywewouldliketothankourcustomersandyou,ourshareholders,forthestrongsup-
port which the bank enjoys.
John Bull Fisker
CEO
ANNUAL REPORT 2021 PAGE 3
ANNUAL REPORT – HIGHLIGHTS
• TheprotbeforetaxisDKK1,538million,equivalenttoan18%p.a.returnonequity
• Incomeincreasesby12%andexpensesincreaseby4%,reducingtherateofcoststo
33.6%
• Impairment charges decrease to DKK 68 million and the management estimates
increase to DKK 631 million
• Continuedincreaseinnewcustomersresultsingrowthof14%inloans,10%in
deposits and 35% in funds in custody accounts
• Customer satisfaction and image high or highest in several surveys
• Thepay-outratiois77%ofnetprotfor2021andwillbeeffectedthroughadividend
of DKK 7 per share and share buy-back programmes totalling DKK 738 million
• Inlate2021,thebank’ssharewasincludedintheStoxxEurope600index
• Theexpectationsforprotbeforetaxin2022ofbetweenDKK1,300millionandDKK
1,650million.
2021 2020 2019 2018 2017
Main gures for the bank (DKK million)
Totalcoreincome 2,433 2,179 2,116 2,001 1,917
Total expenses and depreciation 817 788 805 866 845
Core earnings before impairments 1,616 1,391 1,311 1,135 1,072
Impairment charges for loans etc. -68 -223 -100 -43 -70
Core earnings 1,548 1,168 1,211 1,092 1,002
Result for the portfolio etc. +7 -9 +49 +77 +84
Special costs 17 15 15 217 22
Prot before tax 1,538 1,144 1,245 952 1,064
Net prot for the year 1,229 920 978 778 848
Equity 8,723 8,146 7,610 7,189 6,769
Depositsincludingpooledschemes 43,740 39,639 38,128 36,993 35,854
Loans 41,179 36,241 35,465 33,350 31,173
Balancesheettotal 60,357 54,862 52,941 49,651 46,324
Key gures for the bank (percent)
Protbeforetax/averageequity 18.2 14.5 16.8 13.8 16.3
Netprotfortheyear/averageequity 14.6 11.7 13.2 11.3 13.0
Rate of costs 33.6 36.2 38.0 43.3 44.1
Common equity tier 1 capital ratio 17.6 17.5 14.7 14.6 15.8
Total capital ratio 22.3 21.1 20.0 18.4 17.3
MREL capital ratio 27.8 26.7 27.3 24.9 -
Key gures per DKK 1 share (DKK)
Core earnings 54 40 41 37 31
Protbeforetax 54 39 43 32 34
Netprotfortheyear 43 32 34 26 27
Book value 307 280 260 240 175
Price,endofyear 878 554 514 340 322
Dividend 7 7 11 10 9
MAIN AND KEY FIGURES
(2017-2018 pro forma)
PAGE 4 RINGKJØBING LANDBOBANK A/S
ANNUAL REPORT 2021 PAGE 5
MANAGEMENT’S REVIEW
Page
6 Financial review
24 Capital structure
30 Risks and risk management
43 Corporate governance etc.
53 Corporate social responsibility
PAGE 6 RINGKJØBING LANDBOBANK A/S
Core earnings
Core income
Interest
NetinterestincomewasDKK1,343millionin2021comparedtoDKK1,256millionin
2020,anincreaseof7%.Thebankissatisedwiththisdevelopment.
The development is attributable to a 14% increase in lending compared to the end of
December 2020. The increase in lending is broadly based and relates to both niches and
retail,includingincreaseddrawingsoncreditlinesbythebank’sbusinesscustomersin
thefourthquarterof2021.Inaddition,thebanktookovertheclientportfoliofromBIL
Danmark in the third quarter of 2021.
The total interest margin at the end of the year was at the same level as at the end of
2020,althoughthebankloweredthethresholdfornegativeinterestonpersonalcus-
tomers’depositstoDKK100,000witheffectfromthebeginningofJanuary2021.With
effectfrom1July2021,thebankloweredtheinterestrateondepositsfrombusiness
customers. The deposit rate was lowered by 0.10 percentage point from the beginning
of November 2021 for business customers and from the beginning of December 2021
for personal customers in consequence of Danmarks Nationalbank’s (the central bank
of Denmark) reduction of the interest rate on 1 October 2021. The interest margin on the
bank’s loans was thus under pressure in 2021.
Fee, commission and foreign exchange income
Fee,commissionandforeignexchangeincomeamountedtoDKK906millionin2021,
comparedtoDKK770millionin2020,anincreaseof18%.Thebankishighlysatised
withthisdevelopment,andtheincreasereectsaveryhighlevelofactivity–especially
intherstandlastquartersoftheyear.However,thegenerallevelsofactivityinboth
the second and third quarters of 2021 were also higher than before.
The sources of net fee, commission and foreign exchange income were as follows:
(DKK million) 2021 2020 2019 2018 2017
Securities trading 171 138 128 88 86
Asset management and custody accounts 182 150 148 160 183
Payment handling 84 63 79 91 83
Loan fees 81 82 103 40 31
Guarantee commission and mortgage
credit commission etc. 245 225 217 214 200
Other fees and commission 85 71 80 63 53
Foreign exchange income 58 41 30 31 31
Total 906 770 785 687 667
The bank’s focus on the private banking segment has had a positive effect on the
“Securitiestrading”,“Assetmanagementandcustodyaccounts”and“Foreignexchange
income” items in particular.
Duetothehighlevelofactivityandthecontinuedbigincreaseinnewcustomers,“Guar-
antee commission and mortgage credit commission etc.” also developed positively with
a 10% increase in arranged mortgage loans compared to 2020.
FINANCIAL REVIEW
ANNUAL REPORT 2021 PAGE 7
The item “Loan fees” remained unchanged in 2021 relative to 2020. The activity level
was stagnant to slightly down in 2021.
Initiatives aimed at normalising the income from payment handling activities were
implementedwitheffectfrom1April2021.Theseinitiativesarereectedintheincome
from“Paymenthandling”,whichhasimprovedcomparedto2020.
Finally,theincomefrom“Otherfeesandcommission”developedpositivelycomparedto
2020. This is partly attributable to the bank’s focus on the pension and insurance activities.
There was a large increase in customers’ funds in custody accounts etc. in 2021. There
areseveralreasonsforthisincludingtheincreaseincustomernumbers,thebank’s
focus on private banking and the increases in the value of securities. In the second half
of2021,fundsincustodyaccountswerealsopositivelyaffectedbythebank’stakeover
of BIL Danmark’s client portfolio.
Funds in custody accounts etc. End of End of End of End of
(DKK million) 2021 2020 2019 2018
Custodyaccountholdings 74,589 54,811 48,186 39,668
Deposits in pooled schemes 5,538 4,700 4,276 3,786
Letpension/PFAPension 3,408 2,576 2,050 1,472
Total 83,535 62,087 54,512 44,926
Sector shares and other operating income
Total earnings from banking sector shares amounted to DKK 179 million in 2021 com-
pared to DKK 151 million in 2020. The earnings derive primarily from return on the
bank’sownershipinterestsinBankInvest(BIHolding),DLRKreditandPRAS.
OtheroperatingincomestoodatDKK5millionin2021,incontrastto2020,whenthis
item was DKK 2 million. The other operating income for the year relates primarily to the
sale of a property.
Core income
Totalcoreincomeincreasedby12%,fromDKK2,179millionin2020toDKK2,433mil-
lion in 2021. The bank considers the increase highly satisfactory.
1,917
2,001
2,116
2,179
2,433
1,800
1,900
2,000
2,100
2,200
2,300
2,400
2,500
2017 2018 2019 2020 2021
DKK million
Core income
PAGE 8 RINGKJØBING LANDBOBANK A/S
Expenses, depreciation and write-downs
Total expenses including depreciation and write-downs on tangible assets amounted to
DKK817millionin2021,comparedtoDKK788millionin2020,anincreaseof4%.The
increasereectsthehighlevelsofactivityandthepurchaseofBILDanmark.
Therateofcostswas33.6%in2021,comparedto36.2%in2020.Itisconsideredhighly
satisfactory that the rate of costs is now back down to the level that applied before the
merger of Ringkjøbing Landbobank and Nordjyske Bank in 2018.
A low cost rate combined with good credit quality are the foundation for the bank’s
businessmodel.Thiscombinationprovidesahighfreecashowandastrongrevenue
shield.
The bank’s business model is functioning as planned and a cost rate below 33% is not
in itself a goal. In the years to come we therefore expect the bank’s costs to increase as
income grows.
FINANCIAL REVIEW
47.3
44.3
44.1
37.2
34.2
33.7
32.4
31.6 31.6
32.4
32.2
32.4
32.8
32.1
32.3
32.8
43.3
38
36.2
33.6
20
30
40
50
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Per cent
Rate of costs
* Pro forma
*
ANNUAL REPORT 2021 PAGE 9
Impairment charges for loans etc.
Impairmentchargesforloansetc.representedanexpenseofDKK68millionin2021,
compared to an expense of DKK 223 million in 2020. The expense thus amounted to
0.15%ofthetotalloansandguaranteesattheendof2021,comparedto0.48%theyear
before.
Seeninisolation,thetotalexpensesforlossesandimpairmentchargeswereDKK7
millioninthefourthquarterof2021,comparedtoDKK38millioninthesamequarterof
2020. The trend in the bank’s expenditure for losses and impairment charges has been
decreasingeachquartersincetherstquarterof2020.
During2021,thebank’stotalaccountforimpairmentchargesincreasedbyDKK79mil-
liontoDKK2,283millionandamountedto4.2%ofthebank’stotalloansandguarantees
attheendof2021.DKK1,174millionofthetotalaccountforimpairmentchargesis
attributable to stage 3 exposures. The remainder is attributable to stage 1 and 2 expo-
sures.
Actual losses were at an acceptable level in 2021. The development has generally been
positive with lower losses and impairment charges than expected at the beginning of
the year.
Inthebank’sjudgment,however,severaleventshaveoccurredthatresultincredit
uncertainty which cannot yet be detected in the individual exposures. We also see some
uncertainty in the use of the statistical models the bank uses to calculate impairment
chargesforstage1and2customers.Tocountertheserisks,thebankincreasedthe
management estimates from DKK 566 million to DKK 631 million during 2021.
Theseestimatesincludetheriskswhich,inthebank’sassessment,maystillbecon-
nectedwiththecoronavirussituation,e.g.theimpactonglobalsupplychainswiththe
resultingshortageofcomponentsandincreasesinprices,includingtherecentmarked
increases in global energy prices.
The bank has also increased the management estimate for exposure to the agricultural
sector,partlybasedontheuncertaintyofhowthereformofthesubsidiesperhectare
will affect the price of farm land and partly based on the currently very low pork and
piglet prices paid to farmers. The bank’s total exposure to pig farming amounts to 1.1%
ofthetotalloansandguarantees,comparedto1.2%theyearbefore.Thebankhascur-
rently written down the exposure to pig farming by 20.5%.
The bank also assesses that we do not yet fully know the long-term effect on Danish
sheriesofthepoliticalagreementsmadeinthewakeofBrexit.Thisriskisalsoinclud-
edinthebank’smanagementestimates.Thebank’sexposuretosheriesamountsto
1.4%ofthetotalloansandguarantees,comparedto1.8%theyearbefore.
Thequalityofthebank’spersonalcustomerportfoliodevelopedpositivelyin2021,de-
spite the coronavirus. Unemployment is historically low and the housing market has also
developed positively with large price increases. Despite this a management estimate
has also been added for write-downs on the personal customer portfolio based on the
judgment that the different stimulus measures have resulted in an abnormally positive
picture of the credit quality.
The bank’s loans with suspended calculation of interest decreased from DKK 265 million
at the end of 2020 to DKK 98 million at the end of 2021.
PAGE 10 RINGKJØBING LANDBOBANK A/S
Core earnings
Coreearningsin2021totalledDKK1,548millioncomparedtothepreviousyear’sDKK
1,168million,anincreaseof33%.
(DKK million) 2021 2020 2019 2018 2017
Totalcoreincome 2,433 2,179 2,116 2,001 1,917
Total expenses and depreciation 817 788 805 866 845
Coreearningsbeforeimpairments 1,616 1,391 1,311 1,135 1,072
Impairment charges for loans etc. -68 -223 -100 -43 -70
Core earnings 1,548 1,168 1,211 1,092 1,002
Thebankplacesemphasisonthekeygure“Coreearningspershare”andhowitdevel-
ops.Overtheperiod2012to2019,thebankhasbeenabletoincreasecoreearningsper
shareeachyear.In2020,“Coreearningspershare”werenegativelyaffectedbythein-
creaseinimpairmentchargesresultingfromthecoronavirussituation.In2021,thebank
againdeliveredanincreasein“Coreearningspershare”,by35%fromDKK40.2in2020
to DKK 54.4 in 2021. The development in earnings and the share buy-back programmes
completed in 2021 positively affected “Core earnings per share”.
Result for the portfolio etc.
The result for the portfolio etc. including portfolio funding costs was positive by DKK 7
millionnetfor2021.In2020,theresultfortheportfolioetc.wasnegativebyDKK8mil-
lion net.
FINANCIAL REVIEW
16.6
18.9
22.4
25.7
27.6
30.9
36.5
41.4
40.2
54.4
0
10
20
30
40
50
60
2012 2013 2014 2015 2016 2017 2018* 2019 2020 2021
Core earnings per DKK 1 share (DKK)
*Proformagures
ANNUAL REPORT 2021 PAGE 11
Amortisation and write-downs on intangible assets
Thebanktreatsamortisationandwrite-downsonintangibleassetsasaspecialitem,
since expensing them enhances the quality of equity and helps to reduce the deduction
when computing total capital.
Amortisationandwrite-downsonintangibleassetsamountedtoDKK17millionin2021,
which is marginally higher than the DKK 15 million in 2020. The increase is attributable
to amortisation of the purchase of the BIL Danmark client portfolio.
Prot before and after tax and follow-up on nancial expectations for 2021
TheprotbeforetaxwasDKK1,538million,equivalenttoan18.2%p.a.returnonaver-
ageequity,whichisconsideredsatisfactory.
ThenetprotfortheyearwasDKK1,229million,equivalenttoa14.6%p.a.returnon
average equity.
Onpublicationofthe2020annualreport,thebankannounceditsexpectationsforcore
earningsfor2021intherangeDKK1,100-1,300millionandprotbeforetaxintherange
DKK1,000-1,300million.
On8June2021,thebankupwardlyadjusteditsexpectationsfor2021tocoreearnings
intherangeDKK1,300-1,500millionandprotbeforetaxintherangeDKK1,200-1,500
million.Thebackgroundtotheupwardadjustmentwasprimarilyabetterincomeow
thanpreviouslyexpected,includingfromacontinuedlargeincreaseincustomersanda
high level of activity.
On27October2021,thebankannouncedthatitmaintainedtheupwardlyadjustedex-
pectationsandspeciedthatitexpectedresultsattheupperendoftheranges.
On6January2022,thebankupwardlyadjusteditsexpectationsforcoreearningsfrom
theDKK1,300-1,500millionrangetoapproximatelyDKK1,545millionandtheexpecta-
tionsforprotbeforetaxfromtheDKK1,200-1,500millionrangetoapproximatelyDKK
1,535million.Thebackgroundtotheupwardadjustmentwasagainacontinuedsatis-
factoryincomeowincludingcontinuedgrowthinloans,acontinuedlargeincreasein
customers and continued satisfactory credit quality.
CoreearningsstoodatDKK1,548millionandprotbeforetaxatDKK1,538million,both
realised as announced on 6 January 2022.
Balance sheet items and contingent liabilities
Thebank’sbalancesheettotalstoodatDKK60,357millionattheendof2021,com-
paredtoDKK54,862milliontheyearbefore.
Depositsincludingpooledschemesincreasedby10%in2021:fromDKK39,639million
attheendof2020toDKK43,740millionattheendof2021.Thebank’sloansincreased
by14%:fromDKK36,241millionattheendof2020toDKK41,179millionattheendof
2021.
EquityincreasedfromDKK8,146millionattheendof2020toDKK8,723millionatthe
end of 2021.
Thebank’scontingentliabilities,includingguarantees,attheendoftheyearamounted
toDKK10,270million,comparedtoDKK9,812millionattheendof2020.
PAGE 12 RINGKJØBING LANDBOBANK A/S
Credit intermediation
Inadditiontothetraditionalbankloansshownonitsbalancesheet,thebankalsoar-
ranges mortgage loans on behalf of both Totalkredit and DLR Kredit.
Withanincreaseof12%comparedtotheendof2020,thedevelopmentinthebank’s
total credit intermediation was very positive in 2021. The development is shown in the
following summary:
Total credit intermediation 31 Dec. 31 Dec. 31 Dec. 31 Dec.
(DKK million) 2021 2020 2019 2018
Loans and other receivables
atamortisedcost 41,179 36,241 35,465 33,350
ArrangedthroughTotalkredit 43,849 39,454 36,374 32,905
ArrangedthroughDLRKredit 9,778 9,511 9,029 8,693
Arranged through others 394 - - -
Total 95,200 85,206 80,868 74,948
Securities and market risk
Theitem“Shares,etc.”amountedtoDKK1,467millionattheendof2021,withDKK29
millioninlistedsharesandinvestmentfundcerticatesandDKK1,438millioninsector
sharesetc.,mainlyinthecompaniesDLRKredit,BIHoldingandPRAS.
ThebondportfolioamountedtoDKK6,744million,ofwhichthemajorityconsistedof
AAA-rated Danish mortgage credit bonds.
Thetotalinterestraterisk–impactonprotofa1percentagepointchangeintheinter-
estlevel–wascomputedas0.4%ofthebank’stier1capitalon31December2021,the
equivalent of DKK 31 million.
The bank’s risk of losses calculated on the basis of a Value at Risk model (computed
with a 10-day horizon and 99% probability) was as follows in 2021:
Value at Risk Risk relative to equity
Risk in DKK million end of year in %
Highest risk of loss: 15.0 0.17%
Lowest risk of loss: 4.4 0.05%
Average risk of loss: 9.8 0.11%
End of year risk of loss: 7.8 0.09%
Thebank’stotalmarketriskwithinexposurestointerestraterisk,listedsharesetc.and
foreigncurrencyremainsatamoderatelevel,andthispolicywillcontinue.
Liquidity
The bank’s liquidity situation is good. The bank’s short-term funding with term to matu-
rityoflessthan12monthsamountstoDKK1.3billion,balancedbyDKK10.4billionin
short-term deposits in Danmarks Nationalbank and in liquid tradable securities.
FINANCIAL REVIEW
ANNUAL REPORT 2021 PAGE 13
The bank’s deposits (excluding pooled schemes) and equity exceeded its loans by DKK
5.7billionandthesetwoitemsthereforemorethanfullynancetheloanportfolio.Inad-
dition,partoftheloanportfolioforrenewableenergyprojectsisnancedback-to-back
withKfWBankengruppe,whichmeansthatDKK1.2billioncanbedisregardedinterms
of liquidity.
Intermsofliquidity,thebankmustcomplywiththestatutoryrequirementofatleast
100% for both of the two liquidity ratios LCR and NSFR.
On 31 December 2021 the bank’s LCR was 176% and its NSFR 116%. The bank thus met
the statutory requirement for both ratios by a good margin.
The Supervisory Diamond
The bank carefully complies with the Danish FSA’s Supervisory Diamond. The Superviso-
ry Diamond now contains four different benchmarks and associated limit values which
Danish banks are expected to observe.
Witheffectfrom1July2021andfollowingtheimplementationoftheNSFR,the“Fund-
ing ratio” benchmark was removed from the Supervisory Diamond.
TheSupervisoryDiamondbenchmarksandlimitvaluesandthebank’skeyguresare
given in the following table.
Benchmark Limit value 2021 2020 2019 2018 2017
Liquidity benchmark >100% 161.1% 177.6% 193.2% 179.5% -
Total large exposures <175% 109.8% 99.8% 121.0% 106.0% 136.1%
Growth in loans <20% 13.5% 2.2% 6.3% 72.3%* 10.7%
Real property exposure <25% 18.4% 17.9% 17.5% 15.8% 18.0%
* The increase was mainly caused by the merger. The pro forma growth in loans relative to December 2017 was 7.0%.
Asshownabove,RingkjøbingLandbobankmeetsallfourcurrentlimitvaluesbyagood
margin.
Rating
The bank is rated by the international credit rating agency Moody’s Investors Service.
Themostimportantratings,conrmedmostrecentlyon22September2021,areasfol-
lows:
Rating Assigned rating
Baseline Credit Assessment a3
Adjusted Baseline Credit Assessment a3
Long Term Bank Deposits Aa3
Short Term Bank Deposits P-1
Long Term Issuer Rating A1
Short Term Issuer Rating P-1
Outlook Stable
PAGE 14 RINGKJØBING LANDBOBANK A/S
The bank’s share
The bank’s share is listed on the Nasdaq Copenhagen and the volume in circulation is
100%. The share is part of the Large Cap index and was included in the Stoxx Europe
600 index in late 2021.
Atthebeginningof2021thesharepricewas554.0.Attheendof2021,thepricehad
increased to 878.0. The market capitalisation thus totalled DKK 25.5 billion.
The return on the share in 2021 was 60% including the dividend of DKK 7.0 distributed in
2021.
FINANCIAL REVIEW
6.0
0.0
0.00.0
0.0
0.0 1.8 5.0 5.5
6.0 2.4
2.6
2.8 5.0 5.2 6.0 97.2 10 11 7
7
0
1
2
3
4
5
6
7
8
9
10
11
0
100
200
300
400
500
600
700
800
900
1,000
1,100
jan/01
jul/01
jan/02
jul/02
jan/03
jul/03
jan/04
jul/04
jan/05
jul/05
jan/06
jul/06
jan/07
jul/07
jan/08
jul/08
jan/09
jul/09
jan/10
jul/10
jan/11
jul/11
jan/12
jul/12
jan/13
jul/13
jan/14
jul/14
jan/15
jul/15
jan/16
jul/16
jan/17
jul/17
jan/18
jul/18
jan/19
jul/19
jan/20
jul/20
jan/21
jul/21
jan/22
Dividend (DKK)
Share price (DKK)
Share price and dividend
Share price
Dividend in DKK per share of nom. DKK 1
0
400
800
1,200
1,600
2,000
2,400
2,800
3,200
3,600
4,000
4,400
4,800
5,200
jan/01
jul/01
jan/02
jul/02
jan/03
jul/03
jan/04
jul/04
jan/05
jul/05
jan/06
jul/06
jan/07
jul/07
jan/08
jul/08
jan/09
jul/09
jan/10
jul/10
jan/11
jul/11
jan/12
jul/12
jan/13
jul/13
jan/14
jul/14
jan/15
jul/15
jan/16
jul/16
jan/17
jul/17
jan/18
jul/18
jan/19
jul/19
jan/20
jul/20
jan/21
jul/21
jan/22
Index
RILBA OMX Bank PI
Development in OMX Bank PI index and Landbobank share
ANNUAL REPORT 2021 PAGE 15
Includingdividendsuptoandincludingthe2021nancialyearandgiventheshareprice
on31December2021,theaverageannualreturnonaninvestmentinthebank’sshares
at the beginning of 2001 is 21%.
Asindicatedinthechartabove,thebank’ssharehasoutperformedtheindexforbanks
(OMX Copenhagen Banks PI) in the same period.
BIL Danmark
InJune2021,thebankenteredintoanagreementwithBanqueInternationaleàLuxem-
bourgS.A.,ofLuxembourg,regardingtakeoverofallBILDanmark’sclients.
Paymentfortheclientportfoliowilltaketheformofanearn-out,basedonearningsover
atwo-yearperiod.Inthisconnection,intangibleassetsintheformofclientrelationships
equivalent to DKK 45 million have been capitalised on the bank’s balance sheet.
The client transfer process for deposits and loans of around DKK 1 billion each was
completed satisfactorily in the third quarter of 2021. The takeover of the BIL Danmark
client portfolio has strengthened the bank’s position in private banking.
Organisational changes etc.
In2021,variousadjustmentstothebank’sorganisationalstructureandadministrative
set-up were decided. The aim of all the adjustments is to strengthen the bank’s special-
ist environments to ensure the continued best possible advisory services and experi-
ence for its customers. All adjustments have been implemented successfully and will
resultinsomespecicsavings.
The employees in the bank’s branch in Hvide Sande are now permanently attached to
theheadofceinRingkøbing,buttheHvideSandebranchwillcontinuetobethevenue
for customer meetings etc.
The bank’s branch on Kastetvej in Aalborg has been combined with the branch in Has-
seris,Aalborg.ThishasmadeHasserisoneofthebank’sbiggestretailcustomerbranch-
es.
Finally,CentralProductioninNorthJutland,whichhassofarhadtwolocationsin
NørresundbyandFrederikshavnrespectively,hasbeenconsolidatedinonelocationin
Frederikshavn.
During2021,stafnghasincreasedinthemostsuccessfulbrancheswiththebiggest
increases in customers. This has resulted in a cost increase.
Itwasalsodecidedin2021toestablishamiddleofceinthesecuritiesareaandto
increasethestafnginITsecurityandcompliance-relatedmattersforimplementationin
2022. This will also increase the costs.
Finally,in2021thebankdecidedandstartedanenlargementoftheheadofceinRing-
købingbyjustover1,300m
2
. The plan is to complete the enlargement in late 2022.
Theenlargementoftheheadofcewillensurethatthebankcancontinuetopursuean
organic growth strategy.
PAGE 16 RINGKJØBING LANDBOBANK A/S
IT development
New mobile banking service
Thebank’sITsupplier,Bankdata,suppliedanewmobilebankingappforthebank’s
personal customers in 2021. The app was rolled out successfully to the bank’s custom-
ers in the third quarter of 2021. The new mobile banking app establishes a new future-
proofedcommunicationplatformwiththecustomers.Itcontainsdetailsonhousing,
pension and assets and also offers good possibilities for customer self-compliance and
better security and integration with third parties. New functions for the mobile banking
app are expected to be developed and implemented on an ongoing basis.
Securities trading
Aspartoftheimplementationofthenewmobilebankingapp,theinvestmentplatform
in the bank’s online and mobile banking services was also upgraded. The bank further
decided to lower the minimum brokerage on trading in Danish and international shares
for transactions made online or via the mobile banking app.
Darwin and “A world of difference”
ThroughBankInvest,thebanklaunchedaninvestmentrobotin2018:Darwin.Theinvest-
ment robot will now be relaunched with a changed investment mix where all funds are
now also ESG screened.
AtthesametimeandalsoinpartnershipwithBankInvest,anewwebsitewillbeintro-
duced: “A world of difference”. The website enables the bank’s customers to test their
attitudestovariousESG-relatedissuesand,basedontheirpreferences,suggestsan
investment portfolio.
MitID
2021 was also the year when the replacement of NemID by MitID started. The aim is
tostrengthensecurityandthereplacementwillcontinue,andisscheduledtobecom-
pleted,in2022.
Foreign exchange trading
Inthesecondhalfof2021,thebankintroducedanewtradingplatformenablingthe
bank to offer large business customers online foreign exchange trading.
Customer satisfaction, image and reputation, bank of the year and customer inow
Wearepleased,proudandhumbledtonotethatthebankhasobtainedhighlysatisfac-
tory scores in different surveys and analyses.
Reputation/image and customer satisfaction
InSeptember2021,themarketresearchcompanyVoxmeterpublishedareputation/im-
agesurveyofDanishnancialinstitutions.Theanalysisisbasedon39,000respondents
and the bank’s two brands obtained the following places:
• The Ringkjøbing Landbobank brand is no. 1
• The Nordjyske Bank brand is no. 4
FINANCIAL REVIEW
ANNUAL REPORT 2021 PAGE 17
InOctober2021,Berlingskepublishedanimageanalysisofmorethan100ofthebig-
gest companies in Denmark produced in partnership with IFO - Instituttet for Opinion-
sanalyse.Theimageanalysisisbasedonanswersfrom2,217executivesandRing-
kjøbingLandbobankwasthenancialinstitutionwiththehighestplacing.
InNovember2021,theonlinenewsportalFinansWatchpublishedananalysisofthe
imageofDanishnancialcompaniesinpartnershipwiththemarketresearchcompany
Wilke.Theanalysisisbasedonanswersfromarepresentativesampleofjustover5,000
Danes. This analysis placed Ringkjøbing Landbobank highest among banks.
InJanuary2022,themarketresearchcompanyVoxmeterpublishedacustomersatis-
factionsurveyofDanishnancialinstitutions.TheVoxmetersurveyisbyfarthebig-
gestinDenmarkandbasedonmorethan60,000respondents.Thebank’stwobrands
obtained the following places:
• The Ringkjøbing Landbobank brand is no. 2
• The Nordjyske Bank brand is no. 8
Bank of the year
Inadditiontothesatisfactoryplacingsintermsofcustomersatisfaction,imageand
reputation,thebankwasawardedtheaccoladeofBankoftheYearamongmajorbanks
for the sixth time in a row in June 2021.
Happy customers and skilled staff are fundamental to a good bank. As in previous
years,theawardwasmadebyFinansWatchincollaborationwiththeauditandconsul-
tancyrmEY.
Customer inow
The high level of customer satisfaction and the bank’s good image and reputation have
contributed to the continued highly satisfactory growth in new customers and good
retentionofcustomersin2021,asinpreviousyears.
The coronavirus situation
We see support of our customers and business partners during the coronavirus pan-
demicasanimportantpartofourtask.Fromthestartofthepandemicwehave,of
course,alsoplacedgreatemphasisonprotectingouremployeestolessentheriskof
transmission of the virus.
The bank has thus prepared for operating in an ever-changing environment due to the
coronavirus situation and for potential reintroduction of varying restrictions.
The bank supports the Government’s and Finance Denmark’s declaration of intent of 9
September 2021 regarding termination of the governmental loan schemes.
ESG report
Inadditiontothisannualreport,thebankalsopublishesitsthirdESGreporttoday.The
ESG report contains the bank’s annual statutory statement on corporate social respon-
sibility and its Communication On Progress (COP report) in connection with the bank’s
endorsement of the Ten Principles of the UN Global Compact.
PAGE 18 RINGKJØBING LANDBOBANK A/S
Liketherestofthesector,thebankisfacingthebigtaskofmappingandpublishingthe
carbon emissions from its loans and the securities it either owns or has under manage-
ment. This means that the bank must comply with the recommendations of the Forum
forSustainableFinance,andtheinformationwillformabasisfortheworkoncarbon
reductioninDenmarkandforthefutureDanishnancialsector.
The2021ESGreportforthersttimecontainsinformationonportfoliolevelcarbon
emissions from the bank’s own securities portfolio and from securities in the bank’s
management or pooled schemes. Portfolio-level information on carbon emissions from
the bank’s loan portfolio is planned to be part of the ESG report for 2022.
Expected results and plans for 2022
In2021,coreearningswereDKK1,548millionandprotbeforetaxwasDKK1,538mil-
lion.
2021 was a year when the bank continued its organic growth strategy and purchased
the BIL Danmark client portfolio.
Both helped strengthen and increase the bank’s customer base. The bank also took vari-
ous organisational initiatives in 2021 to further strengthen its set-up.
Itisjudgedtherefore,thatthebankhasastrongerbasisforcontinuingtopursueitsor-
ganic growth strategy by focusing on serving its existing customers and attracting more
new ones.
Basedontheabove,thebank’sexpectationsfor2022areasfollows:
• Total core income is expected to develop positively in 2022 as a result of an
expectedcontinuedinowofcustomersandincreaseinthebusinessvolume.
• An increase of approximately 5% in total expenses is expected in 2022
compared to 2021.
• Impairment charges are expected to remain low in 2022.
Onthebasisoftheabove,thebankmaintainsthepreviouslyannouncedexpectations
for2022forcoreearningsintherangeDKK1,350-1,650millionandprotbeforetaxin
therangeDKK1,300-1,650million.
Accounting policies
Theaccountingpoliciesforthe2021nancialyearareunchangedcomparedtothe
2020nancialyear.
See “Accounting policies etc.” in note 51 on page 102 for a detailed description.
Events after the reporting period
No events after 31 December 2021 are judged to have an impact on the annual report
for 2021.
FINANCIAL REVIEW
ANNUAL REPORT 2021 PAGE 19
Quarterly overviews
Thefollowingpagescontainquarterlyoverviewscomprisingcoreearnings,balance
sheetitemsandcontingentliabilities,andstatementofcapital.
See note 51 on page 110 for further details on the different items.
Comments on the fourth quarter of 2021
Core income
Core income of DKK 651 million in the fourth quarter of 2021 is the highest ever realised
by the bank in a single quarter.
Both net interest income and net fee and commission income thus increased compared
topreviousquartersandreectahighlevelofactivity.Thequarterwasalsotherst
full quarter in which income from the client portfolio taken over from BIL Danmark was
included.Inaddition,theincreaseinnewcustomerscontinuedinthequarterandthe
development in the bank’s loans was positive although part of the increase in lending
was realised towards the end of the quarter.
Expenses
Expenses in the quarter totalled DKK 217 million compared to DKK 212 million in the
fourth quarter of 2020.
Impairment charges for loans
Asaresultofcontinuedsatisfactorycreditquality,impairmentchargesinthequar-
ter decreased compared to the previous quarters. Impairment charges in the quarter
amounted to DKK 7 million.
The management estimate in the quarter increased during the quarter: from DKK 614
million at the beginning to DKK 631 million at the end of the quarter.
Result for the portfolio
The result for the portfolio in the quarter was positive by DKK 11 million.
