Ringkjøbing Landbobank A/S Page 0
Financial review
ANNUAL REPORT 2023
Ringkjøbing Landbobank A/S Page 1
Contents
Page
2 Letter to shareholders
3 Annual report - highlights
3 Main and key figures
Management’s review:
5 Financial review
16 Capital structure
20 Risks and risk management
22 Corporate governance etc.
31 Corporate social responsibility
32 Shareholders’ committee
33 Board of directors
43 General management
45 Company information
45 Shareholders
46 Company announcements
47 Financial calendar
Statement and reports:
49 Management statement
50 Auditors’ reports
Financial statements:
56 Statements of income and comprehensive income
56 Proposed distribution of profit
57 Core earnings
58 Balance sheet
60 Statement of changes in equity
61 Statement of capital
62 Overview of notes
63 Notes
116 Five-year main figures
118 Five-year key figures
120 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.
Ringkjøbing Landbobank A/S Page 2
Letter to shareholders
War, interest rate increases, and a slowdown of the economy were issues that marked 2023. By contrast, Ringkjøbing
Landbobank achieved exceptional results with a 44% increase to DKK 2,155 million in net profit for the year and 22% return
on equity.
Our image and a high level of customer satisfaction in 2023 again formed the basis for growth of 5% in the bank’s loans and
8% in deposits. Despite cost increases and zero growth in Denmark, the bank’s customers have excelled at adapting, so the
credit quality of the bank’s loan portfolio remains high.
All of this resulted in increases of 34% in the bank’s income and 8% in its expenses. We were therefore able to reduce the
bank’s cost/income ratio from 31% to 25%, which is very clear confirmation that our business model is strong. The
improvement also shows that the return to normal after the zero-interest period benefits the financial sector.
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 5% in 2023. Distribution of 84% of the net profit for the year is recommended to the
general meeting. This will be effected through a dividend of DKK 10 per share and doubling of the share buyback programme
to DKK 1,525 million.
For a number of years, we have worked to visualise sustainability as a foundation stone of the bank and in 2023 we
determined goals and targets for reduction of carbon emissions from the bank’s loan and investment portfolios. The bank’s
goals and targets are set so that we support the intentions of the Paris Agreement. We will work according to these goals
and targets by helping our customers with the transition of their finances and by participating actively in financing a more
sustainable economy. We will continue to support and work with all the associations, clubs and events which are a very
important part of the communities in which the bank is rooted. MSCI, one of the world’s largest and most used ESG rating
agencies, recognised this development in 2023 and upgraded the bank’s ESG rating from A to AA.
We have just applied the finishing touches to an update of the bank’s strategy. It is still based on elements central to the
bank’s success such as: “The customer is the king”, a high level of expertise, and personal customer advisers who are
available and able to make fast decisions for the benefit of our customers. We want to continue pursuing our organic growth
strategy and will develop our bank by offering all the functions that matter in the relationship with our customers. We
supplement this strategy by having the best partnerships in areas that others do better than us, so that Ringkjøbing
Landbobank can offer the best to our customers.
We would like to thank our highly skilled employees who have made an extraordinary effort again this year. We are pleased
that employee wellbeing has never been higher in our surveys. This is the foundation for our continued growth.
We are looking ahead into 2024 with anticipation. On the one hand we are concerned about the economic decline we have
seen in Denmark and our neighbouring countries. On the other, the inflation is falling heavily and a soft landing for the
economy is realistic. Standing on a firm foundation that has never been stronger, the bank expects to continue to increase
its market share. Our principal tasks will be to serve our existing customers and continue the increase in new customer
relationships by winning additional market share.
We expect net profit for 2024 to be in the range DKK 1,800-2,200 million.
Finally, we would like to thank our customers and our shareholders for the strong support which the bank enjoys.
John Bull Fisker
CEO
Ringkjøbing Landbobank A/S Page 3
Annual report - highlights
• Net profit for the year is DKK 2,155 million, equivalent to a 22% return on equity
• Earnings per share (EPS) - measured on core earnings and net profit for the year - increase by 50% and 48% respectively
• Core income increases by 34% to DKK 3,828 million
• Costs increase by 8%, and the cost/income ratio decreases to 25.2%
• Strong credit quality results in impairment charges of only DKK 1 million and coincides with an increase in management
estimates to DKK 950 million
• Highly satisfactory increase in new customers and growth of 5% in loans, 8% in deposits, and 11% in custody account
holdings
• The pay-out ratio increases from 65 to 84, achieved through a dividend of DKK 10 and a doubling of the share buyback
programme to DKK 1,525 million
• Positive expectations for 2024 with expected net profit for the year in the range DKK 1.8-2.2 billion
Main figures for the bank
(DKK million)
2023 2022
2021 2020 2019
Total core income
3,828
2,862
2,433
2,179
Total expenses and depreciation
963
891
817
788
Core earnings before impairment charges for loans
2,865
1,971
1,616
1,391
Impairment charges for loans etc.
-1
-2
-68
-223
Core earnings
2,864
1,969
1,548
1,168
Result for the portfolio etc.
-7
-69
+7
-9
Special costs
20
20
17
15
Profit before tax
2,837
1,880
1,538
1,144
Net profit for the year
2,155 1,495
1,229 920 978
Equity
10,451
9,295
8,723
8,146
Deposits including pooled schemes
52,626
48,700
43,740
39,639
Loans
50,881
48,342
41,179
36,241
Balance sheet total
73,520
68,980
60,357
54,862
Guarantees
6,465
7,570
10,270
9,812
Key figures for the bank
(percent)
Profit before tax / average equity
28.7
20.9
18.2
14.5
Net profit for the year / average equity
21.8
16.6
14.6
11.7
Cost/income ratio
25.2
31.1
33.6
36.2
Common equity tier 1 capital ratio
18.9
17.4
17.6
17.5
Total capital ratio
23.0
21.6
22.3
21.1
MREL capital ratio
28.9
28.9
27.8
26.7
Key figures per DKK 1 share (DKK)
Core earnings
107
72
54
40
Profit before tax
106
68
54
39
Net profit for the year
81
54
43
32
Book value
391
337
307
280
Price, end of year
992
948
878
554
Dividend
10
7
7
7
Main and key figures
Ringkjøbing Landbobank A/S Page 4
Annual report - highlights
MANAGEMENT’S REVIEW
Page
5 Financial review
16 Capital structure
20 Risks and risk management
22 Corporate governance etc.
31 Corporate social responsibility
32 Shareholders’ committee
33 Board of directors
43 General management
45 Company information
45 Shareholders
46 Company announcements
47 Financial calendar
Ringkjøbing Landbobank A/S Page 5
Financial review
Core earnings
Core income
Interest
Net interest income was DKK 2,616 million in 2023
compared to DKK 1,677 million in 2022, an increase of
56%. The bank is highly satisfied with this development,
which has various causes.
Danmarks Nationalbank, the central bank of Denmark,
has increased interest rates 10 times by a total of 4.20
percentage points since July 2022. This means higher
income for Ringkjøbing Landbobank, because an amount
equivalent to its equity is placed in Danmarks
Nationalbank and short-term securities.
In addition, compared to 2022 there is no longer an
exemption limit of DKK 100,000 for negative interest on
personal customers’ deposits, and the rising interest rate
level has restored Ringkjøbing Landbobank’s deposit
earnings to normal.
Furthermore, deposits increased by 8% and lending by 5%
compared to the end of 2022.
After two years of growth in loans of 14% in 2021 and
17% in 2022, growth in 2023 was lower due to the impact
of the general slowdown of society. Certain industries
were cautious and reduced their inventories during the
year. The inflation relief package implemented in 2023
enabled businesses to postpone their payments of A-tax
and labour market contributions in July and August 2023
by either 3.5 months or 6 months. This also reduced
business customers’ drawings on credit lines. In addition,
the bank sold off home loans corresponding to
approximately 1% of the loan portfolio in 2023.
Against this background, the bank is pleased with the 5%
growth in loans for the year, which was broadly based
and related both to niches and to retail. It also supports
the bank’s growth strategy and aim of increasing its
market share.
Combined with the growth for the year, the interest
income for the year, which increased gradually during all
four quarters, leads the bank to expect higher net interest
income in 2024 compared to 2023, despite expected
interest rate falls.
Fee, commission, and foreign exchange income
Fee, commission, and foreign exchange income
amounted to DKK 1,013 million in 2023, unchanged
compared to 2022, when the figure was DKK 1,014
million.
Net fee, commission, and foreign exchange income
(DKK million)
2023
2022
2021
2020
2019
Securities trading
159
164
171
138
128
Asset management and custody
accounts
218
207
182
150
148
Payment handling
126
104
84
63
79
Loan fees
79
115
81
82
103
Guarantee and mortgage credit
commission etc.
248
257
245
225
217
Other fees and commission
106
101
85
71
80
Foreign exchange income
77
66
58
41
30
Total
1,013
1,014
906
770
785
Income from “Securities trading”, “Asset management
and custody accounts”, and “Foreign exchange income”
is assessed as one item as it relates primarily to the
bank’s focus on private banking and other asset
management.
Total income from these three items increased from DKK
437 million in 2022 to DKK 454 million in 2023, an
increase of 4%. The development reflects lower income
from securities trading, as the year was characterised by
a lower level of trading activity due to market uncertainty.
It also reflects an increase in the income from both asset
management and foreign exchange due to an increase in
new customers during 2023 and in assets under
management, including an 11% increase in funds in
custody accounts etc.
Funds in custody accounts etc.