PAGE 20 RINGKJØBING LANDBOBANK A/S
Quarterly overviews
Core earnings
(DKK million)
Q4
2021
Q3
2021
Q2
2021
Q1
2021
Q4
2020
Q3
2020
Q2
2020
Q1
2020
Q4
2019
Q3
2019
Q2
2019
Q1
2019
Q4
2018
Q3
2018
Q2
2018
Q1
2018
Q4
2017
Q3
2017
Q2
2017
Q1
2017
Net interest income 355 336 327 325 321 319 311 305 292 294 296 291 289 287 284 287 288 277 280 279
Net fee and commission
income excluding securities
trading 182 170 166 159 156 147 136 152 154 163 159 150 146 136 141 146 130 128 154 138
Income from sector shares etc. 47 49 43 40 43 38 35 35 36 36 36 37 39 34 49 38 31 30 30 29
Foreign exchange income 15 14 13 16 13 9 9 10 8 9 8 6 8 8 9 6 7 8 8 8
Other operating income 0 0 1 4 1 0 1 0 5 7 0 1 2 1 2 1 1 2 2 1
Total core income
excluding securities trading 599 569 550 544 534 513 492 502 495 509 499 485 484 466 485 478 457 445 474 455
Securities trading 52 34 29 56 32 39 28 39 35 29 23 41 17 23 20 28 18 24 20 24
Total core income 651 603 579 600 566 552 520 541 530 538 522 526 501 489 505 506 475 469 494 479
Staff and administration
expenses 206 191 195 198 206 179 190 191 202 180 198 198 221 203 217 206 225 202 201 201
Depreciation and write-downs
on tangible assets 9 3 4 3 4 5 2 3 9 8 4 2 3 3 2 8 3 3 2 3
Other operating expenses 2 2 2 2 2 2 0 4 1 0 2 1 1 0 1 1 2 1 1 1
Total expenses etc. 217 196 201 203 212 186 192 198 212 188 204 201 225 206 220 215 230 206 204 205
Core earnings before
impairment charges for loans 434 407 378 397 354 366 328 343 318 350 318 325 276 283 285 291 245 263 290 274
Impairment charges for loans
and other receivables etc. -7 -13 -19 -29 -38 -44 -66 -75 -25 -26 -24 -25 -25 -20 -11 +13 +3 -17 -23 -33
Core earnings 427 394 359 368 316 322 262 268 293 324 294 300 251 263 274 304 248 246 267 241
Result for the portfolio etc. +11 -1 +7 -10 +15 +17 +29 -70 -4 +20 +7 +26 -20 +4 +3 +90 -2 +22 +26 +38
Amortisation and write-downs
on intangible assets 5 4 4 4 4 3 4 4 4 3 4 4 4 3 12 6 5 6 5 6
Merger and restructuring
costs 0 0 0 0 0 0 0 0 0 0 0 0 26 46 46 4 - - - -
Non-recurring costs 0 0 0 0 0 0 0 0 0 0 0 0 1 0 69 0 - - - -
Prot before tax 433 389 362 354 327 336 287 194 285 341 297 322 200 218 150 384 241 262 288 273
Tax 79 87 71 72 64 64 60 36 62 66 76 63 46 37 33 58 47 52 62 55
Net prot for the year 354 302 291 282 263 272 227 158 223 275 221 259 154 181 117 326 194 210 226 218
FINANCIAL REVIEW
ANNUAL REPORT 2021 PAGE 21
Quarterly overviews
Core earnings
(DKK million)
Q4
2021
Q3
2021
Q2
2021
Q1
2021
Q4
2020
Q3
2020
Q2
2020
Q1
2020
Q4
2019
Q3
2019
Q2
2019
Q1
2019
Q4
2018
Q3
2018
Q2
2018
Q1
2018
Q4
2017
Q3
2017
Q2
2017
Q1
2017
Net interest income 355 336 327 325 321 319 311 305 292 294 296 291 289 287 284 287 288 277 280 279
Net fee and commission
income excluding securities
trading 182 170 166 159 156 147 136 152 154 163 159 150 146 136 141 146 130 128 154 138
Income from sector shares etc. 47 49 43 40 43 38 35 35 36 36 36 37 39 34 49 38 31 30 30 29
Foreign exchange income 15 14 13 16 13 9 9 10 8 9 8 6 8 8 9 6 7 8 8 8
Other operating income 0 0 1 4 1 0 1 0 5 7 0 1 2 1 2 1 1 2 2 1
Total core income
excluding securities trading 599 569 550 544 534 513 492 502 495 509 499 485 484 466 485 478 457 445 474 455
Securities trading 52 34 29 56 32 39 28 39 35 29 23 41 17 23 20 28 18 24 20 24
Total core income 651 603 579 600 566 552 520 541 530 538 522 526 501 489 505 506 475 469 494 479
Staff and administration
expenses 206 191 195 198 206 179 190 191 202 180 198 198 221 203 217 206 225 202 201 201
Depreciation and write-downs
on tangible assets 9 3 4 3 4 5 2 3 9 8 4 2 3 3 2 8 3 3 2 3
Other operating expenses 2 2 2 2 2 2 0 4 1 0 2 1 1 0 1 1 2 1 1 1
Total expenses etc. 217 196 201 203 212 186 192 198 212 188 204 201 225 206 220 215 230 206 204 205
Core earnings before
impairment charges for loans 434 407 378 397 354 366 328 343 318 350 318 325 276 283 285 291 245 263 290 274
Impairment charges for loans
and other receivables etc. -7 -13 -19 -29 -38 -44 -66 -75 -25 -26 -24 -25 -25 -20 -11 +13 +3 -17 -23 -33
Core earnings 427 394 359 368 316 322 262 268 293 324 294 300 251 263 274 304 248 246 267 241
Result for the portfolio etc. +11 -1 +7 -10 +15 +17 +29 -70 -4 +20 +7 +26 -20 +4 +3 +90 -2 +22 +26 +38
Amortisation and write-downs
on intangible assets 5 4 4 4 4 3 4 4 4 3 4 4 4 3 12 6 5 6 5 6
Merger and restructuring
costs 0 0 0 0 0 0 0 0 0 0 0 0 26 46 46 4 - - - -
Non-recurring costs 0 0 0 0 0 0 0 0 0 0 0 0 1 0 69 0 - - - -
Prot before tax 433 389 362 354 327 336 287 194 285 341 297 322 200 218 150 384 241 262 288 273
Tax 79 87 71 72 64 64 60 36 62 66 76 63 46 37 33 58 47 52 62 55
Net prot for the year 354 302 291 282 263 272 227 158 223 275 221 259 154 181 117 326 194 210 226 218
Quarterly overviews – continued
Core earnings – continued
PAGE 22 RINGKJØBING LANDBOBANK A/S
Quarterly overviews – continued
Balance sheet items and contingent liabilities
(DKK million)
End of
Q4
2021
End of
Q3
2021
End of
Q2
2021
End of
Q1
2021
End of
Q4
2020
End of
Q3
2020
End of
Q2
2020
End of
Q1
2020
End of
Q4
2019
End of
Q3
2019
End of
Q2
2019
End of
Q1
2019
End of
Q4
2018
End of
Q3
2018
End of
Q2
2018
End of
Q1
2018
End of
Q4
2017
End of
Q3
2017
End of
Q2
2017
End of
Q1
2017
Loans 41,179 38,849 37,268 37,210 36,241 35,479 35,260 36,130 35,465 34,757 34,528 34,195 33,350 32,192 31,970 31,647 31,173 30,368 30,371 29,093
Deposits including pooled
schemes 43,740 41,475 41,376 41,766 39,639 39,204 39,670 37,051 38,128 38,554 39,070 37,439 36,993 36,866 37,313 36,307 35,854 36,065 35,593 34,161
Equity 8,723 8,563 8,333 8,132 8,146 7,884 7,612 7,380 7,610 7,426 7,231 7,071 7,189 7,171 7,066 6,644 6,769 6,609 6,438 6,246
Balance sheet total 60,357 57,562 57,123 56,845 54,862 53,956 53,984 51,531 52,941 53,601 52,426 50,266 49,651 49,287 49,859 47,349 46,324 46,500 45,577 43,665
Contingent liabilities 10,270 10,886 11,811 10,370 9,812 9,590 9,379 9,992 9,665 10,836 10,466 7,976 7,829 8,078 7,809 7,821 7,858 7,382 7,235 6,595
Statement of capital
(DKK million)
End of
Q4
2021
End of
Q3
2021
End of
Q2
2021
End of
Q1
2021
End of
Q4
2020
End of
Q3
2020
End of
Q2
2020
End of
Q1
2020
End of
Q4
2019
End of
Q3
2019
End of
Q2
2019
End of
Q1
2019
End of
Q4
2018
End of
Q3
2018
End of
Q2
2018
End of
Q1
2018
End of
Q4
2017
End of
Q3
2017
End of
Q2
2017
End of
Q1
2017
Common equity tier 1 7,632 7,255 7,274 7,122 7,277 7,049 6,973 6,109 6,072 5,624 5,441 5,284 5,326 5,099 4,978 5,185 5,381 5,263 5,175 4,909
Tier 1 capital 7,632 7,255 7,274 7,122 7,277 7,049 6,973 6,109 6,072 5,624 5,441 5,284 5,326 5,099 4,978 5,185 5,381 5,263 5,175 4,909
Total capital 9,635 8,743 8,763 8,614 8,774 8,553 8,507 8,009 8,242 7,786 6,854 6,667 6,711 6,470 6,348 5,757 5,921 5,811 5,722 5,442
MREL capital 12,033 11,167 11,596 10,837 11,112 11,587 11,580 10,985 11,248 10,790 9,551 9,033 9,057 - - - - - - -
Total risk exposure 43,285 41,729 41,063 42,271 41,561 39,682 38,900 41,444 41,223 39,547 40,106 38,308 36,385 34,123 33,784 34,314 34,162 32,618 32,197 31,517
(Percent)
Common equity tier 1
capital ratio 17.6 17.4 17.7 16.8 17.5 17.8 17.9 14.7 14.7 14.2 13.6 13.8 14.6 15.0 14.7 15.1 15.8 16.1 16.1 15.6
Tier 1 capital ratio 17.6 17.4 17.7 16.8 17.5 17.8 17.9 14.7 14.7 14.2 13.6 13.8 14.6 15.0 14.7 15.1 15.8 16.1 16.1 15.6
Total capital ratio 22.3 21.0 21.3 20.4 21.1 21.6 21.9 19.3 20.0 19.7 17.1 17.4 18.4 19.0 18.8 16.8 17.3 17.8 17.8 17.3
MREL capital ratio 27.8 26.8 28.2 25.6 26.7 29.2 29.8 26.5 27.3 27.3 23.8 23.6 24.9 - - - - - - -
FINANCIAL REVIEW
ANNUAL REPORT 2021 PAGE 23
Quarterly overviews – continued
Balance sheet items and contingent liabilities
(DKK million)
End of
Q4
2021
End of
Q3
2021
End of
Q2
2021
End of
Q1
2021
End of
Q4
2020
End of
Q3
2020
End of
Q2
2020
End of
Q1
2020
End of
Q4
2019
End of
Q3
2019
End of
Q2
2019
End of
Q1
2019
End of
Q4
2018
End of
Q3
2018
End of
Q2
2018
End of
Q1
2018
End of
Q4
2017
End of
Q3
2017
End of
Q2
2017
End of
Q1
2017
Loans 41,179 38,849 37,268 37,210 36,241 35,479 35,260 36,130 35,465 34,757 34,528 34,195 33,350 32,192 31,970 31,647 31,173 30,368 30,371 29,093
Deposits including pooled
schemes 43,740 41,475 41,376 41,766 39,639 39,204 39,670 37,051 38,128 38,554 39,070 37,439 36,993 36,866 37,313 36,307 35,854 36,065 35,593 34,161
Equity 8,723 8,563 8,333 8,132 8,146 7,884 7,612 7,380 7,610 7,426 7,231 7,071 7,189 7,171 7,066 6,644 6,769 6,609 6,438 6,246
Balance sheet total 60,357 57,562 57,123 56,845 54,862 53,956 53,984 51,531 52,941 53,601 52,426 50,266 49,651 49,287 49,859 47,349 46,324 46,500 45,577 43,665
Contingent liabilities 10,270 10,886 11,811 10,370 9,812 9,590 9,379 9,992 9,665 10,836 10,466 7,976 7,829 8,078 7,809 7,821 7,858 7,382 7,235 6,595
Statement of capital
(DKK million)
End of
Q4
2021
End of
Q3
2021
End of
Q2
2021
End of
Q1
2021
End of
Q4
2020
End of
Q3
2020
End of
Q2
2020
End of
Q1
2020
End of
Q4
2019
End of
Q3
2019
End of
Q2
2019
End of
Q1
2019
End of
Q4
2018
End of
Q3
2018
End of
Q2
2018
End of
Q1
2018
End of
Q4
2017
End of
Q3
2017
End of
Q2
2017
End of
Q1
2017
Common equity tier 1 7,632 7,255 7,274 7,122 7,277 7,049 6,973 6,109 6,072 5,624 5,441 5,284 5,326 5,099 4,978 5,185 5,381 5,263 5,175 4,909
Tier 1 capital 7,632 7,255 7,274 7,122 7,277 7,049 6,973 6,109 6,072 5,624 5,441 5,284 5,326 5,099 4,978 5,185 5,381 5,263 5,175 4,909
Total capital 9,635 8,743 8,763 8,614 8,774 8,553 8,507 8,009 8,242 7,786 6,854 6,667 6,711 6,470 6,348 5,757 5,921 5,811 5,722 5,442
MREL capital 12,033 11,167 11,596 10,837 11,112 11,587 11,580 10,985 11,248 10,790 9,551 9,033 9,057 - - - - - - -
Total risk exposure 43,285 41,729 41,063 42,271 41,561 39,682 38,900 41,444 41,223 39,547 40,106 38,308 36,385 34,123 33,784 34,314 34,162 32,618 32,197 31,517
(Percent)
Common equity tier 1
capital ratio 17.6 17.4 17.7 16.8 17.5 17.8 17.9 14.7 14.7 14.2 13.6 13.8 14.6 15.0 14.7 15.1 15.8 16.1 16.1 15.6
Tier 1 capital ratio 17.6 17.4 17.7 16.8 17.5 17.8 17.9 14.7 14.7 14.2 13.6 13.8 14.6 15.0 14.7 15.1 15.8 16.1 16.1 15.6
Total capital ratio 22.3 21.0 21.3 20.4 21.1 21.6 21.9 19.3 20.0 19.7 17.1 17.4 18.4 19.0 18.8 16.8 17.3 17.8 17.8 17.3
MREL capital ratio 27.8 26.8 28.2 25.6 26.7 29.2 29.8 26.5 27.3 27.3 23.8 23.6 24.9 - - - - - - -
Quarterly overviews – continued
Balance sheet items and contingent liabilities – continued
Statement of capital – continued
PAGE 24 RINGKJØBING LANDBOBANK A/S
CAPITAL STRUCTURE
Share buy-back programmes, capital reduction
and prot distribution
The bank’s board of directors initiated a DKK 255 million share buy-back programme in
February2021inconnectionwiththedistributionofthe2020prot.InSeptember2021,
the board of directors further decided a DKK 242.5 million share buy-back programme
corresponding to the portion of the buy-back that was planned for 2020 but not execut-
ed due to the coronavirus situation.
Both share buy-back programmes were completed under the Safe Harbour regulation
with the purpose of cancelling the shares bought at a future general meeting.
Theannualgeneralmeetingalsodecidedtocancelthe160,600ofthebank'sown
sharesboughtin2020.ThecapitalreductionwasnalisedinMay2021.
ItisproposedtothegeneralmeetinginMarch2022thatthe688,055sharesboughtin
2021anduptoandincluding25January2022benallycancelledinconnectionwith
acapitalreduction,thusreducingthenumberofsharesinthebankfrom29,067,721to
28,379,666.
Thebank’sactualsharecapitalisthusDKK28,431,916innom.DKK1shares,seebe-
low.
Number of shares
Beginningof2021 29,228,321
May 2021
Capitalreductionbycancellationofownshares -160,600
Endof2021 29,067,721
Share buy-back programmes
Purchasedin2021 -635,805
28,431,916
Purchasedin2022 -52,250
Numberofsharesfollowingcapitalreduction 28,379,666
The bank has completed an application process with the Danish FSA regarding distribu-
tionoftheprotfor2021.Basedonthisprocess,thebank’sboardofdirectorsintends
todistribute77%ofthenetprotfortheyear.
The board of directors proposes that a dividend of DKK 7 per share be paid for the 2021
nancialyear,equivalenttoatotalofDKK203million.AdividendofDKK7pershare
wasalsopaidforthe2020nancialyear.
The board of directors further intends to initiate share buy-back programmes totalling
DKK738million,ofwhichDKK138millionrelatestotheprotdistributionfor2020.
Therstpartofthesharebuy-backprogrammeisforDKK369millionandexpectedto
begin on 3 February 2022 and end on 28 July 2022. Implementation of the programme
issubjecttotheannualgeneralmeeting,asinpreviousyears,authorisingtheboardof
directors to acquire the bank’s own shares in March 2022.
It is therefore proposed to the general meeting that the bank’s board of directors be
authorised,asinpreviousyears,topermitthebanktoacquireitsownshares,inaccor-
dancewithcurrentlegislation,untilthenextannualgeneralmeeting,toatotalnominal
CAPITAL STRUCTURE
ANNUAL REPORT 2021 PAGE 25
valueoftenpercent(10%)ofthesharecapital,suchthatthesharescanbeacquiredat
current market price plus or minus ten percent (+/- 10%) at the time of acquisition.
The share buy-back programmes will be initiated in several rounds. This means that the
amount of the share buy-back programmes must be deducted from the bank’s total capi-
tal on the dates in 2022 when the bank obtains the Danish FSA’s approval and the board
of directors decides to initiate the programmes.
Seeninisolation,thiswillmeanareductionofthebank’scommonequitytier1capital
ratio by a total of 1.8 percentage points calculated on the basis of the capital structure
on31December2021;0.9percentagepointofthisrelatestotherstsharebuy-back
programme of DKK 369 million.
Capital objectives and pay-out ratios
Managementwantsthebank’sgeneralcapitalisationtobesuchaswillensuresufcient
capitalforfuturegrowthandforhedgingagainstanyuctuationsintherisksassumed
by the bank.
Atthebeginningof2021,thecountercyclicalcapitalbufferwas0%.During2021,several
noticesofincreasesinthiscapitalbufferwereissued.On23June2021,theMinistryfor
Industry,BusinessandFinancialAffairsannouncedthatthecountercyclicalcapitalbuf-
ferwillincreaseto1%witheffectfrom30September2022,andon15December2021
it was stated that the buffer will increase by an additional 1 percentage point with effect
from31December2022,whichmeansitwilltotal2%attheendof2022.TheSystemic
Risk Council stated on 14 December 2021 that the Council expects to propose a further
increase in the buffer to 2.5% at its meeting in March 2022 unless the Council sees
signs that the build-up of risk is curbed.
Following the above statements in December 2021 but before presenting this annual re-
port,theboardofdirectorsreassessedthecapitaltargets.Ithasbeendecidedthatthe
commonequitytier1capitalratiowillremainatatleast13.5%,thatthetotalcapitalratio
will remain at at least 17% and that the target for the MREL capital ratio for covering the
MREL requirement and capital buffers will be at least 25% instead of the earlier target of
23.5%.Allcapitaltargetsareminimumguresthatmustbemetattheendoftheyear,
buttheremaybeuctuationsinthecapitalratiosovertheyear.
The bank intends to continue the policy for distributions practised in recent years. The
policy has been characterised by stable dividends combined with share buy-back to
adjust the capital structure regularly to the development in the bank’s total risk exposure
amount and its future growth opportunities as envisaged by management.
Forquiteafewyears,thebank’spay-outratioshavebeenbetween60%and65%.In
2020,DKK242.5millionofsharebuy-backprogrammestotallingDKK300millionwas
suspended on the basis of the coronavirus situation. The pay-out ratio for 2019 was
therefore39%.TheDanishFSAlimitedthepay-outratioforthe2020protdistributionto
a maximum of 50%.
Thepay-outratiofor2021iscalculatedat77%,equivalentto65%forthe2021nancial
year plus a distribution of DKK 138 million (the difference between a 65% and a 50% pay-
outratiofor2020)forthe2020protdistribution.
PAGE 26 RINGKJØBING LANDBOBANK A/S
Current capital structure
Thebank’sequityatthebeginningof2021wasDKK8,146million.Theprotfortheyear
mustbeaddedtothis,whilethedividendpaidandthevalueofthebank’sownshares
boughtmustbesubtracted.Afterthis,equityattheendof2021wasDKK8,723million.
InOctober2021,thebankissuedtier2capitalofDKK500million.Theissuehasamatu-
rityof10.25yearswitharstcall(redemption)optionafter5.25years.Theinterestfor
the entire term to maturity is agreed at a three-month Cibor rate + a margin of 110 basis
points.Theinterestwillbexedeverythreemonths.
Attheendof2021,thebank’stier1capitalratiowas17.6%,andthetotalcapitalratio
22.3%.
Thebank'scapitalratiosasattheendofDecember2017-2021wereasfollows:
Capital ratios 2021 2020 2019 2018 2017
Common equity tier 1 capital ratio 17.6 17.5 14.7 14.6 16.5
Tier 1 capital ratio 17.6 17.5 14.7 14.6 16.5
Total capital ratio 22.3 21.1 20.0 18.4 17.8
MREL capital ratio 27.8 26.7 27.3 24.9 -
CalculatedwithoutIFRS9transitionprogrammes,thebank’stier1capitalratiowas
16.3% and the total capital ratio 20.9% on 31 December 2021.
Individual solvency requirement and capital buffers
Ringkjøbing Landbobank focuses on its internally calculated individual solvency require-
ment,denedasadequatetotalcapitalasapercentageofthebank’stotalriskexposure
amount.
Adequatetotalcapitalisassessedandcalculated,onthebasisofaninternalcalcula-
tionmodel,astheamountwhichisappropriatetohedgeagainstthebank’scurrentand
future risks.
The bank calculates the individual solvency requirement using the 8+ model. The model
isbasedon8percentagepoints,plusanysupplementscalculatedforcustomerswith
nancialproblems,andothers.The8+modelthustakesnoaccountofthebank’searn-
ings and cost base and its robust business model.
Despitethis,thebank’sindividualsolvencyrequirementattheendof2021wascalcu-
latedat9.3%,whichisunchangedrelativetotheendof2020.Thecapitalconservation
bufferof2.5%shouldbeaddedtothis,whilethecountercyclicalbufferiscurrently0%.
The total requirement for the bank’s total capital was thus 11.8% at the end of 2021.
ComparedwiththeactualtotalcapitalofDKK9.6billion,thecapitalbufferattheendof
2021wasthusDKK4.5billion,equivalentto10.5percentagepoints.
CAPITAL STRUCTURE
ANNUAL REPORT 2021 PAGE 27
Forfurtherinformation,seethesummarybelow.
Individual solvency requirement
and excess cover 2021 2020 2019 2018 2017
Individual solvency requirement (%) 9.3 9.3 9.3 9.3 9.0
Capital conservation buffer (%) 2.5 2.5 2.5 1.9 1.3
Countercyclical buffer (%) 0.0 0.0 1.0 0.0 0.0
Total requirement for the bank’s total capital (%) 11.8 11.8 12.8 11.2 10.3
Excess cover in percentage points relative
to individual solvency requirement 13.0 11.8 10.7 9.1 8.8
Excess cover in percentage points relative
to total requirement for total capital 10.5 9.3 7.2 7.2 7.5
The computedadequatetotalcapitalisassessedonaregularbasis,andregularreports
are also made to the Danish FSA.
For further information on the calculation of Ringkjøbing Landbobank’s individual
solvencyrequirement,pleaseseethebank’ssolvencyrequirementreportforthefourth
quarter of 2021 on the bank’s website at: www.landbobanken.dk/solvency.
PAGE 28 RINGKJØBING LANDBOBANK A/S
MREL requirement
InJanuary2022,thebankreceivedanupdatedMRELrequirementof17.8%for2022
from the Danish FSA. The MREL requirement must always be met.
TomeettheMRELrequirement,thebankissuednon-preferredseniorcapitaltotalling
theequivalentofDKK1.9billionfromDecember2018toDecember2021.Inaddition,
grandfathered contractual senior capital of DKK 0.5 billion was included at the end of
2021.However,thiswasphasedoutwitheffectfrom1January2022.
Thebank’sMRELcapitalratiowastherefore27.8%attheendof2021,whichmetthe
targetxedfortheMRELcapitalratio.Attheendof2021,theexcesscoverrelativeto
theMRELrequirementwasthus9.9percentagepoints,or8.8percentagepointsifthe
phased out grandfathered contractual senior capital is excluded.
InJanuary2022,thebankraisednon-preferredseniorcapitaltotheequivalentvalueof
DKK 1.1 billion with an average term of 4.1 years. The bank has thus already covered
thefundingrequirementfornon-preferredseniorcapitalfor2022.For2023,thebank
assesses that it will have a funding requirement for non-preferred senior capital of ap-
proximately DKK 1.5 billion.
Thebankcanissuenon-preferredseniorcapitalunderitsEMTNprogramme,which
givesthebankahighdegreeofexibility.
CAPITAL STRUCTURE
MREL requirement and MREL capital ratio
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
Beginning of 2022 30 September 2022 End of 2022
Equity Pillar II add-on MREL add-on Capital conservation buffer Countercyclical capital buffer
20.3%
21.3%
22.3%
8.0%
8.5%
1.3%
2.5%
2.0%
8.0%
8.5%
1.3%
2.5%
1.0%
8.0%
8.5%
1.3%
2.5%
The bank’s total MREL capital ratio end of 2021: 27.8%
17.8%
ANNUAL REPORT 2021 PAGE 29
Capital adequacy rules
The bank uses the methods below for the calculation of its total risk exposure amount
as provided by the CRD IV rules:
Calculation of capital adequacy – methods used
• Credit risk outside the trading portfolio Standardised Approach
• Counterparty risk Mark-to-Market Method
• Creditriskreducingmethod–nancialcollateral ComprehensiveMethod
• Market risk Standardised Approach
• Operational risk Basic Indicator Method
Asevidentfromtheabove,thebankusesthestandardisedmethodforcalculationof
itscreditriskandtherebythetotalriskexposureamount.Thisapproachusesxedrisk
weightings.
The method means that the bank does not apply the same down-weighting of risks as
those banks which apply one of the advanced methods.
Ontheotherhand,thebankdoesnotexperienceincreasingriskweightingsinperiods
ofrecession.Relativetotheadvancedmethods,useofthestandardisedmethodmeans
signicantlygreaterrobustnessinthecalculatedcapitalratiosandlessvolatilityinthe
total risk exposure amount.
In2020,anewve-yearphasing-inperiodforthedynamiccomponentoftheIFRS9
transitional rules was introduced. This meant that the bank was able to add back to its
capital the difference between its current stage 1 and 2 impairment charges and the
stage 1 and 2 impairment charges on 1 January 2020.
Providedthestage1and2impairmentchargeshaveincreasedsince1January2020,
the bank can add back the increase in impairment charges less the effect on tax. The
add-backis100%for2021,75%for2022,50%for2023,25%for2024,and0%for2025.
The arrangement’s positive effect on the bank’s capital ratios is therefore only tempo-
rary. The bank thus uses both the static and the dynamic components of the IFRS 9 tran-
sitionalrules,includingthesimpliedapproachtorecalculationofcapitalrequirements.
In2021,theprovisionsonabackstopforNPEs(non-performingexposures)enteredinto
force. The rules mean that non-performing exposures must be fully deducted from com-
mon equity tier 1 within a period of at most ten years. Deduction must be in the form of
either write-downs of the exposure or deduction from tier 1 capital. The deduction from
common equity tier 1 at the end of 2021 was limited.
In2021,thebank’sportfolioofsecuritieswasdividedintoatradingbookandabanking
book. This means that risk-weighted assets amounting to approximately DKK 1.3 billion
were moved from market risk to credit risk during 2021.
In2021,thebankstartedusinganewsystemforcalculatingtherisk-weighteditems.
The system was delivered by Moody’s and implemented at the bank’s IT supplier Bank-
data. The system ensures continuous updating in line with future legislative amend-
ments.
PAGE 30 RINGKJØBING LANDBOBANK A/S
RISKS AND RISK MANAGEMENT
Risks and risk management
Thebankisexposedtovariousnancialrisksinitsoperations,includingcreditrisks,
marketrisksandliquidityrisks.Therearealsoanumberofnon-nancialrisks,including
therisksofmoneylaunderingandnancingofterrorism,ITrisksandotheroperational
risks.
Creditriskisdenedastheriskthatpaymentobligationstothebankarenon-recover-
able because the debtor is either unable or unwilling to pay at the agreed time.
Marketriskisdenedastheriskthatthemarketvalueofthebank’sassetsandliabilities
willchangeasaresultofuctuationsinmarketconditions.Thebank’stotalmarketrisk
comprisesinterestraterisks,foreigncurrencyrisks,sharepricerisksandpropertyrisks.
Liquidityriskisdenedastheriskthatthebank’scashresourcespreventitfromhonour-
ing its obligations.
Thenon-nancialriskofmoneylaunderingandnancingofterrorismisdenedasthe
inherentriskthatthebankmaybeabusedformoneylaunderingandnancingofterror-
ism.Anothernon-nancialriskistheriskofnon-compliancewithnancialsanctions.
ITriskisdenedasrisksassociatedwiththebank’ssystemsanddata,includingcyber
security,compliancewithdataethics,theintegrationandadequacyofthebank’sIT
systems,dependenceonexternalfactors,includingsubsuppliers,andwiththebank’s
organisation,includingineffectiveseparationoffunctions.
Otheroperationalrisksarethoseentailingotherdirectorindirectnanciallossesasa
resultofawsininternalprocessesandsystems,humanerrororexternalevents.
Policies on risk-taking and management
Theframeworkforthebank’srisk-takingisestablishedbytheboardofdirectors,which
hasadoptedapolicyforeachindividualriskareawhichincludesadenitionofthe
bank’sriskproleinthatarea.Theboardreviewsandreassesseseachpolicyatleast
once a year in connection with its position on the bank’s general business model and
riskprole,ormoreoftenifneeded.
The bank’s general principle for risk-taking is only to take risks within a moderate risk
prolewhichithastheexpertisetomanage.
The board of directors’ review of the bank’s business model and associated policies
for each individual risk area is based on various risk reports which are supplied to the
board.
The reports describe the various risks to which the bank is exposed and give the board
acompletepictureofthebank’sgeneralriskprole.Inlinewiththemarketpossibilities,
theboardthenassesseswhethertoadjustthebank’sbusinessmodelandriskprole.
The reports also act as a basis for a possible decision on adaptation of the policies in
the various risk areas.
Apartfromthestrategicriskmanagement,thereisongoingcentraloperationalmanage-
ment and monitoring of the bank’s risks in each area. This monitoring is reported to the
bank’s general management and board of directors. The management function and the
controlandreportingfunctionsareseparate,andtheworkisperformedbydifferent
central staff functions in the bank.
ANNUAL REPORT 2021 PAGE 31
The bank’s risk manager ensures full reporting of risks which provides an adequate
pictureofthebank’sactualrisktaking.Inthiscontext,theriskmanagerpreparesarisk
managementreporttotheboardofdirectors'riskcommittee.
The various types of risk are described in more detail below.
Credit risks
Credit risks on loans
Overtheyears,RingkjøbingLandbobankhasdevelopedtoitspresentstatusasalocal
bankinWest,CentralandNorthJutlandwhilealsooperatingwithinselectedniches.
Thisdevelopmenthasbeenapartofthebank’sstrategy,andthemanagementnotes
withsatisfactionthatthebankhasachievedasignicantloanportfoliodiversied
acrossindustries,geographicalareasandotherwise.
Ingeneral,thebankassumesmoderatecreditrisksonthebasisofpolicyobjectives
of striking the right balance between assumed risks and return gained by the bank and
keepingthebank’slossesbelowtheleveloflossesintheDanishnancialsector.
Historically,RingkjøbingLandbobankhasalwaysoperatedasoundcreditpolicy,andits
focuswillremainonensuringefcientmanagementandmonitoringofitstotalportfolio
of loans via its central credit function.
The central credit function regularly reviews and follows up all large exposures. Apart
fromthisroutinecreditmonitoringandmanagement,thebankhasdevelopedasetof
credit evaluation models which are used to assess the quality of the credit exposure.
The models take various factors into account.
The personal customer models (for personal and small business customers) are based
oninformationonthecustomer’sassets,debtgearinganddisposableamountaswell
as a range of behavioural data.
The models for major business customers are based on information on the customer’s
nancialstandingandearningcapacity.
Usingthesemodels,thebank’sjudgmentisthatthecreditqualityforthoseofthebank’s
loans and guarantees which have not been impaired has improved relative to last year.
ThisgenerallyreectsasoundDanisheconomywithlowunemploymentandfavourable
conditionsforthebank’sniches.So,eventhoughthecoronavirusremainsachallenge
tosomeindustries(towhichthebankisnotseverelyexposed),theoverallresultisan
improvement in the bank’s credit quality. We refer the reader to note 45 on page 87.
PAGE 32 RINGKJØBING LANDBOBANK A/S
(DKK1,000) Loans and other
receivables
Actual with suspended
Actual net losses calculation Impairments for Total loans and Percentage loss Percentage loss
Year net losses after interest of interest loans etc. guarantees etc. before interest* after interest*
1987 -6,696 304 10,544 75,000 1,358,464 -0.49% 0.02%
1988 -14,205 -5,205 4,522 93,900 1,408,830 -1.01% -0.37%
1989 -18,302 -5,302 13,107 117,270 1,468,206 -1.25% -0.36%
1990 -15,867 -1,867 47,182 147,800 1,555,647 -1.02% -0.12%
1991 -11,429 3,571 47,626 170,000 1,805,506 -0.63% 0.20%
1992 -32,928 -14,928 43,325 177,900 1,933,081 -1.70% -0.77%
1993 -27,875 -6,875 30,964 208,700 1,893,098 -1.47% -0.36%
1994 -14,554 4,446 33,889 223,500 1,938,572 -0.75% 0.23%
1995 -10,806 10,194 27,292 238,800 2,058,561 -0.52% 0.50%
1996 -19,802 -1,802 18,404 233,400 2,588,028 -0.77% -0.07%
1997 -31,412 -12,412 39,846 236,600 3,261,429 -0.96% -0.38%
1998 -2,914 18,086 4,905 263,600 3,752,602 -0.08% 0.48%
1999 -442 21,558 18,595 290,450 5,148,190 -0.01% 0.42%
2000 -405 27,595 12,843 316,750 5,377,749 -0.01% 0.51%
2001 -8,038 20,962 14,222 331,950 6,113,523 -0.13% 0.34%
2002 -8,470 20,530 26,290 382,850 7,655,112 -0.11% 0.27%
2003 -22,741 2,259 23,412 394,850 8,497,124 -0.27% 0.03%
2004 -14,554 9,446 18,875 404,855 11,523,143 -0.13% 0.08%
2005 -22,908 192 35,796 357,000 15,522,264 -0.15% 0.00%
2006 -13,531 7,028 20,578 295,000 17,858,787 -0.08% 0.04%
2007 -15,264 4,888 13,190 289,097 19,227,573 -0.08% 0.03%
2008 -34,789 -10,237 22,110 356,083 16,475,975 -0.21% -0.06%
2009 -73,767 -47,658 62,649 467,025 14,890,027 -0.50% -0.32%
2010 -69,428 -40,207 66,237 565,035 14,758,234 -0.47% -0.27%
2011 -78,813 -43,073 61,419 649,856 14,448,638 -0.55% -0.30%
2012 -90,022 -48,337 113,312 758,363 14,849,602 -0.61% -0.33%
2013 -69,030 -25,117 85,258 853,421 16,604,640 -0.42% -0.15%
2014 -53,427 -9,206 58,244 931,398 18,073,200 -0.30% -0.05%
2015 -87,250 -48,815 74,220 942,950 20,194,063 -0.43% -0.24%
2016 -86,666 -54,200 59,904 937,128 20,878,475 -0.42% -0.26%
2017 -45,769 -16,414 24,995 931,035 23,465,775 -0.20% -0.07%
2018 -251,451 -200,376 209,642 2,040,407 43,220,158 -0.58% -0.46%
2019 -187,787 -118,934 212,195 2,031,645 47,161,735 -0.40% -0.25%
2020 -120,051 -60,373 264,721 2,204,620 48,257,615 -0.25% -0.13%
2021 -49,541 71 97,757 2,283,320 53,680,913 -0.09% 0.00%
35-year average (1987-2021) -0.49% -0.06%
10-year average (2012-2021) -0.37% -0.19%
* Actual net losses relative to total loans excluding reverse repo transactions, guarantees, impairment charges for loans, provi-
sions for losses on guarantees, and unutilised credit facilities and credit undertakings.
Explanation: The percentage losses are computed as the actual net losses for the year before and after interest on the im-
pairedpartofloansasapercentageoftotalloans,guarantees,impairmentsforloansandprovisionsforguarantees.Aminus
infrontofapercentagelossindicatesaloss,whileapositivepercentagelossmeansthattheinterestontheimpairedpartof
loanswasgreaterthantheactualnetlossesfortheyear.Alltheaboveguresarecomputedexclusiveofamountsconcerning
reverse repo transactions and the national Bank Package I etc.
The 10-year average and the 35-year average are calculated as simple averages.
Supplementarycommentsonactualnetlossesin2018,2019and2020:Inconnectionwiththemergerin2018,thetwobanks’
impairment policies for losses were harmonised. In 2018 this resulted in full and partial impairment losses on exposures
taken over from Nordjyske Bank. This harmonisation continued to a lesser extent in 2019 and partly in 2020.
Actual net losses
The table below documents the bank’s track record of sound credit policy.
Thelocalsectionofthebankisrunviabranchesinthebank’scoreareasinWest,Cen-
tral and North Jutland. The most important areas within the bank’s niche are a Private
Bankingconceptcoveringassetmanagementforafuentpersonalclients,medical
practitioners’anddentists’purchasesofprivatepractices,loansforthenancingof
RISKS AND RISK MANAGEMENT
ANNUAL REPORT 2021 PAGE 33
renewableenergyincludingwindturbines,biogasandsolarcellsystems,andselected
wholesaleloans,includingrealpropertynancing.
An important common factor in the niche loans is that the bank attempts to obtain a
rstmortgageandtherebysatisfactorysecurityinthemortgagedassets,whichisan
important part of its business philosophy.
Credit concentration
Thekeygureforlargeexposuresisdenedasthesumofthebank’s20largestexpo-
sures relative to its common equity tier 1 capital.
The credit quality of the bank’s 20 largest exposures is generally high. None of the
exposuresshowsobjectiveevidenceofcreditimpairment,andnoneofthemshowsany
material signs of weakness.
Credit concentration
End of End of End of End of
2021 2020 2019 2018
Total large exposures 109.8% 99.8% 121.0% 106.0%
Explanation:TheDanishFSAkeygure“Totallargeexposures”.
Geographic spread of the bank’s loans and guarantee portfolio
Asthegurebelowshows,considerablegeographicaldiversicationofthebank’sport-
folio of loans and guarantees has been achieved via both the local and niche sections.
Theloansviathebank’snichehavealsohelpedtoensuremajordiversicationinthe
bank’sloanportfolio,sothatthisportfolioislessexposedtocyclicaleconomicuctua-
tions than it would be if the bank were run exclusively as a local bank.
30%
5%
27%
6%
27%
5%
Explanation: Distribution of the bank’s portfolio of loans and guarantees before impairments and provisions, based on the
customers’ addresses.
PAGE 34 RINGKJØBING LANDBOBANK A/S
Credit risks on nancial counterparties
Exposuretonancialcounterparties,andconsequentlyacreditrisk,includingasettle-
mentrisk,arisesfromthebank’stradinginsecurities,foreigncurrencyandderivative
nancialinstruments,itsloanstootherbanks,anditspossessionofbondsandpayment
handling.
The settlement risk is the risk that the bank will not receive payment or securities cor-
responding to the securities and/or payments which it had made and delivered in the
context of trades in securities and/or currency.
The bank’s board of directors grants lines for credit risks and settlement risks on
nancialcounterparties.Whengrantinglines,accountistakenoftheindividualcounter-
party’sriskprole,anyrating,size,andnancialcircumstances,andthereiscontinuous
follow-up of the lines which are granted. The bank also mitigates its settlement risk
concerning clearing of foreign exchange via its membership of a clearing partnership
(referred to as the CLS partnership).
The bank has also entered into a number of CSA (Credit Support Annex) agreements in
connection with ISDA (International Swaps and Derivatives Association) agreements
which had been signed. The CSA agreements contribute to reducing the credit risk for
eitherthebankorthenancialcounterpartiesinderivativescontracts.Whetheritisthe
bankorthenancialcounterparty(withwhomtheindividualderivativescontractwas
signed) which is hedged depends on the market value of the derivatives in question.
Thebank’spolicyistokeepthecreditriskexposuretonancialcounterpartiesata
balancedlevelrelativetothebank’ssize,andlimitittocreditinstitutionsofgoodcredit
quality.
Receivables from central banks and credit institutions
Oneofthemajoritemsofcreditriskexposuretonancialcounterpartiesisreceivables
from central banks and credit institutions. The bank has assumed only a moderate risk
on this item and all of the total receivables from central banks and credit institutions are
thus due within three months.
The bond portfolio
Thebank’sbondportfolioisanothermajoriteminvolvingcreditriskexposuretonan-
cial counterparties.
The majority of the bond portfolio is AAA-rated Danish mortgage credit bonds.
RISKS AND RISK MANAGEMENT
ANNUAL REPORT 2021 PAGE 35
The bank also has a portfolio of corporate bonds etc. The credit quality of these bonds
isgood,buttheirmarketvaluecanvaryovertimeinconnectionwithgeneralchangesin
creditspreadsinthemarket,andcompany-speciccircumstancescanalsoaffectthe
value of these bonds.
The 13% non-rated securities includes non-preferred senior issues.
Market risks
The bank’s basic policy is to keep total market risks at a moderate level.
Thebankhasdeterminedaconcreteframeworkforeachtypeofmarketrisk,andthe
risk assessment includes the objective of a sensible and balanced relationship between
risk and return.
The bank uses derivatives to hedge and manage the various market risk types if it
wishes to reduce or eliminate the market risks which it has assumed.
Thebankhasamathematical/statisticalmodeltocomputemarketrisks,inadditionto
moretraditionalmethods.ThemodelisusedtocomputeValueatRisk(VaR),whichis
regularly reported to the bank’s management.
VaR is a measure of risk which describes the bank’s risk under normal market condi-
tions.
Aaa/AAA, 73%
A3/A-, 4%
Baa1/BBB+, 4%
Baa2/BBB, 5%
Baa3/BBB, 0%
Ba1/BB+, 1%
Ba3/BB, 0%
Not rated, 13%
Bonds distributed by rating class
Explanation: The bond portfolio is distributed by rating classes. Ratings from the credit rating agencies Moody’s Investors
Service,Standard&Poor’sandFitchwereusedinthespecication.
PAGE 36 RINGKJØBING LANDBOBANK A/S
AseparateVaRiscalculatedforinterestrate,foreignexchangeandlistedshareposi-
tionsetc.,andatotalVaRisalsocalculatedforallofthese.Thispossibilityofcalculat-
ing a VaR for the bank’s market risks is one of the major advantages of the VaR model
over more traditional measures of risk. The reader is referred to the section “Value at
Risk”belowforthespecicresultsetc.undertheVaRmodel.
Interest rate risks
The bank’s lending and deposit activities and accounts with credit institutions are
mostlybasedonaoatingrate.However,thebankalsohascertainxed-ratenancial
assetsandliabilitieswhicharemonitoredcontinuously,andhedgingtransactionsare
enteredintoasneeded,withaconsequentreductionoftheinterestraterisk.
RingkjøbingLandbobank’spolicyistomaintainamoderateinterestraterisk,soitdoes
not assume high levels of exposure to movements in interest rates.
The bank’s securities department monitors and manages its interest rate risk daily. The
bank’s accounts department checks that the limits for assumption of interest rate risk
areobserved,andreportstothebank’sboardofdirectorsandgeneralmanagement.
Asthegureshows,thebankhashadamoderateinterestrateriskoverthelastve
years,inaccordancewithitspolicyforthistypeofrisk.
Foreign exchange risks
Thebank’sprincipalcurrencyistheDanishkrone,butithasalsoenteredintolending
anddepositactivities,ownssecurities,andhasissuedbondsandraisedloansinother
currencies.
Thebank’spolicyistomaintainalowforeignexchangerisk,andthebankthusreduces
ongoing positions in foreign currencies via hedging.
RISKS AND RISK MANAGEMENT
0
1
2
3
4
5
6
7
Dec/16
Jun/17
Dec/17
Jun/18
Dec/18
Jun/19
Dec/19
Jun/20
Dec/20
Jun/21
Dec/21
Per cent
Interest rate risk
Explanation:Theinterestrateriskshowstheimpactonprotofaonepercentagepointchangeininterestratelevelasa
ANNUAL REPORT 2021 PAGE 37
Thebank’sforeigndepartmentmanagesitspositionsinforeignexchangedaily,while
the accounts department monitors compliance with limits and reports to the board of
directors and general management.
Asinpreviousyears,thebank’sforeignexchangeriskin2021wasataninsignicant
level.
Share price risks
Thebankisco-ownerofvarioussectorcompaniessuchasBankInvestHoldingA/S,
BokisA/S,DLRKreditA/S,LetpensionHoldingA/S,PRASA/Sandothers.
Theseholdingsarecomparablewiththewholly-ownedsubsidiariesofmajorbanks,and
the equity interests are thus not deemed to be a part of the bank’s share price risk. The
bank also holds a small portfolio of listed shares etc.
Theholdingofsharesetc.amountedtoDKK1,467millionattheendoftheyear,with
DKK29millioninlistedsharesandinvestmentfundcerticatesandDKK1,438millionin
sector shares etc.
The bank’s policy is to maintain a moderate share price risk. The securities department
undertakesthedailymanagementofthebank’sshareportfolio,whiletheaccounts
department monitors limits and reports to general management and the board of direc-
tors.
Asisevidentfromthegurebelow,thebank’sexposuretoshares,excludingsectorand
bond-basedinvestmentfundcerticatesetc.,asapercentageofthebank’sequityhas
beeninaccordancewiththebank’spolicyforthistypeofriskoverthelastveyears.
This documents the bank’s efforts to achieve its goal of maintaining a moderate risk on
share prices.
0
1
2
3
4
5
6
7
Dec/16
Dec/17
Dec/18
Dec/19
Dec/20
Dec/21
Per cent
Share exposure
Explanation: The share price exposure is computed as the bank’s portfolio of shares (excluding sector shares and bond-
basedinvestmentfundcerticatesetc.)asapercentageofthebank’sequity.
PAGE 38 RINGKJØBING LANDBOBANK A/S
Property risks
Thebankprimarilyintendstopossessonlypropertiesforuseinbankingoperations,and
also to maintain low property risks.
The bank’s portfolio mainly consists of domicile properties to which investment proper-
ties should be added that are relatively modest relative to both the bank’s balance sheet
total and equity.
Value at Risk
The bank’s total VaR was DKK 7.8 million at the end of 2021. This sum is an expression
of the maximum loss in a statistical perspective which the bank could risk losing with
99% probability if all market positions were retained unchanged for a period of ten days.
Value at Risk summary
(DKK million) Average Min. Max. End of year
Risk VaR gure VaR gure* VaR gure* VaR gure
Interest 9.1 3.5 14.7 7.1
Foreign currency 0.1 0.1 0.3 0.0
Share 2.9 2.1 3.6 2.9
Diversication -2.3 -1.3 -3.6 -2.2
Total VaR gure 9.8 4.4 15.0 7.8
* Determined by the total VaR gure.
Asindicatedinthetable,thebank’stotalVaRin2021variedfromDKK4.4milliontoDKK
15.0million.TheaverageVaRgurewasDKK9.8million,alowerlevelthan2020.
See note 48 on page 97forthedevelopmentinVaRguresfortheyears2017-2021.
The model in brief
The model is a parametric VaR model based on a historical analysis of the covariance
(correlations)betweenthepricesofvariousnancialassetsetc.,includingdifferent
shareindices,variousofcialinterestratesandinterestswaprates,anddifferentex-
change rate indices.
Bycombininghistoricalknowledgeofthecovarianceonthenancialmarketswiththe
bank’scurrentpositions,themodelcancalculateariskoflossesforaforthcomingten-
day period.
Allofthebank’sinterestrate,foreigncurrencyandlistedsharepositionsetc.areinclud-
edinthecalculation,whilepositionsinsectorsharesarenotincluded.Themodeldoes
not take account of credit spread risks on the bank’s bond portfolio.
Themodel’sunderlyingdataarecalibratedeverymonthtoreectcurrentmarketcondi-
tions,butthemodel’smethodisunchangedcomparedtolastyear.
RISKS AND RISK MANAGEMENT
ANNUAL REPORT 2021 PAGE 39
Back tests and stress tests
“Back tests” are carried out to demonstrate that the VaR model provides a sensible
picture of the bank’s risk. The test compares the loss calculated by the model with the
losses which the bank would actually have suffered if the positions in question had been
retained for a ten-day period. A number of stress tests are also carried out to indicate
the bank’s risk of loss in abnormal market situations. Back-tests of the model were per-
formed throughout the year with satisfactory results.
Liquidity risks
It is the bank’s objective that the budgeted liquidity should meet the current LCR (liquid-
ity coverage ratio) requirement for a period of at least 12 months. The bank seeks to
maintainsufcientliquidityforastressscenariobymeansofrecoveryplansforaperiod
of at least 12 months.
IntermsofLCR,thebankmustcomplywiththestatutoryrequirementofatleast100%.
This key ratio expresses the ability of banks to honour their payment obligations for a
30-dayperiodwithoutaccesstomarketfunds.TheLCRgureiscomputedastheratio
of the bank’s cash and cash equivalents/liquid assets to its payment obligations for the
next30daysascomputedinaccordancewithspecicrules.
On31December2021thebank’sLCRwas176%,whichthusmetthestatutoryrequire-
ment by a good margin.
InadditiontotheLCRgure,aliquiditybenchmarkalsoappliestothebankasmen-
tioned in the section “The Supervisory Diamond”. The liquidity benchmark is based on a
projected version of the LCR requirement. The projection is made on a stressed three-
monthbasisinsteadofthe30daysusedfortheLCRgure,butthebasisofcalculation
ismorerelaxedforsomeofthecomponentsinvolved.Thebank’skeygurefortheli-
quiditybenchmarkwas161%on31December2021,comparedtoalimitvalueof100%.
The bank thus also met this statutory requirement by a good margin.
AttheendofJune2021anewliquidityrequirement,NSFR(NetStableFundingRatio),
entered into force. The NSFR requirement is part of EU regulations and aims to ensure
thatnancialinstitutionshavesufcientlong-termfundingfortheiractivities.TheNSFR
is calculated in percent as the ratio of total available stable funding to total required
stable funding. The statutory requirement is that the ratio must exceed 100%. The bank’s
NSFRwas116%on31December2021,whichthusexceededthestatutoryrequirement
by a good margin.
Thebank’sassetsandthusitsloansportfolioarefundedfromarangeofsources,
primarilythebank’sdeposits,butalsobyjointfunding(bondissuance)ofthebank’s
homeloans,bytakingoutlonger-termloanswithothercreditinstitutions,issuingboth
preferredandnon-preferredseniorcapitalandnallyviathetier2capitalissuedbythe
bank and its equity.
The bank’s deposit base consists of core deposits and deposits from customers with
a long-term relationship with the bank. Ringkjøbing Landbobank has also entered into
longer-term bilateral loan agreements with various European business partners.
The composition of the bank’s funding situation does not leave the bank dependent on
individual business partners.
PAGE 40 RINGKJØBING LANDBOBANK A/S
Toensurediversicationinfunding,thebankalsohasanEMTNbondprogrammeof
EUR 2 billion. The programme helps to ensure alternative funding sources for the bank.
Historically,thebankhasusedtheEMTNbondprogrammetoissueordinarysenior
capital,non-preferredseniorcapitalandtier2capital,andfundswerealsoraisedunder
the programme in 2021.
In2021,thebankissuedtier2capitaltotallingDKK500millionandnon-preferredsenior
capital equivalent to DKK 636 million.
IntheperiodDecember2018toDecember2021,thebankissuednon-preferredsenior
capital equivalent to DKK 1.9 billion.
The bank also has a joint funding agreement with Totalkredit/Nykredit. The agreement
means that the bank can procure liquidity by letting Totalkredit/Nykredit issue SDO
bonds against security in the loans which the bank has provided to customers with
security in real property.
Total capital base, 18%
Other liabilities, 1%
Deposits, 63%
Deposits in pooled schemes, 9%
Issued bonds – term to
maturity less than 1 year, 1%
Issued bonds – term to
maturity more than 1 year, 4%
Debt to credit institutions -
term to maturity more
than 1 year, 2%
Debt to credit institutions -
term to maturity less than
1 year, 2%
Distribution of funding
(DKK1,000)
The short-term funding (term to maturity less than 1 year):
 Debttocreditinstitutionsandcentralbanks–termtomaturitylessthan1year 920,176
Issuedbonds–termtomaturitylessthan1year 372,191
Total 1,292,367
Covered as follows:
CashinhandanddemanddepositswithDanmarksNationalbank 3,459,464
Receivablesfromcreditinstitutions–termtomaturitylessthan1year 216,097
Listedbonds,sharesandinvestmentfundcerticatesatfairvalue 6,773,060
Total 10,448,621
Excess cover 9,156,254
RISKS AND RISK MANAGEMENT
ANNUAL REPORT 2021 PAGE 41
Asevidentfromtheabove,theshort-termfunding(timetomaturitylessthanoneyear)
issupportedviathebank’scashinhandandreceivablesfromDanmarksNationalbank,
short-termdepositswithothercreditinstitutions,andthebank’sownportfolioofliquid
securities.Surplusliquidityattheendof2021wasDKK9.2billion,whilethecorrespond-
inggureattheendof2020wasDKK9.3billion.
Operational risks (non-nancial risks)
Operational risks
Operationalrisksarethoseentailingotherdirectorindirectnanciallossesasaresult
ofawsininternalprocessesandsystems,humanerrororexternalevents.
The bank regularly produces reports on the losses and events which are attributed to
operational risks.
Fromthesereports,anassessmentismadeofwhetherproceduresetc.canbeadjusted
and improved in order to avoid or minimise any operational risks. The bank’s procedures
are regularly reviewed and assessed by the bank’s internal and external auditors.
Inaddition,thebankconductsinternalthematicreviewsofselectedbusinessareas,
identifying and assessing the potential risk scenarios for each area and subsequently
adjusting and improving the bank’s procedures etc. accordingly.
Combating money laundering etc.
Animportantareaundernon-nancialrisksistheriskthatthebankcouldbeabusedfor
moneylaunderingornancingofterrorism.
Thebankwantstocontributetocombatinganyformofmoneylaunderingandnancing
of terrorism etc.
The bank is required to maintain high standards for combating money laundering and
nancingofterrorismandtomonitorandcomplywithnancialsanctions.Thisroleisan
important part of banking in a globalised world.
Thebankhasimplementedinternalprocedures,controls,monitoringetc.tohelpcomply
with applicable rules in the area. The bank also regularly provides in-service training in
combatingmoneylaunderingandnancingofterrorismforitsemployees.Forfurther
information,pleaseseepage 47.
IT risks
IT supports a large part of the systems and tools used by both the bank’s customers and
its employees. IT security is therefore an important element in the assessment of the
bank’s operational risks.
The bank’s board of directors sets and formulates the requirements regarding the level
of the bank’s IT risks in the IT risk management policy and the IT security policy. The two
policies form the basis for the bank’s work with IT risks.
PAGE 42 RINGKJØBING LANDBOBANK A/S
RISKS AND RISK MANAGEMENT
Part of the work with IT risks and their management is an annual risk analysis. The
analysis assesses different IT risk scenarios for the bank’s different systems and the
probability and consequences of the different scenarios – before and after mitigating
measures.
The risk analysis is expressed as a risk score for each individual system. Requirements
forthecondentiality,availabilityandintegrityofthebank’ssystemsarealsoassessed
annually.
Basedontheabove,theboardofdirectorsannuallyupdatesandapprovesthetwopoli-
cies.
InadditiontoaddressingITriskmanagementrisksandITsecurityrisks,thebank’sIT
organisation and management also regularly decide on the IT preparedness plans made.
Preparedness exercises are carried out regularly to ensure that the bank is able to
handle events that may arise.
Thebank’sITriskmanagementpolicy,ITsecuritypolicyandITpreparednessplansap-
plytoallaspectsofitsuseofIT,includingITthatisfullyorpartlyoutsourced.
These requirements apply to the bank’s internal IT organisation as well as its primary ex-
ternalITsupplierBankdata,whichthebankownstogetherwithanumberofotherbanks,
and JN DATA which is a supplier to Bankdata and responsible for the daily operation.
Data processing
Theprocessingandcondentialityofcustomerdataunderapplicablerulesondatapro-
cessingareahighpriorityforthebank.Asaninnovation,thebank’sboardofdirectors
adopted a data ethics policy in 2021. The policy supplements the bank’s systems and
procedures.Thepolicy,systemsandproceduresarealldesignedwiththeaimofensur-
ingcorrectandcondentialprocessingofcustomerdata.
Quantication of operational risks in the statement of capital
The capital adequacy rules require the banks to quantify and recognise an amount for
operational risks when computing their capital adequacy.
The bank uses the basic indicator method which bases the calculation on an average of
themostrecentthreenancialyears’netincomes.Asumisthenquantiedandadded
to the total risk exposure to cover the bank’s operational risks.
Further information on the bank’s risks
Danish banks are required by law to disclose information on risk. This annual report
givessomeoftherequiredriskinformationbut,foramoredetailedoverviewofthe
bank’sdisclosurerequirement,thereaderisreferredtothebank’swebsiteat:
www.landbobanken.dk/risk-information.
ANNUAL REPORT 2021 PAGE 43
Statement on corporate governance
Goal
Ringkjøbing Landbobank has set a goal for corporate governance which focuses on the
bank’sprimarystakeholders,namelyitsshareholders,customers,employees,andthe
local areas where the bank operates.
The bank’s goals are to realise good long-term results and thus the best possible long-
termreturnsforitsowners,theshareholders,andtoachieveanannualreturnonequity
amongthetopone-thirdoftheDanishnancialsector,viarationaloperationofthebank
and sound credit policy.
Foritscustomers,thebank’sgoalistoplayacentralroleinWest,CentralandNorth
Jutland,ofwhichitisanintegralpart.Thebank’sgoalisthustoretainandfurtherde-
velopthatsegmentofitscustomerportfoliowhichislocatedinWest,CentralandNorth
Jutland.
It also seeks to serve selected customer groups throughout Denmark via the bank’s
nicheconceptsanditsprivatebankingbranches,offeringahighlevelofexpertiseand
competitive products.
Ingeneral,thebankwillthusmeettheexpectationsofafull-servicebankforpersonal
and business customers via its strengths in both capital and consultancy.
It is also a goal for Ringkjøbing Landbobank to be a good and attractive place to work
foritsemployees.Onthebasisofitschosenstrategy,thebankwishestocreateanin-
teresting and challenging workplace which can attract and retain competent employees.
Finally,thebank’sgoalistosupportdevelopmentinthoseareaswhereitisrootedhis-
torically.
Codes of management etc.
AsalistednancialinstitutionandmemberofFinanceDenmark,thebankiscoveredby
a number of codes.
BeinglistedontheNasdaqCopenhagen,thebankiscoveredbytheRecommendations
onCorporateGovernanceissuedbytheCommitteeonCorporateGovernance,andasa
memberofFinanceDenmark,bytheCorporateGovernanceCodeoftheDanishBankers
Association.
The Recommendations on Corporate Governance
CorporategovernanceinRingkjøbingLandbobankconcernstheobjectives,generalprin-
ciplesandstructuresgoverningthebankandtheinterplaybetweenthebank,itsman-
agementanditsprimarystakeholders:shareholders,customersandemployees,andthe
local areas in which it has branches.
Since2002,themanagementhaspursuedanactiveapproachtotherecommendations
issued on corporate governance. The bank’s position on corporate governance has been
recorded in the annual reports since that year.
On2December2020,theCommitteeonCorporateGovernanceadoptedandpublished
updatedRecommendationsonCorporateGovernanceapplicabletonancialyearscom-
mencing on or after 1 January 2021.
CORPORATE GOVERNANCE ETC.
PAGE 44 RINGKJØBING LANDBOBANK A/S
The bank’s management has thus addressed the updated 40 recommendations for the
2021nancialyear.Therecommendationsfallintovemainareas:1)Interactionwith
thecompany’sshareholders,investorsandotherstakeholders,2)Thedutiesandre-
sponsibilitiesoftheboardofdirectors,3)Thecomposition,organisationandevaluation
oftheboardofdirectors,4)Remunerationofmanagement,and5)Riskmanagement.
TherecommendationssupplementDanishlaw,particularlytheDanishCompaniesAct,
theDanishFinancialStatementsAct,EUcorporatelawrulesandtheOECDPrinciplesof
Corporate Governance.
Whenpreparingthe2021annualreport,underthe“complyorexplain”principle,the
bank’s board of directors and general management have assessed the bank’s positions
and actions on the recommendations.
Thebank’smanagementsupportstheeffortsintheareaofcorporategovernance,and
the general management and board of directors have elected to comply with almost
alloftherecommendationsinthisarea.Wherethebankdoesnotcomply,thebank’s
management has explained why and which approach the company has chosen instead.
Bydoingso,thebankthuscomplieswithall40recommendations.
Finance Denmark’s Corporate Governance Code
In2013,thethenDanishBankersAssociation(nowFinanceDenmark)publishedacor-
porate governance code.
The recommendations in the Corporate Governance Code aim both to ensure that Fi-
nance Denmark’s member companies actively consider a number of managerial matters
and to achieve greater openness concerning the frameworks for management of the
individual member companies.
Onthe“complyorexplain”principle,themembercompaniesofFinanceDenmarkmust
specify how they view the Corporate Governance Code in connection with the presenta-
tion of the annual report.
Whenpreparingthe2021annualreport,thebank’sboardofdirectorsandgeneral
managementalsospeciedhowtheyviewedFinanceDenmark’sCorporateGovernance
Code.
Thebank’smanagementalsosupportsFinanceDenmark'sCorporateGovernanceCode,
and the board of directors and general management have thus elected to follow all 12
recommendations.
Stewardship
Section 101a of the Danish Financial Business Act contains a provision on stewardship
policy.Underthatprovision,astewardshippolicymusteitherbepreparedoranexplana-
tion given for why a policy has not been prepared.
The bank’s board of directors and general management assess that a stewardship
policy is not necessary since the bank only has a very modest holding of listed shares
and,intheroleofassetmanager,hasnotexplicitlyagreedwithitscustomersthatit
mustexercisestewardship,forexamplebyexercisingthevotingrightspertainingto
investments in listed shares.
CORPORATE GOVERNANCE ETC.
ANNUAL REPORT 2021 PAGE 45
The bank’s nancial reporting process,
management organs and their functions
Theboardofdirectors,theboard’sauditcommitteeandthegeneralmanagement
regularly satisfy themselves that the bank’s controls and risk management in connection
withthenancialreportingprocessarefunctioningsatisfactorily.
The process is designed to ensure that the annual report is presented in accordance
with statutory requirements and is free of material misstatement attributable to fraud or
error.
Thenancialreportingprocessisfurtherorganisedsothatthebank’saccountsdepart-
ment prepares its annual report in cooperation with the general management and other
relevant departments.
Ageneralruleforthenancialreportingprocessisthatthebank’sgeneralmanagement
and accounts department continuously monitor compliance with relevant legislation and
otherregulationsandprovisionsinconnectionwiththenancialreportingprocessand
report regularly to the bank’s board of directors and the board’s audit committee.
The complete statement on corporate governance describes in detail matters including
processes,internalsystems,recognitionandmeasurement,thecontrolenvironment,
riskassessment,controlactivities,monitoringandreporting.
The statement also describes the bank’s management organs and their functions in
detail.
Complete statement on management and corporate governance
The statutory complete statement on management and corporate governance in Ring-
kjøbing Landbobank is available on the bank’s website at: www.landbobanken.dk/cg.
Diversity in the board of directors
The bank has a policy for diversity on the board of directors. The board of directors and
its nomination committee assessed the policy in December 2021 and found that very
few adjustments were needed.
The intention of this policy is that the board’s composition should embrace diverse com-
petencesandbackgrounds,includingdifferencesinprofessionalidentity,workexperi-
ence,gender,ageetc.
The policy further lays down that recruitment of candidates for the board of directors
mustfocusonensuringthatthecandidatespossessdifferentcompetences,back-
grounds,knowledgeandresourceswhichmatchthebank’sbusinessmodeletc.
Compliance with the adopted policy on diversity on the board of directors was assessed
by the board of directors and its nomination committee during the annual evaluation
process.
Theboardofdirectors’assessmentonthisbasisconrmscompliance,throughfocus
on the policy criteria in the recruitment process for candidates both for the board of
directorsandtheshareholders’committee,andotherwise.Thereasonforfocusingon
these criteria when recruiting candidates for the shareholders’ committee is that the
shareholders’ committee elects the bank’s board of directors primarily from among the
membersoftheshareholders'committee.
CORPORATE GOVERNANCE ETC.
PAGE 46 RINGKJØBING LANDBOBANK A/S
Sevenofthecurrenteightboardmembers,electedbytheshareholders’committee,
camefromthemembershipoftheshareholders’committee,whileonlyoneboardmem-
ber(whohasmanagerialexperiencefromanothernancialcompany)wasnotelected
from the membership of the shareholders’ committee.
The under-represented gender
Thebankhasatargetgureforthepercentageoftheunder-representedgendertosit
on the board of directors and a policy aimed at increasing the percentage of the under-
represented gender at the bank’s other management levels.
The board of directors and its nomination committee assessed the need for changing
thetargetgureand/orthepolicyinNovember2021andfoundthattheonlyadjust-
ments needed were references to acts.
Thepolicyspeciesthatthetargetgurefortheproportionofboardmembersofthe
under-represented gender should be at least 16.7% (provided that the number of board
members is twelve).
Figures on the date of closing the accounts were:
• 16.7% women
• 83.3% men
The bank thus meets the target.
The policy adopted to increase the percentage of the under-represented gender at the
bank’s other management levels aims at creating a basis for a more equal gender distri-
bution at these management levels.
It is the bank’s overall and long-term aim to create a more equal gender distribution at
the bank’s other management levels. The bank wants to follow up on developments
with respect to gender distribution at other management levels and to adjust the effort
continually in relation to the target.
Basedonthesewishes,thebankhassetthefollowingspecictargetsfortheunder-
represented gender at the bank’s other management levels:
• Theemployeesmustfeelthattheyhaveequalcareerandmanagementopportunities,
irrespective of gender.
• The percentage of managers from the under-represented gender must be at least 20%.
Attheendof2021,thegenderdistributionatthebank’sothermanagementlevelswas
as follows:
• 27.1% women
• 72.9% men
The distribution thus meets the target.
Infuturerecruitmentprocessesformanagementpositions,thebankwilltakeitspolicy
andtheabovetargetsetc.intoconsiderationbutwillalwaysappointthebestqualied,
irrespective of gender.
In accordance with Section 135a of the Executive Order on Financial Reports for Credit
InstitutionsandInvestmentFirmsetc.,thestatutorycompletestatementontheunder-
represented gender is available on the bank’s website at: www.landbobanken.dk/gender.
CORPORATE GOVERNANCE ETC.
ANNUAL REPORT 2021 PAGE 47
Combating money laundering and nancing of terrorism
In2018,FinanceDenmarkappointedanAnti-MoneyLaunderingTaskForce.InNo-
vember2019,theAnti-MoneyLaunderingTaskForcepublishedareportcontaining25
recommendationsforanti-moneylaunderingandcounter-terroristnancingmeasures
aimedatvariousstakeholdersincludingauthorities,thebankingsectoringeneraland
the individual banks.
The bank’s board of directors has endorsed the 25 recommendations.
One of the 25 recommendations is that the banks dedicate a page on their websites
to targeted and publicly available information about their anti-money laundering and
counter-terroristnancingefforts.
The bank complies with this recommendation by creating the web page:
https://www.landbobanken.dk/en/ir_english/thebank/policies/antimoneylaundering.
Another of the 25 recommendations is that the individual banks undertake to outline
theircommitmenttoactionagainstmoneylaunderingandterroristnancing,including
theiranti-moneylaunderingpolicy,inthemanagement’sreviewsectionoftheirannual
reports.
The bank naturally also wants to comply with this recommendation and details of how
RingkjøbingLandbobankcombatsmoneylaunderingandnancingofterrorismare
givenbelowinthismanagement'sreview.
CombatingmoneylaunderingandnancingofterrorisminRingkjøbingLandbobankis
generallyataskforallemployees,notleastbecausethebankhasastatutoryobligation
to know all its customers and the nature of their transactions. This task is carried out by
collectingdata,includingbytheindividualcustomeradvisers.
Inaddition,allemployeeshavebotharightandthedutytoreportunusualand/orsuspi-
cious activities or transactions to the bank’s central anti-money laundering department.
Theapplicableproceduresforcombatingmoneylaunderingandnancingofterrorism
are available to the employees on the bank’s intranet.
The bank’s employees regularly receive training and are tested in combating money
launderingandnancingofterrorism.Trainingfollowsatwo-yearcycletokeepthecur-
rent employees up to date on new rules and on new methods and tools implemented by
the bank. Training is also provided on an ad hoc basis to familiarise new employees with
the subject upon employment.
The bank’s central anti-money laundering department is in charge of the overall anti-
money-launderingandcounter-terroristnancingcommitmentandsupportstheeffort
of customer advisers and other employees.
The anti-money laundering department continuously monitors suspicious transactions
andreportsanysuchtransactionstotheAnti-MoneyLaunderingSecretariatattheofce
of the State Prosecutor for Serious Crime. The department works continuously to set up
and adjust the criteria for identifying transactions that are picked out for further investi-
gation by the department.
Inaddition,thedepartmentcontinuouslychecksthatthenecessaryinformationon
the individual customers’ identity and ownership are registered. It also checks that the
purpose and intended nature of the customers’ relationship with the bank are registered
and updated.
CORPORATE GOVERNANCE ETC.
PAGE 48 RINGKJØBING LANDBOBANK A/S
InDecember2019,theDanishFSAconductedafunctionalinspectionofRingkjøbing
Landbobank’s anti-money laundering area. The outcome of the inspection was three
orders in September 2020 regarding improvement of the bank’s policy in the area and
certainroutinesandprocedures.In2021,thebankreceivedconrmationthattheDan-
ish FSA notes the material submitted by the bank and considers the three orders to be
fullled.
Data ethics
In2021,anewprovisionwasinsertedinsection135doftheExecutiveOrderonFinan-
cial Reports for Credit Institutions and Investment Firms etc. The provision requires
undertakingswhichhaveadataethicspolicytosupplementthemanagement'sreview
with a statement on data ethics. The statement must contain information on the under-
taking’s work and policy on matters of data ethics.
The bank’s board of directors adopted a data ethics policy in 2021. The policy provides
the framework for the bank’s ethical principles and conduct in relation to data. The
bank’sboardofdirectorshaspreparedastatement,whichisavailableonthebank's
website at: www.landbobanken.dk/dataethics.
Communication with stakeholders
The bank places great emphasis on communication with its stakeholders. It has always
been a priority for the bank that its advisers and other employees must be available to
both customers and other stakeholders.
This will remain a top priority going forward. The bank also gives high priority to hav-
ingawebsiteandawebandmobilebankingplatformwhichareaccessible,easyto
understandandcanbeusedinthebank'scommunicationwithitscustomersandother
stakeholders.
Thebankhaspreparedaninvestorrelationspolicydealingwiththebank'sinformation
to,andcommunicationwith,investorsandotherstakeholders.Acodeofconducthas
alsobeenpreparedwhichincludesgeneralguidelinesforthebank'sinteractionwithits
stakeholders.
Investor relations policy
Thebank'sinvestorrelationspolicystatesamongotherthingsthatthebankmuststrive
foropennessandforgooddialoguewithitsshareholders,investorsandotherstake-
holders.
Thebank'sgoalisthustogive
• the stock exchanges on which the bank has listed issues
• existing and potential shareholders and investors
• share analysts and securities brokers and
• other stakeholders
quickinformationwhichgivesatrueandfairviewofbothprice-relatedandothersigni-
cant matters.
CORPORATE GOVERNANCE ETC.
ANNUAL REPORT 2021 PAGE 49
The bank’s board of directors assessed the policy in November 2021 and found that a
only a few adjustments were needed.
Theinvestorrelationspolicyisavailableonthebank'swebsiteat:
www.landbobanken.dk/policies.
Code of conduct
In2014,thebank’sboardofdirectorsforthersttimeadoptedacodeofconductwhich
establishesguidelinesforthebank’semployees(includingthebank'sboardofdirectors
and general management) concerning the conduct expected of them towards stake-
holderssuchascustomers,suppliersandauthoritiesinrelationtoarangeofdifferent
subjects.
In2021,thecodeofconductwasexpandedtoincludethebank’sexpectationsofits
business partners and their actions.
Inthesecondhalfof2021,theboardofdirectorsthusupdatedthecodeofconduct,
including in connection with the implementation of the responsible purchasing policy
adopted by the board and the bank’s endorsement of the Ten Principles of the UN Global
Compact.
The object of the current code of conduct is to assist employees in their daily decisions
and conduct.
Thecodeisgeneralandinnowayexhaustive,butprovidesexamplesofunacceptable
behaviour.
Thecompletecodeofconductisavailableonthebank'swebsiteat:
www.landbobanken.dk/policies.
Remuneration
Remuneration policy
In2012,thebank’sboardofdirectorsforthersttimeadoptedaremunerationpolicy,
which was subsequently approved by the annual general meeting in 2013.
The board of directors and the board’s remuneration committee have subsequently
reviewed the remuneration policy each year to assess any need for updating. If changes
havebeenadopted,theupdatedremunerationpolicyhasbeensubmittedtothebank’s
annual general meeting for approval.
The current policy is from 2021 and was approved by the bank’s annual general meeting
on3March2021.InNovember2021,theboardofdirectorsanditsremunerationcom-
mittee assessed that no changes to the policy were needed.