(DKK million)
End of
2023
End of
2022
End of
2021
End of
2020
End of
2019
Custody account holdings
87,165
79,740
74,589
54,811
48,186
Deposits in pooled schemes
5,845
4,973
5,538
4,700
4,276
Letpension/PFA Pension
4,666
3,669
3,408
2,576
2,050
Total
97,676
88,382
83,535
62,087
54,512
Based on the above, the development in income for the
three items is considered satisfactory.
Income from “Guarantee and mortgage credit
commission etc.” amounted to DKK 248 million in 2023
compared to DKK 257 million in 2022. The bank sold off
home loans for a total of approximately DKK 2.8 billion
during 2022 and 2023. The interest on sold-off home
loans is posted under the item “Guarantee and mortgage
credit commission etc.” The explanation of the
development in income level is that there was a period
from mid-2022, continuing throughout 2023, when
interest rates increased continuously. Thus, the figure
Ringkjøbing Landbobank A/S Page 6
Financial review
also reflected that the period of notice to borrowers of
interest rate changes for home loans is six months
toward borrowers, whereas the funding rates are adjusted
on an ongoing basis.
There was a small increase in income in 2023 deriving
from the implementation of the interest rate increases
and this increase is expected to continue in the coming
quarters of 2024 as the interest rate increases already
announced enter into force.
As was expected, the level of refinancing and trading
activities for real property was lower in 2023 than in 2022,
which resulted in a DKK 36 million decrease in income
from “Loan fees” in the year.
The increase in income from “Payment handling” was
21%, rising from DKK 104 million in 2022 to DKK 126
million in 2023 driven, among other things, by a continued
return to normality for income during 2023.
With an increase of DKK 5 million, the income from “Other
fees and commission” also developed positively
compared to 2022. This is attributable to the bank’s
continued focus on pension and insurance activities.
Sector shares and other operating income
Total earnings from banking sector shares amounted to
DKK 193 million in 2023 compared to DKK 169 million in
2022. The earnings derive primarily from returns on the
bank’s ownership interests in BankInvest (BI Holding),
DLR Kredit, and PRAS. The earnings increase in 2023 is
attributable to increased operating results in all three
companies.
Other operating income amounted to DKK 6 million in
2023, an increase compared to 2022, where the figure
was DKK 2 million. The income for the year was of a non-
recurring nature as it related primarily to the proceeds
from the sale of a property.
Core income
Total core income increased by 34%, from DKK 2,862
million in 2022 to DKK 3,828 million in 2023. The bank
considers the increase highly satisfactory.
Core income
2,116
2,179
2,433
2,862
3,828
1,800
2,300
2,800
3,300
3,800
2019
2020 2021 2022 2023
DKK million
Ringkjøbing Landbobank A/S Page 7
Financial review
Expenses, depreciation, and write-downs
Total expenses including depreciation and write-downs
on tangible assets amounted to DKK 963 million in 2023,
compared to DKK 891 million in 2022, an increase of 8%.
The cost increase primarily reflects higher staff costs and
higher IT expenses resulting from the bank’s growth. In
addition, the bank has expanded its organisation over the
last two years to gear itself for the future and conform to
a regulatory setup which subjects the bank to more
supervisory inspections.
The cost/income ratio was 25.2% in 2023, compared to
31.1% in 2022, which is considered highly satisfactory.
The marked improvement in the cost/income ratio is
attributable to an increase in the bank’s business volume
and the fact that the bank is again generating earnings
from deposits.
A low cost/income ratio combined with good credit
quality are the foundation for the bank’s business model.
This combination provides a high free cash flow and a
strong revenue shield.
Impairment charges for loans etc.
Impairment charges for loans etc. represented an
expense of DKK 1 million in 2023, compared to an
expense of DKK 2 million in 2022.
During 2023, the bank’s total account for impairment
charges increased by DKK 33 million to DKK 2,335 million
and amounted to 4.1% of the bank’s total loans and
guarantees at the end of 2023. DKK 873 million of the
total account for impairment charges is attributable to
stage 3 exposures. The remainder is attributable to stage
1 and 2 exposures.
The bank’s expenditure for losses and impairment
charges in 2023 was lower than expected at the
beginning of the year. It is thus positive to note that the
bank’s customers are generally robust and have so far
handled the period of considerable interest rate increases
without any significant new impairment charges and
losses for the bank. Total individual impairment charges
were thus falling in 2023.
Despite market expectations of declining interest rates in
2024, we judge that there is still a risk of delayed negative
effects on the economy resulting from the rate increases
in 2022 and 2023. The bank thus chose to further
increase the management estimates for losses and
impairment charges during 2023. The management
estimates were DKK 950 million at the end of 2023,
compared to DKK 794 million at the end of 2022. The
majority of the management estimate is attributable to a
general risk of economic decline.
We continue to be of the opinion that the credit quality of
the bank’s loans is at a satisfactory high level.
At a more sector-specific level, the bank’s portfolio of
personal customers is naturally hit by increasing interest
rates. However, highly-geared customers generally have
Cost/income ratio
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
38.0
36.2
33.6
31.1
25.2
20
30
40
50
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Percent
Ringkjøbing Landbobank A/S Page 8
Financial review
fixed-rate financing consistent with both the bank’s credit
policy and the Danish FSA’s guidelines. Combined with a
continued strong labour market, this resulted in the
bank’s personal customers coping well in 2023 and they
are also judged to be robust for the future. The
cumulative impairment ratio for personal customers was
2.3% on 31 December 2023.
After a 2022 with unfavourable conditions for the bank’s
pig farmers, the situation improved significantly in 2023,
when their earnings were generally very satisfactory. For
dairy farmers, milk prices fell from the record high in
2022 but are still at a level judged to be satisfactory. The
bank’s loans and guarantees to pig and dairy farmers
were 1.0% and 1.1% respectively at the end of 2023 and
the impairment ratios 24% and 22% respectively at the
end of the year.
The bank has a considerable exposure to financing of
real property of 18.5% of loans and guarantees. Here it is
important to note that 77% of the bank’s exposure to
financing of real property is granted without prior debt.
The increasing interest rates naturally depress prices and
put the turnover of investment properties under pressure.
The bank continually assesses the value of the security
under the mortgages provided and we continue to believe
that the bank’s loans are generally well covered.
The bank has made management estimates in relation to
the above circumstances for personal customers, pig and
dairy farmers, and financing of real property.
Actual losses (less amounts received on receivables
previously written off) were DKK 37 million in 2023, which
is judged to be extremely satisfactory. The bank’s loans
with suspended interest amounted to DKK 120 million at
the end of 2023 compared to DKK 81 million in 2022.
Core earnings
Core earnings in 2023 totalled DKK 2,864 million
compared to the previous year’s DKK 1,969 million, an
increase of 45%.
Core earnings
(DKK million)
2023
2022
2021
2020
2019
Total core income
3,828
2,862
2,433
2,179
2,116
Total expenses and depreciation
963
891
817
788
805
Core earnings before impairments
2,865
1,971
1,616
1,391
1,311
Impairment charges for loans etc.
-1
-2
-68
-223
-100
Core earnings
2,864
1,969
1,548
1,168
1,211
The bank places emphasis on the key figure “Core
earnings per share” and how it develops. Apart from
2020, the bank has been able to increase core earnings
per share each year in the period 2014-2023.
In 2023, “Core earnings per share” increased by 50% from
DKK 71.5 in 2022 to DKK 107.1 in 2023. The development
in the bank’s earnings and the share buyback
programmes completed thus had a positive effect on
“Core earnings per share”.
Core
earnings
per DKK
1 share (DKK)
22.4
25.7
27.
6
30.9
36.5
41.4
40.2
54.4
71.5
107.1
0
20
40
60
80
100
120
2014 2015 2016 2017 2018 2019
2020 2021
2022
2023
Ringkjøbing Landbobank A/S Page 9
Financial review
Result for the portfolio etc.
The result for the portfolio etc. including portfolio funding
costs was negative by DKK 7 million net for 2023. In
2022, the result for the portfolio etc. was negative by DKK
69 million net.
The result for the portfolio for the year reflects a loss for
the bank on its portfolio of short-term bonds in 2023
because the short-term interest rates rose continually
during the year. On the other hand, the bank made a profit
on its portfolio of long-term bonds, since long-term
interest rates fell toward the end of the year.
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 20 million net in 2023, unchanged
relative to 2022.
Profit before and after tax and follow-up on financial
expectations for 2023
The profit before tax was DKK 2,837 million, equivalent to
a 28.7% p.a. return on average equity.
The net profit for the year was DKK 2,155 million,
equivalent to a 21.8% p.a. return on average equity.
Core earnings per share measured on the net profit for
the year, increased from DKK 54.4 per share in 2022 to
DKK 80.6 in 2023, an increase of 48%.
The bank finds the above very satisfactory.
On 18 January 2023, the bank announced its
expectations for 2023, which were core earnings in the
range DKK 1,700-2,100 million and net profit for the year
in the range DKK 1,200-1,600 million.
On 11 April 2023, the bank upwardly adjusted its
expectations for 2023 to core earnings in the range DKK
2,000-2,400 million and net profit for the year in the range
DKK 1,400-1,800 million.
The background to the upward
adjustment was primarily a more satisfactory income
flow than expected, and a very satisfactory loss level was
also noted in the first quarter of 2023.
On 12 June 2023, the bank again upwardly adjusted its
expectations for 2023, this time taking core earnings into
the range DKK 2,300-2,650 million and net profit for the
year into the range DKK 1,700-2,000 million. The
background to the upward adjustment was a continued
satisfactory increase in customers and a more positive
development in the need for impairment charges than
expected.