Thepolicyspeciesthatthebank’smanagementispaidremunerationwhichisbothin
linewiththemarketandreectsthemanagement’sperformanceforthebank.
Italsospeciesthattheremunerationpaidtotheboardofdirectorsandthegeneral
managementshouldbeaxedamountwithoutanyformofincentivecomponent.
Other major risk-takers and employees in control functions may be paid variable salary
componentsincashwithinthenancialframeworkforpaymentofpersonalallowances
CORPORATE GOVERNANCE ETC.
PAGE 50 RINGKJØBING LANDBOBANK A/S
CORPORATE GOVERNANCE ETC.
underacurrentworkplaceagreement,belowthecaponvariablesalarycomponentsand
subject to the provisions in points 4 and 5 of the remuneration policy. Severance may
also be paid unless deemed to be variable salary in the terms of the applicable law.
The remuneration policy also complies with the remuneration policy requirements of the
Danish Companies Act applicable to public limited companies with shares admitted to
trading on a regulated market.
Thecurrentremunerationpolicyisavailableonthebank'swebsiteat:
www.landbobanken.dk/policies.
Remuneration report and remuneration details
PursuanttotheDanishCompaniesAct,aremunerationreporthasbeenpreparedonthe
remuneration paid to the board of directors and the general management for the 2021
nancialyear.
The remuneration report must be submitted for a consultative vote at the bank’s annual
general meeting in March 2022. The remuneration report contains a statement by the
bank’s external auditor.
Inaddition,adocumentwithvariousremunerationdetailsetc.ispreparedpursuant
totheexecutiveorderonwagepoliciesandremunerationinnancialinstitutionsetc.,
Article 450 of the CRR and section 80c of the Danish Financial Business Act.
The remuneration policy and the remuneration details document are available on the
bank'swebsiteat:www.landbobanken.dk/policies.
ANNUAL REPORT 2021 PAGE 51
CORPORATE GOVERNANCE ETC.
Information on listed companies
In accordance with Section 133a of the Executive Order on Financial Reports for Credit
InstitutionsandInvestmentFirmsetc.,thebankadvisesasfollows:
Thebank’ssharecapitalon31December2021wasDKK29,067,721in29,067,721nom.
DKK 1 shares.
Thebankhasonlyoneshareclass,andtheentiresharecapital,andthusallshares,are
listed on the Nasdaq Copenhagen. There are no restrictions on the shares’ negotiability.
The following shareholders have advised that they owned more than 5% of the bank’s
share capital on 31 December 2021:
• LiontrustInvestmentPartnersLLP,London,GreatBritainowned6.12%ofthebank’s
sharecapitalon31December2021,correspondingto3,000votes.
• ATP,ofHillerød,Denmarkowned5.08%ofthebank’ssharecapitalon31December
2021,correspondingto3,000votes.
Withrespecttotheexercisingofvotingrights,eachnom.DKK1sharecarriesonevote
whentheshareisrecordedinthecompany’sregisterofshareholders,orwhenthe
shareholderhasreportedanddocumentedhisorherright.However,ashareholdermay
castnomorethan3,000votes.
Underthebank’sarticlesofassociation,themembersofthebank’sboardofdirectors
areelectedbythemembersofthebank’sshareholders’committeeforfour-yearperiods,
and the bank’s employees also elect members to the bank’s board of directors in accor-
dance with rules in force.
A decision to amend the bank’s articles of association is only valid if the resolution is
adopted by at least two-thirds of votes cast and two-thirds of the voting capital repre-
sented at the general meeting.
Onthedateofclosingtheaccounts,theboardofdirectorsisauthorisedasfollows,
pursuanttothearticlesofassociation,toissueshares:
The general meeting has decided to authorise the board of directors to increase the
sharecapitalinoneormoreroundsbyuptonom.DKK5,813,544withrightofpre-
emption for the bank’s existing shareholders. The capital increase must be fully paid up
in cash. The capital increase may be below the market price. This authorisation applies
until 2 March 2026 (Article 2a).
The general meeting has decided to authorise the board of directors to increase the
sharecapitalinoneormoreroundsbyuptonom.DKK2,906,772withoutrightofpre-
emption for the bank’s existing shareholders. The capital increase may be by cash pay-
mentorcontributionofanexistingcompanyorspecicassetvaluescorrespondingto
the value of the shares issued. The capital increase must be fully paid up at the market
price ascertained by the board of directors. This authorisation applies until 2 March
2026 (Article 2b).
PAGE 52 RINGKJØBING LANDBOBANK A/S
The board of directors may use the authorisations under Articles 2a and 2b to increase
thesharecapitalbyamaximumofnom.DKK5,813,544intotal.
The board of directors has the following powers with respect to the possibility of acquir-
ing the bank’s own shares:
Thebank’sannualgeneralmeetinghascontinuallyauthorisedtheboardofdirectors,
beforethenextannualgeneralmeetingandinaccordancewithapplicablelaw,topermit
the bank to acquire its own shares to a total nominal value of 10% of the bank’s share
capital,sothatthesharescanbeacquiredatthecurrentlistedpriceplusorminus10%.
The authorisation was most recently renewed at the bank’s annual general meeting on 3
March 2021.
This authority was used in several rounds during 2021 to initiate share buy-back pro-
grammes:on3February2021foraDKK255millionsharebuy-backprogramme,on30
July 2021 for a DKK 30 million share buy-back programme corresponding to the unused
portionoftheDKK255millionsharebuy-backprogramme,andnallyon15September
2021 for a DKK 242.5 million share buy-back programme.
Atotalof688,055shareshavebeenboughtunderthesharebuy-backprogrammes.
Cancellation of the shares will be recommended at the bank’s annual general meeting in
March 2022.
Inconclusion,thebankhasaccepted“changeofcontrol”clausesincertainfunding
agreements.Forreasonsofcompetition,nofurtherdetailsaregiven.
CORPORATE GOVERNANCE ETC.
ANNUAL REPORT 2021 PAGE 53
Corporate social responsibility and ESG report
Ringkjøbing Landbobank wants to be a responsible and value-creating bank that shows
socialresponsibility.Thebankworkstocreategood,long-termresultsforitssharehold-
ersandintendstocontributetocreatingasustainablesociety,focusingoncustomers,
employees,climateandtheenvironment,andsociety.
It is also the bank’s overall goal to be seen as a reliable and attentive partner by all its
stakeholders.
In response to this goal and the bank’s anchoring in Denmark and the local communi-
tieswherewehaveroots,theboardofdirectorshaspreparedandadoptedacorporate
social responsibility (CSR) policy.
Thebank’sCSRpolicyfocusesspecicallyonthevestakeholdergroups:customers,
employees,climateandtheenvironment,thelocalcommunityandDanishsociety.
The bank’s policy in the area of social responsibility is available on its website at:
www.landbobanken.dk/csr.
Asinpreviousnancialyears,thebankhaspreparedanESGreportfor2021.
TheESGreportiscomprehensiveandcontainsanumberofdetailsontheEnvironment,
Social aspects and Governance.
The ESG report also covers the requirement for a statutory statement on corporate
social responsibility pursuant to section 135 of the Executive Order on Financial Reports
for Credit Institutions and Investment Firms etc.
The ESG report is available on the bank’s website:
www.landbobanken.dk/en/ir_english/thebank/esgen.
AsasupplementtotheannualESGreport,thebankpreparedandpublishedanewESG
Fact Book in 2021 at landbobanken.dk/en/ir_english/thebank/esgen. The ESG Fact Book
presents data in a compact and clear form and beyond the data of the ESG report. The
Fact Book is updated continually.
Furthertotheabove,pleasenotethatthebankhasnotpreparedspecicpolicieson
human rights or climate. The bank supports the efforts to put human rights and climate
highontheagenda,however.
In2021,thebankthusendorsedtheTenPrinciplesoftheUNGlobalCompact,which
includes principles regarding human rights. The ESG report therefore also contains the
bank’sCOP(CommunicationonProgress)reportfor2021,includingreportsonthework
of implementing the Ten Principles and the support of the UN Sustainable Development
Goals in the bank’s operations.
Inaddition,thebank’sCSRpolicycontainsagoalofbeingandremainingcarbonneutral
in respect of its CO
2
scope 1 and scope 2 emissions.
Thebank’smanagementalsondsthatthebankhasclearlyshownitsattitudetoand
support of both areas via its CSR policy and code of conduct.
CORPORATE GOVERNANCE ETC. CORPORATE SOCIAL RESPONSIBILITY
PAGE 54 RINGKJØBING LANDBOBANK A/S
ANNUAL REPORT 2021 PAGE 55
Page
56 Management statement
57 Auditors’ reports
STATEMENT AND REPORTS
PAGE 56 RINGKJØBING LANDBOBANK A/S
Management statement
The board of directors and the general management have today discussed and approved the annual
reportofRingkjøbingLandbobankA/Sforthenancialyear1Januaryto31December2021.
The annual report was prepared in accordance with the provisions of the Danish Financial Business Act.
Weconsiderthechosenaccountingpoliciestobeappropriateandtheestimatesmaderesponsible,so
thatthenancialstatementsprovideatrueandfairviewofthebank’sassets,liabilitiesandnancial
positionat31December2021andoftheresultofthebank’sactivitiesforthenancialyear1January
to 31 December 2021. We also believe that the management’s review contains a true and fair account
ofthedevelopmentinthebank’sactivitiesandnancialcircumstancesaswellasadescriptionofthe
most important risks and uncertainties which can affect the bank.
Inouropinion,theannualreportofRingkjøbingLandbobankA/Sforthenancialyear1Januaryto31
December2021,identiedas“RILBA-2021-12-31.xhtml”,isprepared,inallmaterialrespects,incompli-
ance with the ESEF regulation.
The annual report is recommended for approval by the general meeting.
Ringkøbing,2February2022
General management:
John Fisker Claus Andersen Jørn Nielsen Carl Pedersen
CEO General Manager General Manager General Manager
Ringkøbing,2February2022
Board of directors:
Martin Krogh Pedersen Mads Hvolby Jens Møller Nielsen
Chairman Deputy chairman Deputy chairman
Morten Jensen Jon Steingrim Johnsen Jacob Møller
Lone Rejkjær Söllmann Sten Uggerhøj
Dan Junker Astrup Gitte E.S.H. Vigsø Arne Ugilt Finn Aaen
Employee representative Employee representative Employee representative Employee representative
MANAGEMENT STATEMENT
ANNUAL REPORT 2021 PAGE 57
Internal auditor’s report
To the shareholders of Ringkjøbing Landbobank A/S
Auditor’s report on the nancial statements
Opinion
Inmyopinion,thenancialstatementsforRingkjøbingLandbobankA/Sgiveatrueandfairviewofthe
bank’sassets,liabilitiesandnancialpositionat31December2021,andoftheresultsofthebankop-
erationsforthenancialyear1Januaryto31December2021inaccordancewiththeDanishFinancial
Business Act.
My opinion is consistent with my long-form audit report to the audit committee and the board of direc-
tors.
The audit
IhaveauditedthenancialstatementsforRingkjøbingLandbobankA/Sforthenancialyear1January
to31December2021,whichcompriseincomestatementandstatementofcomprehensiveincome,
coreearnings,balancesheet,statementofchangesinequity,statementofcapitalandnotes,including
accountingpolicies,andve-yearmainandkeygures.Thenancialstatementswerepreparedinac-
cordance with the Danish Financial Business Act.
The audit was performed on the basis of the Danish FSA’s Executive Order on Auditing Financial Under-
takingsetc.andFinancialGroups,andinaccordancewithinternationalauditingstandardsregarding
planning and performing the audit.
Ihaveplannedandperformedtheaudittoobtainreasonableassurancethatthenancialstatements
are free from material misstatement. I participated in the audit of all material and high-risk areas.
IbelievethattheauditevidenceIhaveobtainedissufcientandappropriatetoprovideabasisformy
opinion.
Statement on management review
Management is responsible for the management review.
Myopiniononthenancialstatementsdoesnotcoverthemanagementreview,andIexpressnoform
of assurance conclusion on that review.
Inconnectionwithmyauditofthenancialstatements,myresponsibilityistoreadthemanagement
reviewand,indoingso,considerwhetheritismateriallyinconsistentwiththenancialstatementsor
withmyknowledgeobtainedintheaudit,orotherwiseappearstobemateriallymisstated.
I also considered whether the management review includes the disclosures required by the Danish
Financial Business Act.
BasedontheworkIhaveperformed,inmyview,themanagementreviewisinaccordancewiththe-
nancial statements and has been prepared in accordance with the requirements of the Danish Financial
Business Act. I did not identify any material misstatement in the management review.
Ringkøbing,2February2022
Henrik Haugaard
Chief internal auditor
AUDITORS’ REPORTS
PAGE 58 RINGKJØBING LANDBOBANK A/S
The independent auditor’s report
To the Shareholders of Ringkjøbing Landbobank A/S
Auditor’s Report on the Financial Statements
Opinion
Inouropinion,theFinancialStatementsgiveatrueandfairviewofthenancialpositionoftheBank
at31December2021,andoftheresultsoftheBankoperationsandcashowsforthenancialyear1
January to 31 December 2021 in accordance with the Danish Financial Business Act.
Our opinion is consistent with our Auditor’s Long-form Report to the Audit Committee and the Board of
Directors.
What we have audited
RingkjøbingLandbobankA/S’sFinancialStatementsforthenancialyear1Januaryto31December
2021comprisetheincomestatementandstatementofcomprehensiveincome,thecoreincome,the
balancesheet,thestatementofchangesinequity,thestatementofcapitalandnotes,includingsum-
maryofsignicantaccountingpolicies,andve-yearnancialhighlights(‘theFinancialStatements’).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) and the addition-
al requirements applicable in Denmark. Our responsibilities under those standards and requirements
are further described in the Auditor’s responsibilities for the audit of the Financial Statements section of
ourreport.Webelievethattheauditevidencewehaveobtainedissufcientandappropriatetoprovide
a basis for our opinion.
Independence
We are independent of the Bank in accordance with International Ethics Standards Board for Accoun-
tants’ Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements
applicableinDenmark.Wehavealsofullledourotherethicalresponsibilitiesinaccordancewiththese
requirements and the IESBA Code.
Tothebestofourknowledge,noprohibitednon-auditservicesasreferredtoinArticle5(1)ofRegula-
tion (EU) No 537/2014 have been provided.
Appointment
WewererstappointedauditorsofRingkjøbingLandbobankA/Son8June2018forthenancialyear
2018. We have been reappointed annually by shareholder resolution for a total period of uninterrupted
engagementoffouryearsincludingthenancialyear2021.
Key audit matters
Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignicancein
our audit of the Financial Statements for 2021. These matters were addressed in the context of our
auditoftheFinancialStatementsasawhole,andinformingouropinionthereon,andwedonotprovide
a separate opinion on these matters.
Key audit matter How our audit addressed the key audit matter
Loan impairment charges
Loans and advances are measured at amortised
cost less impairment charges.
Impairment of loans and advances constitutes
Management’s best estimate of expected losses
on loans and advances at the balance sheet date
in accordance with the provisions of IFRS 9 as in-
corporated in the Danish Executive Order on the
We reviewed and assessed the impairment charges
recognised in the income statement for 2021 and in
the balance sheet at 31 December 2021.
We carried out risk assessment procedures to gain
anunderstandingofITsystems,businesspractices
and relevant controls relating to the calculation of
loan impairment charges. We assessed whether
the controls have been designed and implemented
AUDITORS’ REPORTS
ANNUAL REPORT 2021 PAGE 59
Key audit matter How our audit addressed the
key audit matter
Presentation of Financial Statements of Credit Insti-
tutionsand Stockbroker Companies, etc.Werefer
to note 51 for a detailed description of the account-
ing policies applied.
AsaresultofCOVID-19anditsconsequences,Man-
agementhasmaintaineditssignicantincreasein
loan impairment charges by way of an accounting
estimate ('management estimate'). The impact of
thecoronaviruspandemicontheBank'scustomers
islargelyundetermined,whichimpliesthattheesti-
mation uncertainty related to the calculation of the
indication of impairment remains increased.
Inaddition,theBankhasincreaseditsmanagement
estimates in segments subject to particular credit
uncertainty,includingtheagriculturalsegment.
Since accounting estimates are inherently complex
andsubjective,andthussubjecttoconsiderablees-
timationuncertainty,loanimpairmentchargescon-
stitute a central focus area.
The following areas are central to the calculation of
loan impairment charges:
• Determination of credit classication on initial
and subsequent recognition.
• Model-based impairment charges in stages 1 and
2,includingManagement’sdeterminationofmod-
el variables adapted to the Bank’s loan portfolio.
• The Bank’s procedures to ensure completeness
of the registration of credit-impaired loans (stage
3)orloanswithsignicantincreaseincreditrisk
(stage 2).
•Mostsignicantassumptionsandestimatesap-
plied by Management in the calculations of im-
pairmentcharges,includingprinciplesfortheas-
sessment of various outcomes of the customer’s
nancialposition(scenarios)andfortheassess-
ment ofcollateral valueof, for example,proper-
ties included in the calculations of impairment.
• Management’s assessment of expected credit
losses at the balance sheet date as a result of
possible changes in conditions and which are not
included in the model-based calculations or indi-
viduallyassessedimpairmentcharges,including
in particular the impact of the coronavirus pan-
demic or other uncertain market conditions on the
Bank’s customers
We refer to note 50 ‘Accounting estimates and
judgements’, note 44 ‘Risk factors and risk man-
agement’andnote47‘Creditrisk’totheFinancial
Statements which show factors that may affect the
impairment of loans and advances.
to effectively address the risk of material mis-
statement. Selected controls, which we planned
torelyon,weretestedtocheckwhethertheyhad
been carried out on a consistent basis.
Weassessedtheimpairmentmodelapplied,pre-
pared by the data centre Bankdata, and its use,
including the division of responsibilities between
Bankdata and the Bank.
We assessed and tested the Bank’s calculation
of model-based impairment charges in stages 1
and2,includingassessmentofManagement’sde-
termination and adaptation of model variables to
own issues.
We reviewed and assessed the Bank’s validation
of the methods applied for the calculation of ex-
pected credit losses as well as the procedures
designed to ensure that credit-impaired loans in
stage 3 and underperforming loans in stage 2 are
identiedandrecordedonatimelybasis.
We assessed and tested the principles applied by
the Bank for the determination of impairment sce-
narios and for the measurement of collateral value
of,forexample,propertiesincludedinthecalcula-
tions of impairment of credit-impaired loans and
advances,andloansandadvancesthataresigni-
cantly underperforming.
We tested a sample of credit-impaired loans in
stage 3 and underperforming loans in stage 2 by
testing the calculations of impairment charges
and applied data to underlying documentation.
We tested a sample of other loans by making an
assessment of stage and credit classication.
This included samples of large loans as well as
loans relating to segments with generally in-
creasedexposure,includingsegmentswhichare
particularly affected by the coronavirus pandemic
or other uncertain market conditions.
We reviewed and challenged the material as-
sumptions underlying Management’s estimates
of expected credit losses not included in the mod-
el-based calculations or individually assessed
impairment charges based on our knowledge of
theportfolio,thesectorsandcurrentmarketcon-
ditions. We focussed specically on the Bank's
calculation of management estimates for hedg-
ing of expected credit losses as a result of the
coronavirus pandemic or other uncertain market
conditions.
We assessed whether the factors which may af-
fect loan impairment charges had been disclosed
appropriately.
PAGE 60 RINGKJØBING LANDBOBANK A/S
AUDITORS’ REPORTS
Statement on Management’s Review
Management is responsible for Management’s Review.
OuropinionontheFinancialStatementsdoesnotcoverManagement’sReview,andwedonotexpress
any form of assurance conclusion thereon.
InconnectionwithourauditoftheFinancialStatements,ourresponsibilityistoreadManagement’s
Reviewand,indoingso,considerwhetherManagement’sReviewismateriallyinconsistentwiththe
FinancialStatementsorourknowledgeobtainedintheaudit,orotherwiseappearstobemateriallymis-
stated.
Moreover,weconsideredwhetherManagement’sReviewincludesthedisclosuresrequiredbytheDan-
ish Financial Business Act.
Basedontheworkwehaveperformed,inourview,Management’sReviewisinaccordancewiththeFi-
nancial Statements and has been prepared in accordance with the requirements of the Danish Financial
Business Act. We did not identify any material misstatement in Management’s Review.
Management’s responsibilities for the Financial Statements
Managementisresponsibleforthepreparationofnancialstatementsthatgiveatrueandfairview
in accordance with the Danish Financial Business Act and for such internal control as Management
determinesisnecessarytoenablethepreparationofnancialstatementsthatarefreefrommaterial
misstatement,whetherduetofraudorerror.
InpreparingtheFinancialStatements,ManagementisresponsibleforassessingtheBank’sabilityto
continueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthe
going concern basis of accounting in preparing the Financial Statements unless Management either
intendstoliquidatetheBankortoceaseoperations,orhasnorealisticalternativebuttodoso.
Auditor’s responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole
arefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditor’sreportthat
includesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatan
audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
areconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinu-
ence the economic decisions of users taken on the basis of these Financial Statements.
AspartofanauditinaccordancewithISAsandtheadditionalrequirementsapplicableinDenmark,we
exercise professional judgement and maintain professional scepticism throughout the audit. We also:
• IdentifyandassesstherisksofmaterialmisstatementoftheFinancialStatements,whetherdue
tofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainaudit
evidencethatissufcientandappropriatetoprovideabasisforouropinion.Theriskofnotdetect-
ing a material misstatement resulting from fraud is higher than for one resulting from error as fraud
mayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternal
control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
thatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopiniononthe
effectiveness of the Bank’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by Management.
• Conclude on the appropriateness of Management’s use of the going concern basis of accounting in
preparingtheFinancialStatementsand,basedontheauditevidenceobtained,whetheramaterial
uncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignicantdoubtontheBank’sability
tocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredto
The independent auditor’s report – continued
ANNUAL REPORT 2021 PAGE 61
drawattentioninourauditor’sreporttotherelateddisclosuresintheFinancialStatementsor,ifsuch
disclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidence
obtaineduptothedateofourauditor’sreport.However,futureeventsorconditionsmaycausethe
Bank to cease to continue as a going concern.
• Evaluatetheoverallpresentation,structureandcontentsoftheFinancialStatements,includingthe
disclosures,andwhethertheFinancialStatementsrepresenttheunderlyingtransactionsandevents
in a manner that gives a true and fair view.
Wecommunicatewiththosechargedwithgovernanceregarding,amongothermatters,theplanned
scopeandtimingoftheauditandsignicantauditndings,includinganysignicantdecienciesin
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethicalrequirementsregardingindependence,andtocommunicatewiththemallrelationshipsandother
mattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,safeguards
in place or measures taken to eliminate threats.
Basedonthematterscommunicatedwiththosechargedwithgovernance,wedeterminethosematters
thatwereofthemostsignicanceinourauditofthenancialstatementsofthecurrentperiod,and
which thus constitute key audit matters. We describe these matters in our auditor’s report unless law or
regulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,we
determine that a matter should not be communicated in our report because the adverse consequences
ofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenetsofsuchcommunica-
tion.
Report on compliance with the ESEF Regulation
AspartofourauditoftheFinancialStatementsofRingkjøbingLandbobankA/S,wehaveperformed
proceduresforthepurposeofexpressinganopinionastowhethertheAnnualReportforthenancial
year1Januaryto31December2021,withthelename"RILBA-2021-12-31.xhtml",hasbeenpreparedin
accordance with the Commission Delegated Regulation (EU) 2018/815 on the single electronic report-
ingformat(theESEFRegulation),whichrequiresthepreparationofanannualreportinXHTMLformat.
ManagementisresponsibleforpreparinganannualreportincompliancewiththeESEFRegulation,
including the preparation of an annual report in XHTML format.
Basedontheevidenceobtained,ourresponsibilityistoobtainreasonableassurancewhethertheAn-
nualReport,inallmaterialrespects,hasbeenpreparedinaccordancewiththeESEFRegulation,andto
express an opinion. Our procedures include verifying whether the Annual Report has been prepared in
XHTML format.
Inouropinion,theAnnualReportforthenancialyear1Januaryto31December2021,withthele
name"RILBA-2021-12-31.xhtml",has,inallmaterialrespects,beenpreparedinaccordancewiththe
ESEF Regulation.
Herning,2February2022
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR-nr. 33 77 12 31
Per Rolf Larssen
State Authorised Public Accountant
mne24822
The independent auditor’s report – continued
PAGE 62 RINGKJØBING LANDBOBANK A/S
ANNUAL REPORT 2021 PAGE 63
Page
64 Statements of income and comprehensive income
64 Proposeddistributionofprot
65 Core earnings
66 Balance sheet
68 Statement of changes in equity
69 Statement of capital
71 Overview of notes
72 Notes
112 Five-yearmaingures
114 Five-yearkeygures
FINANCIAL STATEMENTS
PAGE 64 RINGKJØBING LANDBOBANK A/S
Note
2021 2020
no. DKK1,000 DKK1,000
1 Interest income 1,459,846 1,373,215
2 Interest expenses 103,080 120,910
Net interest income 1,356,766 1,252,305
3 Dividends from shares etc. 77,109 71,241
4 Fee and commission income 939,219 814,821
4 Fee and commission expenses 91,183 85,545
Net interest and fee income 2,281,911 2,052,822
5 Value adjustments +163,127 +126,079
Other operating income 5,490 2,054
6,7,8,9 Staff and administration expenses 790,374 765,933
10
Amortisation,depreciationandwrite-downs
on intangible and tangible assets
35,793
29,241
Other operating expenses 7,643 8,110
11 Impairment charges for loans and other receivables etc. -78,629 -233,348
Results from investments in associated companies
and group undertakings
+22
-13
Prot before tax 1,538,111 1,144,310
12 Tax 308,846 224,596
Net prot for the year 1,229,265 919,714
Other comprehensive income:
Value changes in pension liabilities -404 -561
Total comprehensive income for the year 1,228,861 919,153
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
2021
DKK1,000
2020
DKK1,000
Total comprehensive income for the year 1,228,861 919,153
Total amount available for distribution 1,228,861 919,153
Appropriated for ordinary dividend 203,474 204,598
Appropriated for charitable purposes 2,000 2,000
Transfer to net revaluation reserve
under the equity method
22
-13
Transfer to retained earnings 1,023,365 712,568
Total distribution of the amount available 1,228,861 919,153
PROPOSED DISTRIBUTION OF PROFIT
ANNUAL REPORT 2021 PAGE 65
CORE EARNINGS
Note
no.
2021
DKK1,000
2020
DKK1,000
13 Net interest income 1,342,559 1,255,816
14 Net fee and commission income excluding securities trading 676,831 591,147
15 Income from sector shares etc. 179,190 150,935
Foreign exchange income 57,670 40,759
Other operating income 5,490 2,054
Total core income excluding securities trading 2,261,740 2,040,711
14 Securities trading 171,205 138,129
Total core income 2,432,945 2,178,840
16 Staff and administration expenses 790,374 765,933
16 Depreciation and write-downs on tangible assets 18,539 14,241
Other operating expenses 7,643 8,110
16 Total expenses etc. 816,556 788,284
Core earnings before impairment charges for loans 1,616,389 1,390,556
17 Impairment charges for loans and other receivables etc. -68,333 -223,052
18 Core earnings 1,548,056 1,167,504
18 Result for the portfolio etc. 7,309 -8,194
16 Amortisation and write-downs on intangible assets 17,254 15,000
18 Prot before tax 1,538,111 1,144,310
12 Tax 308,846 224,596
Net prot for the year 1,229,265 919,714
PAGE 66 RINGKJØBING LANDBOBANK A/S
BALANCE SHEET
Note
no.
31 Dec. 2021
DKK1,000
31 Dec. 2020
DKK1,000
Assets
Cash in hand and demand deposits with central banks 3,459,464 659,004
19 Receivables from credit institutions and central banks 216,097 3,376,233
20.21 Total loans and other receivables at amortised cost 41,179,255 36,241,166
Loans and other receivables at amortised cost 40,008,162 35,088,380
Loans for renewable energy projects with direct funding 1,171,093 1,152,786
Bonds at fair value 6,743,836 6,636,965
22 Shares etc. 1,467,417 1,385,807
Investments in associated companies 481 482
Investments in subsidiaries 12,020 11,997
23 Assets linked to pooled schemes 5,537,863 4,700,080
24 Intangible assets 1,062,672 1,034,838
25 Total land and buildings 199,632 215,910
Investment properties 8,667 7,667
Domicile properties 168,387 186,971
Domicile properties (leasing) 22,578 21,272
26 Other tangible assets 14,999 17,626
Current tax assets 23,501 24,249
27 Deferred tax assets 11,263 17,868
Temporary assets 5,868 6,368
28 Other assets 407,166 510,327
Prepayments
15,854 23,209
Total assets 60,357,388 54,862,129
BALANCE SHEET
ANNUAL REPORT 2021 PAGE 67
Note
no.
31 Dec. 2021
DKK1,000
31 Dec. 2020
DKK1,000
Liabilities and equity
29 Debt to credit institutions and central banks 2,030,175 2,448,918
Total deposits and other debt 43,740,049 39,638,645
30 Deposits and other debt 38,202,186 34,938,565
Deposits in pooled schemes 5,537,863 4,700,080
31 Issued bonds at amortised cost 2,961,422 2,361,796
Preferred senior capital 1,019,790 1,032,489
Non-preferred senior capital 1,941,632 1,329,307
32 Other liabilities 728,954 591,109
Deferred income 1,167 1,728
Total debt 49,461,767 45,042,196
33 Provisions for pensions and similar liabilities 2,473 2,560
21 Provisions for losses on guarantees 97,207 85,814
21 Other provisions for liabilities 28,763 36,534
Total provisions for liabilities 128,443 124,908
Tier 2 capital 2,044,505 1,549,150
34 Total subordinated debt 2,044,505 1,549,150
35 Share capital 29,068 29,228
Net revaluation reserve under the equity method 428 406
Retained earnings 8,487,703 7,909,643
Proposed dividend etc. 205,474 206,598
Total shareholders’ equity 8,722,673 8,145,875
Total liabilities and equity 60,357,388 54,862,129
PAGE 68 RINGKJØBING LANDBOBANK A/S
STATEMENT OF CHANGES IN EQUITY
DKK1,000
Share
capital
Net
revaluation
reserve
under the
equity
method
Retained
earnings
Proposed
dividend
etc.
Total share-
holders’
equity
2020
Shareholders’ equity at the end
of the previous nancial year
29,662
419
7,252,515
327,280
7,609,876
Comprehensive income
Netprotfortheyear -13 713,129 206,598 919,714
Other comprehensive income -561 -561
Total comprehensive income 0 -13 712,568 206,598 919,153
Transactions with shareholders
Reduction of share capital -434 434 0
Dividend etc. paid -327,280 -327,280
Dividend received on own shares 4,966 4,966
Purchase of own shares -680,099 -680,099
Sale of own shares 611,241 611,241
Other equity transactions
(employee shares)
8,018
8,018
Total transactions with shareholders -434 0 -55,440 -327,280 -383,154
Shareholders’ equity on the
balance sheet date
29,228
406
7,909,643
206,598
8,145,875
2021
Shareholders’ equity at the end
of the previous nancial year
29,228
406
7,909,643
206,598
8,145,875
Comprehensive income
Netprotfortheyear 22 1,023,769 205,474 1,229,265
Other comprehensive income -404 -404
Total comprehensive income 0 22 1,023,365 205,474 1,228,861
Transactions with shareholders
Reduction of share capital -160 160 0
Dividend etc. paid -206,598 -206,598
Dividend received on own shares 1,645 1,645
Purchase of own shares -1,238,871 -1,238,871
Sale of own shares 776,227 776,227
Other equity transactions
(employee shares)
15,534
15,534
Total transactions with shareholders -160 0 -445,305 -206,598 -652,063
Shareholders’ equity on the
balance sheet date
29,068
428
8,487,703
205,474
8,722,673
ANNUAL REPORT 2021 PAGE 69
STATEMENT OF CAPITAL
31 Dec. 2021
DKK1,000
31 Dec. 2020
DKK1,000
Credit risk 37,454,457 35,080,095
Market risk 1,719,608 2,912,209
Operational risk 4,111,013 3,568,376
Total risk exposure 43,285,078 41,560,680
Shareholders’ equity 8,722,673 8,145,875
Proposed dividend etc. -205,474 -206,598
Addition for transition programme concerning IFRS 9 533,172 661,258
Deductionforinsufcientcoverageofnon-performingexposures -3,215 -
Deduction for the sum of equity investments etc. above 10% -258,432 -244,297
Deduction for prudent valuation -14,044 -16,284
Deduction for intangible assets -1,062,672 -1,034,838
Deferred tax on intangible assets 22,169 24,548
Deduction of amount of share buy-back programme -497,500 0
Actual utilisation of amount of share buy-back programme 449,894 0
Deduction for trading limit for own shares -55,000 -55,000
Actual utilisation of the trading limit for own shares 161 2,794
Common equity tier 1 7,631,732 7,277,458
Tier 1 capital 7,631,732 7,277,458
Tier 2 capital 2,043,630 1,543,925
Deduction for the sum of equity investments etc. above 10% -40,258 -46,950
Total capital 9,635,104 8,774,433
Contractual senior funding (grandfathered) 456,272 1,031,852
Non-preferred senior capital 1,941,178 1,305,374
MREL capital 12,032,554 11,111,659
Common equity tier 1 capital ratio 17.6 17.5
Tier 1 capital ratio 17.6 17.5
Total capital ratio 22.3 21.1
MREL capital ratio 27.8 26.7
Pillar I capital requirements 3,462,806 3,324,854
MRELrequirement(%)xedbytheDanishFSA 17.9 17.9
Excess cover in percentage points relative to MREL requirement 9.9 8.8
PAGE 70 RINGKJØBING LANDBOBANK A/S
ANNUAL REPORT 2021 PAGE 71
OVERVIEW OF NOTES
Page
  1 Interestincome .................................................................................................................................. 72
  2 Interestexpenses .............................................................................................................................. 72
  3 Dividendsfromsharesetc. .............................................................................................................. 72
  4 Feesandcommission ....................................................................................................................... 73
  5 Valueadjustments ............................................................................................................................. 73
  6 Staffandadministrationexpenses.................................................................................................. 74
  7 Numberoffull-timeemployees ........................................................................................................ 74
  8 Salariespaidtoothermajorrisk-takersandemployeesincontrolfunctions ............................... 74
  9 Feetotheauditorelectedbytheannualgeneralmeeting .............................................................. 74
10 Amortisation,depreciationandwrite-downsonintangibleandtangibleassets .......................... 75
11 Impairment charges for loans and other receivables etc. .............................................................. 75
12 Tax ...................................................................................................................................................... 75
13 Net interest income ........................................................................................................................... 76
14 Net fee and commission income excluding securities trading ...................................................... 76
15 Income from sector shares etc. ........................................................................................................ 76
16 Total expenses etc. ............................................................................................................................ 76
17 Impairment charges for loans and other receivables etc. .............................................................. 76
18 Protbeforetaxandcoreearningsbeforetax ............................................................................... 76
19 Receivables from credit institutions and central banks ................................................................. 77
20 Loans and other receivables at amortised cost .............................................................................. 77
21 Impairment charges for loans and other receivables and provisions for losses on
guarantees,unutilisedcreditfacilitiesandcreditundertakings .................................................... 77
22 Shares etc. ......................................................................................................................................... 79
23 Assets linked to pooled schemes .................................................................................................... 79
24 Intangible assets ............................................................................................................................... 79
25 Land and buildings ............................................................................................................................ 80
26 Other tangible assets ........................................................................................................................ 80
27 Deferred tax assets ............................................................................................................................ 81
28 Other assets ....................................................................................................................................... 81
29 Debt to credit institutions and central banks ................................................................................... 81
30 Deposits and other debt .................................................................................................................... 81
31 Issued bonds at amortised cost ....................................................................................................... 81
32 Other liabilities ................................................................................................................................... 82
33 Provisions for pensions and similar liabilities ................................................................................. 82
34 Subordinated debt ............................................................................................................................. 82
35 Share capital ...................................................................................................................................... 82
36 Own shares ........................................................................................................................................ 83
37 Contingent liabilities etc. ................................................................................................................... 83
38 Assets furnished as security ............................................................................................................. 83
39 Contractual obligations ..................................................................................................................... 83
40 Legal proceedings etc. ...................................................................................................................... 84
41 Related parties ................................................................................................................................... 84
42 Fairvalueofnancialinstruments ................................................................................................... 85
43 Hedging .............................................................................................................................................. 86
44 Risks and risk management ............................................................................................................. 86
45 Credit risk ........................................................................................................................................... 87
46 Foreign exchange risk ....................................................................................................................... 96
47 Interest rate risk ................................................................................................................................ 96
48 Value at Risk/Market risk .................................................................................................................. 97
49 Derivativenancialinstruments ....................................................................................................... 98
50 Accounting estimates and assessments ...................................................................................... 101 
51 Accounting policies etc. .................................................................................................................. 102
PAGE 72 RINGKJØBING LANDBOBANK A/S
Note
no.
2021
DKK1,000
2020
DKK1,000
1 Interest income
Receivables from credit institutions and central banks – net -14,893 -15,917
Loans and other receivables 1,253,811 1,251,394
Discounts – amortisation concerning loans taken over etc. 10,296 10,296
Loans – interest on the impaired part of loans -49,612 -59,678
Bonds – net 28,211 13,188
Totalderivativenancialinstruments–net 21,620 20,424
of which currency contracts – net 5,079 9,740
of which interest-rate contracts – net 16,541 10,684
Other interest income 2,464 2,862
Total interest income after offsetting of negative interest 1,251,897 1,222,569
Negative interest income transferred to interest expenses
Receivables from credit institutions and central banks 16,685 17,969
Bonds 5,134 10,883
Totalderivativenancialinstruments 2,979 4,064
of which currency contracts 771 1,102
of which interest-rate contracts 2,208 2,962
Total negative interest income transferred to interest expenses 24,798 32,916
Negative interest expenses transferred from interest expenses
Debt to credit institutions and central banks 1 161
Deposits and other debt 183,150 117,569
Total negative interest expenses transferred
from interest expenses
183,151
117,730
Total interest income 1,459,846 1,373,215
2 Interest expenses
Credit institutions and central banks – net 9,996 11,885
Deposits and other debt – net -165,948 -97,803
Issued bonds 22,959 21,538
Subordinated debt 27,311 32,003
Other interest expenses 813 2,641
Total interest expenses after offsetting of negative interest -104,869 -29,736
Negative interest expenses transferred to interest income
Debt to credit institutions and central banks 1 161
Deposits and other debt 183,150 117,569
Total negative interest expenses transferred to interest income 183,151 117,730
Negative interest income transferred from interest income
Receivables from credit institutions and central banks 16,685 17,969
Bonds 5,134 10,883
Totalderivativenancialinstruments 2,979 4,064
of which currency contracts 771 1,102
of which interest-rate contracts 2,208 2,962
Total negative interest income transferred
from interest income
24,798
32,916
Total interest expenses 103,080 120,910
3 Dividends from shares etc.
Shares 77,109 71,241
Total dividends from shares etc. 77,109 71,241
NOTES
ANNUAL REPORT 2021 PAGE 73
Note
no.
2021
DKK1,000
2020
DKK1,000
4 Fees and commission
Gross fee and commission income
Securities trading 188,682 154,196
Asset management and custody accounts 197,448 165,388
Payment handling 125,136 100,790
Loan fees 93,246 91,361
Guarantee commission and mortgage credit commission etc. 244,423 224,817
Other fees and commission 90,284 78,269
Total gross fee and commission income 939,219 814,821
Fee and commission expenses
Securities trading 17,477 16,067
Asset management and custody accounts 15,508 15,376
Payment handling 41,224 37,718
Loan fees 11,865 9,322
Other fees and commission 5,109 7,062
Total fee and commission expenses 91,183 85,545
Net fee and commission income
Securities trading 171,205 138,129
Asset management and custody accounts 181,940 150,012
Payment handling 83,912 63,072
Loan fees 81,381 82,039
Guarantee commission and mortgage credit commission etc. 244,423 224,817
Other fees and commission 85,175 71,207
Total net fee and commission income 848,036 729,276
Foreign exchange income 57,670 40,759
Total net fee, commission and foreign exchange income 905,706 770,035
5 Value adjustments
Otherloansandreceivables,fairvalueadjustment* -4,492 1,292
Bonds -15,820 10,658
Shares etc. 106,003 76,441
Foreign exchange 57,670 40,759
Totalderivativenancialinstruments -18,337 24,106
of which currency contracts -23,489 22,235
of which interest-rate contracts 5,095 1,870
of which share contracts 57 1
Assets linked to pooled schemes 490,318 124,574
Deposits in pooled schemes -490,318 -124,574
Issued bonds etc.* 38,103 -27,177
Total value adjustments 163,127 126,079
* See note 43.
PAGE 74 RINGKJØBING LANDBOBANK A/S
Note
no.
2021
DKK1,000
2020
DKK1,000
6 Staff and administration expenses
Paymentstogeneralmanagement,boardofdirectorsand
shareholders’ committee:
General management:
Salary 14,601 14,879
Pension 2,365 2,295
Total payments 16,966 17,174
Totaltaxablevalueofcompanycar:2021:tDKK526,2020:tDKK481.
The amounts are not included in the salary amounts stated.
Board of directors:
Total payments 4,225 3,170
Shareholders’ committee
Total payments 890 857
Total 22,081 21,201
Staff expenses:
Salaries 345,780 344,570
Pensions 39,665 41,958
Social security expenses 5,353 5,244
Costs depending on number of staff 60,293 60,840
Total 451,091 452,612
Other administration expenses 317,202 292,120
Total staff and administration expenses 790,374 765,933
Information on the remuneration paid to the individual members of the board
of directors and general management is shown in the remuneration report for
2021,availableonthebank’swebsite:www.landbobanken.dk/policies
7 Number of full-time employees
Averagenumberofemployeesduringthenancialyear
converted into full-time employees 619 632
Number of full-time employees at the end of the period 626 612
8 Salaries paid to other major risk-takers and employees in
control functions
Fixed salary 17,631 15,399
Variable salary 630 340
Pension 1,926 1,570
Total 20,187 17,309
Number of full-time employees at end of year 21 18
9 Fee to the auditor elected by the general meeting
Statutory audit 712 743
Other assurance engagements 101 60
Advice on tax 145 0
Other services 270 263
Total fee to the auditor elected by the general meeting 1,228 1,066
Fees for other assurance engagements primarily concern reports to
public authorities.
Fees for advice on tax primarily concern advice on VAT.
Fees for other services include issue of the comfort letter regarding
thebank’sEMTNprogrammeandvericationofregularrecognitionof
protincommonequitytier1.
The bank also has an internal auditor.
NOTES
ANNUAL REPORT 2021 PAGE 75
Note
no.
2021
DKK1,000
2020
DKK1,000
10 Amortisation, depreciation and write-downs
on intangible and tangible assets
Intangible assets
Customerrelationships,amortisation 17,254 15,000
Tangible assets
Domicileproperties,depreciation 1,838 1,964
Domicileproperties,write-downtoreassessedvalue 5,500 1,500
Domicileproperties(leasing),depreciation 5,438 3,852
Othertangibleassets,depreciation 5,660 6,925
Othertangibleassets(leasing),depreciation 103 0
Total amortisation, depreciation and write-downs
on intangible and tangible assets
35,793
29,241
11 Impairment charges for loans and other receivables etc.
Net changes in impairment charges for loans and other
receivables etc. and provisions for losses on guarantees
78,700
172,975
Actual realised net losses 49,541 120,051
Interest on the impaired part of loans -49,612 -59,678
Total impairment charges for loans and other receivables etc. 78,629 233,348
12 Tax
Tax calculated on income for the year 293,912 223,794
Adjustment of deferred tax 6,604 -3,689
Adjustment of tax calculated for previous years 8,330 4,491
Total tax 308,846 224,596
Effective tax rate (%):
Tax rate currently paid by the bank 22.0 22.0
Non-taxable income and non-deductible costs* -2.4 -2.8
Adjustment of tax calculated for previous years 0.5 0.4
Total effective tax rate 20.1 19.6
* Primarily value adjustment of and dividends from sector shares.
PAGE 76 RINGKJØBING LANDBOBANK A/S
Note
no.
Explanation of the correlation between prot before tax
and core earnings
2021
DKK1,000
2020
DKK1,000
13 Net interest income
Net interest income – income statement 1,356,766 1,252,305
Discounts – amortisation concerning loans taken over etc. -10,296 -10,296
Funding income – own portfolio 26,088 29,028
Bond yields etc. -29,999 -15,221
Net interest income – core earnings 1,342,559 1,255,816
14 Net fee and commission income excluding
securities trading
Fee and commission income – income statement 939,219 814,821
Fee and commission expenses – income statement -91,183 -85,545
Securities trading – core earnings -171,205 -138,129
Net fee and commission income excluding
securities trading – core earnings
676,831
591,147
15 Income from sector shares etc.
Value adjustment of sector shares etc. 102,933 81,525
Dividends from sector shares etc. 76,257 69,410
Income from sector shares etc. – core earnings 179,190 150,935
16 Total expenses etc.
Staff and administration expenses – income statement 790,374 765,933
Amortisation,depreciationandwrite-downsonintangibleand
tangible assets – income statement
35,793
29,241
Other operating expenses – income statement 7,643 8,110
Amortisation and write-downs on intangible
assets – core earnings -17,254
-15,000
Total expenses etc. – core earnings 816,556 788,284
17 Impairment charges for loans and other receivables etc.
Impairment charges for loans and other receivables etc.
– income statement
-78,629
-233,348
Discounts – amortisation concerning loans taken over etc. 10,296 10,296
Impairment charges for loans and other receivables etc.
– core earnings
-68,333
-223,052
18 Prot before tax and core earnings
Prot before tax 1,538,111 1,144,310
Value adjustments – income statement 163,127 126,079
Results from investments in associated companies and group
undertakings – income statement
22
-13
Value adjustment of sector shares etc. -102,933 -81,525
Foreign exchange income – core earnings -57,670 -40,759
Funding expenses – own portfolio -26,088 -29,028
Bond yields etc. 29,999 15,221
Dividends – not sector shares 852 1,831
Result for the portfolio – core earnings (minus) 7,309 -8,194
Special costs – core earnings (plus) 17,254 15,000
Core earnings 1,548,056 1,167,504
NOTES
ANNUAL REPORT 2021 PAGE 77
Note
no.
31 Dec. 2021
DKK1,000
31 Dec. 2020
DKK1,000
19 Receivables from credit institutions and central banks
Demand 216,097 114,751
Up to and including 3 months 0 3,211,482
More than 1 year and up to and including 5 years 0 5,000
More than 5 years 0 45,000
Total receivables from credit institutions and central banks 216,097 3,376,233
Distributed as follows:
Receivables from central banks 0 3,211,482
Receivables from credit institutions 216,097 164,751
216,097 3,376,233
20 Loans and other receivables at amortised cost*
Demand 4,889,428 3,859,843
Up to and including 3 months 1,396,536 1,252,486
More than 3 months and up to and including 1 year 9,266,165 7,954,602
More than 1 year and up to and including 5 years 11,311,679 10,053,336
More than 5 years 14,315,447 13,120,899
Total loans and other receivables at amortised cost 41,179,255 36,241,166
Of which collateralised repurchase agreements/
reverse repo transactions
52,090 0
* See note 43.
31 Dec. 2021
DKK1,000
31 Dec. 2020
DKK1,000
Inaddition,adiscountonloansandguaranteestakenoverfrom
Nordjyske Bank amounted to
14,803
25,099
The above includes the following stage 3 impairment charges
and provisions taken over from Nordjyske Bank:
Cumulative stage 3 impairment charges and provisions at the
endofthepreviousnancialyear
247,609
507,433
Changes during the year -56,990 -259,824
Total stage 3 impairment charges and provisions taken over 190,619 247,609
21 Impairment charges for loans and other receivables and provisions for losses on guarantees,
unutilised credit facilities and credit undertakings
Impairment charges and provisions by stages
Stage 1
DKK1,000
Stage 2
DKK1,000
Stage 3
DKK1,000
Total
DKK1,000
2021
Loans and other receivables at amortised cost 232,549 825,278 1,099,523 2,157,350
Guarantees 7,961 14,987 74,259 97,207
Unutilised credit facilities and credit undertakings 10,531 18,232 0 28,763
Total impairment charges and provisions by stages 251,041 858,497 1,173,782 2,283,320
Of which management estimates* 123,178 283,159 224,906 631,243
2020
Loans and other receivables at amortised cost 304,520 839,303 938,449 2,082,272
Guarantees 23,665 23,886 38,263 85,814
Unutilised credit facilities and credit undertakings 18,659 17,875 0 36,534
Total impairment charges and provisions by stages 346,844 881,064 976,712 2,204,620
Of which management estimates* 205,137 255,284 105,765 566,186
* See the description of distribution by stages on page 95.
PAGE 78 RINGKJØBING LANDBOBANK A/S
Note
no.
21 Impairment charges for loans and other receivables and provisions for losses on guarantees,
unutilised credit facilities and credit undertakings – continued
Impairment charges and provisions
2021
Stage 1
DKK1,000
Stage 2
DKK1,000
Stage 3
DKK1,000
Total
DKK1,000
Impairment
charges
etc. taken
to income
statement
DKK1,000
Impairment charges and provisions at the
endofthepreviousnancialyear 346,844 881,064 976,712 2,204,620 -
Impairment charges and provisions for
newexposuresduringtheyear,including
new accounts for existing customers 91,455 118,960 98,793 309,208 309,208
Reversed impairment charges and
provisions for repaid accounts -83,784 -134,825 -95,421 -314,030 -314,030
Transfer of impairment charges and
provisions at beginning of year to stage 1 158,998 -152,580 -6,418 0 0
Transfer of impairment charges and
provisions at beginning of year to stage 2 -15,390 66,408 -51,018 0 0
Transfer of impairment charges and
provisions at beginning of year to stage 3 -1,731 -107,727 109,458 0 0
Impairment charges and provisions during
the year resulting from credit risk change -245,351 187,197 203,740 145,586 145,586
Previouslywrittendown,nowdenitivelylost - - -62,064 -62,064 -
Lost,notpreviouslywrittendown - - - - 10,088
Received on receivables previously written off - - - - -72,223
Total impairment charges and provisions 251,041 858,497 1,173,782 2,283,320 78,629
of which regarding credit institutions etc. 3,302 0 0 3,302 1,297
2020
Impairment charges and provisions at the
endofthepreviousnancialyear 136,729 404,006 1,490,910 2,031,645 -
Impairment charges and provisions for
newexposuresduringtheyear,including
new accounts for existing customers 110,102 86,720 122,077 318,899 318,899
Reversed impairment charges and
provisions for repaid accounts -35,138 -70,486 -180,189 -285,813 -285,813
Transfer of impairment charges and
provisions at beginning of year to stage 1 147,307 -58,732 -88,575 0 0
Transfer of impairment charges and
provisions at beginning of year to stage 2 -10,189 453,417 -443,228 0 0
Transfer of impairment charges and
provisions at beginning of year to stage 3 -1,573 -17,205 18,778 0 0
Impairment charges and provisions during
the year resulting from credit risk change -394 83,344 153,320 236,270 236,270
Previouslywrittendown,nowdenitivelylost - - -96,381 -96,381 0
Lost,notpreviouslywrittendown - - - - 66,781
Received on receivables previously written off - - - - -102,789
Total impairment charges and provisions 346,844 881,064 976,712 2,204,620 233,348
of which regarding credit institutions etc. 2,005 0 0 2,005 1,094
NOTES
ANNUAL REPORT 2021 PAGE 79
Note
no.
31 Dec. 2021
DKK1,000
31 Dec. 2020
DKK1,000
22 Shares etc.
Listed on Nasdaq Copenhagen 8,879 10,850
Investmentfundcerticates 20,345 29,577
Unlisted shares at fair value 6,838 14,186
Sector shares at fair value 1,431,355 1,331,194
Total shares etc. 1,467,417 1,385,807
23 Assets linked to pooled schemes
Cash deposits 267,180 101,854
Bonds:
Other bonds 1,431,770 1,513,905
Total bonds 1,431,770 1,513,905
Shares:
Other shares 777,747 672,557
Investmentfundcerticates 3,061,166 2,411,764
Total shares 3,838,913 3,084,321
Total assets linked to pooled schemes 5,537,863 4,700,080
24 Intangible assets
Goodwill
Costattheendofthepreviousnancialyear 923,255 923,255
Total cost on the balance sheet date 923,255 923,255
Total goodwill on the balance sheet date 923,255 923,255
Customer relationships
Costattheendofthepreviousnancialyear 150,000 150,000
Additions during the year 45,088 0
Total cost on the balance sheet date 195,088 150,000
Amortisationattheendofthepreviousnancialyear 38,417 23,417
Amortisation for the year 17,254 15,000
Total amortisation on the balance sheet date 55,671 38,417
Total customer relationships on the balance sheet date 139,417 111,583
Total intangible assets on the balance sheet date 1,062,672 1,034,838
Goodwillwasimpairment-testedattheendof2021.Themergedbankwastestedasasingleunit,sincethe“old”
NordjyskeBankisnanciallyfullyintegratedinRingkjøbingLandbobank.Thereforeatrueandfairviewcouldnotbe
obtained from a test only of the part that had been taken over. The impairment test did not result in any write-downs.
Themodelusedintheimpairmenttestisbasedonthebank’sbudgetfor2022.“Netprotfortheyear”isusedas
the opening value for calculating the sensitivity. The tax rate is expected to be unchanged throughout the period.
Using“Netprotfortheyear”astheopeningvalueinthemodelmakesthetestharderthaniffreecashowswere
used.Aweightedaveragecostofcapitalof8.5%andanexpectedannualincreasein“Netprotfortheyear”of2%
were used.
Therobustnessofthemodelistestedinsensitivityanalyseswheretherequiredrateofreturn,changesingrowth
rate and negative effects of “Result for the portfolio etc.” are tested. The management believes that the model is
robust in respect of the relevant scenarios chosen.
Inaddition,thebank’smarketvalueisanindicatorthatthereisnoneedforimpairment.On31December2021,the
market value was approximately three times the equity value.
PAGE 80 RINGKJØBING LANDBOBANK A/S
Note
no.
31 Dec. 2021
DKK1,000
31 Dec. 2020
DKK1,000
25 Land and buildings
Investment properties
Fairvalueattheendofthepreviousnancialyear 7,667 11,567
Disposals during the year -2,340 -1,500
Disposalsonreclassicationduetochangeduse 0 -2,400
Value adjustments to fair value for the year 2,500 0
Reversal of previous years’ write-downs for the year and rever-
sal of total depreciation and write-downs on assets which were
disposed of or taken out of operation during the year
840
0
Fair value on the balance sheet date 8,667 7,667
Domicile properties
Revaluedamountattheendofthepreviousnancialyear 186,971 197,314
Additionsduringtheyear,includingimprovements 5,000 0
Additionsonreclassicationduetochangeduse 0 2,400
Disposals during the year -17,882 -4,529
Disposalsonreclassicationduetochangeduse 0 -6,784
Depreciation for the year -1,838 -1,964
Write-downs after revaluation for the year -5,500 -1,500
Reversal of previous years’ write-downs for the year and
reversal of total depreciation and write-downs on assets
which were disposed of or taken out of operation during the year
1,636
2,034
Total revalued amount on the balance sheet date 168,387 186,971
Domicile properties (leasing)
Recognisedamountattheendofthepreviousnancialyear 21,272 0
Effectoftransitiontonewaccountingrules,beginningofyear 0 21,777
Additions during the year 8,655 3,347
Disposals during the year -2,164 0
Depreciation for the year -5,438 -3,852
Reversal of previous years’ write-downs for the year and rever-
sal of total depreciation and write-downs on assets which were
disposed of or taken out of operation during the year
253
0
Total recognised amount on the balance sheet date 22,578 21,272
Whenvaluinginvestmentanddomicileproperties,arequiredrateofreturn
between 6% and 10% is applied. No external experts were involved in the
valuations of investment and domicile properties.
26 Other tangible assets
Cost
Costattheendofthepreviousnancialyearwithout
depreciation and write-downs 82,701 78,807
Additionsduringtheyear,includingimprovements 3,136 4,767
Disposals during the year -216 -873
Total cost on the balance sheet date 85,621 82,701
Depreciation and write-downs
Depreciationandwrite-downsattheendofthepreviousnancialyear 65,075 58,752
Depreciation for the year 5,763 6,925
Reversal of previous years’ write-downs for the year and
reversal of total depreciation and write-downs on assets
which were disposed of or taken out of operation during the year
-216
-602
Total depreciation and write-downs on the balance sheet date 70,622 65,075
Total other tangible assets on the balance sheet date 14,999 17,626
Thebankislesseeunderleasesforothertangibleassets,which
are recognised at:
207
311
NOTES
ANNUAL REPORT 2021 PAGE 81
Note
no.
31 Dec. 2021
DKK1,000
31 Dec. 2020
DKK1,000
27 Deferred tax assets
The calculated provisions for deferred tax relate to
the following balance sheet items:
Loans and other receivables 31,325 24,790
Securitiesandnancialinstruments -10,326 -1,475
Intangible assets -22,169 -24,548
Tangible assets 4,597 5,597
Other balance sheet items 7,836 13,504
Total deferred tax assets 11,263 17,868
28 Other assets
Interest and commission receivable 78,373 68,888
Positivemarketvalueofderivativenancialinstruments 117,478 185,190
Collateral under CSA agreements 20,720 35,193
Miscellaneous debtors and other assets 142,895 173,758
Other deposits 47,700 47,298
Total other assets 407,166 510,327
29 Debt to credit institutions and central banks
Demand 803,571 711,366
Up to and including 3 months 62,901 292,643
More than 3 months and up to and including 1 year 53,704 385,258
More than 1 year and up to and including 5 years 405,266 562,413
More than 5 years 704,733 497,238
Total debt to credit institutions and central banks 2,030,175 2,448,918
Distributed as follows:
Debt to credit institutions 2,030,175 2,448,918
2,030,175 2,448,918
30 Deposits and other debt
Demand* 32,744,980 29,973,193
Deposits and other debt with notice:
Up to and including 3 months 853,645 418,740
More than 3 months and up to and including 1 year 1,620,263 1,395,528
More than 1 year and up to and including 5 years 532,593 668,580
More than 5 years 2,450,705 2,482,524
Total deposits and other debt 38,202,186 34,938,565
of which deposits covered by the Guarantee Fund 59.2% 64.1%
Distributed as follows:
Demand 32,632,512 29,849,983
With notice 1,246,496 1,328,132
Time deposits 968,119 277,918
Long-term deposit agreements 902,960 1,050,783
Special types of deposits* 2,452,099 2,431,749
38,202,186 34,938,565
* Special types of deposits are entered under the item “Demand” pending
payment whereas, in the specication of the different types of deposits, the
sum is included under “Special types of deposit”.
31 Issued bonds at amortised cost*
More than 3 months and up to and including 1 year 372,191 0
More than 1 year and up to and including 5 years 1,982,321 1,675,470
More than 5 years 606,910 686,326
Total issued bonds at amortised cost 2,961,422 2,361,796
* See note 43.
PAGE 82 RINGKJØBING LANDBOBANK A/S
Note
no.
31 Dec. 2021
DKK1,000
31 Dec. 2020
DKK1,000
32 Other liabilities
Interest and commission payable 24,750 22,309
Negativemarketvalueofderivativenancialinstruments 70,605 103,115
Collateral under CSA agreements 15,752 41,802
Miscellaneous creditors and other liabilities 617,847 423,883
Total other liabilities 728,954 591,109
33 Provisions for pensions and similar liabilities
Pension obligations taken over on the merger 2,473 2,560
Total provisions for pensions and similar liabilities 2,473 2,560
34 Subordinated debt*
Type Interest
Cur-
rency
Mil-
lion
Due
date
Possible early
repayment
date
Tier 2 capital
Bond loan** Fixed-rate DKK 500 13 June 2028 13 June 2023
500,000 500,000
Bond loan*** Floating-rate DKK 300 13 June 2030 13 June 2025
300,000 300,000
Bond loan**** Floating-rate EUR 100 22 Aug. 2029 22 Aug. 2024
743,630 743,925
Bond loan***** Floating-rate DKK 500 11 Jan. 2032 11 Jan. 2027
500,000 -
Total tier 2 capital (included in total capital) 2,043,630 1,543,925
Adjustment to amortised cost and fair value adjustment 875 5,225
Total subordinated debt 2,044,505 1,549,150
* See note 43.
** Issued on 13 June 2018. The interest rate is a xed rate corresponding
to a 5-year mid-swap plus 1.65% p.a., after which the interest rate will
be a oating rate corresponding to Cibor 6M plus 1.65% p.a. Interest
expenses – 2021: tDKK 11,283, 2020: tDKK 11,246. Costs of raising
loan: tDKK 2,500
*** Issued on 13 June 2018. The interest rate is a oating rate correspond-
ing to the Cibor 6M plus 1.85% p.a. Interest expenses – 2021: tDKK
5,460, 2020: tDKK 5,528. Costs of raising loan: tDKK 1,500
**** Issued on 22 August 2019. The interest rate is a oating rate cor-
responding to the Euribor 6M plus 1.75% p.a. Interest expenses – 2021:
tDKK 9,557, 2020: tDKK 10,686. Costs of raising loan: tDKK 2,462
***** Issued on 11 October 2021. The interest rate is a oating rate cor-
responding to the Euribor 3M plus 1.10% p.a. Interest expenses – 2021:
tDKK 1,011. Costs of raising loan: tDKK 1,750
35 Share capital
Number of DKK 1 shares:
Beginning of year 29,228,321 29,661,796
Cancellation during the year -160,600 -433,475
End of year 29,067,721 29,228,321
of which reserved for subsequent cancellation 635,805 160,600
Total share capital 29,068 29,228
The whole share capital has been admitted for listing on Nasdaq Copenhagen.
NOTES
ANNUAL REPORT 2021 PAGE 83
Note
no.
31 Dec. 2021
DKK1,000
31 Dec. 2020
DKK1,000
36 Own shares
Own shares included in the balance sheet at 0 0
Market value 558,397 91,767
Number of own shares:
Beginning of year 165,644 433,721
Purchase during the year 1,792,600 1,525,629
Sale during the year -1,161,656 -1,360,231
Cancellation during the year -160,600 -433,475
End of year 635,988 165,644
of which reserved for subsequent cancellation 635,805 160,600
Nominalvalueofholdingofownshares,endofyear 636 166
Ownshares’proportionofsharecapital,endofyear(%):
Beginning of year 0.6 1.5
Purchase during the year 6.2 5.2
Sale during the year -4.0 -4.6
Cancellation during the year -0.6 -1.5
End of year 2.2 0.6
The purchases and sales of own shares during the year were effected
on the basis of the bank’s ordinary trading in shares and share buy-back
programmes.
37 Contingent liabilities etc.
Contingent liabilities
Financial guarantees 3,673,137 3,536,326
Guarantees against losses on mortgage credit loans 3,065,101 2,813,424
Registrationandrenancingguarantees 2,713,942 2,684,855
Sector guarantees 105,626 104,802
Other contingent liabilities 712,622 672,423
Total contingent liabilities 10,270,428 9,811,830
Other contractual obligations
Irrevocable credit undertakings etc. 781,832 0
Total other contractual obligations 781,832 0
38 Assets provided as security
First-mortgage loans are provided for renewable energy projects.
TheloansarefundeddirectlybyKfWBankengruppe,to
which security in the associated loans has been provided. Each
reductionoftherst-mortgageloansisdeducteddirectlyfrom
the funding at KfW Bankengruppe.
The balance sheet item is 1,171,093 1,152,786
Assecurityforclearingetc.,thebankhaspledgedsecurities
from its holding to Danmarks Nationalbank to a total
market price of
114,020
168,512
Collateral under CSA agreements etc. 20,720 35,193
39 Contractual obligations
The following information is provided on material contractual obligations:
• ThebankisamemberoftheassociationBankdata.Ifthebankterminatesitsmembership,it
is liable to pay an exit charge.
• LiketherestoftheDanishbankingsector,thebankhasanobligationtomakepaymentsto
the Guarantee Fund and the Resolution Fund.
PAGE 84 RINGKJØBING LANDBOBANK A/S
Note
no.
40 Legal proceedings etc.
The bank is not party to legal proceedings expected to result in major losses and therefore to
substantial alteration of the accounts.
41 Related parties
Related parties are the bank’s board of directors and general management and their related par-
ties. Ringkjøbing Landbobank advises that it has no related parties with a controlling interest.
The bank’s subsidiary Sæbygård Skov A/S and associated company Tarm Plantage ApS are also
related parties.
There were no transactions during the year with the board of directors and the general manage-
ment,apartfrompaymentsofsalariesandfeesetc.,securitiestrading,loansandtheprovision
of collateral security. All transactions performed in 2021 and 2020 with related parties were on
market terms or on an at-cost basis.
Information on the remuneration paid to the board of directors and the general management is
given in note 6 and the remuneration report for 2021.
Informationonthesizeofloans,mortgages,suretiesandguaranteesprovidedtomembersofthe
bank’sboardofdirectorsandgeneralmanagement,thesecurityreceivedandshareholdingsis
given in this note. The information in this note covers these parties’ personal exposures and those
of their related parties.
31 Dec. 2021
DKK1,000
31 Dec. 2020
DKK1,000
Amounts of loans issued to and mortgages, sureties or
guarantees issued for the members of the bank’s organs:
General management
1,330
1,330
Interest rate 2.75% - 5.95% 2.75% - 5.95%
Boardofdirectors,includingmemberselectedbytheemployees 48,814 18,903
Interest rate 0.75% - 19.50% 0.75% - 19.50%
New exposures during the year have been granted for a net 27,995 3,250
Allexposuresareonmarketterms,includingbothinterestandguarantee
commission rates.
Security provided by members of the bank’s organs:
General management 0 0
Boardofdirectors,includingmemberselectedbytheemployees 6,702 4,091
Shareholdings* of the board of directors and general manage-
ment in Ringkjøbing Landbobank at the end of the year
No. of shares
No. of shares
General management:
John Bull Fisker 76,015 76,015
Claus Andersen 1,947 1,774
Jørn Nielsen 9,089 9,519
Carl Pedersen 1,289 1,198
Board of directors:
Martin Krogh Pedersen 30,015 30,015
Mads Hvolby 3,204 2,961
Jens Møller Nielsen 270 270
Morten Jensen 1,100 1,100
Jon Steingrim Johnsen 0 0
Jacob Møller 785 785
Lone Rejkjær Söllmann 978 930
Sten Uggerhøj 30,122 30,122
Dan Junker Astrup 163 130
Gitte E.S.H. Vigsø 293 124
Arne Ugilt 839 839
Finn Aaen 555 533
* Shares owned by members of management and their personal related parties.
NOTES
ANNUAL REPORT 2021 PAGE 85
42 Fair value of nancial instruments
Financial instruments are measured in the balance sheet at either fair value or amortised cost
(withconsiderationtoriskcoverthatfullstheconditionsapplyingtohedgeaccounting).
Fairvalueistheamountatwhichanancialassetcanbetradedoratwhichanancialliability
canberepaidbetweenagreedindependentparties.Thefairvaluesofnancialassetsandliabili-
ties priced on active markets are calculated on the basis of observed market prices on the bal-
ancesheetdate.Thefairvaluesofnancialinstrumentswhicharenotpricedonactivemarkets
are calculated on the basis of generally recognised pricing methods.
Sharesetc.,investmentsinassociatedandgroupundertakings,assetslinkedtopooled
schemesandderivativenancialinstrumentsaremeasuredintheaccountsatfairvalue.Recog-
nised amounts equal fair values.
Loans are measured in the balance sheet at amortised cost plus any fair value hedging.
Thedifferencefromfairvaluesiscalculatedasfeesandcommissionreceived,costspaidinthe
lendingactivities,andforxed-interestloans,thevalueadjustmentwhichisdependentonthe
interestlevel.This,inturn,iscalculatedbycomparingtheactualmarketinterestratewiththe
nominal rate applying to the loans. The stage 1 impairment charges stated on the balance sheet
date are also added.
The fair value of receivables from credit institutions and central banks is determined by the
same method as for loans.
Foroating-ratenancialliabilitiesintheformofdepositsanddebttocreditinstitutionsmea-
suredatamortisedcost,itisestimatedthatthecarryingvaluecorrespondstothefairvalue.For
xed-ratenancialliabilitiesintheformofdepositsanddebttocreditinstitutionsmeasuredat
amortisedcost,thedifferencefromfairvaluesisestimatedtobethevalueadjustmentwhichis
dependent on interest level.
Deposits in pooled schemes are measured in the accounts at fair value. Recognised amounts
equal fair values.
Issued bonds and subordinated debt are measured at amortised cost plus any fair value hedg-
ing,whichisestimatedtocorrespondtothefairvalue.
Note
no.
Book value
31 Dec. 2021
Fair value
Book value
31 Dec. 2020
Fair value
DKK1,000 DKK1,000 DKK1,000 DKK1,000
Financial assets
Cash in hand and demand deposits
with central banks
3,459,464
3,459,464
659,004
659,004
Receivables from credit institutions and
central banks*
216,097
216,097
3,376,233
3,376,233
Loans and other receivables at
amortised cost*
41,237,540
41,511,548
36,295,300
36,661,341
Bonds at fair value* 6,756,373 6,756,373 6,646,627 6,646,627
Shares etc. 1,467,417 1,467,417 1,385,807 1,385,807
Investments in associated companies 481 481 482 482
Investments in group undertakings 12,020 12,020 11,997 11,997
Assets linked to pooled schemes 5,537,863 5,537,863 4,700,080 4,700,080
Derivativenancialinstruments 117,478 117,478 185,190 185,190
Total nancial assets 58,804,733 59,078,741 53,260,720 53,626,761
Financial liabilities
Debt to credit institutions and central banks* 2,030,582 2,030,700 2,449,288 2,450,219
Deposits and other debt* 38,195,382 38,195,161 34,935,357 34,935,497
Deposits in pooled schemes 5,537,863 5,537,863 4,700,080 4,700,080
Issued bonds at amortised cost* 2,975,764 2,975,764 2,375,239 2,375,239
Derivativenancialinstruments 70,605 70,605 103,115 103,115
Subordinated debt* 2,052,632 2,052,632 1,556,389 1,556,389
Total nancial liabilities 50,862,828 50,862,725 46,119,468 46,120,539
* The item includes calculated interest on the balance sheet date. The calculated interest in the balance sheet is
included under the items “Other assets” and “Other liabilities”.
PAGE 86 RINGKJØBING LANDBOBANK A/S
Note
no.
31 Dec. 2021
DKK1,000
31 Dec. 2020
DKK1,000
43 Hedging*
Loans at book value 194,821 211,801
Hedgedbycurrencyswap(SEK/DKK),
maturity 2022 (early redemption):
Synthetic principal 0 12,020
Fair value 0 572
Hedgedbycurrencyswap(EUR/DKK),maturity2025:
Synthetic principal 149,098 149,157
Fair value -4,393 -7,372
Hedgedbyinterestrateswaps,maturity2021-2035:
Synthetic principal 46,219 51,168
Fair value -1,113 -2,358
Issued bonds at book value 1,698,264 1,624,299
Hedgedbycurrencyswaps(EUR/DKK),maturity2023-2039:
Synthetic principal 1,005,846 931,487
Fair value 20,965 51,911
Hedgedbyinterestrateswaps,maturity2023-2029:
Synthetic principal 694,363 694,393
Fair value 4,211 8,259
Tier 2 capital at book value 500,000 500,000
Hedgedbyinterestrateswap,maturity2023:
Synthetic principal 500,000 500,000
Fair value 10,201 14,111
Hedging is thus:
Currency swaps – total synthetic principal 1,154,944 1,092,664
Interest rate swaps – total synthetic principal 1,240,582 1,245,561
Fair value – currency swaps 16,572 45,111
Fair value – interest rate swaps 13,299 20,012
* Fair value hedging only.