Finally, on 9 October 2023, the bank again upwardly
adjusted its expectations for 2023 to core earnings in the
range DKK 2,600-2,900 million and net profit for the year
in the range DKK 1,900-2,200 million.
The background to
the upward adjustment was primarily a strong credit
quality and thus a more positive development in the need
for impairment charges than expected.
Core earnings stood at DKK 2,864 million and net profit
for the year at DKK 2,155 million, both realised within the
expected ranges announced on 9 October 2023.
Balance sheet items and contingent liabilities
The bank’s balance sheet total stood at DKK 73,520
million at the end of 2023, compared to DKK 68,980
million the year before.
Loans increased by 5% from DKK 48,342 million at the
end of 2022 to DKK 50,881 million at the end of 2023.
Further comments on the development in the loan
portfolio are provided in the section “Interest” on page 5.
Deposits including pooled schemes increased by 8% in
2023 from DKK 48,700 million at the end of 2022 to DKK
52,626 million at the end of 2023.
Equity increased from DKK 9,295 million at the end of
2022 to DKK 10,451 million at the end of 2023.
The bank’s contingent liabilities, including guarantees, at
the end of the year amounted to DKK 6,465 million,
compared to DKK 7,570 million at the end of 2022. The
continued reduced level of the bank’s contingent
liabilities is attributable, among other things, to a lower
level of activity on the housing market.
Credit intermediation
In addition to the traditional bank loans shown on its
balance sheet, the bank also arranges mortgage loans on
behalf of both Totalkredit and DLR Kredit.
With an increase of 3% compared to the end of 2022, the
development in the bank’s total credit intermediation was
positive in 2023.
The development in the credit intermediation is shown in
the following summary:
Total credit intermediation
(DKK million)
31 Dec.
2023
31 Dec.
2022
31 Dec.
2021
31 Dec.
2020
31 Dec.
2019
Loans etc.
50,881
48,342
41,179
36,241
35,465
Mortgage credit -
Totalkredit
46,766
45,248
43,849
39,454
36,374
Mortgage credit - DLR
Kredit and others
9,551
10,256
10,172
9,511
9,029
Total
107,198
103,846
95,200
85,206
80,868
Ringkjøbing Landbobank A/S Page 10
Financial review
Securities and market risk
The item “Shares, etc.” amounted to DKK 1,471 million at
the end of 2023, with DKK 54 million in listed shares and
investment fund certificates and DKK 1,417 million in
sector shares etc., mainly in the companies DLR Kredit, BI
Holding (BankInvest), and PRAS.
The bond portfolio amounted to DKK 8,127 million, of
which the majority consisted of AAA-rated Danish
mortgage credit bonds.
The total interest rate risk - impact on profit of one
percentage point change in the interest level - was
computed as 0.5% of the bank’s tier 1 capital on 31
December 2023, the equivalent of DKK 49 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 2023:
Value at Risk
Risk in DKK
million
Risk relative to equity
end of year in %
Highest risk of loss
65.2
0.58
Lowest risk of loss
9.0
0.08
Average risk of loss
30.9
0.28
End-of-year risk of loss
14.4
0.13
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. Please
see note 50 on pages 97-98 for further information.
Liquidity
In terms of liquidity, the bank’s short-term funding
liabilities total DKK 2.5 billion, comprising debt to credit
institutions and issued bonds with term to maturity of
less than 12 months. This is balanced by short-term
liquidity management deposits in Danmarks
Nationalbank, receivables from credit institutions with
term to maturity of less than 12 months and securities at
fair value totalling DKK 13.3 billion, which means the total
excess cover is DKK 10.8 billion.
The bank’s deposits (excluding pooled schemes) and
equity exceeded its loans by DKK 6.3 billion on 31
December 2023 and these two items therefore more than
fully finance the loan portfolio. In addition, part of the
loan portfolio for renewable energy projects is financed
back-to-back with KfW Bankengruppe, which means that
DKK 0.8 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 liquidity
ratios, LCR and NSFR. On 31 December 2023 the bank’s
LCR was 254% and its NSFR 123%. The bank thus met the
statutory requirement for both ratios by a good margin.
The Supervisory Diamond
The bank complies with the Danish FSA’s Supervisory
Diamond. The Supervisory Diamond contains four
different benchmarks and associated limit values which
Danish banks are expected to observe.
The Supervisory Diamond benchmarks and limit values
and the bank’s key figures are given in the following table,
which shows that the bank meets all four current limit
values by a good margin.
Benchmark
Limit
value
2023
2022
2021
2020
2019
Liquidity benchmark
>100%
224.9%
143.4%
161.1%
177.6%
193.2%
Large exposures
<175%
116.9%
118.0%
109.8%
99.8%
121.0%
Growth in loans
<20%
5.0%
17.5%
13.5%
2.2%
6.3%
Real property exposure
<25%
21.1%
20.0%
18.4%
17.9%
17.5%
Financial rating and ESG rating
The bank is rated by the international credit rating
agency, Moody’s Investors Service. The bank’s ratings
were last affirmed by Moody’s on 24 February 2023 with
stable outlook.
The most important ratings at the end of 2023 were:
Rating
Assigned rating
Long-term Bank Deposits
Aa3
Long-term Issuer Rating
Aa3
Short-term Bank Deposits
P-1
Short-term Issuer Rating
P-1
Outlook
Stable
In the economic, social, and governance (ESG) area, the
bank is rated, for example, by MSCI, one of the world’s
largest, most used ESG rating agencies. In July 2023,
MSCI upgraded the bank’s ESG rating from A to AA, the
second-highest rating on MSCI’s rating scale.
Ringkjøbing Landbobank A/S Page 11
Financial review
The bank’s share
The bank’s share is listed on the Nasdaq Copenhagen
and the volume in circulation is 100%. The Ringkjøbing
Landbobank share is part of both the Danish Large Cap
index on OMX Copenhagen and the Stoxx Europe 600
index.
At the beginning of 2023 the share price was 948.0. At
the end of 2023, the price was 991.5. The market
capitalisation totalled DKK 27.3 billion at the end of the
year.
The return on the share in 2023 was 5% including the
dividend of DKK 7.0 distributed in 2023.
Including dividends up to and including the 2023 financial
year and given the share price on 31 December 2023, the
average annual return on an investment in the bank’s
shares at the beginning of 2001 is 19%.
As indicated in the chart below, the bank’s share has
outperformed the OMX Copenhagen Banks Performance
Index in the same period.
Ringkjøbing Landbobank A/S Page 12
Financial review
ESG
As in previous years, the bank has focused on ESG in
2023. This is natural to a financial institution wanting to
play an important role in society.
In addition to this annual report, the bank also publishes
its ESG report today. The ESG report contains the bank’s
statutory statement on corporate social responsibility.
In December 2023, the bank’s goals and targets for
carbon reductions in the bank’s loan portfolio and
investment portfolio were published in the bank’s social
responsibility and sustainability policy. The goals and
targets are described in further detail in the section
“Social responsibility, sustainability and ESG report” on
page 31.
Reputation/image, Bank of the Year, and employee
wellbeing
In September 2023, the market research company
Voxmeter published a reputation/image survey of Danish
financial 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. 5
In May 2023, Ringkjøbing Landbobank was awarded the
accolade of Bank of the Year among major banks for the
eighth time in a row. As in previous years, the selection
was made by FinansWatch in collaboration with the audit
and consultancy firm EY.
The Bank of the Year award supplements the satisfactory
rankings regarding image and reputation.
The basis for operating a good bank with happy
customers is happy, highly skilled employees. We are
thus also very pleased that employee satisfaction with
the bank is high. In an employee satisfaction survey
completed in the second quarter of 2023, employee
satisfaction/wellbeing is at its highest level since these
surveys began.
The high employee satisfaction/wellbeing is a good
foundation for the continued focus on the bank’s organic
growth strategy, under which all employees work every
single day to create value for both existing and new
customers in their relations with the bank.
Expected results and plans for 2024
The net profit for 2023 was DKK 2,155 million.
In late 2023, the bank’s board of directors adopted a
strategy update for the years 2024-2026. Overall, the new
strategy is a continuation of the organic growth strategy
- focusing on serving the bank’s existing customers and
on an additional increase in customer numbers - which
the bank has pursued and executed for many years.
We are looking into a 2024 with continued
macroeconomic uncertainty, as in 2023.
Based on the above, the bank’s expectations for 2024 are
as follows:
• Core income: The bank forecasts continued growth in
loans in 2024. The bank also starts 2024 with a higher
level of net interest income compared to the
beginning of 2023. On the other hand, the bank
expects interest rate decreases during the coming
year. In summary, based on the above the bank
expects total core income to develop positively in
2024 compared to 2023
• Expenses: An increase of approximately 7% in total
expenses is expected in 2024 compared to 2023
• Impairment charges: The bank forecasts a small
increase in impairment charges in 2024
On the basis of the above, the bank maintains the
previously announced expectations for 2024 for net profit
for the year in the range DKK 1.8-2.2 billion.
Events after the reporting period
No events after 31 December 2023 are judged to have an
impact on the annual report for 2023.
Ringkjøbing Landbobank A/S Page 13
Financial review
Comments on the fourth quarter of 2023
Core income
Core income of DKK 1,043 million in the fourth quarter of
2023 is the highest ever realised by the bank in a single
quarter.