44 Risks and risk management
Asdescribedinthesectiononrisk“Risksandriskmanagement”inthemanagementreview,
Ringkjøbing Landbobank is exposed to various types of risk. See the section on risks on pages
30-42ofthemanagementreviewforadescriptionofnancialrisksandpoliciesandobjectives
for the management of these risks:
• Credit risks – page 31
• Market risks – page 35
• Interest rate risks – page 36
• Foreign exchange risks – page 36
• Share price risks – page 37
• Value at Risk – page 38
• Liquidity risks – page 39
Thefollowingnotestothenancialstatementscontaindetailedinformationanddescriptionsof
the bank’s credit and market risks.
NOTES
ANNUAL REPORT 2021 PAGE 87
Security received
Security received
for maximum
credit exposure
Maximum
credit
exposure
Loans and
guarantees
Real
property Movables
Securities
and cash
Other
Security* Total
DKK1,000 DKK1,000 DKK1,000 DKK1,000 DKK1,000 DKK1,000 DKK1,000
2021
Public
authorities
22,470
2,020
117
963
912
120
2,112
Business customers:
Agriculture,forestry
andsheries
5,742,096
4,147,045
1,502,751
777,203
190,273
1,483,151
3,953,378
Industry and raw
materials extraction
2,576,960
1,621,696
226,662
534,402
17,298
171,128
949,490
Energy supply 4,702,091 3,510,502 92,425 700 21,721 2,183,499 2,298,345
Building and
construction
3,235,952
1,929,500
734,221
186,528
173,580
139,831
1,234,160
Trade 3,122,538 1,746,443 499,554 508,192 112,322 106,063 1,226,131
Transport,hotels
and restaurants
1,164,156
933,470
287,185
74,301
108,899
374,852
845,237
Information and
communication
405,912
277,166
94,823
60,206
19,218
68,223
242,470
Finance and
insurance
8,027,396
4,956,447
296,928
386,246
1,632,097
502,247
2,817,518
Real property 12,893,856 8,940,036 5,527,036 19,498 486,740 625,880 6,659,154
Other business
customers
6,203,776
3,381,539
1,192,305
265,603
686,408
320,325
2,464,641
Total business
customers
48,074,733
31,443,844
10,453,890
2,812,879
3,448,556
5,975,199
22,690,524
Private individuals 25,469,798 19,906,612 8,954,470 2,060,668 1,319,083 2,721,142 15,055,363
Total 73,567,001 51,352,476 19,408,477 4,874,510 4,768,551 8,696,461 37,747,999
* Includes security in the form of wind turbines, farms, mortgaged share capital, surety etc.
Note
no.
31 Dec. 2021
DKK1,000
31 Dec. 2020
DKK1,000
45 Credit risk
Maximum credit exposure classied by balance sheet and off-
balance sheet items (after impairment charges and provisions)
Loans and other receivables at amortised cost 41,179,255 36,241,166
Guarantees (contingent liabilities) 10,173,221 9,726,014
Unutilised credit facilities and credit undertakings* 21,208,177 17,505,748
Otherexposures,includingderivativenancialinstruments 1,006,348 665,819
Total maximum credit exposure 73,567,001 64,138,747
* On 31 December 2021 the bank had provided unutilised credit facilities and credit undertakings to a total of DKK
21.2 billion. Committed credit facilities and credit undertakings were DKK 782 million.
PAGE 88 RINGKJØBING LANDBOBANK A/S
Note
no.
45 Credit risk – continued
Security received
Security received
for maximum
credit exposure
Maximum
credit
exposure
Loans and
guarantees
Real
property Movables
Securities
and cash
Other
Security* Total
DKK1,000 DKK1,000 DKK1,000 DKK1,000 DKK1,000 DKK1,000 DKK1,000
2020
Public
authorities
26,255
2,119
593
1,351
909
0
2,853
Business customers:
Agriculture,forestry
andsheries
5,750,572
4,409,601
1,424,637
827,043
164,700
1,401,940
3,818,320
Industry and raw
materials extraction
2,211,843
1,235,569
230,438
455,705
31,987
149,058
867,188
Energy supply 4,478,033 3,456,696 106,093 700 21,369 2,412,019 2,540,181
Building and
construction
2,753,669
1,530,035
658,671
178,161
165,516
186,372
1,188,720
Trade 2,820,751 1,537,366 448,420 543,354 45,126 120,297 1,157,197
Transport,hotels
and restaurants
1,158,292
935,411
230,349
62,028
73,353
447,881
813,611
Information and
communication
314,970
206,653
73,693
52,023
15,910
28,511
170,137
Finance and
insurance
5,556,574
3,716,805
183,272
311,664
1,026,669
455,051
1,976,656
Real property 10,355,014 7,755,735 4,749,301 16,053 237,073 490,102 5,492,529
Other business
customers
5,555,306
3,273,992
1,090,986
182,733
510,970
363,141
2,147,830
Total business
customers
40,955,024
28,057,863
9,195,860
2,629,464
2,292,673
6,054,372
20,172,369
Private individuals 23,157,468 17,907,198 8,108,849 1,746,329 950,384 2,409,083 13,214,645
Total 64,138,747 45,967,180 17,305,302 4,377,144 3,243,966 8,463,455 33,389,867
* Includes security in the form of wind turbines, farms, mortgaged share capital, surety etc.
Description of security
Whenenteringintotransactionswithitscustomers,RingkjøbingLandbobankwantstoreduce
theriskasmuchaspossiblebyobtainingcollateralintheformofphysicalassets,securities,
bankdepositsetc.aswellasguarantees,includingbysurety.
Thebankregularlymonitorsthevalueofcollateralsecurityobtained,andtherelatedloanvalues
are calculated in accordance with the bank’s internal procedures as follows:
• Detachedhouses,owner-occupiedatsandholidayhomesarevaluedatfairvaluelessa
deduction.
• Rentalpropertiesarevaluedatcalculatedfairvaluesonthebasisofprotabilityanalyses
less a deduction.
• Movables are in principle valued at book value less a deduction.
• AgriculturalpropertiesarevaluedonthesameprinciplesasusedbytheDanishFSA,except
that the bank applies lower prices for farm land.
• Securities are valued at fair value less a safety margin.
• Windturbinesarevaluedatthepresentvalueofthecalculatedcashowovertheirexpected
/ remaining lives. The calculation is based on the wind turbine’s expected output in a normal
wind year.
NOTES
ANNUAL REPORT 2021 PAGE 89
Note
no.
45 Credit risk – continued
Whencomputingloanvalues,adeductionismadetocovertheriskinconnectionwithrealisa-
tion,costsetc.
The tables above only show loan values corresponding to the maximum credit exposure for the
individual exposure. If the loan value for the individual exposure exceeds the maximum credit
exposureallowed,thesurplusloanvalueisnotincludedinthetables.
Asaresultofgeneralcautiousnesswhencomputingloanvalues,thepossiblerealisationvalues
areoftenhigherthantheloanvaluesshown.Inanumberofinstances,customers'drawdown
of their maximum credit facilities is also conditional upon their ability to deposit additional
security. The real collateral values for the maximum credit risk are therefore actually higher than
indicated in the tables.
Inaddition,aportionoftheundrawncreditlineswhicharepartofthemaximumcreditexpo-
sureisinclosedcircuits,wherethebankhasnancedassetswithoutenablingthecustomers
to claim any undrawn credit facilities. The maximum credit exposure is consequently lower in
practice than indicated in the tables.
Distribution by sector and industry
A more detailed distribution by sector and industry of the items “Loans and other receivables
atamortisedcost”,“Guarantees”and“Unutilisedcreditfacilities”isgivenbelow.Thereisalso
a distribution by sector and industry covering only the items “Loans and other receivables at
amortised cost” and “Guarantees”.
31 Dec. 2021
Percent
31 Dec. 2020
Percent
Loans and guarantees in percent, end of year, by sector
and industry (net)*
Public authorities 0.0 0.0
Business customers:
Agriculture,huntingandforestry
Cattle farming etc. 1.1 1.3
Pig farming etc. 1.1 1.2
Otheragriculture,huntingandforestry 4.4 5.4
Fisheries 1.4 1.8
Industry and raw materials extraction 3.2 2.7
Energy supply
Renewable energy 6.5 7.2
Other energy supply 0.3 0.3
Building and construction 3.8 3.3
Trade 3.4 3.3
Transport,hotelsandrestaurants 1.8 2.0
Information and communication 0.5 0.5
Finance and insurance 9.7 8.1
Real property
First mortgage without prior creditors 13.1 12.7
Otherrealpropertynancing 4.3 4.2
Other business customers 6.6 7.1
Total business customers** 61.2 61.1
Private individuals 38.8 38.9
Total 100.0 100.0
* The distribution by sector and industry is made on the basis of Statistics Denmark’s sector codes etc.
** SME’s share of this was 52.4 percentage points in 2021.
PAGE 90 RINGKJØBING LANDBOBANK A/S
Note
no.
45 Credit risk – continued
Comments on the distribution by sector and industry
The bank’s assessment is that the credit quality of its loans is generally high. The ability of the
bank’scustomerstopayisgenerallygoodand,combinedwiththebank’ssolidcoverofmany
exposuresthroughcollateral,theresultislowcreditrisks.
Thebankhasawell-diversiedportfoliorelatedtoagriculture,withcattlefarmsaccountingfor
1.1%ofthetotalvolumeofloansandguarantees,pigfarmsaccountingfor1.1%,andothersfor
4.4%.2021wasaverymixedyearforagriculture.Inthersthalf-yearpricespaidtopigproduc-
ers were acceptable whereas the year closed with very unsatisfactory price levels. Prices paid
to cattle farmers were sensible and increased gradually. In all branches of farming the increas-
ing raw material prices are resulting in higher production costs. Security consists primarily
ofmortgagesonagriculturalproperty(land,buildingsandotherproductionfacilitiesonthe
farms). To this must be added assignment to the bank of subsidies per hectare and other ac-
counts etc.
Thebankhasnancedwindturbinesformanyyearsandinrecentyearsalsograntedloansfor
the establishment of solar cell and biogas plants. The “Renewable energy” portfolio accounts
for a total of 6.5% of the bank’s total loans and guarantees. Security consists of mortgages on
renewable energy plants and assignment in electricity accounts etc.
Realpropertyaccountsforatotalof17.4%ofthebank’stotalloansandguarantees,ofwhich
13.1%isrstmortgageswithoutpriorcreditors.Theseloansarerstmortgagesonrealprop-
ertyandconstructionnancingwithoutpriorcreditors.Theriskproleisjudgedtobelower
thanfortraditionalrealpropertynancing,whichistypicallyjuniortomortgagecreditnancing.
Finance and insurance comprise a total of 9.7% of the bank’s total loans and guarantees and
includeexposuretowell-consolidatednancialcounterparties,loansgrantedonmortgage
deed portfolios and leasing companies and the bank’s concept for securities lending. Security
consists,amongotherthings,oflistedsecuritiesandmortgagedeeds.
Personal customers account for a total of 38.8% of Ringkjøbing Landbobank’s total loans and
guarantees.Thequalityoftheloansisgoodandcustomers’nancesgenerallystrongand
positively affected by low unemployment and increasing house prices. Collateral received from
personal customers consists primarily of mortgages on real property (private homes).
NOTES
ANNUAL REPORT 2021 PAGE 91
Note
no.
45 Credit risk – continued
Loans, guarantees and unutilised credit facilities and credit undertakings by credit quality,
sector and industry and IFRS 9 stages (before impairment and provisions)
Distribution by credit quality and stages
Stage 1 Stage 2 Stage 3
Credit-
impaired on
initial
recognition Total Total
DKK1,000 DKK1,000 DKK1,000 DKK1,000 DKK1,000 Percent
2021
Credit quality
High 56,013,173 244,013 0 0 56,257,186 75.2%
Medium 10,262,509 1,751,905 0 0 12,014,414 16.0%
Low 1,215,687 3,570,338 0 0 4,786,025 6.4%
Credit-impaired 0 0 1,499,175 287,173 1,786,348 2.4%
Total 67,491,369 5,566,256 1,499,175 287,173 74,843,973 100%
Impairment charges etc. 251,041 858,497 983,163 190,619 2,283,320
2020
Credit quality
High 47,043,274 123,728 0 0 47,167,002 71.8%
Medium 9,525,618 1,630,433 0 0 11,156,051 17.0%
Low 1,640,245 3,932,329 0 0 5,572,574 8.5%
Credit-impaired 0 0 1,415,013 366,909 1,781,922 2.7%
Total 58,209,137 5,686,490 1,415,013 366,909 65,677,549 100%
Impairment charges etc. 346,844 881,064 729,103 247,609 2,204,620
PAGE 92 RINGKJØBING LANDBOBANK A/S
Note
no.
45 Credit risk – continued
Loans, guarantees and unutilised credit facilities and credit undertakings by credit quality, sector and
industry and IFRS 9 stages (before impairment and provisions) – continued
Distribution by sector and industry and stage
Stage 1 Stage 2 Stage 3
Credit-
impaired on
initial
recognition Total
Total im-
pairment
charges
etc.
DKK1,000 DKK1,000 DKK1,000 DKK1,000 DKK1,000 DKK1,000
2021
Public
authorities
21,929
375
479
0
22,783
614
Business customers:
Agriculture,forestry
andsheries
4,317,397
1,409,516
779,352
153,226
6,659,491
993,851
Industry and raw
materials extraction
2,277,955
190,311
43,872
227
2,512,365
54,352
Energy supply 4,608,886 96,405 0 6,990 4,712,281 28,590
Building and
construction
3,038,868
226,606
91,585
5,466
3,362,525
128,206
Trade 2,800,461 316,009 29,721 3,200 3,149,391 89,312
Transport,hotels
and restaurants
950,632
209,282
37,771
1,861
1,199,546
44,890
Information and
communication
363,571
35,872
24,157
0
423,600
19,739
Finance and
insurance
7,254,369
680,927
54,078
0
7,989,374
89,648
Real property 12,172,671 600,708 94,271 30,399 12,898,049 160,333
Other business
customers
5,407,604
480,891
90,747
3,554
5,982,796
182,680
Total business
customers
43,192,414
4,246,527
1,245,554
204,923
48,889,418
1,791,601
Private individuals 24,277,026 1,319,354 253,142 82,250 25,931,772 491,105
Total 67,491,369 5,566,256 1,499,175 287,173 74,843,973 2,283,320
Total (percent) 90.2% 7.4% 2.0% 0.4% 100%
NOTES
ANNUAL REPORT 2021 PAGE 93
Note
no.
45 Credit risk – continued
Loans, guarantees and unutilised credit facilities and credit undertakings by credit quality, sector and
industry and IFRS 9 stages (before impairment and provisions) – continued
Distribution by sector and industry and stage – continued
Stage 1 Stage 2 Stage 3
Credit-
impaired on
initial
recognition Total
Total im-
pairment
charges
etc.
DKK1,000 DKK1,000 DKK1,000 DKK1,000 DKK1,000 DKK1,000
2020
Public
authorities
22,660
379
478
0
23,517
412
Business customers:
Agriculture,forestry
andsheries
4,043,908
1,725,844
543,557
148,878
6,462,187
773,401
Industry and raw
materials extraction
1,906,668
203,054
79,568
706
2,189,996
83,722
Energy supply 4,400,017 103,941 0 8,983 4,512,941 52,308
Building and
construction
2,565,982
174,984
60,564
6,566
2,808,096
54,560
Trade 2,521,675 272,243 79,488 6,866 2,880,272 118,546
Transport,hotels
and restaurants
1,051,372
107,892
33,632
6,731
1,199,627
49,890
Information and
communication
276,973
25,862
22,367
398
325,600
12,680
Finance and
insurance
5,042,007
374,494
140,414
500
5,557,415
95,151
Real property 9,613,682 649,540 78,054 51,069 10,392,345 209,155
Other business
customers
5,118,941
401,009
100,251
6,867
5,627,068
162,272
Total business
customers
36,541,225
4,038,863
1,137,895
237,564
41,955,547
1,611,685
Private individuals 21,645,252 1,647,248 276,640 129,345 23,698,485 592,523
Total 58,209,137 5,686,490 1,415,013 366,909 65,677,549 2,204,620
Total (percent) 88.6% 8.7% 2.1% 0.6% 100%
PAGE 94 RINGKJØBING LANDBOBANK A/S
Note
no.
45 Credit risk – continued
Loans in stage 3
Loans (gross) with
impairment charges Impairment charges
Security for
impaired loans
DKK1,000 DKK1,000 DKK1,000
2021
Public authorities 678 533 128
Business customers:
Agriculture,forestryandsheries 829,987 405,495 373,691
Industry and raw materials extraction 6,368 4,455 2,080
Energy supply 6,835 7,008 0
Building and construction 74,478 47,408 27,373
Trade 26,492 23,330 5,021
Transport,hotelsandrestaurants 34,510 18,408 10,081
Information and communication 21,067 12,389 9,550
Finance and insurance 51,952 15,752 33,378
Real property 123,447 46,244 54,269
Other business customers 86,818 68,963 19,871
Total business customers 1,261,954 649,452 535,314
Private individuals 298,600 224,632 81,158
Total 1,561,232 874,617 616,600
2020
Public authorities 405 335 69
Business customers:
Agriculture,forestryandsheries 624,285 298,985 306,001
Industry and raw materials extraction 7,771 4,950 3,328
Energy supply 8,388 9,008 0
Building and construction 35,489 15,769 12,863
Trade 57,607 42,017 15,117
Transport,hotelsandrestaurants 35,699 23,978 10,116
Information and communication 21,185 7,937 11,339
Finance and insurance 116,441 44,147 72,648
Real property 126,830 47,664 64,235
Other business customers 89,909 72,141 13,971
Total business customers 1,123,604 566,596 509,618
Private individuals 353,917 265,753 93,058
Total 1,477,926 832,684 602,745
NOTES
ANNUAL REPORT 2021 PAGE 95
Note
no.
45 Credit risk – continued
Comments on the distribution by credit quality
Thequalityofthebank’sexposuresisgenerallystrong.Thetableshowsexposuresbyhigh,mediumand
low credit quality as well as credit-impaired and shows that the credit quality is high for 75.2% of the
bank’sexposures,anincreasecomparedtothe71.8%lastyear.ThisgenerallyreectsastrongDanish
economywithlowunemployment,lowinterestrates,increasingassetpricesandcontinuedfavourable
conditionsforthebank’sniches.Thecoronavirussituationhaschallengedsomeindustries,butsince
thebankisnotseverelyexposedtoparticularlyvulnerableindustries,thishasaverymodesteffecton
the credit quality of the exposures.
Thecategorieshigh,mediumandlowcreditqualitydonottranslatedirectlyintotheDanishFSA’srating
classesbut,asaprincipalrule,highcreditqualitycanbeviewedasFSAratingclasses3and2a,me-
diumcreditqualityasthebestpartofFSAratingclass2b,whilelowcreditqualitycoverstherestofFSA
rating classes 2b and 2c as well as the customers with objective evidence of impairment where losses
are not expected in the most probable scenario. Credit-impaired exposures are those where losses are
expected in the most probable scenario.
Comments on the distribution by stages
90.2percentofthebank’sexposuresareinstage1,while7.4%areinstage2.Thebank'sexposuresin
stage 3 account for 2.4%. The group “Credit-impaired on initial recognition” is included as a part of stage
3.Thetableshowsthatexposuresinagricultureinparticularareinstage3.Theprinciplesforclassica-
tion in stages are described in note 51 “Accounting policies etc.” in the section “Model for impairment of
expected credit losses on loans and other receivables etc.”
Comments on loans in stage 3
The bank is particularly focused on covering the risk on exposures which have been impaired. Under
thebank’screditpolicy,theseexposuresmustbecoveredtothegreatestpossibleextentbycollateral.
Whendeterminingtheneedforanimpairmentcharge,thevalueofcollateralisincludedattheexpected
netrealisationvalueindifferentscenarios.Whendeterminingtheneedforanimpairmentcharge,the
bank makes only modest allowance for the ability to make payments over and above the value of col-
lateral.
PAGE 96 RINGKJØBING LANDBOBANK A/S
Note
no.
31 Dec. 2021
DKK1,000
31 Dec. 2020
DKK1,000
45 Credit risk – continued
Suspended calculation of interest
Loans and other receivables with suspended calculation of
interest on the balance sheet date 97,757 264,721
Credit risk on derivative nancial instruments
Positive market value (by counterparty risk) after netting
Counterparty risk weighting 20% 19,998 17,635
Counterparty risk weighting 50% 24,611 35,655
Counterparty risk weighting 75% 19,452 32,089
Counterparty risk weighting 100% 30,941 54,384
Counterparty risk weighting 150% 4,467 1,428
Total risk weighting 99,469 141,191
46 Foreign exchange risk
Total assets in foreign currency 5,753,404 5,090,577
Total liabilities in foreign currency 5,653,534 5,054,501
Foreign exchange indicator 1 112,524 9,627
Foreign exchange indicator 1 in percent of tier 1 capital (%) 1.5 0.1
Foreign exchange indicator 2 100 97
Foreign exchange indicator 2 in percent of tier 1 capital (%) 0.0 0.0
47 Interest rate risk
Total interest rate risk 31,033 80,014
Interest rate risk (%) 0.4 1.1
Interest rate risk by foreign currency:
DKK 24,064 65,714
CHF -163 -182
EUR 6,706 14,450
GBP -529 -185
NOK 196 107
SEK 307 -111
USD 469 244
Other currencies -17 -23
Total 31,033 80,014
NOTES
ANNUAL REPORT 2021 PAGE 97
0
5
10
15
20
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Q2 2018
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Value at Risk (DKK million)
10-days period with 99% probability
Development in Value at Risk
Interest Total
Foreign currency Share
Note
no.
48 Value at Risk/Market risk
Ringkjøbing Landbobank uses a Value at Risk (VaR) model as a sensitivity analysis for market
risks. The model is a parametric VaR model based on a historic analysis of the covariance (the
correlations)betweenthepricesofvariousnancialassetsetc.Themodelcombineshistorical
knowledgeofcovarianceonthenancialmarketswiththebank’scurrentpositions,andonthis
basis calculates the risk of losses for a forthcoming ten-day period. The bank’s interest rate
positions,foreigncurrencypositionsandlistedsharepositionsetc.areincludedinthecalcula-
tion,whilepositionsinsectorsharesetc.arenotincluded.Themodeldoesnotincludethecredit
spread risks on the bank’s portfolio of bonds. The calculated VaR thus indicates the bank’s
sensitivity to losses on the basis of its positions. The model is used as one of a number of tools
in the bank’s management of market risks.
See pages 35 and 38 of this annual report for further description of the model etc.
Average Minimum Maximum End of year
Risk type VaR gure VaR gure* VaR gure* VaR gure
(DKK million)
Interest 9.1 3.5 14.7 7.1
Foreign exchange 0.1 0.1 0.3 0.0
Share price 2.9 2.1 3.6 2.9
Diversication -2.3 -1.3 -3.6 -2.2
Total VaR gure 9.8 4.4 15.0 7.8
* Determined by the total VaR gure.
Sensitivity analysis of sector shares(DKK1,000)
Sector shares cf. note 22 1,431,355
Impactontheprotofa10%pricechange 143,136
PAGE 98 RINGKJØBING LANDBOBANK A/S
49 Derivative nancial instruments
Remaining time to maturity
DKK1,000 Up to and including 3 months More than 3 months and up to and
including 1 year
Nominal value
Net
market value
Nominal value
Net
market value
Currency contracts
Spot,purchase 24,519 -60 0 0
Spot,sale 56,428 22 0 0
Forwardtransactions/futures,purchase 1,175,652 10,787 92,239 2,858
Forwardtransactions/futures,sale 2,239,643 -487 108,874 -586
Swaps 22,655 877 102,746 1,239
Options,acquired 5,490 111 0 0
Options,issued 5,447 -111 0 0
Interest-rate contracts
Spot,purchase 127,313 62 0 0
Spot,sale 163,331 116 0 0
Forwardtransactions/futures,purchase 282,106 1,431 26,991 54
Forwardtransactions/futures,sale 488,741 -869 73,653 141
Swaps 80,122 -214 181,618 -2,599
Options,acquired 0 0 51,514 -359
Options,issued 0 0 47,110 496
Share contracts
Spot,purchase 3,339 1,138 0 0
Spot,sale 3,279 -1,024 0 0
Forwardtransactions/futures,sale 0 0 0 0
Options,acquired 13,510 0 0 0
Options,issued 13,516 0 0 0
More than 1 year and up to and
including 5 years
More than 5 years
Nominal value
Net
market value
Nominal value
Net
market value
Currency contracts
Forwardtransactions/futures,purchase 28,698 736 0 0
Forwardtransactions/futures,sale 29,825 -506 0 0
Swaps 1,370,762 18,213 785,367 33,847
Interest-rate contracts
Swaps 1,539,743 -5,859 321,530 -12,893
Options,acquired 70,301 -502 8,082 -160
Options,issued 70,301 755 4,145 219
Note
no.
NOTES
ANNUAL REPORT 2021 PAGE 99
Note
no.
49 Derivative nancial instruments – continued
DKK1,000 Total nominal value Total net market value
2021 2020 2021 2020
Currency contracts
Spot,purchase 24,519 86,981 -60 -63
Spot,sale 56,428 48,497 22 50
Forwardtransactions/futures,purchase 1,296,589 1,252,456 14,381 -1,312
Forwardtransactions/futures,sale 2,378,342 2,193,296 -1,579 24,060
Swaps 2,281,530 1,563,203 54,176 45,295
Options,acquired 5,490 4,336 111 55
Options,issued 5,447 4,336 -111 -59
Interest-rate contracts
Spot,purchase 127,313 80,420 62 -1,262
Spot,sale 163,331 224,884 116 1,297
Forwardtransactions/futures,purchase 309,097 245,716 1,485 1,250
Forwardtransactions/futures,sale 562,394 299,375 -728 -528
Swaps 2,123,013 2,740,960 -21,565 13,155
Options,acquired 129,897 197,266 -1,021 3,440
Options,issued 121,556 197,266 1,470 -3,440
Share contracts
Spot,purchase 3,339 9,006 1,138 -816
Spot,sale 3,279 9,100 -1,024 952
Forwardtransactions/futures,purchase 0 0 0 0
Forwardtransactions/futures,sale 0 0 0 1
Options,acquired 13,510 131 0 963
Options,issued 13,516 131 0 -963
Total net market value 46,873 82,075
PAGE 100 RINGKJØBING LANDBOBANK A/S
49 Derivative nancial instruments – continued
DKK1,000 Market value Average market value
Positive Negative Positive Negative
2021 2020 2021 2020 2021 2020 2021 2020
Currency contracts
Spot,purchase
70 119 130 182 190 218 307 300
Spot,sale
34 53 12 3 97 58 32 88
Forward transactions/
futures,purchase
19,757
4,506
5,376
5,818
16,152
13,862
3,024
11,319
Forward transactions/
futures,sale
8,580
33,549
10,159
9,489
9,403
27,949
8,351
4,455
Swaps
64,065 55,015 9,889 9,720 71,890 60,148 12,090 11,010
Options,acquired
111 55 0 0 70 32 0 0
Options,issued 0
0 111 59
0
0 70 35
Interest-rate contracts
Spot,purchase
137 132 75 1,394 562 2,352 318 596
Spot,sale
388 1,522 272 225 762 721 355 1,769
Forward transactions/
futures,purchase
2,023
3,481
538
2,231
2,155
3,951
2,221
1,383
Forward transactions/
futures,sale
1,501
2,271
2,229
2,799
4,850
1,775
1,954
4,102
Swaps
17,579 77,118 39,144 63,963 16,553 100,635 44,362 94,126
Options,acquired
33 3,440 1,054 0 23 3,961 1,762 0
Options,issued 1,503
0 33 3,440
2,165
0 35 3,961
Share contracts
Spot,purchase
1,397 1,009 259 1,825 8,862 3,748 1,179 1,482
Spot,sale
300 1,956 1,324 1,004 1,253 1,558 8,599 3,532
Forward transactions/
futures,purchase
0
0
0
0
0
0
0
1
Forward transactions/
futures,sale
0
1
0
0
2
6
0
0
Options,acquired 0
963
0
0
18
0 0 391
Options,issued
0 0 0 963 0 391 18 0
Total market value
117,478 185,190 70,605 103,115 135,007 221,365 84,677 138,550
Allcontractsofderivativenancialinstrumentsarenon-guaranteedcontracts.
Note
no.
OVERVIEW OF NOTES
NOTES
ANNUAL REPORT 2021 PAGE 101
Note
no.
50 Accounting estimates and judgments
General
Incomputingthebookvalueofcertainassetsandliabilities,estimateshavebeenmadeof
how future events will affect the value of the assets and liabilities on the balance sheet date.
Theestimatesarebasedonassumptionswhichmanagementjudgestoberesponsible,but
whicharenotcertainorpredictable.Thenalactualresultsmaythusdeviatefromtheesti-
mates,asthebankissubjecttorisksanduncertaintieswhichcanaffecttheresults.
The most important estimates concern the following areas:
• Calculation of expected losses on loans and other credit exposures
• Assessment of collateral security
•Fairvalueofunlistednancialinstruments
• Valuation of intangible assets including goodwill
Calculation of expected losses on loans and other credit exposures
Expected impairment is computed as a combination of individual calculations for facilities
with objective evidence of impairment and model-based calculations for facilities without
objective evidence of impairment.
The calculations for facilities with objective evidence of impairment involve a number of es-
timates.Theassessmentinvolvesestimatesofvariousscenariosoffuturecashowswhich
the customer is expected to generate. In addition to the calculated impairment charges which
arebasedonprobability-weightedscenarios,amanagementestimateisalsoallocatedfor
facilities with objective evidence of impairment.
Facilities that do not show objective evidence of impairment are included in a portfolio of
exposures where automated impairment calculations are made on the basis of customer rat-
ings and a number of parametric values. The parametric values are determined on the basis of
historicaldata,includingtheriskoflossondifferentratingclassesandtheexpectedpercent-
age loss if a loss arises. The historical data is translated into forward-looking expectations via
a macroeconomic adjustment.
Theseestimatescompriseconsiderationsregardingtheindustry,i.e.nottheindividualexpo-
sure,andthemacro-economicimpactoftheprobabilityweightingsusedforcalculatingthe
individualfacilities.In2021,pigprices,priceincreasesandthesupplychainchallengesresult-
ing from the coronavirus and Brexit in particular have given rise to the management estimates
for both customers with and customers without objective evidence of impairment.
The reader is referred to note 51 “Accounting policies etc.” under “Model for impairment of
expected credit losses on loans and other receivables etc.” for details of the calculation of
expected loss.
Assessment of collateral security
Toreducetheriskoftheindividualexposures,thebankreceivescollateralsecuritymainly
intheformofphysicalassets(withrealpropertyasthemainform),securitiesetc.Material
estimates are involved in valuing the security.
A detailed description of security is provided in note 45 “Credit risk”.
PAGE 102 RINGKJØBING LANDBOBANK A/S
Fair value of unlisted nancial instruments
Thebankmeasuresanumberofunlistednancialinstrumentsatfairvalue,includingall
derivativenancialinstrumentsandunlistedshares.
Aspartofitsoperations,thebankhasacquiredstrategicsharesindifferentsectorcompa-
nies. Strategic shares in sector companies are measured at fair value on the basis of available
informationontransactionsintherelevantcompany’ssharesor,alternatively,byavaluation
modelusingrecognisedmethodsandvariousdata.Valuationisalsoinuencedbyco-owner-
ship,trading,shareholders’agreementsetc.
Estimatesareaninuencewherevaluationsofnancialinstrumentsarebasedlesson
observablemarketdata.Thisisthecase,forexample,withunlistedsharesandcertainbonds
wherethereisnoactivemarket.Pleasealsoseethesections“Derivativenancialinstru-
ments” and “Bonds and shares” under “Accounting policies etc.” in note 51.
Valuation of goodwill
Goodwill is impairment-tested at least annually. This involves a degree of estimation in quan-
tifying the future income and determining the weighted average cost of capital (consisting of
the return on shareholders’ equity and the cost of loan capital) in line with presumed market
expectations.
See note 24 “Intangible assets” for further details on the impairment test.
51 Accounting policies etc.
General
The annual report was prepared in accordance with the provisions of the Danish Financial
Business Act.
The annual report is presented in Danish kroner (DKK).
Theaccountingpoliciesareunchangedsincethelastnancialyear.
Recognition and measurement – general
Assetsarerecognisedinthebalancesheetwhenitisprobablethatfuturenancialadvan-
tages will accrue to the bank and the value can be measured reliably.
Liabilities are recognised in the balance sheet when they are probable and can be measured
reliably.
Income is recognised in the income statement as it is earned.
Expensespaidtoearntheincomefortheyeararerecognisedintheincomestatement,and
valueadjustmentsmadetonancialassets,nancialliabilitiesandderivativenancialinstru-
ments are also recognised in the income statement.
Whenmeasuringfairvalueetc.ofbondsandshares,thethreelevelsoftheIFRS13hierarchy
are used as valuation categories:
•Level1:Quotedpricesinactivemarketsforidenticalinstruments,i.e.withoutchangesin
formorcomposition,includinglistedsharesandbonds.
• Level 2: Quoted prices in active markets for similar assets or other valuation methods where
allsignicantinputsarebasedonobservablemarketdata.
•Level3:Valuationmethodswhereanysignicantinputsarebasedonunobservableinputs.
Valuation is primarily based on generally recognised valuation techniques.
The following sections describe the criteria for recognition and the basis of measurement.
NOTES
Note
no.
50 Accounting estimates and assessments – continued
ANNUAL REPORT 2021 PAGE 103
Foreign currency
Assets and liabilities in foreign currency are converted to DKK at the exchange rate for the
currency published by the central bank of Denmark on the balance sheet date. Income and
expenses are converted continuously at the exchange rate on the transaction date.
Lease contracts (lessee)
Lease assets consist only of operating leases with the bank as lessee and concern primarily
rental contracts for properties used by the branch network (domicile properties) and a few
other assets.
Whenassessingtheexpectedleaseterms,thebankidentiedthexedleaseterminthe
agreements at 3-25 years. The lease assets are depreciated on a straight-line basis over the
expected periods of use of 3-25 years and the lease liabilities are repaid according to the
principle of annuities and measured at amortised cost.
The lease liabilities are discounted to present value using the bank’s incremental borrowing
rate,whichisthecostofraisingexternalnanceforasimilarassetwithanancingtermsimi-
lartothetermofthelease.Whenmeasuringtheleaseliability,thebankusesborrowingrates
of 1-2% for discounting future lease payments.
The bank has chosen not to recognise low-value asset leases and short-term leases in the bal-
ance sheet. Lease payments for these leases are instead recognised in the income statement.
Financial instruments – general
Ingeneral,thebankmeasuresnancialassetsandliabilitiesatfairvalueoninitialrecognition.
Measuringissubsequentlycarriedoutatfairvalueunlessotherwisespecicallystatedinthe
following sections on the individual items. The bank uses the date of payment as the date of
recognitionfornancialinstruments.
Derivative nancial instruments
Forwardtransactions,interestrateswapsandotherderivativenancialinstrumentsaremea-
sured at fair value on the balance sheet date.
Hedgingtransactionswhich,underthetermsoftheDanishFSA’sExecutiveOrderonFinancial
ReportsforCreditInstitutionsandInvestmentFirmsetc.,areregardedashedgeaccountingat
fairvalue,arerecognisedatfairvalueonthebalancesheetdatewithrespecttoboththehedg-
inginstrumentandthehedgedpartofthenancialinstrument.
Allvalueadjustmentsconcerningderivativenancialinstrumentsanditemssubjecttohedge
accounting are entered under the item “Value adjustments” in the income statement.
Business combination
Theacquisitionmethodisusedwhennewbusinessesarebought.Underthismethod,the
acquiredbusinesses’identiableassetsandliabilities,includinganyassetsandliabilitiesthat
havenotpreviouslybeenbookedintheacquiredbusiness,aremeasuredatfairvalueonthe
takeover date.
Anypositivedifferencebetweenthecostpriceandfairvalueoftheidentiablenetassetsis
recognised as goodwill.