The development reflects a continued positive trend in
the net interest income compared to the first three
quarters of the year, including that the bank’s loans
increased by 2.6% and its deposits by 0.8% in the fourth
quarter of 2023 compared to the end of the third quarter
of 2023.
There was also a small increase in net fee and
commission income compared to the preceding quarters.
This includes an increase in income from “Asset
management and custody accounts” and the level of
activity in the housing area was also higher in the fourth
quarter compared to the first three quarters of 2023 with
consequent higher earnings from “Loan fees”.
Expenses
Expenses in the quarter totalled DKK 255 million
compared to DKK 236 million in the fourth quarter of
2022, an increase of 8%. The cost increase primarily
reflects higher staff costs and higher IT expenses.
Impairment charges for loans
With the good credit quality, impairment charges in the
quarter followed the pattern from the first three quarters
of the year and were thus zero in the fourth quarter of
2023.
The management estimate in the quarter increased
during the quarter from DKK 877 million at the beginning
to DKK 950 million at the end of the quarter.
Result for the portfolio
The result for the portfolio for the quarter was positive at
DKK 29 million. This reflects, among other things, that the
bank made a profit on its portfolio of long-term bonds
since the long-term interest rates fell toward the end of
the year. The bank thus recovered some of the negative
result for the portfolio in the three preceding quarters.
Ringkjøbing Landbobank A/S Page 14
Financial review
Quarterly overviews
The following pages contain quarterly overviews comprising core earnings, balance sheet items and contingent liabilities, and statement of capital.
Core earnings
(DKK million)
Q4
2023
Q3
2023
Q2
2023
Q1
2023
Q4
2022
Q3
2022
Q2
2022
Q1
2022
Q4
2021
Q3
2021
Q2
2021
Q1
2021
Q4
2020
Q3
2020
Q2
2020
Q1
2020
Q4
2019
Q3
2019
Q2
2019
Q1
2019
Net interest income
717
686
652
561
511
410
390
366
355
336
327
325
321
319
311
305
292
294
296
291
Net fee and commission income
excluding securities trading
207
193
193
185
190
199
196
199
182
170
166
159
156
147
136
152
154
163
159
150
Income from sector shares etc.
60
47
45
41
46
38
41
44
47
49
43
40
43
38
35
35
36
36
36
37
Foreign exchange income
20
18
19
20
17
18
16
15
15
14
13
16
13
9
9
10
8
9
8
6
Other operating income
1
5
0
0
1
0
0
1
0
0
1
4
1
0
1
0
5
7
0
1
Core income excluding securities
1,005
949
909
807
765
665
643
625
599
569
550
544
534
513
492
502
495
509
499
485
Securities trading
38
40
38
42
34
40
41
49
52
34
29
56
32
39
28
39
35
29
23
41
Total core income
1,043
989
947
849
799
705
684
674
651
603
579
600
566
552
520
541
530
538
522
526
Staff and administration expenses
248
231
238
222
229
214
221
207
206
191
195
198
206
179
190
191
202
180
198
198
Depreciation and write-downs, tangible
assets
5
3
3
3
5
3
4
1
9
3
4
3
4
5
2
3
9
8
4
2
Other operating expenses
2
3
3
2
2
2
1
2
2
2
2
2
2
2
0
4
1
0
2
1
Total expenses etc.
255
237
244
227
236
219
226
210
217
196
201
203
212
186
192
198
212
188
204
201
Core earnings before impairment charges
788
752
703
622
563
486
458
464
434
407
378
397
354
366
328
343
318
350
318
325
Impairment charges for loans and other
receivables etc.
0
0
0
-1
0
0
-1
-1
-7
-13
-19
-29
-38
-44
-66
-75
-25
-26
-24
-25
Core earnings
788
752
703
621
563
486
457
463
427
394
359
368
316
322
262
268
293
324
294
300
Result for the portfolio etc.
+29
-8
-7
-21
+11
-61
-10
-9
+11
-1
+7
-10
+15
+17
+29
-70
-4
+20
+7
+26
Amortisation and write-downs, intangible
assets
5
5
5
5
5
5
5
5
5
4
4
4
4
3
4
4
4
3
4
4
Profit before tax
812
739
691
595
569
420
442
449
433
389
362
354
327
336
287
194
285
341
297
322
Tax
198
178
166
140
110
91
94
90
79
87
71
72
64
64
60
36
62
66
76
63
Net profit for the year
614
561
525
455
459
329
348
359
354
302
291
282
263
272
227
158
223
275
221
259
Ringkjøbing Landbobank A/S Page 15
Financial review
Quarterly overviews - continued
Balance sheet items and contingent liabilities
(DKK million)
End of
Q4
2023
End of
Q3
2023
End of
Q2
2023
End of
Q1
2023
End of
Q4
2022
End of
Q3
2022
End of
Q2
2022
End of
Q1
2022
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
Loans
50,881
49,590
49,996
48,842
48,342
48,052
46,681
43,352
41,179
38,849
37,268
37,210
36,241
35,479
35,260
36,130
35,465
34,757
34,528
34,195
Deposits including pooled
schemes
52,626
52,216
50,799
48,700
48,700
47,637
46,144
42,599
43,740
41,475
41,376
41,766
39,639
39,204
39,670
37,051
38,128
38,554
39,070
37,439
Equity
10,451
10,042
9,647
9,295
9,295
9,009
8,864
8,671
8,723
8,563
8,333
8,132
8,146
7,884
7,612
7,380
7,610
7,426
7,231
7,071
Balance sheet total
73,520
73,254
71,012
68,980
68,980
67,463
65,226
60,157
60,357
57,562
57,123
56,845
54,862
53,956
53,984
51,531
52,941
53,601
52,426
50,266
Contingent liabilities
6,465
6,780
7,216
7,570
7,570
8,998
11,244
12,432
10,270
10,886
11,811
10,370
9,812
9,590
9,379
9,992
9,665
10,836
10,466
7,976
Statement of capital
Common equity tier 1
9,225
8,391
8,408
7,951
8,154
7,532
7,720
7,471
7,632
7,255
7,274
7,122
7,277
7,049
6,973
6,109
6,072
5,624
5,441
5,284
Tier 1 capital
9,225
8,391
8,408
7,951
8,154
7,532
7,720
7,471
7,632
7,255
7,274
7,122
7,277
7,049
6,973
6,109
6,072
5,624
5,441
5,284
Total capital
11,188
10,314
9,847
9,894
10,107
9,499
9,730
9,476
9,635
8,743
8,763
8,614
8,774
8,553
8,507
8,009
8,242
7,786
6,854
6,667
MREL capital
14,097
13,202
13,113
13,113
13,533
12,937
13,183
12,445
12,033
11,167
11,596
10,837
11,112
11,587
11,580
10,985
11,248
10,790
9,551
9,033
Total risk exposure
48,733
47,706
47,627
47,627
46,855
47,326
46,940
44,880
43,285
41,729
41,063
42,271
41,561
39,682
38,900
41,444
41,223
39,547
40,106
38,308
(Percent)
Common equity tier 1
capital ratio
18.9
17.6
17.7
16.9
17.4
15.9
16.4
16.6
17.6
17.4
17.7
16.8
17.5
17.8
17.9
14.7
14.7
14.2
13.6
13.8
Tier 1 capital ratio
18.9
17.6
17.7
16.9
17.4
15.9
16.4
16.6
17.6
17.4
17.7
16.8
17.5
17.8
17.9
14.7
14.7
14.2
13.6
13.8
Total capital ratio
23.0
21.6
20.7
21.0
21.6
20.1
20.7
21.1
22.3
21.0
21.3
20.4
21.1
21.6
21.9
19.3
20.0
19.7
17.1
17.4
MREL capital ratio
28.9
27.7
27.5
28.5
28.9
27.3
28.1
27.7
27.8
26.8
28.2
25.6
26.7
29.2
29.8
26.5
27.3
27.3
23.8
23.6
Ringkjøbing Landbobank A/S Page 16
Capital structure
Share buyback programmes, capital
reduction and profit distribution
The bank’s board of directors initiated share buyback
programmes in both February and August 2023, for DKK
385 million each and both relating to the profit
distribution for 2022.
Both share buyback programmes were completed under
the Safe Harbour rules for the purpose of cancelling the
bought shares at a future general meeting.
The annual general meeting in March 2023 also decided
to cancel the 888,327 shares in Ringkjøbing Landbobank
bought in 2022/23. The capital reduction was finalised in
May 2023.
It is proposed to the annual general meeting in February
2024 that the 784,600 shares bought back in the period
from 2 February 2023 and up to and including 22 January
2024 be finally cancelled in connection with a capital
reduction, thus reducing the number of shares in the bank
from 27,491,339 to 26,706,739.
The bank’s actual share capital at the end of the year was
thus DKK 26,727,729 in nom. DKK 1 shares, see below.
Share
capital/Number
of shares
Beginning of 2023
28,379,666
Capital reduction, cancellation of shares, May 2023
-888,327
Share capital at end of 2023
27,491,339
Share buyback programmes - purchased in 2023
763,610
Actual share capital at end of 2023
26,727,729
Share buyback programmes - purchased in 2024
20,990
Actual share capital following a capital reduction in 2024
26,706,739
The bank has completed an application process at the
Danish FSA regarding distribution of the profit for 2023.
Based on this process, the bank’s board of directors
intends to increase the pay-out ratio from 65 for the profit
for 2022 to 84 for the profit for 2023.
The board of directors proposes that a dividend of DKK
10 per share be paid for the 2023 financial year,
equivalent to a total of DKK 275 million. A dividend of
DKK 7 per share was paid for the 2022 financial year.
In addition, the board of directors has decided to initiate a
share buyback programme totalling DKK 1,525 million
divided into two parts. Part I of the programme, for DKK
750 million and a maximum of 1,500,000 shares, is for
execution in the period 1 February 2024-28 June 2024
and part II of the programme, for DKK 775 million and a
maximum of 1,550,000 shares, is for execution in the
period 1 July 2024-27 January 2025. If part I of the share
buyback programme is completed before 28 June 2024,
part II will be initiated immediately after completion of
part I.
Implementation of the share buyback programme is
subject to the annual general meeting in February 2024,
as in previous years, again authorising the board of
directors to acquire the bank’s own shares.
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
accordance with current legislation, until the next annual
general meeting, to a total nominal value of 10% of the
share capital, such that the shares can be acquired at
current market price +/- 10% at the time of acquisition.
Seen in isolation, the implementation of the share
buyback programme will mean a reduction of the bank’s
common equity tier 1 capital ratio by a total of 3.3
percentage points calculated on the basis of the capital
structure on 31 December 2023.
Capital objectives and pay-out ratios
Management wants the bank’s general capitalisation to
be such as will ensure sufficient capital for future growth
and for hedging against any fluctuations in the risks
assumed by the bank.
At the beginning of 2023, the countercyclical capital
buffer was implemented at 2.0%. During 2023, this capital
buffer was increased once by 0.5 percentage point, which
means it totalled 2.5% at the end of 2023. The capital
conservation buffer was also 2.5% at the end of the year.
On 3 October 2023, the Systemic Risk Council
recommended activating a sector-specific systemic risk
buffer for exposures to real estate companies at a rate of
7% of the risk-weighted assets of the exposures,
applicable from 30 June 2024. The Council
recommended that the measure should apply solely to
exposures to real estate companies, i.e. firms engaged in
activities under the economic activity codes
“Development of building projects” and “Real estate”,
while exposures to “Social housing companies” and
“Cooperative housing societies” under the activity code
“Real estate” are exempt from the measure.
The government announced on 3 October 2023 that it
intends to follow the recommendation.
The result for the bank will be a sector-specific systemic
buffer of around 1% in addition to the other regulatory
capital requirements that the bank must meet as
described above.
Before the financial reporting process, the board of
directors re-assessed the bank’s internal capital targets.
The conclusion of this assessment was that the internal
capital targets below will be maintained for the time
Ringkjøbing Landbobank A/S Page 17
Capital structure
being and revisited before the sector-specific systemic
risk buffer for the real estate sector takes effect at the
end of the first half of 2024 and the specific rules are
known. However, the new sectoral systemic buffer is
expected to be of only marginal significance to the bank’s
internal capital targets.
The internal capital targets will therefore be maintained
for the time being, meaning that the common equity tier 1
capital ratio must be at least 13.5%, the total capital ratio
must be at least 17.0% and the MREL capital ratio for
covering the MREL requirement must be at least 25.0%
including the capital buffers. All capital targets must be
met at the end of the year. While capital ratios may
fluctuate during the year, the MREL requirement must
always be met.
The bank intends to continue the policy for distributions
practised in recent years. The policy has been
characterised by stable dividends combined with share
buyback to adjust the capital structure regularly to the
development in the amount of the bank’s total risk
exposure and its future growth opportunities as
envisaged by management.
The bank’s earnings were increasing significantly in 2023,
and on this basis the board of directors proposes
increasing the pay-out ratio to 84 for the distribution of
profit for 2023, as stated above.
Current capital structure
The bank’s equity at the beginning of 2023 was DKK
9,295 million. The profit 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 2023 was DKK 10,451 million.
With effect from 1 September 2023, the bank issued tier 2
capital for a total amount of DKK 500 million. The capital
issue has a maturity of 10 years with a first call
(redemption) option after 5 years. The interest for the
entire term to maturity is agreed at a 6-month Cibor rate
plus a margin of 200 basis points and with fixing of
interest every six months. The issue, which is unlisted,
was made as a private placement with an institutional
investor. The issue was part of the bank’s ongoing capital
planning.
At the end of 2023, the bank’s tier 1 capital ratio was
18.9%, and the total capital ratio 23.0%.
The bank's capital ratios as at the end of December 2019-
2023 were as follows:
Capital ratios
2023
2022
2021
2020
2019
Common equity tier 1 capital
ratio
18.9
17.4
17.6
17.5
14.7
Tier 1 capital ratio
18.9
17.4
17.6
17.5
14.7
Total capital ratio
23.0
21.6
22.3
21.1
20.0
MREL capital ratio
28.9
28.9
27.8
26.7
27.3
Calculated without IFRS 9 transition programmes, the
bank’s tier 1 capital ratio was 18.3% and the total capital
ratio 22.3% on 31 December 2023.
Individual solvency requirement and
capital buffers
Ringkjøbing Landbobank focuses on its internally
calculated individual solvency requirement, defined 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 calculation 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 financial problems, and others. The 8+ model thus
takes no account of the bank’s earnings and cost base
and its robust business model.
Despite this, the bank’s individual solvency requirement at
the end of 2023 was calculated at 9.0%, which is
marginally lower than at the end of 2022, when the
individual solvency requirement was calculated at 9.3%.
The capital conservation buffer of 2.5% and a
countercyclical buffer of 2.5% at the end of 2023 should
be added to this.
The total requirement for the bank’s total capital was
thus 14.0% at the end of 2023. Compared with the actual
total capital of DKK 11.2 billion, the capital buffer at the
end of 2023 was thus DKK 4.4 billion, equivalent to 9.0
percentage points.
For further information, see the summary below.
Individual solvency requirement and excess cover
(%)
2023
2022
2021
2020
2019
Individual solvency requirement
9.0
9.3
9.3
9.3
9.3
Capital conservation buffer
2.5
2.5
2.5
2.5
2.5
Countercyclical buffer
2.5
2.0
0.0
0.0
1.0
Total requirement for the bank’s
total capital
14.0
13.8
11.8
11.8
12.8
Excess cover in percentage points
relative to individual solvency
requirement
14.0
12.3
13.0
11.8
10.7
Excess cover in percentage points
relative to total requirement for
total capital
9.0
7.8
10.5
9.3
7.2
Ringkjøbing Landbobank A/S Page 18
Capital structure
The computed adequate total capital is regularly
assessed and reported 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 2023 on the bank’s website:
www.landbobanken.dk/solvency
MREL requirement
The MREL requirement for 2023 was 17.9%. In December
2023, the bank received an updated MREL requirement of
18.9% from the Danish FSA, applicable from the
beginning of 2024. The Danish FSA at the same time
notified the bank of a subordination requirement of
22.8%.
The subordination requirement must be met, at a
minimum, with non-preferred senior capital, while the
difference between the MREL requirement plus the
combined capital buffer requirements and the
subordination requirement can be met with preferred
senior capital.
Both the MREL requirement and the subordination
requirement must always be met.
To meet the MREL requirement, the bank has issued non-
preferred senior capital over time. At the end of 2023,
non-preferred senior capital equivalent to DKK 2.9 billion
had been issued.
In addition, the bank had issued preferred senior capital
equivalent to a total of DKK 500 million at the beginning
of 2024, which complies with the eligibility provisions and
can be used to cover the difference between the MREL
requirement plus the combined capital buffer
requirements and the subordination requirement.
The bank expects not to need refinancing of non-
preferred senior capital and tier 2 capital in 2024, but
expects to issue non-preferred senior capital/preferred
senior capital equivalent to DKK 400-800 million in 2024.
The bank’s MREL capital ratio was 28.9% at the end of
2023, which met the target fixed for the MREL capital
ratio. At the end of 2023, the excess cover relative to the
MREL requirement was 11.0 percentage points.
Ringkjøbing Landbobank A/S Page 19
Capital structure
Capital adequacy rules
The bank used the methods below for the calculation of
its total risk exposure amount at the end of 2023 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, financial collateral
Comprehensive Method
Market risk
Standardised Approach
Operational risk
Basic Indicator Method
As is 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 fixed 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 significantly greater
robustness in the calculated capital ratios and less
volatility in the total risk exposure amount.
In 2020, a new five-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 50% for 2023, 25% for 2024, and 0% for
2025. The last year in which the arrangement can be used
is thus 2024.
The bank uses both the static and the dynamic
components of the IFRS 9 transitional rules, including the
simplified approach to recalculation of capital
requirements.
The bank is also subject to the provisions on a backstop
for non-performing exposures (NPEs). The rules mean
that NPEs must be fully deducted from common equity
tier 1 capital 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. However,
the deduction from common equity tier 1 capital at the
end of 2023 was only DKK 6 million.
Ringkjøbing Landbobank A/S Page 20
Risks and risk management
Risk-taking
Risk-taking is a natural part of banking.
Ringkjøbing Landbobank’s business activities result in
exposure to credit, market, and liquidity risks and to
operational risks including IT, compliance, and
reputational risks.
Risks associated with climate change are an integral part
of the individual risk types. The notes to the annual report
contain details on the individual risk areas. The bank’s
general approach to risk-taking has been unchanged for
years. The absolutely biggest risk area for the bank is
credit risk, for which the bank’s credit policy sets the
framework.
The bank wants to assume moderate credit risks based
on a balanced relationship between risk and return. Over
a multi-year period, the bank wants to operate with losses
which are lower relative to losses in the Danish financial
sector. The result of this historically is credit losses at a
low level as shown in the table on the next page.