Anynegativedifferencebetweenthecostpriceandfairvalueoftheidentiablenetassetsis
recognised as badwill under other operating income in the income statement.
Asaresultofusingtheacquisitionmethod,thecomparativeguresforpreviousyears(2017)
have not been adjusted and therefore only cover Ringkjøbing Landbobank before the merger
with Nordjyske Bank in 2018.
Note
no.
51 Accounting policies etc. – continued
PAGE 104 RINGKJØBING LANDBOBANK A/S
NOTES
Group
ThebankownstheentiresharecapitalofSæbygårdSkovA/S,ofRingkøbing.Consolidated
accountshavenotbeenprepared,asthesubsidiary’sbusinessisinsignicantwithrespectto
both balance sheet and activity compared to the bank.
The income statement
Interest income
Interestincomeisrecognisedbytheeffectiveinterestmethod,underwhichinterestincome
includestheallocatedportionofloanestablishmentfeesetc.,whichareconsideredtobepart
of the effective interest on the loan.
Negative interest income is recognised as interest expenses and negative interest expenses
are recognised as interest income. Negative interest is presented separately in the notes to
interest income and interest expenses.
Onstage3loanswhichhavebeenwrittendownoroff,theinterestincomerelatingtothe
written-down part is entered under the item “Impairment charges for loans and receivables etc.”
Net fee and commission income
Fees and commission relating to loans and receivables are recognised as part of the book
value of loans and receivables. They are recognised as interest income in the income state-
mentoverthetermoftheloansandreceivables,aspartoftheeffectiveinterestrateonthe
loans. See “Interest income” section above. Guarantee-related commission is carried to in-
comeovertheguaranteeterm.Incomegeneratedonperformingagiventransaction,including
securitiesandcustodianshipfeespluspaymenthandlingfees,isrecognisedasincomewhen
the transaction has been completed.
Staff and administration expenses
Staffandadministrationexpensesincludesalaries,pensioncosts,ITcosts,etc.
Other operating expenses
Other operating expenses include contributions to the Guarantee Fund and the Resolution
Fund.Otheroperatingexpensesalsoincludeitemswhich,bynature,aresecondarytothe
banking activities.
Impairment charges for loans and receivables etc.
This item includes losses and impairment charges for loans and losses and provisions on
guarantees etc. Losses and impairment charges for receivables from credit institutions are
also included.
Tax
Taxontheprotfortheyearisbookedasanexpenseintheincomestatement.
Net deferred tax is calculated on the items which cover the temporary differences in account-
ing and booking of taxable income and expenses. Changes in the corporate tax rate will be
taken into account.
The bank is jointly taxed with the subsidiary Sæbygård Skov A/S.
Corporation tax is paid in accordance with the Danish Tax Prepayment Scheme.
Core earnings
The bank uses the alternative performance measure “Core earnings”. Core earnings are used
asameasureofperformanceforbothexternalandinternalnancialreportingbecausethey
aredeemedtogiveatrueandfairviewoftheactualbankingoperations.Overall,coreearn-
ingscontainthesameitemsasthetraditionalmeasureofperformance“Protbeforetax,”but
thecalculationmethodanddegreeofspecicationaredifferent.
Coreearningsshowthebank’sincomeandexpensesadjustedfortemporaryuctuations
following from the development in the bank’s trading portfolio of securities (the securities
portfoliolesssectorsharesetc.),andtheprotbeforetaxisdividedintotwomainelements:
core earnings and result for the portfolio.
Note
no.
51 Accounting policies etc. – continued
ANNUAL REPORT 2021 PAGE 105
The result for the trading portfolio is composed of value adjustments for the portfolio plus the
actual return in the form of interest and dividends from the portfolio and less the calculated
funding costs for the portfolio.
Anumericalexplanationofthecorrelationbetween“Protbeforetax”and“Coreearnings”is
given in notes 13-18 on page 76.
The balance sheet
Receivables from credit institutions and central banks
Initialrecognitiontakesplaceatfairvalueplustransactioncosts,lessestablishmentfees
etc.,andsubsequentmeasurementisatamortisedcost.Pleaseseethesection“Derivative
nancialinstruments”withrespecttohedgeaccounting.
Loans and other receivables
Initialrecognitionisatfairvalueplustransactioncosts,lessestablishmentfeesetc.,and
subsequent measurement is at amortised cost. Establishment fees etc. which are comparable
withongoinginterestpayments,andthusdeemedpartoftheeffectiveinterestontheloan,
are accrued over the life of the individual loan.
Leasing
Leasecontractsareclassiedasnanceleasesiftheytransfersubstantiallyallrisksand
rewards of ownership to an asset to the lessee.
Finance lease assets where the bank is the lessor are recognised as loans at the net invest-
ment in the lease contracts less depreciation (repayments) calculated according to the annu-
ity method over the lease term.
Income from the lease assets is recognised on the basis of the effective interest agreed in the
lease contracts and included under interest income in the income statement.
Allofthebank’sleaseagreementsarenanceleaseagreements.
Model for impairment of expected credit losses on loans and other receivables etc.
UndertheIFRS9-compatibleimpairmentrules,allnancialassetsrecognisedatamortised
costareimpairedbytheexpectedcreditlosses.Underthesamerules,provisionsforexpected
creditlossesaremadeforunutilisedcreditlines,loanundertakingsandnancialguarantees.
Theimpairmentrulesuseamodelbasedonexpectations,whichmeansearlierrecognition
of impairment charges compared to the previous impairment model under which objective evi-
dence of impairment had to exist before impairment charges could and had to be recognised.
Fornancialassetsrecognisedatamortisedcost,impairmentchargesforexpectedcredit
losses are recognised in the income statement and reduce the value of the asset in the bal-
ance sheet.
Provisionsforlossesonunutilisedcreditfacilities,loanundertakingsandnancialguarantees
are recognised as liabilities.
Development stages for credit risk
Theexpectedlossimpairmentrulesmeanthat,oninitialrecognition,anancialassetetc.
must be impaired by the expected credit loss for a twelve-month period (stage 1). If the credit
riskfortheassetsubsequentlyincreasessignicantlyrelativetoinitialrecognition,thenan-
cial asset must be impaired by the expected credit loss over the asset’s expected remaining
life(stage2).Iftheinstrumentisfoundtobeimpaired(stage3),theassetmustbeimpaired
bytheexpectedcreditlossoveritsremaininglife,andinterestincomemustberecognisedin
the income statement based on the effective interest method applied to the impaired amount.
Thesameappliestothepartoftheimpairedinstrumentsthatareclassiedasweakstage2
forpresentationpurposes:seethesection“Denitionofcredit-impairedanddefault”.
Note
no.
51 Accounting policies etc. – continued
PAGE 106 RINGKJØBING LANDBOBANK A/S
NOTES
TheexpectedlossiscalculatedasafunctionofPD(theprobabilityofdefault),EAD(exposure
atdefault)andLGD(lossgivendefault),intowhichforward-lookinginformationrepresenting
the management’s expectations for future development has been incorporated.
TheEADvaluesforon-balancesheetitemsaredeterminedas100%ofactualdrawdowns,
whileoff-balancesheetitemsarerecognisedonthebasisofannex1oftheCRRonclassica-
tion of off-balance sheet items. The maturities of the facilities are determined based on their
actualtermtomaturityuptoamaximumofveyears.Forcustomersshowingmaterialsigns
ofweakness,theactualtermtomaturityisused.
Theclassicationinstagesandcomputationoftheexpectedlossarebasedonthebank’srat-
ingmodels,whichweredevelopedbythedatacentreBankdata,andthebank’sinternalcredit
management.
Assessment of signicant increase in credit risk etc.
Asignicantincreaseinthecreditriskcomparedtoinitialrecognitionispresumedtohave
occurred on a downgrading in the bank’s internal rating of the customer corresponding to one
ratingclassintheDanishFSA’srecommendedratingclassication.
Paymentsthataremorethan30daysoverduearealsoconsideredasignicantincreasein
credit risk.
AmajordowngradingwithintheDanishFSA’sratingclass2bisalsoconsideredasignicant
increase in credit risk. The Danish FSA’s rating class 2c in principle always characterises a
signicantincreaseincreditrisk,regardlessofthefacility’sinitialrating.
Inaccordancewiththerules,stage1and2facilitiesfromNordjyskeBankwereconsidered
initialrecognitionsinconnectionwiththemergerandthusclassiedinstage1.Facilitiesin
stage 3 are treated as credit-impaired on initial recognition.
Ifthecreditriskonthenancialassetisconsideredlowonthebalancesheetdate,theasset
remainsinstage1,whichischaracterisedbynosignicantincreaseincreditrisk.
The bank considers credit risk to be low when the bank’s internal rating of the customer
corresponds to the Danish FSA’s rating class 3 and the best part of 2a. The rest of 2a is only
considered low credit risk if payments are not overdue.
Denition of credit-impaired and default
Anexposureisdenedascredit-impaired(stage3)andindefaultifitmeetsatleastoneof
the following criteria:
•Theborrowerisinsignicantnancialdifcultiesandthebankjudgesthattheborrowerwill
fail to honour its obligations as agreed;
•Theborrowerisinbreachofcontract,forexamplebyfailingtomeetitsobligationtopay
interest and repayments or by repeated overdrafts;
• The bank has granted the borrower a relaxation of terms which would not have been consid-
eredwereitnotforthedebtor’snancialdifculties;
•Theborrowerislikelytogobankruptorbesubjecttoothertypesofnancialrestructuring;
•Anancialassetisacquiredataconsiderablediscountwhichreectsthefactthatlosses
have been incurred;
• The exposure has been in arrears/overdue for more than 90 days by an amount judged to be
notinsignicant.
However,ifthecustomerisinsignicantnancialdifcultiesorthenancialinstitutionhas
grantedarelaxationoftermsbecauseofthecustomer’snancialdifculties,thenancialas-
set remains in stage 2 if no losses are expected in the most probable scenario (weak stage 2).
Note
no.
51 Accounting policies etc. – continued
ANNUAL REPORT 2021 PAGE 107
Thedenitionofcredit-impairedanddefaultusedbythebankwhenmeasuringtheexpected
creditlossandfortransferstostage3correspondstothedenitionusedforinternalrisk
managementpurposesandisalsoclosetothedenitionofdefaultinthecapitalrequirements
regulation (CCR).
Thecalculationofimpairmentforexposuresinstages1and2,exceptforexposuresinweak
stage2,isonaportfolio-basedmodel,whileimpairmentfortherestoftheexposuresisbased
onamanual,individualassessmentofrelevantscenariosandassociatedprobabilitiesthat
they will occur.
Inaddition,amanagementestimatereectingmacroeconomicexpectationsanduncertain-
ties in models is allocated: see also note 50.
Calculation of expected losses
The portfolio-based calculation model is based on the bank’s rating of its customers in dif-
ferent rating classes and an estimation of the risk for the individual classes. Calculations
aremadeinaset-updevelopedandmaintainedbythebank’sdatacentreBankdata,supple-
mentedbyaforward-lookingmacroeconomicmoduledevelopedandmaintainedbyLOPI,the
AssociationofLocalBanks,SavingsBanksandCooperativeBanksinDenmark,andusedas
the starting point for incorporating management’s expectations for the future.
The macroeconomic module is built around a number of regression models that determine
the historical connection between impairment charges for the year in a number of sectors and
industries and a number of explanatory macroeconomic variables. The regression models
are then supplied with estimates for the macroeconomic variables based on forecasts from
consistentsourcessuchastheDanishEconomicCouncil,DanmarksNationalbankandoth-
ers. The forecasts generally cover two years ahead and include variables such as increase
inpublicspending,increaseinGDP,interestetc.Theexpectedimpairmentchargesarethus
calculated up to two years ahead for the individual sectors and industries. For terms of more
thantwoyears,alinearinterpolationisappliedbetweentheimpairmentratioforyear2and
the impairment ratio for year 10. The model assumes that long-term equilibrium will exist in
the form of a normal impairment level. The calculated impairment ratios are then transformed
into adjustment factors adjusting the data centre’s estimates in the individual sectors and
industries.
Practice for derecognising nancial assets from the balance sheet
Financial assets are derecognised fully or partly from the balance sheet when the exposure or
asignicantpartofitisdeemedtobelost.Derecognitionisbasedonaspecicassessment
oftheindividualexposures.Forbusinesscustomers,thebankbasesitsassessmentonnan-
cialindicatorssuchasthecustomer’scashows,earningsandequityandonanycollateral
furnishedassecurityfortheexposure.Forpersonalcustomers,theassessmentisalsobased
onthecustomer’snancialsituation,includingthepossibilityofenforcingthesecurity,ifany.
Whenanancialassetisderecognisedfullyorpartlyfromthebalancesheet,theassociated
impairmentchargesforthenancialassetarealsoremovedfromthecumulativeimpairment
charges: see note 21.
Asaprincipalrule,thebank’seffortstocollecttheassetscontinueafterderecognitionfrom
thebalancesheet.Thestepstakendependonthespecicsituation.Thebankrstattempts
toreachavoluntaryagreementwiththecustomer,includingrenegotiationoftermsorrestruc-
turing of an enterprise. Debt recovery and petition for bankruptcy are not applied until other
steps have been tried.
Note
no.
51 Accounting policies etc. – continued
PAGE 108 RINGKJØBING LANDBOBANK A/S
NOTES
Bonds and shares
Bonds at fair value
Bonds listed on a stock exchange are measured at fair value determined on the basis of the
closing price on the balance sheet day (level 1).
Unlistedbondsaremeasuredatfairvalue,computedonthebasisofpriceinformationfrom
the issuer (levels 2 and 3).
Shares etc.
Shares listed on a stock exchange are measured at fair value determined on the basis of the
closing price on the balance sheet day (level 1).
Unlistedsharesaremeasuredatfairvalue,computedonthebasisofthepriceofatransac-
tion between independent parties. Measurement is based on available information on transac-
tions,publishedannouncementsofnancialresultsor,alternatively,marketcapitalisation
calculations (levels 2 and 3).
For unlisted shares in the form of shares in companies owned by the sector where the shares
aredistributed,theredistributionisconsideredtobetheprimarymarketfortheshares.Fair
value is determined at the redistribution price and the shares are included as level 2 assets.
Unlisted shares for which a reliable fair value cannot be determined are measured at cost less
impairment charges (level 3).
The management actively considers the fair value computations.
All ongoing value adjustments to listed and unlisted securities are entered in the income state-
ment under the item “Value adjustments”.
Investments in subsidiaries and associated companies
Investments in subsidiaries and associated companies are recognised and measured by the
equitymethod,whichmeansthattheinvestmentsaremeasuredattheproportionateshareof
the entity’s equity value.
Thebank’sshareoftheentity’sprotsaftertaxandanygainorlossonsaleoftheinvestment
are recognised in the income statement.
Net revaluation of investments in subsidiaries is transferred to the net revaluation reserve by
theequitymethod,subjecttostatutoryreserves,totheextentthattheequityvalueexceeds
the cost price. Write-downs are recognised in and deducted from any positive statutory re-
serves as long as a reserve for offsetting exists.
Subsidiaries and associated companies with negative equity values are recognised at DKK
0.Ifthebankhasanobligationinlaworinfacttocovertheentity’sdecit,aprovisionwillbe
recognised.
Assets linked to pooled schemes
All pooled assets and deposits are recognised as separate balance sheet items.
Returns on pooled assets and distributions to participants are posted under the item “Value
adjustments” in the income statement.
Intangible assets
Goodwill
Goodwill acquired in connection with acquisitions is recognised at cost less cumulative
impairment charges.
Goodwill is not amortised but the value is impairment tested at least once a year. Goodwill is
written down to the recoverable amount through the income statement if the net asset’s car-
ryingamountexceedsthehigherofnetsalespriceandvalueinuse,whichcorrespondstothe
netpresentvalueofexpectedfuturecashows.
Note
no.
51 Accounting policies etc. – continued
ANNUAL REPORT 2021 PAGE 109
Customer relationships
The value of customer relationships acquired in connection with acquisitions is recognised at
cost and amortised on a straight-line basis over the estimated useful life which will not exceed
tenyears.Theusefullifedependsoncustomerloyalty,andisreassessedannually.Changes
in amortisation as a result of changes in useful life are recognised prospectively as a change
in accounting estimates.
Customer relationships are impairment tested when there is evidence of impairment. Impair-
ment charges for customer relationships are recognised in the income statement and not
subsequently reversed.
Land and buildings
Landandbuildingscoverthethreeitems“Investmentproperties”,“Domicileproperties”and
“Domicile properties (leasing)”. The properties which house the bank’s branches are included
underdomicileproperties,whileotherpropertiesareconsideredtobeinvestmentproperties.
Investmentpropertiesareincludedinthebalancesheetatfairvalue,computedbythereturn
method. Ongoing changes in the value of investment properties are recognised in the income
statement.
Domicilepropertiesareincludedinthebalancesheetatreassessedvalue,whichisthefair
value computed by the return method less cumulative depreciation and any impairment loss.
Depreciationiscalculatedonthebasisofanexpectedusefullifeof50years,computingde-
preciation at cost plus or minus revaluation less scrap value. Depreciation and losses due to
impairmentarerecognisedintheincomestatement,whileincreasesinreassessedvalueare
recognised in total comprehensive income in shareholders’ equity under the item “Provisions
for revaluation” unless the increase corresponds to a reduction in value which was previously
recognised in the income statement.
Other tangible assets
Othertangibleassets,includingoperatingequipmentandimprovementstorentedpremises,
are recognised in the balance sheet at cost less cumulative depreciation and write-downs for
any loss due to impairment.
Depreciationiscalculatedonthebasisoftheassets’expectedlives,whichareonetove
yearsforoperatingequipmentandthirtyyearsforimprovementstorentedpremises,onthe
basis of depreciation computed at cost less scrap value. Depreciation and losses due to
impairment are recognised in the income statement.
Temporary assets
Temporary assets comprise assets taken over as a result of termination of customer expo-
sures,theintentionbeingtosellofftheassetsassoonaspossible.Theitemalsoincludes
domicile properties for sale. Temporary assets are included at cost on transfer and will subse-
quently be written down to a possibly lower realisation value.
Other assets
Other assets include interest and commission receivables as well as the positive market value
ofderivativenancialinstruments.
Tax
Current tax assets and current tax liabilities are recognised in the balance sheet as tax calcu-
latedonthetaxableincomefortheyear,adjustedfortaxpaidonaccount.
A deferred tax liability is allocated under the item “Provisions for deferred tax”.
A deferred tax asset is booked under the item “Deferred tax assets” following a prudent as-
sessment of the asset’s value.
The effect of changes in the corporate tax rate is recognised in “Deferred tax
assets”/“Provisions for deferred tax”.
Note
no.
51 Accounting policies etc. – continued
PAGE 110 RINGKJØBING LANDBOBANK A/S
NOTES
Note
no.
51 Accounting policies etc. – continued
Debt to credit institutions and central banks/Deposits and other debt/Deposits in pooled
schemes/Issued bonds at amortised cost/Subordinated debt
Measurementisatamortisedcost,butseethesection“Derivativenancialinstruments”with
respect to hedge accounting.
Other liabilities
Other liabilities include interest and commission payable and the negative market value of
derivativenancialinstruments.
Provisions for liabilities
“Provisionsforpensionsandsimilarliabilities”,“Provisionsforlossesonguarantees”and
“Other provisions for liabilities” all come under the heading of Provisions for liabilities.
Unfunded pension liabilities for former management members are itemised in the balance
sheet under the item “Provisions for pensions and similar liabilities”. The liability is calculated
as the capitalised value of the expected future pension payments.
Aprovisionisrecognisedinrespectofnancialguaranteesandunutilisedcreditundertakings
in accordance with the IFRS 9-compatible impairment rules: see the section “Model for impair-
ment of expected credit losses on loans and other receivables etc.”
Provisions are also made for other guarantees if it is probable that the guarantee will be called
and the amount of the liability can be reliably determined.
Contingent liabilities/guarantees
The bank’s outstanding guarantees are given in the notes under the item “Contingent liabilities”
Statement of capital
Phasing in IFRS 9 impairment rules concerning capital
The bank has decided to take advantage of the transition programme under the capital
requirements regulation (CRR). Thus both the static and the dynamic components of the IFRS
9transitionalrulesarenowused,includingthesimpliedapproachtorecalculationofcapital
requirements. The negative effect of the transition to the IFRS 9 impairment rules will thus not
take full effect on total capital until the beginning of 2025.
Main and key gures (page 3)
“Mainguresforthebank”for2017and2018arestatedonaproformabasis,whereasthe
guresfor2019,2020and2021aretheactualgures.
“Keyguresforthebank”for2017and2018arecalculatedonaproformabasis,althoughthe
capitalratiosattheendof2018aretheactualgures.Theguresfor2019,2020and2021
arealsotheactualgures.
The rate of costs is calculated as “Total expenses etc.” in percent of “Total core income”.
Both “Total expenses etc.” and “Total core income” are shown under “Core earnings” on page 6.
“KeyguresperDKK1share”for2017arecalculatedonthebasisoftheactualguresfor
the“old”RingkjøbingLandbobank.“KeyguresperDKK1share”for2018arecalculatedon
aproformabasis,whereastheguresfor2019,2020and2021aretheactualgures.“Key
guresperDKK1share”arecalculatedonthebasisof2021:28,431,916shares,and2020:
29,067,721shares,and2019:29,228,321shares,and2018:29,906,383sharesand2017:
21,812,000shares.
Statements in the nancial review (pages 6-23)
Coreearningsandtheassociatedspecicationsonpages7,8and10fortheyears2017and
2018andtheincomestatementitemsfortherstquarterof2017uptoandincludingthe
secondquarterof2018inthequarterlyoverview“Coreearnings”,onpage 21,areproforma
gures(i.e.asifthemergerhadtakeneffecton1January2017).Thegureswerecalculated
byaddingupguresfromRingkjøbingLandbobank’sstatementofthealternativemeasure
ofperformance“Coreearnings”andproformaguresfromNordjyskeBank,convertedand
ANNUAL REPORT 2021 PAGE 111
adjusted to Ringkjøbing Landbobank’s statement of the alternative performance measure
“Core earnings”.
Thecoreearningsfor2021,2020and2019,onpages20-21,andthecoreearningsfromthe
thirdquarterof2018onwards,onpage 21,aretheactualguresforthepost-mergerentity.
Balancesheetitemsandcontingentliabilities,aswellascapitalratios,inthequarterlyover-
views of “Balance sheet items and contingent liabilities” and “Statement of capital” from and
includingtherstquarterof2017,uptoandincludingtherstquarterof2018,onpage 23,
areproformagures(i.e.asifthemergerhadtakeneffecton1January2017),calculatedby
simpleadditionofguresfromtherespectiveaccountsfromRingkjøbingLandbobankand
NordjyskeBank,withoutanyadjustments,whiletheguresfromandincludingthesecond
quarterof2018,onpage 23,areforthepost-mergerentity.
Core earnings per DKK 1 share (page 10)
The bank’s alternative performance measure “Core earnings” is used as the value of earnings.
Fortheyears2009-2017,coreearningsguresfromthe“old”RingkjøbingLandbobankwere
used;for2018,theproformacoreearningsforthemergedbankwereused;andnally,for
2019,2020and2021,theactualcoreearningsfor2019,2020and2021forthemergedbank
were used.
Thefollowingnumbersofshareswereusedinthecalculation:Endof2010:25,200,000
shares,endof2011:24,700,000shares,endof2012:24,200,000shares,endof2013:
23,900,000shares,endof2014:23,350,000shares,endof2015:22,850,000shares,endof
2016:22,350,000shares,endof2017:21,812,000shares,endof2018:29,906,383shares,
endof2019:29,228,321shares,endof2020:29,067,721shares,andendof2021:28,431,916.
The number of shares is calculated based on transactions made.
Note
no.
51 Accounting policies etc. – continued
PAGE 112 RINGKJØBING LANDBOBANK A/S
Summary (DKK1,000) 2021 2020 2019 2018 2017
Income statement
Interest income 1,459,846 1,373,215 1,299,449 1,031,664 694,136
Interest expenses 103,080 120,910 131,144 105,169 53,094
Net interest income 1,356,766 1,252,305 1,168,305 926,495 641,042
Dividends from shares etc. 77,109 71,241 70,409 27,619 10,258
Fee and commission income 939,219 814,821 833,082 538,862 322,717
Fee and commission expenses 91,183 85,545 78,541 48,293 42,486
Net interest and fee income 2,281,911 2,052,822 1,993,255 1,444,683 931,531
Value adjustments +163,127 +126,079 +168,906 +179,833 +143,225
Other operating income 5,490 2,054 13,582 5,770 4,979
Staff and administration expenses 790,374 765,933 778,458 704,778 327,024
Amortisation,depreciationandwrite-
downs on intangible and tangible assets
35,793
29,241
37,959
22,690
4,249
Other operating expenses 7,643 8,110 3,934 2,816 3,174
Impairment charges for loans
and receivables etc.
-78,629
-233,348
-110,172
-86,955
-10,320
Results from investments in associated
companies and group undertakings
+22
-13
+201
+80
-20
Prot before tax 1,538,111 1,144,310 1,245,421 813,127 734,948
Tax 308,846 224,596 267,156 149,935 146,308
Net prot for the year 1,229,265 919,714 978,265 663,192 588,640
FIVE-YEAR MAIN FIGURES
ANNUAL REPORT 2021 PAGE 113
Summary (DKK1,000) End of 2021 End of 2020 End of 2019 End of 2018 End of 2017
Balance sheet
Assets
Cash in hand and deposits
with credit institutions
and central banks
3,675,561
4,035,237
3,354,295
3,823,860
1,519,788
Loans and other receivables at
amortised cost
41,179,255
36,241,166
35,465,416
33,350,334
19,350,866
Securities 8,223,754 8,035,251 8,076,548 6,906,742 4,574,388
Assets linked to pooled schemes 5,537,863 4,700,080 4,276,344 3,786,476 -
Intangible assets 1,062,672 1,034,838 1,049,838 1,064,838 -
Tangible assets 214,631 233,536 228,936 266,265 74,458
Other assets 463,652 582,021 489,517 452,013 276,983
Total assets 60,357,388 54,862,129 52,940,894 49,650,528 25,796,483
Liabilities and equity
Debt to credit institutions and
central banks
2,030,175
2,448,918
2,172,765
1,916,476
1,599,416
Deposits and other debt 38,202,186 34,938,565 33,851,493 33,206,095 19,110,127
Deposits in pooled schemes 5,537,863 4,700,080 4,276,344 3,786,476 -
Issued bonds 2,961,422 2,361,796 2,212,709 1,428,024 673,436
Other liabilities 730,121 592,837 533,417 599,966 214,570
Provisions for liabilities 128,443 124,908 83,433 76,327 10,263
Subordinated debt 2,044,505 1,549,150 2,200,857 1,448,474 371,753
Share capital 29,068 29,228 29,662 30,994 22,350
Reserves 8,693,605 8,116,647 7,580,214 7,157,696 3,794,568
Total shareholders’ equity 8,722,673 8,145,875 7,609,876 7,188,690 3,816,918
Total liabilities and equity 60,357,388 54,862,129 52,940,894 49,650,528 25,796,483
Contingent liabilities etc.
Contingent liabilities 10,270,428 9,811,830 9,664,674 7,829,417 3,183,874
Irrevocable credit undertakings 781,832 0 281,000 13,531 392,000
Total contingent liabilities etc. 11,052,260 9,811,830 9,945,674 7,842,948 3,575,874
PAGE 114 RINGKJØBING LANDBOBANK A/S
2021 2020 2019 2018 2017
Capital ratios:
Total capital ratio % 22.3 21.1 20.0 18.4 17.8
Tier 1 capital ratio % 17.6 17.5 14.7 14.6 16.5
MREL capital ratio* % 27.8 26.7 27.3 24.9 -
Earnings:
Return on equity before tax % 18.2 14.5 16.8 14.8 19.9
Return on equity after tax % 14.6 11.7 13.2 12.1 16.0
Income / cost ratio DKK 2.69 2.10 2.34 1.99 3.13
Return on assets % 2.0 1.7 1.8 1.3 2.3
Market risk:
Interest rate risk % 0.4 1.1 0.9 1.0 1.1
Foreign exchange position % 1.5 0.1 1.4 1.1 1.1
Foreign exchange risk % 0.0 0.0 0.0 0.0 0.0
Liquidity risk:
Liquidity Coverage Ratio (LCR) % 176 206 204 183 193
Loans and impairments thereon
relative to deposits
%
99.0
96.7
98.1
95.5
106.1
Credit risk:
Loans relative to shareholders’ equity 4.7 4.4 4.7 4.6 5.1
Growth in loans for the year % 13.5 2.2 6.3 72.9 10.7
(Pro forma growth in loans in 2018: 7.7%)
Total large exposures % 109.8 99.8 121.0 106.0 136.1
Cumulative impairment ratio % 4.2 4.6 4.3 4.7 4.0
Impairment ratio for the year % 0.15 0.48 0.21 0.20 0.04
Proportion of receivables at reduced interest % 0.2 0.5 0.4 0.5 0.1
Share return:
Earnings per share***** DKK 30,679 28,029 26,036 24,068 17,500
Dividend per share** DKK 700 700 1,100 1,000 900
Market price relative to earnings
per share*****
2.86
1.98
1.97
1.41
1.84
* Comparative gures are only stated for the years when the key gure has applied.
** Calculated on the basis of a denomination of DKK 100 per share.
*** Calculated on the basis of number of shares in circulation at the end of the year.
**** Calculated on the basis of the average number of shares. The average number of shares is calculated as a simple average of
the shares at the beginning of the year and at the end of the year.
FIVE-YEAR KEY FIGURES
ANNUAL REPORT 2021 PAGE 115
Denitions of the ofcial key gures/ratios etc. from the Danish FSA
Total capital ratio
Total capital in percent of total risk exposure.
Tier 1 capital ratio
Tier 1 capital in percent of total risk exposure.
MREL capital ratio*
MREL capital in percent of total risk exposure.
Return on equity before tax
Protbeforetaxinpercentofaverageshareholders’equity.Theaverageshareholders’equityiscalculatedas
a simple average of the shareholders’ equity at the beginning of the year and at the end of the year.
Return on equity after tax
Netprotfortheyearinpercentofaverageshareholders’equity.Theaverageshareholders’equityiscalcu-
lated as a simple average of the shareholders’ equity at the beginning of the year and at the end of the year.
Income/cost ratio
Income for the year divided by expenses for the year including impairment charges for loans and other receiv-
ables etc.
Return on assets
Netprotfortheyearinpercentoftotalassets.
Interest rate risk
Interest rate risk in percent of tier 1 capital.
Foreign exchange position
Foreign exchange indicator 1 in percent of tier 1 capital.
Foreign exchange risk
Foreign exchange indicator 2 in percent of tier 1 capital.
Liquidity Coverage Ratio (LCR)
Holdingofliquidassetsinpercentofnetoutowsover30days.
Loans and impairments thereon relative to deposits
Loans plus impairments thereon in percent of deposits.
Loans relative to shareholders’ equity
Loans / shareholders’ equity.
Growth in loans for the year
Growthinloansfromthebeginningoftheyeartotheendoftheyear,inpercent(excludingreverserepotrans-
actions).
Total large exposures
The total sum of the 20 largest exposures in percent of common equity tier 1.
Cumulative impairment ratio
Impairment charges for loans and provisions for losses on guarantees etc. in percent of loans plus impairment
charges for loans plus guarantees plus provisions for losses on guarantees etc.
Impairment ratio for the year
Impairment charges for the year in percent of loans plus impairment charges for loans plus guarantees plus
provisions for losses on guarantees etc.
Proportion of receivables at reduced interest
Proportion of receivables at reduced interest before impairment charges in percent of loans plus impairment
charges for loans plus guarantees plus provisions for losses on guarantees etc.
Earnings per share*****
Shareholders’ equity / share capital excluding own shares.
Dividend per share**
Proposed dividend / share capital.
Market price relative to earnings per share*****
Market price / book value per share
****/****: See page 114.
PAGE 116 RINGKJØBING LANDBOBANK A/S
ANNUAL REPORT 2021 PAGE 117
Page
118 Shareholders’ committee
120 Board of directors
130 General management
132 Company information
133 Company announcements
134 Financial calendar
137 The bank’s branches
OTHER INFORMATION
Page
118 Shareholders’ committee
120 Board of directors
132 General management
134 Company information
135 Shareholder relations
136 Company announcements
138 Financial calendar
141 The bank’s branches
OTHER INFORMATION
PAGE 118 RINGKJØBING LANDBOBANK A/S
SHAREHOLDERS' COMMITTEE
Shareholders’ committee
Name Position Home town Born
Kristian Skannerup Manufacturer Tim 14 June 1959
chairman of the
shareholders'committee
Allan Østergaard Sørensen Attorney-at-law (High Court) Ringkøbing 26 June 1982
deputy chairman of the
shareholders’ committee
Anette Ørbæk Andersen Manager Skjern 4 March 1963
Hejne Fomsgaard Andersen Manufacturer Ringkøbing 30 August 1954
Per Lykkegaard Christensen Farmer Hjallerup 12 December 1959
Dennis Conradsen General Manager Frederikshavn 26 June 1984
Claus Dalgaard Vice president Ringkøbing 28 April 1962
Ole Kirkegård Erlandsen Butcher Snejbjerg 19 December 1962
Thomas Sindberg Hansen Grocer Kloster 12 December 1978
Tonny Hansen Former college principal Ringkøbing 27 May 1958
Leif Haubjerg Farmer No 18 December 1959
Mads Hvolby* Chartered surveyor Nørresundby 9 December 1956
Poul Johnsen Høj Fishing boat skipper Hvide Sande 10 November 1964
Kim Jacobsen Commercial estate agent Aalborg 25 September 1969
Erik Jensen Manager Skjern 7 September 1965
Morten Jensen* Attorney-at-law (Supreme Court) Dronninglund 31 October 1961
Toke Kjær Juul CEO Herning 15 August 1978
AnneKaptain CheiflegalandHRofcer Sæby 14March1980
Kasper Lykke Kjeldsen Manager Aarhus C 27 February 1981
Carl Erik Kristensen Manager Hvide Sande 28 January 1978
Henrik Lintner Pharmacist Hjørring 7 May 1955
Karsten Madsen Attorney-at-law (Supreme Court) Sæby 26 July 1961
Niels Erik Burgdorf Madsen Manager Ølgod 25 October 1959
Dorte Zacho Martinsen Self-employed business consultant Tvis 2 May 1972
Jacob Møller* CEO Ringkøbing 2 August 1969
Lars Møller Municipal chief executive Holstebro 30 November 1957
Bjarne Bjørnkjær Nielsen Manager Skjern 11 March 1973
Jens Møller Nielsen* Former manager Ringkøbing 25 August 1956
Marianne Oksbjerre Manager Brande 26 November 1966
Bente Skjørbæk Olesen Shop owner Vemb 16 February 1971
ANNUAL REPORT 2021 PAGE 119
Name Position Home town Born
Martin Krogh Pedersen* CEO Ringkøbing 7 June 1967
Poul Kjær Poulsgaard Farmer Madum 21 February 1974
Karsten Sandal Manager Ølstrup 25 June 1969
YvonneSkagen Manager Aalborg 22August1957
Lone Rejkjær Söllmann* Finance manager Tarm 26 January 1968
Egon Sørensen Insurance broker Spjald 16 June 1965
Jørgen Kolle Sørensen Car dealer Hvide Sande 17 September 1970
Peer Buch Sørensen Draper Frederikshavn 20 May 1967
Lise Kvist Thomsen Manager Virum 24 May 1984
Sten Uggerhøj* Car dealer Frederikshavn 6 July 1959
Lasse Svoldgaard Vesterby Manager Ringkøbing 25 April 1978
John Christian Aasted Manager Aalborg 12 February 1961
* Member of the board of directors
PAGE 120 RINGKJØBING LANDBOBANK A/S
Board of directors
Martin Krogh Pedersen
CEO
Ringkøbing
Born on 07 June 1967
Chairman of the board of directors
Board committees:
Remunerationcommittee,
committee chairman
Nominationcommittee,
committee chairman
Auditcommittee,committeemember
Riskcommittee,committeechairman
Seniority:
Member of the board of directors
since 27 April 2011
End of current term of ofce: 2023
Independence assessment: Independent
Professional competences:
Hasspecialcompetences,knowledgeand
experience within the areas of the business
model,creditrisks,marketrisks,liquidity
risks,otherrisks,includinginrelationto
moneylaundering,terrornancing,other
economiccrime,goodpracticeandcompli-
ance,budgets,accountingandauditing,cap-
italstructure,insurancerisksandgeneral
managerial experience.
Other managerial activities –
member of the management of:
• KP Components A/S
• KP Components Group A/S
• KP Group Holding ApS
• MHKP Holding ApS
• MHKPO ApS
• MHKPS ApS
• PcP Corporation A/S
• PcP Danmark A/S
• The supplementary pension fund
for employees
of Ringkjøbing Landbobank
• Techo A/S
Mads Hvolby
Chartered surveyor
Nørresundby
Born on 9 December 1956
Deputy chairman of the board of directors
Board committees:
Remunerationcommittee,
committee member
Nominationcommittee,committeemember
Auditcommittee,committeemember
Riskcommittee,committeemember
Seniority:
Member of the board of directors since 7
June 2018
End of current term of ofce:
2022
Independence assessment:
Independent
Professional competences:
Hasspecialcompetences,knowledgeand
experience within the areas of the busi-
nessmodel,creditrisks,operationalrisks,
budgets,accountingandauditing,capital
structure,insurancerisks,riskmanagement,
generalmanagerialexperience,managerial
experiencefromothernancialundertak-
ings and legal insight.
Other managerial activities –
member of the management of:
• Landinspektørernes Gensidige
Erhvervsansvarsforsikring
•LandinspektørrmaetLE34A/S
• M. Hvolby Holding ApS
• NB Partnere I/S
• Ny NB Gruppen Landinspektøranpartsselskab
BOARD OF DIRECTORS
BOARD OF DIRECTORS
ANNUAL REPORT 2021 PAGE 121
Jens Møller Nielsen
Former manager
Ringkøbing
Born on 25 August 1956
Deputy chairman of the board of directors
Board committees:
Remunerationcommittee,committee
member
Nominationcommittee,committeemember
Auditcommittee,committeechairman
Riskcommittee,committeemember
Seniority:
Member of the board of directors
since 22 April 2015
End of current term of ofce:
2023
Independence assessment:
Independent
Professional competences:
Hasspecialcompetences,knowledgeand
experience within the areas of the business
model,creditrisks,marketrisks,liquidity
risks,operationalrisks,otherrisks,includ-
inginrelationtomoneylaundering,terror
nancing,othereconomiccrime,good
practiceandcompliance,budgets,account-
ingandauditing,capitalstructure,insurance
risks,riskmanagement,generalmanagerial
experience and legal insight. As the chair-
manofthebank’sauditcommittee,Jens
Møller Nielsen has competences within
accounting or auditing.
Other managerial activities –
member of the management of:
• The independent institution Generator
• Ringkøbing Station
PAGE 122 RINGKJØBING LANDBOBANK A/S
Morten Jensen
Attorney-at-law (Supreme Court)
Dronninglund
Born on 31 October 1961
Board committees:
Nominationcommittee,
committee member
Riskcommittee,committeemember
Seniority:
Member of the board of directors
since 7 June 2018
End of current term of ofce:
2022
Independence assessment:
Independent
Professional competences:
Hasspecialcompetences,knowledgeand
experiencewithintheareasofcreditrisks,
operationalrisks,risksofoutsourcing,
otherrisks,includinginrelationtomoney
laundering,terrornancing,othereconomic
crime,goodpracticeandcompliance,
budgets,accountingandauditing,riskman-
agement,generalmanagerialexperience
and legal insight and within sections of the
business model and liquidity risk areas.
Other managerial activities –
member of the management of:
•AdvokatrmaetBørgeNielsen
• AEC-Fonden
•Andersen&AaquistA/S
• ANS-Fundacion Fonden
• Christine og Poul Goos Fond for Fri Forsikring
• Dan Østergård ApS
• Dansk Bilglas A/S
• Dansk Facility Service Holding A/S
• DCH A/S
• Desmi Contracting A/S
• Ejendomsselskabet Nordtyskland
Kommanditaktieselskab
• Ejendomsselskabet Nordtyskland I A/S
• Ejendomsselskabet Nordtyskland II A/S
• Ejendomsselskabet Nordtyskland III A/S
• Ejendomsselskabet Nordtyskland IV A/S
• Ejendomsselskabet Nordtyskland V A/S
• Ejendomsselskabet Nordtyskland VI A/S
• Ejendomsselskabet Nordtyskland VII A/S
• Ejendomsselskabet Nordtyskland VIII A/S
• Ejendomsselskabet Nordtyskland IX A/S
• Ejendomsselskabet Nordtyskland Nr. 10 A/S
• Ejendomsselskabet Nordtyskland Nr. 11 A/S
• Ejendomsselskabet Nordtyskland Nr. 12 A/S
• Ejendomsselskabet Nordtyskland Nr. 13 A/S
• Ejendomsselskabet Nordtyskland Nr. 14 A/S
• Ejendomsselskabet Nordtyskland Nr. 15 A/S
• Ejendomsselskabet Nordtyskland Nr. 16 A/S
• Ejendomsselskabet Nordtyskland Nr. 17 A/S
• Ejendomsselskabet Nordtyskland Nr. 18 A/S
• Ejendomsselskabet Nordtyskland Nr. 19 A/S
• Ejendomsselskabet Nordtyskland Nr. 20 A/S
• Ejendomsselskabet Nordtyskland Nr. 21 A/S
• Ejendomsselskabet Nordtyskland Nr. 22 A/S
• Ejendomsselskabet Svinkløv Badehotel A/S
• Ejendomsselskabet Udsigten A/S
• Ergonomic Solutions International Ltd.
• Ergonomic Solutions Manufacturing A/S
• Ergonomic Solutions Nordic A/S
• Havnens Fiskebod A/S
• Hotel Sandvig Havn ApS
• JenSchu K/S
• Kjærgaard Nord A/S
• Lundagergaard Holding ApS
• Madera Holding ApS
• Mesterbyg Klokkerholm A/S
• Micodan A/S
• Micodan Ejendomme A/S
• Micodan Holding A/S
• Micodan Norge AS
• Miljø-Art A/S
•P.J.Skovværktøj,NørresundbyApS
• PM Energi A/S
• RengøringsCompagniets Fond
• Saga Shipping A/S
• Sølund Ejendomsinvest Holding A/S
•Teglbakken,NiverødP/S
• Toma Facility Danmark A/S
• Vibeke Emborg Holding ApS
• Vibeke Emborg Invest ApS
BOARD OF DIRECTORS
ANNUAL REPORT 2021 PAGE 123
Jon Steingrim Johnsen
CEO
Humlebæk
Born on 17 April 1968
Board committees:
Nominationcommittee,committeemember
Riskcommittee,committeemember
Seniority:
Member of the board of directors
since 22 February 2017
End of current term of ofce:
2025
Independence assessment:
Independent
Professional competences:
Hasspecialcompetences,knowledgeand
experience within the areas of the business
model,marketrisks,liquidityrisks,opera-
tionalrisks,ITrisks,risksofoutsourcing,
otherrisks,includinginrelationtomoney
laundering,terrornancing,othereco-
nomiccrime,goodpracticeandcompliance,
budgets,accountingandauditing,capital
structure,insurancerisks,riskmanagement,
generalmanagerialexperience,managerial
experiencefromothernancialundertak-
ings and legal insight and within sections of
the credit risk area.
Other managerial activities –
member of the management of:
• AIP Management P/S
• Axcelfuture
• A/S Kjøbenhavns Ejendomsselskab
• Ejendomsaktieselskabet Dronningegården
• Farmakonomernes Ejendomsaktieselskab
• Farmapension A/S
• Forca A/S
•Forsikring&Pension
• Forsikringsorganisationernes
Fællessekretariat F.M.B.A.
• Forstædernes Ejendomsaktieselskab
• IIP Denmark P/S
• IIP Denmark GP ApS
• Institutional Holding P/S
• Institutional Investors Group on Climate
Change (IIGCC)
• Pensionskassen for Farmakonomer
•PensionskassenforSocialrådgivere,
Socialpædagoger og Kontorpersonale
• Pensionskassen for Sundhedsfaglige
• Pensionskassen for Sygeplejersker
og Lægesekretærer
• Pensionskassernes Administration A/S
• PKA Ejendomme I I/S
• PKA Ejendomme af 2012 I/S
• PKA Ejendomme af 2013 I/S
• PKA Private Funds III GP ApS
• PKA Private Funds IV GP ApS
• PKA Projektselskab I/S
• PKA Skejby P/S
• PKA Skejby Komplementar ApS
• PKA Venture I GP ApS
• PKA+Pension Forsikringsselskab A/S
• Poppelstykket 12 A/S
• Rugårdsvej Odense A/S
•Socialrådgivernes,Socialpædagogernesog
Kontorpersonalets Ejendomsaktieselskab
• Sundhedsfagliges Ejendomsaktieselskab
• Sygeplejerskernes og Lægesekretærernes
Ejendomsaktieselskab
• Tuborg Havnevej I/S
PAGE 124 RINGKJØBING LANDBOBANK A/S
Jacob Møller
CEO
Ringkøbing
Born on 2 August 1969
Board committees:
Nominationcommittee,committeemember
Auditcommittee,committeemember
Riskcommittee,committeemember
Seniority:
Member of the board of directors
since 26 April 2017
End of current term of ofce:
2023
Independence assessment:
Independent
Professional competences:
Hasspecialcompetences,knowledgeand
experience within the areas of insurance
risks,generalmanagerialexperienceand
legal insight and within sections of the
businessmodel,creditriskandmarketrisk
areas.
Other managerial activities –
member of the management of:
• Dansk Energi
• Goenergi A/S
• Iron Fonden
• Iron Pump A/S
• Iron Pump Ejendomme A/S
• Iron Pump Holding A/S
• N H Vind 16 ApS
• RAH A.M.B.A.
• RAH Fiberbredbånd A/S
• RAH Holding A/S
• RAH Net A/S
• RAH Service A/S
• Scanenergi A/S
• Scanenergi Elsalg A/S
• Scanenergi Holding A/S
• Scanenergi Solutions A/S
• Vestjyske Net 60 KV A/S
• Vestjyske Net Service A/S
Lone Rejkjær Söllmann
Finance manager
Tarm
Born on 26 January 1968
Board committees:
Nominationcommittee,committeemember
Riskcommittee,committeemember
Seniority:
Member of the board of directors
since 26 April 2017
End of current term of ofce:
2022
Independence assessment:
Independent
Professional competences:
Hasspecialcompetences,knowledgeand
experiencewithintheareasofbudgets,ac-
counting and auditing and within sections of
the business model and credit risk areas.
Other managerial activities –
member of the management of:
• Tama ApS
BOARD OF DIRECTORS
ANNUAL REPORT 2021 PAGE 125
Sten Uggerhøj
Car dealer
Frederikshavn
Born on 6 July 1959
Board committees:
Nominationcommittee,committeemember
Riskcommittee,committeemember
Seniority:
Member of the board of directors
since 7 June 2018
End of current term of ofce:
2022
Independence assessment:
Independent
Professional competences:
Hasspecialcompetences,knowledgeand
experience within the areas of the business
model,creditrisks,marketrisks,liquidity
risks,operationalrisks,otherrisks,includ-
inginrelationtomoneylaundering,terror
nancing,othereconomiccrime,goodprac-
ticeandcompliance,budgets,accounting
andauditing,capitalstructure,riskmanage-
ment,generalmanagerialexperienceand
legal insight.
Other managerial activities –
member of the management of:
• A/S Knud Uggerhøj
• Aktieselskabet Trigon
• Atletikvej 1 ApS
• Civilingeniør Bent Bøgh og
Hustru Inge Bøgh’s Fond
• Dalsgaard Biler A/S
• Ejendomsselskabet Møllehuset A/S
• Ejendomsselskabet Wedellsborgvej 1 A/S
• Fortin Madrejon A/S
• Hjørring Bilcenter A/S
• Knud Uggerhøj Kapital ApS
• MAN Nordjylland A/S
• Semler Retail Silkeborg A/S
• Solgt.com Invest ApS
• Techno Danmark F.M.B.A.
• Trigon Holding A/S
• Uggerhøj A/S
• Uggerhøj Ejendomme A/S
• Uggerhøj Erhverv ApS
• Uggerhøj Finans A/S
• Uggerhøj Herning A/S
• Uggerhøj Holding ApS
• Uggerhøj Horsens A/S
• Uggerhøj Aarhus A/S
• UGTHO ApS
Dan Junker Astrup
Credit manager
Videbæk
Born on 20 January 1989
Elected by the employees
Board committees:
Nominationcommittee,committeemember
Riskcommittee,committeemember
Seniority:
Member of the board of directors
since 1 March 2015
End of current term of ofce:
2023
Independence assessment:
Not independent
Professional competences:
Hasspecialcompetences,knowledgeand
experience within the areas of the business
model,creditrisks,marketrisks,budgets,
accountingandauditing,capitalstructure,
riskmanagement,generalmanagerialexpe-
rience and legal insight.
No other managerial activities
PAGE 126 RINGKJØBING LANDBOBANK A/S
Gitte E.S.H. Vigsø
MA(Laws)/complianceofcer
Holstebro
Born on 24 April 1976
Elected by the employees
Board committees:
Remunerationcommittee,
committee member
Nominationcommittee,committeemember
Riskcommittee,committeemember
Seniority:
Member of the board of directors
since 1 March 2011
End of current term of ofce:
2023
Independence assessment:
Not independent
Professional competences:
Hasspecialcompetences,knowledgeand
experience within the areas of operational
risks,risksofoutsourcing,otherrisks,
includinginrelationtomoneylaundering,
terrornancing,othereconomiccrime,good
practiceandcompliance,andlegalinsight
and within sections of the business model
and credit risk areas.
Other managerial activities –
member of the management of:
• Financial Services Union Denmark
•FinancialServicesUnionDenmark,
District West
• FTFa
• The supplementary pension fund for em-
ployees of Ringkjøbing Landbobank
Arne Ugilt
Credit consultant
Hjørring
Born on 6 August 1956
Elected by the employees
Board committees:
Nominationcommittee,committeemember
Riskcommittee,committeemember
Seniority:
Member of the board of directors
since 7 June 2018
End of current term of ofce:
2023
Independence assessment:
Not independent
Professional competences:
Hasspecialcompetences,knowledgeand
experience within the areas of the business
model,creditrisksandmarketrisks.
No other managerial activities
BOARD OF DIRECTORS
ANNUAL REPORT 2021 PAGE 127
Finn Aaen
Business customer adviser
Aalborg
Born on 22 April 1970
Elected by the employees
Board committees:
Nominationcommittee,committeemember
Riskcommittee,committeemember
Seniority:
Member of the board of directors
since 7 June 2018
End of current term of ofce:
2023
Independence assessment:
Not independent
Professional competences:
Hasspecialcompetences,knowledgeand
experience within sections of the business
model and credit risk areas.
No other managerial activities
The board members’ other managerial activities are stated as at the date of closing the accounts.
PAGE 128 RINGKJØBING LANDBOBANK A/S
BOARD OF DIRECTORS
Board committees
Theboardofdirectorshasappointedaremunerationcommittee,anominationcommittee,anaudit
committee and a risk committee.
Information on the individual board committees is provided below.
Remuneration committee
The bank’s board of directors has agreed a brief for the remuneration committee which includes
provisionsonscopeandobjective,membersandhowitisconstituted,tasks,meetings,authorityand
resources,reportingandminutesofmeetings,publication,evaluationandself-assessment,aswellas
changes to its brief.
Theremunerationcommitteeis,asaminimum,responsibleforthefollowingtasks:
• Negotiation with the general management on remuneration of the general management
• Undertakingthepreparatoryworkfortheboardofdirectors’decisionsonremuneration,including
the remuneration policy and any other associated decisions that may affect the bank’s risk manage-
mentand,inthatconnection,undertakinganytasksandobligationsfollowingfromthelegislation,
including:
• Advisingtheboardofdirectorsonthedevelopmentoftheremunerationpolicy,assistingthe
boardwithmonitoringcompliancewithit,assessingwhethertheremunerationpolicyneedsto
beupdatedand,ifnecessary,proposingchangestothepolicyincluding
• Drafting and recommending guidelines for the board of directors’ monitoring of compliance
withtheremunerationpolicyetc.forapprovalbytheboardofdirectors,includingensuring
that compliance with the policy is monitored
• Monitoring remuneration of the management of the part of the organisation in charge of
monitoringthelimitsofrisk-taking,andthemanagementofthepartoftheorganisationoth-
erwiseinchargeofmonitoringandauditing,includingthemanagementofthecompliance
function and the chief internal auditor
• Ensuring that the information on the bank’s remuneration policy and practice presented to the
general meeting is adequate
• Assessing whether the bank’s procedures and systems are adequate and allow for the bank’s
risks associated with the management of capital and liquidity in relation to the remuneration
structure
• Ensuring that the remuneration policy and practice are in accordance with and promote sound
andeffectiveriskmanagementandthattheycomplywiththebank’sbusinessstrategy,objec-
tives,valuesandlong-terminterests
• Ensuring that independent control functions and other relevant functions are included to the
extentnecessaryfortheperformanceofsuchtasksand,ifnecessary,seekingexternaladvice
• Initspreparatorywork,andwithreferencetotheadoptedremunerationpolicy,thecommitteemust
protectthebank’slong-terminterests,includingthoseofshareholders,otherinvestorsandthe
public
• Otherremuneration-relatedtasks,includingsupportingtheboardofdirectorsinitstaskofidentify-
ing major risk takers
• Tasks in connection with the bank’s compliance with the remuneration policy under the special
requirements for housing.
Inaddition,theRecommendationsonCorporateGovernancerequiretheremunerationcommitteeto
undertake at least the following preparatory tasks:
• Priortoapprovalbytheshareholders'committee,theremunerationcommitteemustsubmitpropos-
alsforremunerationofmembersofthebank'sboardofdirectorsandshareholders'committeeto
theboardandtheshareholders'committee,ensurethattheremunerationisinaccordancewiththe
bank'sremunerationpolicyandrecommendaremunerationpolicyapplyingtothebankingeneral.
ANNUAL REPORT 2021 PAGE 129
Nomination committee
The bank’s board of directors has agreed a brief for the nomination committee which includes provi-
sionsonscopeandobjective,membersandhowthecommitteeisconstituted,tasks,meetings,author-
ityandresources,reportingandminutesofmeeting,publication,evaluationandself-assessment,as
well as changes to the brief.
Thenominationcommitteeis,asaminimum,responsibleforthefollowingtasks:
• Preparing proposals and recommendations for the election and re-election of members to the
bank’s shareholders’ committee and board of directors and appointment of the bank’s general man-
agement,includingdescribingthequalicationsrequiredoftheboardofdirectorsandthebank’s
general management etc. The process of recruitment of candidates for the board of directors is
carried out on the basis of discussions in the committee
• Regularlyandatleastonceayearassessingtheboardofdirectors’size,structure,compositionand
results in relation to its tasks and reporting and making recommendations for possible changes
thereof to the full board of directors
• Regularly and at least once a year assessing whether the full board of directors has the required
combinationofknowledge,professionalskills,diversityandexperience,andwhetherindividual
membersmeettherequirementsofsection64oftheDanishFinancialBusinessAct,andreporting
andmakingrecommendationsforpossiblechangesthereoftothefullboardofdirectors,includinga
possibleactionplanforthefuturecompositionandproposalsforspecicchanges.Individualmem-
bers of the management (board of directors) must also regularly assess that they have allocated
sufcienttimetotheirduties:seesection64aoftheDanishFinancialBusinessAct.Thenomination
committee must assess at least once a year whether it agrees with the individual’s assessment
• Regularlyandatleastonceayearevaluatingthebank’sgeneralmanagement,makingrecommenda-
tions to the board of directors and ensuring that the board of directors discusses succession plans
when judged to be necessary
• Regularly reviewing the board of directors’ policy for selection and appointment of members to
thegeneralmanagementifsuchapolicyhasbeenprepared,andmakingrecommendationstothe
board of directors (currently there is no such policy)
• Setting a target percentage of the under-represented gender on the board of directors and preparing
apolicyonhowtoreachthisgure
• Preparing a policy for diversity on the board of directors.
Audit committee
JensMøllerNielsenisthespeciallyqualiedmemberoftheauditcommittee.Giventhebank’ssizeand
complexityandMrNielsen’seducation,professionalexperienceandexperienceonthebank’sboardof
directorsandboardcommittees,includingtheauditcommittee,thebank’sboardofdirectorsconsiders
thatMrNielsenisindependentandthathepossessesthequalicationsrequiredpursuanttotheDanish
Act on Approved Auditors and Audit Firms.
The bank’s board of directors has agreed a brief for the audit committee which includes provisions on
howthecommitteeisconstitutedanditsobjective,members,meetings,authorityetc.,tasks,reporting
and self-assessment.
Theauditcommitteeis,asaminimum,responsibleforthefollowingtasks:
• Informingtheboardofdirectorsoftheresultofthestatutoryaudit,includingthenancialreporting
process
• Monitoringthenancialreportingprocessandmakingrecommendationsorproposalsforthepur-
pose of ensuring integrity
• Monitoringwhetherthebank’sinternalcontrolsystem,internalauditandriskmanagementsystems
areeffectivewithrespecttothenancialreportingofthebankwithoutviolatingitsindependence
• Monitoringthestatutoryauditingofthenancialstatementsetc.
• Monitoringandverifyingtheauditor’sindependence,pursuanttosections24-24coftheActonAp-
proved Auditors and Audit Firms and to Article 6 of Regulation (EU) no. 537/2014 of the European
ParliamentandoftheCouncilof16April2014onspecicrequirementsregardingauditofpublic-in-
terestentities,andapprovingtheauditor’sprovisionofservicesotherthanaudit,pursuanttoArticle
5 of the Regulation
PAGE 130 RINGKJØBING LANDBOBANK A/S
• Beinginchargeoftheprocedureforselectingandrecommendinganauditorforelection,pursuant
to Article 16 of Regulation (EU) no. 537/2014 of the European Parliament and of the Council of 16
April2014onspecicrequirementsregardingauditofpublic-interestentities.
Risk committee
The bank’s board of directors has agreed a brief for the risk committee which includes provisions on
scopeandobjective,membersandhowthecommitteeisconstituted,tasks,meetings,authorityand
resources,reportingandminutesofmeetings,publication,evaluationandself-assessment,aswellas
changes to the brief.
Theriskcommitteeis,asaminimum,responsibleforthefollowingtasks:
• Advisingtheboardofdirectorsonthebank’sgeneralexistingandfutureriskproleandriskstrategy
• Assisting the board of directors with ensuring that the board’s risk strategy is implemented correctly
in the organisation
• Assessingwhetherthenancialproductsandservicestradedbythebankareinaccordancewith
thebank’sbusinessmodelandriskprole,includingwhethertheearningsonsuchproductsandser-
vicesreecttheassociatedrisks,andpreparingproposalsforremediesiftheproductsorservices
andtheassociatedearningsarenotinaccordancewiththebank’sbusinessmodelandriskprole
• Assessing whether the incentive components of the bank’s remuneration structure take account of
thebank’srisks,capital,liquidityandtheprobabilityandtimeofpaymentofremuneration(under
thebank’sremunerationpolicy,noformsofincentivecomponentsareusedforthebank’sboardof
directors and general management)
• Conducting a review of the quarterly credit reports.
Regardingthecommitteesingeneral,incaseswhereacommitteeconsistsofthebank’sfullboardof
directorsorwherethefullboardofdirectorsparticipatesinacommitteemeeting,boththecommittee
and the board of directors’ proceedings may take place simultaneously.
GENERAL MANAGEMENT
BOARD OF DIRECTORS
ANNUAL REPORT 2021 PAGE 131
Board of directors – competences
The members of the bank’s board of directors together possess all the competences required for the
overall management of the bank on the basis of the business model for the bank’s operations.
The members of the bank’s full board of directors thus possess competences concerning:
• The business model and relevant related matters
• Credit risks and relevant related matters
• Market risks and relevant related matters
• Liquidity risks and relevant related matters
• Operational risks and relevant related matters
• IT risks and relevant related matters
• Risks of outsourcing
• Otherrisks,includinginrelationtomoneylaundering,terrornancing,othereconomiccrime,good
practice and compliance
• Budgets,accountingandauditing
• Capital structure including capital adequacy and solvency requirement
• Insurance risks
• Risk management including interdisciplinary risk management
• General managerial experience
• Managerialexperiencefromothernancialundertakings
• Legalinsight,includinginrelationtonanciallegislation
See also pages 120-127 for the special competences of the individual board members.
Holdings of Ringkjøbing Landbobank shares by members of the board
of directors
See note 41 on page 84 for information on holdings of Ringkjøbing Landbobank shares by members of
the board of directors.
PAGE 132 RINGKJØBING LANDBOBANK A/S
General management
John Bull Fisker
Born on 3 December 1964
CEO
Seniority:
Employed by the bank on 1 January 1995
Member of the general management since 1 May 1999
CEO since 1 May 2012
On the board of directors of the following companies etc.
•ChairmanofLetpensionA/S,Copenhagen
•DeputychairmanofForeningenBankdata,Fredericia
•DeputychairmanofBIHoldingA/S,Copenhagen
•DeputychairmanofBIAssetManagementFondsmæglerselskabA/S,Copenhagen
•BoardmemberofPRASA/S,Copenhagen
• Board member of the supplementary pension fund for employees
ofRingkjøbingLandbobank,Ringkøbing
Member of the customer board of:
•PFAPensionA/S,Copenhagen
Claus Andersen
Born on 19 April 1966
General manager
Seniority:
Employed by the bank on 7 June 2018
Member of the general management since 7 June 2018
On the board of directors of the following companies etc.
•ChairmanofSæbygårdSkovA/S,Ringkøbing
•BoardmemberofDLRKreditA/S,Copenhagen
•BoardmemberoftheAssociationofLocalBanks,
SavingsBanksandCooperativeBanksinDenmark,Copenhagen
•BoardmemberoftheEducationFundoftheAssociationofLocalBanks,Savings
BanksandCooperativeBanksinDenmark,Copenhagen
GENERAL MANAGEMENT
ANNUAL REPORT 2021 PAGE 133
Jørn Nielsen
Born on 9 November 1972
General manager
Seniority:
Employed by the bank on 1 August 1991
Member of the general management since 1 September 2015
No other managerial activities
Carl Pedersen
Born on 28 December 1962
General manager
Seniority:
Employed by the bank on 7 June 2018
Member of the general management since 7 June 2018
On the board of directors of the following companies etc.
•BoardmemberofByggesocietetetAalborg,Aalborg
•BoardmemberofDirektørCarlNøhrFrandsensFamiliefond,Nørresundby
•BoardmemberofVækst-InvestNordjyllandA/S,Aalborg
The board members’ other managerial activities are stated as at the date of closing the accounts.
Holdings of Ringkjøbing Landbobank shares by the general management
See note 41 on page 84 for information on holdings of Ringkjøbing Landbobank shares by members of
the general management.
PAGE 134 RINGKJØBING LANDBOBANK A/S
Ringkjøbing Landbobank Aktieselskab
Torvet 1
6950Ringkøbing,Denmark
Founded: 1886
Phone: +45 9732 1166
Telefax: +45 7624 4913
E-mail: post@landbobanken.dk
Website: www.landbobanken.com
CVR no.: 37536814
Sort code: 7670
SWIFT / BIC: RINGDK22
LEI code: 2138002M5U5K4OUMVV62
ISIN: DK0060854669
Share capital
RingkjøbingLandbobank’ssharecapitalisDKK29,067,721,
dividedinto29,067,721nom.DKK1shares.
COMPANY INFORMATION
ANNUAL REPORT 2021 PAGE 135
Ownership
On31December2021,RingkjøbingLandbobankhadregisteredsharesofDKK
28,339,236ofthetotalsharecapitalofDKK29,067,721,equivalentto97.49%ofthetotal
share capital.
Thenumberofregisteredshareholderson31December2021totalled51,258.
Major shareholders
On31December2021,twoshareholdershadadvisedthattheyholdbetween5%and
9.99% of Ringkjøbing Landbobank’s share capital:
• LiontrustInvestmentPartnersLLP,London,GreatBritainowned6.12%ofthebank’s
sharecapitalon31December2021andheld3,000votingrights.
• ATP,ofHillerød,Denmarkowned5.08%ofthebank’ssharecapitalon31December
2021andheld3,000votingrights.
Distribution of shareholders
End of
2021
End of
2020
End of
2019
End of
2018
Danish institutional shareholders 16% 25% 27% 36%
Other Danish shareholders 38% 37% 40% 43%
Foreign institutional shareholders 42% 33% 29% 17%
Other foreign shareholders 4% 5% 4% 4%
100% 100% 100% 100%
SHAREHOLDER RELATIONS
PAGE 136 RINGKJØBING LANDBOBANK A/S
COMPANY ANNOUNCEMENTS
Company announcements 2021
Summary of Ringkjøbing Landbobank’s company announcements to Nasdaq
Copenhagen and others in 2021:
0
3.02.2021 Ringkjøbing Landbobank’s annual report for 2020
03.02.2021 Notice convening annual general meeting of Ringkjøbing Landbobank
03.02.2021 Initiation of share buy-back programme
08.02.2021 Share buy-back programme – week 5
15.02.2021 Share buy-back programme – week 6
22.02.2021 Share buy-back programme – week 7
01.03.2021 Share buy-back programme – week 8
03.03.2021 Minutes of the annual general meeting on 3 March 2021
08.03.2021 Share buy-back programme – week 9
08.03.2021 Articles of association of Ringkjøbing Landbobank
15.03.2021 Share buy-back programme – week 10
22.03.2021 Share buy-back programme – week 11
29.03.2021 Share buy-back programme – week 12
06.04.2021 Share buy-back programme – week 13
12.04.2021 Share buy-back programme – week 14
19.04.2021 Share buy-back programme – week 15
26.04.2021 Share buy-back programme – week 16
28.04.2021 RingkjøbingLandbobank’sreportfortherstquarterof2021
03.05.2021 Share buy-back programme – week 17
10.05.2021 Share buy-back programme – week 18
10.05.2021 Implementation of capital reduction
10.05.2021 Articles of association of Ringkjøbing Landbobank
17.05.2021 Share buy-back programme – week 19
25.05.2021 Share buy-back programme – week 20
31.05.2021 Share buy-back programme – week 21
07.06.2021 Share buy-back programme – week 22
08.06.2021 Upward adjustment of expectations for 2021
11.06.2021 Announcement concerning large shareholders
under the Danish Act on Capital Markets
14.06.2021 Share buy-back programme – week 23
21.06.2021 Share buy-back programme – week 24
23.06.2021 Takeover of client portfolio from BIL Danmark
(branchofBanqueInternationaleàLuxembourgS.A.,Luxembourg)
24.06.2021 Announcement concerning large shareholders
under the Danish Act on Capital Markets
25.06.2021 The Danish FSA approves the takeover of client portfolio
from BIL Danmark (branch of Banque Internationale
àLuxembourgS.A.,Luxembourg)
ANNUAL REPORT 2021 PAGE 137
25.06.2021 Announcement concerning large shareholders
under the Danish Act on Capital Markets
28.06.2021 Share buy-back programme – week 25
05.07.2021 Share buy-back programme – week 26
12.07.2021 Share buy-back programme – week 27
19.07.2021 Share buy-back programme – week 28
26.07.2021 Share buy-back programme – week 29
30.07.2021 Completion of share buy-back programme and initiation
of share buy-back programme
04.08.2021 RingkjøbingLandbobank’sinterimreportforthersthalfof2021
09.08.2021 Share buy-back programme – week 31
16.08.2021 Share buy-back programme – week 32
23.08.2021 Share buy-back programme – week 33
30.08.2021 Share buy-back programme – week 34
06.09.2021 Share buy-back programme – week 35
13.09.2021 Share buy-back programme – week 36
15.09.2021 Initiation of share buy-back programme
20.09.2021 Share buy-back programme – week 37
27.09.2021 Share buy-back programme – week 38
29.09.2021 Completion of share buy-back programme
04.10.2021 Share buy-back programme – week 39
04.10.2021 Ringkjøbing Landbobank issues tier 2 capital
11.10.2021 Share buy-back programme – week 40
18.10.2021 Share buy-back programme – week 41
25.10.2021 Share buy-back programme – week 42
27.10.2021 Ringkjøbing Landbobank’s quarterly report for the
rstthreequartersof2021
27.10.2021 Financial calendar 2022 for Ringkjøbing Landbobank
01.11.2021 Share buy-back programme – week 43
08.11.2021 Share buy-back programme – week 44
15.11.2021 Share buy-back programme – week 45
22.11.2021 Share buy-back programme – week 46
29.11.2021 Share buy-back programme – week 47
06.12.2021 Share buy-back programme – week 48
13.12.2021 Share buy-back programme – week 49
20.12.2021 Share buy-back programme – week 50
27.12.2021 Share buy-back programme – week 51
Notices regarding reportable transactions in Ringkjøbing Landbobank shares are not
included in the summary above.
All the company announcements from the bank to Nasdaq Copenhagen and others can be
seen on the bank´s website: www.landbobanken.com.
PAGE 138 RINGKJØBING LANDBOBANK A/S
FINANCIAL CALENDAR
Financial calendar 2022
Thenancialcalendarfortheupcomingpublicationsisasfollows:
02.03.2022 Annual general meeting
27.04.2022 Quarterly report 1st quarter 2022
03.08.2022 Interim report 2022
26.10.2022 Quarterly report 1st-3rd quarters 2022
ANNUAL REPORT 2021 PAGE 139
PAGE 140 RINGKJØBING LANDBOBANK A/S
THE BANK’S BRANCHES
Branch Address Telephone
Ringkøbing, HQ Torvet 1, DK-6950 Ringkøbing +45 9732 1166
Brønderslev Algade 39-41, DK-9700 Brønderslev +45 9870 4500
Frederikshavn Jernbanegade 4-8, DK-9900 Frederikshavn +45 9870 6000
Hasseris Thulebakken 34, DK-9000 Aalborg +45 9870 5900
Herning Torvet 18, DK-7400 Herning +45 9721 4800
Hjallerup Hjallerup Centret 5, DK-9320 Hjallerup +45 9870 5100
Hjørring Østergade 4, DK-9800 Hjørring +45 9633 5520
Holstebro Den Røde Plads 2, DK-7500 Holstebro +45 9610 9500
Holte Kongevejen 272A, DK-2830 Virum +45 7624 9550
Copenhagen Frederiksborggade 1, 1.th.,
DK-1360 Copenhagen K +45 9633 5240
Læsø Byrum Hovedgade 79, DK-9940 Læsø +45 9633 5480
Nørresundby Torvet 4, DK-9400 Nørresundby +45 9870 5000
Skagen Sct. Laurentii Vej 39 B, DK-9990 Skagen +45 9633 5210
Sæby Vestergade 21, DK-9300 Sæby +45 9633 5320
Tarm Storegade 6-10, DK-6880 Tarm +45 9737 1411
Vejgaard Vejgaard Bymidte 2, DK-9000 Aalborg +45 9870 4400
Vejle Lysholt Allé 10, DK-7100 Vejle +45 7624 9780
Vestbjerg Bakkelyvej 2A, DK-9380 Vestbjerg +45 9870 4900
Viborg Gravene 18, DK-8800 Viborg +45 8662 5501
Vildbjerg Søndergade 6, DK-7480 Vildbjerg +45 9713 3166
Aabybro Østergade 12, DK-9440 Aabybro +45 9870 5400
Aarhus Marselis Boulevard 9, DK-8000 Aarhus C +45 7624 9760
RINGKJØBING LANDBOBANK A/S
Rasmussens Bogtrykkeri, Ringkøbing
ANNUAL REPORT 2021
Ringkjøbing Landbobank A/S
Torvet 1
6950 Ringkøbing, Denmark
Telephone: +45 9732 1166
Email: post@landbobanken.dk
Web: www.landbobanken.com
CVR no.: 37536814