Further information on the bank’s risks
The various types of risk are described in more detail in
notes 44-53 on pages 82-102 of this annual report. In
addition, Danish banks are required by law to disclose
information on risk. Some of the required risk information
is given in this annual report, but for a full overview of the
bank’s duty to provide information, the reader is referred
to the bank’s website: www.landbobanken.dk/risk-
information
Ringkjøbing Landbobank A/S Page 21
Risks and risk management
Actual net losses
(DKK 1,000)
Actual net
losses after
interest
Loans and other
receivables with
suspended interest
Impairment
charges for
loans etc.
Total loans and
guarantees etc.
Percentage
loss before
interest*
Percentage
loss after
interest*
Year
Actual net
losses
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%
2022
-42,658
6,401
81,176
2,302,171
58,213,791
-0.07%
0.01%
2023
-36,968
26,626
119,789
2,334,589
59,534,652
-0.06%
0.04%
37-year average (1987-2023)
-0.46%
-0.06%
10-year average (2014-2023)
-0.28%
-0.14%
* Actual net losses relative to total loans excluding reverse repo transactions, guarantees, impairment charges for loans, provisions 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 impaired 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 figures are computed exclusive of amounts concerning reverse repo transactions and the national Bank
Package I etc.
The 10-year average and the 37-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.
Ringkjøbing Landbobank A/S Page 22
Corporate governance etc.
Statement on corporate governance
Goal
Ringkjøbing Landbobank has set a goal for corporate
governance which focuses on the bank’s primary
stakeholders, namely its customers, shareholders,
employees, and the local areas where the bank operates.
As a responsible financial institution, the bank also
focuses on climate and environment and on
sustainability.
The bank’s goals are to realise good results and thus
achieve 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 financial
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
develop that section of its customer portfolio which is
situated in these areas.
It also seeks to serve selected customer groups
throughout Denmark via its niche concepts and 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 employer. In line with this goal and the
chosen strategy, the bank wishes to create an interesting
and challenging workplace which can both retain and
develop competent employees and continually attract
new employees.
In the context of corporate governance, the bank also
focuses on ESG aspects and sustainability and in 2023
set targets for carbon emissions from its loan and
investment portfolio: see the section “Corporate social
responsibility, sustainability and ESG report” on page 31
and the bank’s ESG report for 2023.
Finally, the bank’s goal is to support development in
those areas where it is rooted historically.
Codes of management etc.
As a listed financial institution and member of Finance
Denmark, the bank is covered by a number of codes of
practice.
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 principles, and
structures governing the bank and the interplay between
the bank/the bank’s management and its primary
stakeholders: customers, shareholders, and employees,
and relations with the local areas in which it has
branches.
The bank’s management pursues an active approach to
the Recommendations on Corporate Governance issued
and gives an account of them in its annual reports.
The bank’s management has thus addressed the 40
different recommendations for the 2023 financial year in
the main areas:
1) Interaction with the company’s shareholders,
investors, and other stakeholders;
2) The duties and responsibilities of the board of
directors;
3) The composition, organisation, and evaluation of
the board of directors;
4) Remuneration of the 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 2023 annual report, the bank’s board
of directors and general management have assessed the
bank’s positions and actions on the recommendations
under the “comply or explain” principle.
The bank’s management supports the efforts in the area
of corporate governance, and the general management
and board of directors have chosen to comply with
almost all of the recommendations in this area. Where
the bank does not comply, the bank’s management has
Ringkjøbing Landbobank A/S Page 23
Corporate governance etc.
explained why not, and which approach the bank has
chosen instead. This is also considered to constitute
compliance with the recommendations.
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 corporate governance
code.
The recommendations in the Corporate Governance Code
aim both to ensure that Finance 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 presentation of the annual report.
When preparing the 2023 annual report, the bank’s board
of directors and general management also specified 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 opted to
follow all 12 recommendations.
Active ownership
Section 101a of the Danish Financial Business Act
contains a provision on active ownership policy. Under
that provision, an active ownership policy must be
prepared, or an explanation given for why a policy has not
been prepared.
The bank’s board of directors and general management
assess that a policy is not necessary since the bank only
has a very modest holding of listed shares. In the role of
asset manager, the bank has not explicitly agreed with its
customers that it must exercise active ownership, for
example by exercising the voting rights pertaining to
investments in listed shares.
The bank’s financial reporting process,
management organs and their functions
The board of directors, the board’s audit committee and
the general management regularly ensure that the bank’s
controls and risk management in connection with the
financial 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 financial reporting process is further organised so
that the bank’s accounts department prepares its annual
report in cooperation with the general management and
other relevant departments.
A general rule for the financial 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 financial reporting process and
report regularly to the bank’s board of directors and the
board’s audit committee.
The complete statement on management and 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 Ringkjøbing 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 November 2023 and
found no need for changes.
The intention of this policy is that the board’s
composition should embrace diverse competences and
backgrounds, including diversity in professional identity,
work experience, gender, age etc.
The policy further lays down that recruitment of
candidates to serve as board members must focus on
ensuring that the candidates possess competences,
backgrounds, knowledge, and resources that are different
from the current board members and collectively match
the competences required by the bank’s business model
etc.
Lene Weldum joined the board in 2023. She brings IT
skills to the position. This has contributed to achieving
the diversity policy during 2023, including ensuring
Ringkjøbing Landbobank A/S Page 24
Corporate governance etc.
diverse competences and backgrounds among board
members in terms of work experience, gender etc.
Compliance with the adopted policy on diversity on the
board of directors was thus assessed by the board of
directors and its nomination committee during the annual
evaluation process and the conclusion was that the
policy is complied with. As stated above, compliance is
achieved through focus on the policy criteria when
candidates are recruited to serve as members of the
board of directors and of the shareholders’ committee,
and otherwise.
The reason for focusing on these diversity criteria also
when recruiting candidates to serve as members of the
shareholders’ committee is that the shareholders’
committee elects the members of the bank’s board of
directors primarily from among the members of the
shareholders' committee.
On the date of closing the accounts, seven of the nine
board members elected by the shareholders’ committee
came from the membership of the shareholders’
committee, while two board members (one with
managerial experience from another financial
undertaking and one with IT skills) was not elected from
the membership of the shareholders’ committee.
The under-represented gender
The following sections are the statutory complete
statement on the under-represented gender in
accordance with Section 135a of the Executive Order on
Financial Reports for Credit Institutions and Investment
Firms etc.
The bank has both a target figure and a policy aimed at
increasing the percentage of the under-represented
gender at the bank’s other management levels. Since the
beginning of 2023, it has also had a target figure for the
under-represented gender to sit on the board of directors.
Board of directors
In 2022, the board of directors and its nomination
committee set a target figure of at least 30% for the
under-represented gender on the board of directors to be
met in 2023.
On 1 February 2023, the bank’s shareholders' committee
elected an additional board member, subject to a
proposal, submitted to the bank’s annual general
meeting, to amend the articles of association regarding
the number of board members. The annual general
meeting held on 1 March 2023 adopted the proposed
amendment to the articles, which permitted an
enlargement of the board of directors.
The result was that the target of 30% set for the under-
represented gender was met and with the under-
represented gender representing 33.3% of the board
members elected by the shareholders' committee, equal
gender distribution as defined by the Danish Business
Authority (three out of nine board members are of the
under-represented gender) was achieved. On this basis
and in accordance with section 79a (1)(1) of the Financial
Business Act, a target figure is no longer set for the
under-represented gender on the board of directors
following the update in November 2023.
Other management levels
Under the statutory definition of “other management
levels”, the bank’s other management levels are members
of the general management (reported to the Danish
Business Authority), employees placed at the same
management level, in organisational terms, as the general
management, and employees with staff responsibilities
reporting directly to the general management or to
employees placed at the same level, in organisational
terms, as the general management.
It is a goal of the policy that the bank’s employees should
feel that equal career and management opportunities are
open to them, irrespective of gender. The policy adopted
to increase the percentage of the under-represented
gender at the bank’s other management levels also aims
at creating a basis for a more equal gender distribution 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’s
management 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.
In 2022, the board of directors and its nomination
committee set a target figure of at least 25% for the
under-represented gender at the bank’s other
management levels to be met by 2025.
When updating the policy and target figure for other
management levels in 2023, the board of directors and its
nomination committee assessed that there was no need
for changes in relation to other management levels.
At the end of 2023, the gender distribution at the bank’s
other management levels was as follows:
• 22.9% women
• 77.1% men
During 2023, the bank implemented various initiatives
aimed at meeting the target figure by 2025. They
comprise recruitment initiatives and initiatives aimed at
Ringkjøbing Landbobank A/S Page 25
Corporate governance etc.
motivating employees of the under-represented gender to
pursue different managerial roles, thus becoming eligible
candidates for the bank’s other management levels. The
implemented initiatives contributed to an improvement
from 20.7% at year-end 2022 to 22.9% at year-end 2023.
The bank does not yet meet the target of 25% as the
initiatives need time to work.
Sound corporate culture
The bank’s board of directors has adopted a policy for a
sound corporate culture containing a set of principles for
the bank’s and the employees’ actions, which
supplements the framework of the bank’s code of
conduct.
The policy was most recently updated in November 2023
and is available on the bank’s website:
www.landbobanken.dk/policies
The bank’s general management must report annually to
the board of directors on the bank’s compliance with the
policy and the code of conduct. Through this report and
otherwise, the board of directors gains insight into
matters relating to the policy and code of conduct.
The report of the chair of the bank’s board of directors to
the annual general meeting on behalf of the board must
cover the implementation of the corporate culture policy
and compliance with it. The bank’s ESG report for 2023
also reports on these matters.
Anti-money laundering, anti-terrorist
financing, and sanctions
The bank’s board of directors has endorsed the 25
recommendations made in the report issued in November
2019 by the Anti-Money Laundering Task Force, which
was appointed by Finance Denmark. The 25
recommendations for anti-money laundering and counter-
terrorist financing measures are aimed at various
stakeholders including authorities, the banking sector in
general and the individual banks.
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 financing efforts. The bank has
complied with this recommendation by creating the web
page: https://www.landbobanken.dk/en/ir-
english/policies/antimoneylaundering
Another of the 25 recommendations is that the individual
banks undertake to outline their commitment to action
against money laundering and terrorist financing,
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 financing of
terrorism are given below in this management's review.
Combating money laundering and terrorist financing is
basically a task for all employees in Ringkjøbing
Landbobank, one reason being that the bank has a
statutory obligation to know all its customers, including
to collect proper documentation of identity and details of
ownership structures of legal persons.
The bank must also have details of the individual
customer’s purpose of being a customer in the bank, the
scope of the customer relationship and the origin of their
funds. This task is carried out by collecting data,
including by the individual customer advisers and/or via
customers’ self-serve solutions.
However, the bank’s central anti-money laundering
department carries out the general work of combating
money-laundering and financing of terrorism and
continuously checks that the necessary information on
the individual customers’ identity and ownership are
registered. It also checks that the purpose and intended
31 December 2023
31 December 2022
Board of directors (supreme management body)
Total number of board members elected by the shareholders'
committee
9
8
Under-represented gender in %
33.3
25.0
Target in %
not relevant*
30.0
Year target must be met
not relevant*
2023
Other management levels
Number of members (FTE)
55.8
56.8
Under-represented gender in %
22.9
20.7
Target in %
25.0
25.0
Year target must be met
2025
2025
* No target set as equal gender distribution has been achieved
Ringkjøbing Landbobank A/S Page 26
Corporate governance etc.
scope of the customers’ relations with the bank are
registered and updated.
In addition, the bank must monitor customer transactions
on an ongoing basis. All of the bank’s employees are both
entitled and required to report unusual/suspicious
transactions or activities to the anti-money laundering
department. The anti-money laundering department thus
supports the efforts of customer advisers and other
employees and is also responsible for digital/automated
monitoring of unusual/suspicious transactions or
activities and for manual follow-up on them.
The department works continuously to set up and adjust
the criteria for identifying transactions that are picked out
for further investigation by the department.
The anti-money laundering department also reports to the
Money Laundering Secretariat at the National Special
Crime Unit.
The bank’s monitoring of customers includes a risk
assessment in which the bank has divided the customers
into different risk categories. The risk assessment is
based, among other things, on the EU’s supranational risk
assessment.
The current procedures for combating money laundering
and financing of terrorism are available to the employees
on the bank’s intranet.
In addition, the bank’s employees regularly receive
training and are tested in combating money laundering
and financing of terrorism. Training is provided in the
following ways:
• Basic modules must be completed by all employees
every two years. Training based on case studies and
bank-specific learning - targeted at the employee’s
job functions - is also provided on a regular basis.
• New employees are trained on an ad-hoc basis in
basic modules and case studies depending on
whether they completed any training at previous
workplaces and if so which.
On 19 April 2023, the bank received the Danish FSA’s
report on the inspection of the anti-money laundering
area carried out in Ringkjøbing Landbobank in November
2022. The bank received a total of five orders from the
Danish FSA, all of which were complied with by the end of
2023. The bank is pleased to note that the examination of
its risk assessment, policies, records, and notifications to
the Money Laundering Secretariat did not occasion any
supervisory reactions and no cases of failure to notify the
Secretariat were found.
On 11 January 2024, the bank received the Danish FSA’s
report on Ringkjøbing Landbobank’s handling of EU
sanctions including against Russia and Belarus. The
examination commenced in May 2023, and the Danish
FSA judged that the bank - like the other financial
institutions examined - bears an inherent risk that the
bank’s transactions, carried out for its own purposes or
on behalf of its customers, could violate current
regulations regarding financial sanctions against
countries, persons etc. The bank is pleased to note that
the examination, on the described basis, did not occasion
any supervisory reactions from the Danish FSA.
Data ethics
The bank’s board of directors has adopted a data ethics
policy which provides the framework for the bank’s
ethical principles and conduct in relation to data. The
board of directors made minor editorial changes to the
policy in November 2023.
Section 135d of the Executive Order on Financial Reports
for Credit Institutions and Investment Firms etc. 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 undertaking’s work and policy on matters of data
ethics.
The bank’s board of directors has prepared a statement,
which is available on the bank's website at:
www.landbobanken.dk/dataethics
Product approval and product
management
The bank has a policy for product approval and product
management to ensure that customers are offered
suitable investment products and investment services
etc. If new investment products and services are
introduced which may result in significant risks, the
bank’s board of directors has overall responsibility for
approving them.
In addition to this, the product approval and management
of investment products and services are structured so
that the bank’s middle office function handles these
matters on an ongoing basis.
The middle office function, in a cycle, recommends
investment products and services for review by the
bank’s compliance function. New investment products
and services are subject to approval by the bank’s
compliance function, risk management function, and
general management. The compliance and risk
management functions can always request that risks be
submitted to the board of directors for consideration.
Ringkjøbing Landbobank A/S Page 27
Corporate governance etc.
At least annually, the compliance function reports to the
board of directors on the bank’s investment products and
services, including target group compliance, based on
reporting from the middle office function and the
compliance function’s own examinations during the year.
Complaints handling
In the event of disagreements between a customer and
the bank, the bank’s fundamental view is that they are
always best resolved through dialogue between the
customer and the adviser, possibly with the involvement
of the adviser’s line manager.
If agreement is not reached, the customer always has the
possibility of complaining to the bank’s complaints
function. The complaints function is independent of the
departments serving customers and handles complaints
received and sends answers to the customer.
The complaints function reports annually to both the
bank’s board of directors and general management,
which gives them full insight into the scope and type of
complaints.
Ringkjøbing Landbobank A/S Page 28
Corporate governance etc.
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
must be available to its customers. This will remain a top
priority going forward. The bank also gives high priority to
having a mobile and web banking platform and a website
which are accessible, easy to understand and can be
used in the bank's communication with its customers.
In addition, 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 includes statements
that the bank must strive for openness and constructive
dialogue with its shareholders, investors, and other
stakeholders.
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 significant matters.
The bank’s board of directors assessed the policy in
November 2023 and found that various adjustments were
needed.
The investor relations policy is available on the bank's
website at: www.landbobanken.dk/policies
Code of conduct
The bank has a code of conduct which establishes
guidelines for its employees (including the board of
directors and general management) concerning the
conduct expected of them toward stakeholders such as
customers, suppliers, and authorities on a range of
different subjects. The code of conduct also specifies the
bank’s expectations of its business partners and their
actions.
The overall object of the code of conduct is to assist
employees in their daily decisions and conduct.
The code is general and not exhaustive but provides
examples of unacceptable behaviour.
The code of conduct was reviewed in 2023 and the board
of directors adopted an update to the code in November
2023. The code of conduct is available on the bank's
website at: www.landbobanken.dk/policies
Ringkjøbing Landbobank A/S Page 29
Corporate governance etc.
Remuneration
Remuneration policy
The current policy is from December 2022 and was
approved by the bank’s annual general meeting on 1
March 2023.
In November 2023, the bank’s board of directors and its
remuneration committee assessed the need for changes
to the policy. The committee assessed that various minor
changes were needed.
The policy adopted and updated by the board of directors
will be recommended for approval at the bank’s annual
general meeting in February 2024.
The updated policy continues to specify that the bank’s
management is paid remuneration which is both in line
with the market and reflects the management’s
performance for the bank.
It also specifies that the remuneration paid to the board
of directors and the general management should be a
fixed 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 financial framework for payment of
personal allowances under a current workplace
agreement, below the cap on variable salary components
and subject to the other provisions of the remuneration
policy. Severance may also be paid unless it is deemed to
be variable salary in the terms of the applicable law.
In addition, the remuneration policy contains provisions
on the remuneration paid to the bank’s other employees,
including variable salary paid to them.
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 also been prepared on the remuneration paid
to the board of directors and the general management for
the 2023 financial year.
The remuneration report will be submitted for a
consultative vote at the bank’s annual general meeting in
February 2024.
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 financial 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 at the bank's website at:
www.landbobanken.dk/policies
Ringkjøbing Landbobank A/S Page 30
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 2023 was DKK
27,491,339 in 27,491,339 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 shareholder has notified voting rights for
and management of more than 5% of the bank’s share
capital on 31 December 2023:
• Nordflint Capital Partners Fondsmæglerselskab A/S,
Copenhagen, Denmark held voting rights for, and
managed, 8.29% of the bank’s share capital on 31
December 2023.
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 accordance 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
represented 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 5,498,267 with right of pre-
emption for the bank’s existing shareholders. The capital
increase must be fully paid up in cash and may be below
the market price. This authorisation applies until 28
February 2028 (Article 2a of the articles of association).
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 2,749,131 without right of pre-
emption for the bank’s existing shareholders.
The capital increase may be by cash payment or
contribution of an existing company or specific 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 28 February 2028 (Article 2b of
the articles of association).
The board of directors may use the authorisations under
Articles 2a and 2b to increase the share capital by a
maximum of nom. DKK 5,498,267 in total (Article 2c of
the articles of association).
The board of directors has the following powers with
respect to the possibility of acquiring 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, and the
shares can be acquired at the current market price plus or
minus 10%.
The authorisation was most recently renewed at the
bank’s annual general meeting on 1 March 2023.
This authority was used in several rounds during 2023 to
initiate share buyback programmes: on 1 February 2023
for a DKK 385 million share buyback programme (for
execution in the period 2 February 2023 to 27 July 2023;
this share buyback programme was completed on 4 July
2023), and on 2 August 2023 for another DKK 385 million
share buyback programme (for execution in the period 3
August 2023 to 22 January 2024; this share buyback
programme was completed on 22 January 2024).
A total of 784,600 shares have been bought under the
share buyback programmes. Cancellation of the shares
will be recommended at the bank’s annual general
meeting in February 2024.
In conclusion, the bank has accepted “change of control”
clauses in certain funding agreements. For reasons of
competition, no further details are given.
Ringkjøbing Landbobank A/S Page 31
Corporate social responsibility
Corporate social responsibility, sustainability and ESG report
Ringkjøbing Landbobank wants to be a responsible and
value-creating bank that shows social responsibility.
The bank wants to serve its customers based on its core
values, competent, responsive, and proper, and works to
generate good, long-term results for its shareholders. The
bank also intends to contribute to creating a sustainable
society, focusing on customers, employees, climate, and
the environment.
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 communities where we have roots,
the board of directors has prepared and adopted a social
responsibility and sustainability policy.
The bank’s social responsibility and sustainability policy
focuses specifically on the five stakeholder groups:
customers, employees, climate and the environment, the
local community, and Danish society.
The bank’s policy in the area of social responsibility and
sustainability is given on its website at:
www.landbobanken.dk/csr
The social responsibility and sustainability policy is
supplemented by other policies adopted by the board of
directors, including the policy on responsible purchasing
and the tax policy, and the board has also adopted a code
of conduct.
As in previous financial years, the bank has also prepared
an ESG report.
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 sections 135 and 135b of the Executive Order
on Financial Reports for Credit Institutions and
Investment Firms etc. In addition, the ESG report,
supplemented by information on the bank’s website,
contains the reporting under article 8 of the taxonomy
regulation.
The ESG report is available on the bank’s website at:
www.landbobanken.dk/esg-en
As a supplement to the annual ESG report, the bank
prepares and publishes an ESG Fact Book in English at:
www.landbobanken.dk/factbook
The ESG Fact Book is a compact and clear presentation
of various ESG information and data which supplement
the bank’s ESG report. The Fact Book is updated
continually.
In addition, the bank has committed to the Ten Principles
of the UN Global Compact, which includes principles
regarding human rights. As an additional supplement to
the ESG report, the bank has prepared a separate
Communication on Progress (CoP) report for 2023,
including reports on the work of implementing and
complying with the Ten Principles in the bank’s
operations, etc. The CoP report for 2023 is published at
www.landbobanken.dk/csr
Further to the above, please note that the bank has not
prepared specific policies on human rights or climate.
The bank supports the efforts to put human rights and
climate high on the agenda, however. This is clear from
the bank’s code of conduct and the following.
In 2023, the bank set targets for reduction of the carbon
emission intensity of its loan portfolio and investment
portfolio. The target for the loan portfolio is 45% by 2030
and the target for the investment portfolio is 50% by
2030. The targets for both portfolios are set with 2020 as
the base year and the ultimate target is carbon neutrality
by 2050. Further comments on the targets are provided in
the bank’s social responsibility and sustainability policy.
The bank’s social responsibility and sustainability policy
also sets the goal that the bank’s operations must be
carbon-neutral in terms of CO
2
scope 1 and 2 emissions.
The bank owns a forest, which captures carbon almost
equal to the bank’s CO
2
scope 1 and 2 emissions.
In 2023, the bank has also worked on the implementation
of the Corporate Sustainability Reporting Directive
(CSRD), and this work will continue in 2024.
Ringkjøbing Landbobank A/S Page 32
Shareholders’ committee
Name
Position
Hometown
Born
Kristian Skannerup,
chair of the shareholders’ committee
Manufacturer
Tim
14.06.1959
Allan Østergaard Sørensen,
deputy chair of the shareholders’ committee
Attorney-at-law (High Court)
Ringkøbing
26.06.1982
Anette Ørbæk Andersen
Manager
Skjern
04.03.1963
Mette Bundgaard
Police superintendent
No
03.11.1966
Per Lykkegaard Christensen
Farmer
Hjallerup
12.12.1959
Dennis Conradsen
CEO
Frederikshavn
26.06.1984
Claus Dalgaard
Vice president
Ringkøbing
28.04.1962
Ole Kirkegård Erlandsen
Butcher
Snejbjerg
19.12.1962
Thomas Sindberg Hansen
Grocer
Kloster
12.12.1978
Tonny Hansen
Former college principal
Ringkøbing
27.05.1958
Mads Hvolby*
Chartered surveyor
Nørresundby
09.12.1956
Poul Johnsen Høj
Fishing boat skipper
Hvide Sande
10.11.1964
Kim Jacobsen
Manager
Aalborg
25.09.1969
Erik Jensen
Manager
Skjern
07.09.1965
Morten Jensen*
Attorney-at-law (Supreme Court)
Dronninglund
31.10.1961
Anne Kaptain*
Chief legal and HR officer
Sæby
14.03.1980
Kasper Lykke Kjeldsen
Timber merchant
Højbjerg
27.02.1981
Lotte Littau Kjærgaaard
Manager
Holstebro
10.10.1969
Carl Erik Kristensen
Manager
Hvide Sande
28.01.1978
Karsten Madsen
Attorney-at-law (Supreme Court)
Sæby
26.07.1961
Niels Erik Burgdorf Madsen
Manager
Ølgod
25.10.1959
Jacob Møller*
CEO
Ringkøbing
02.08.1969
Lars Møller
Municipal chief executive
Holstebro
30.11.1957
Bjarne Bjørnkjær Nielsen
Manager
Skjern
11.03.1973
Jens Møller Nielsen*
Former manager
Ringkøbing
25.08.1956
Marianne Oksbjerre
Manager
Brande
26.11.1966
Bente Skjørbæk Olesen
Shop owner
Vemb
16.02.1971
Martin Krogh Pedersen*
CEO
Ringkøbing
07.06.1967
Poul Kjær Poulsgaard
Farmer
Madum
21.02.1974
Karsten Sandal
Manager
Ølstrup
25.06.1969
Yvonne Skagen
Manager
Aalborg
22.08.1957
Lone Rejkjær Söllmann*
Finance manager
Tarm
26.01.1968
Egon Sørensen
Insurance broker
Spjald
16.06.1965
Jørgen Kolle Sørensen
Car dealer
Hvide Sande
17.09.1970
Peer Buch Sørensen
Draper
Frederikshavn
20.05.1967
Lise Kvist Thomsen
Manager
Virum
24.05.1984
Sten Uggerhøj
Car dealer
Frederikshavn
06.07.1959
Lasse Svoldgaard Vesterby
CEO
Ringkøbing
25.04.1978
Dorte Zacho
Self-employed business consultant
Holstebro
02.05.1978
Christina Ørskov
Manager
Gærum
10.09.1969
John Christian Aasted
Manager
Aalborg
12.02.1961
* Member of the board of directors
Ringkjøbing Landbobank A/S Page 33
Board of directors
Martin Krogh Pedersen
CEO
Ringkøbing
Born on 7 June 1967
Chair of the board of directors
Board committees:
Remuneration committee, committee chair
Nomination committee, committee chair
Audit committee, committee member
Risk committee, committee chair
Seniority:
Member of the board of directors since 27
April 2011
End of current term of office:
2027
Independence assessment:
Not 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 risks of money
laundering, financing of terrorism, other
financial crime, good practice, and
compliance, within budgets, accounting and
auditing, capital structure including capital
adequacy and solvency requirements, and
within insurance risks, and has general
managerial experience.
Other managerial activities - member of the
management of:
• KP Group Holding ApS and two wholly
owned Danish subsidiaries
• MHKP Holding ApS and two wholly
owned Danish subsidiaries
• PcP Corporation A/S and one wholly
owned Danish subsidiary
• The supplementary pension fund for
employees of Ringkjøbing Landbobank
• Techo A/S
Mads Hvolby
Chartered surveyor
Nørresundby
Born on 9 December 1956
Deputy chair of the board of directors
Board committees:
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 office:
2026
Independence assessment:
Independent
Professional competences:
Has special competences, knowledge, and
experience within the areas of the business
model, credit risks, operational risks, budgets,
accounting and auditing, capital structure
including capital adequacy and solvency
requirement, and within insurance risks, risk
management including interdisciplinary risk
management, and has general managerial
experience, managerial experience from other
financial undertakings and legal insight
including in relation to financial legislation.
Other managerial activities - member of the
management of:
• Landinspektørernes Gensidige
Erhvervsansvarsforsikring
• Landinspektørfirmaet LE34 A/S
• M. Hvolby Holding ApS
• NB Partnere I/S
• Ny NB Gruppen
Landinspektøranpartsselskab
Ringkjøbing Landbobank A/S Page 34
Board of directors
Jens Møller Nielsen
Former manager
Ringkøbing
Born on 25 August 1956
Deputy chair of the board of directors
Board committees:
Nomination committee, committee
member
Audit committee, committee chair
Risk committee, committee member
Seniority:
Member of the board of directors since 22
April 2015
End of current term of office:
2027
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 including
risks of money laundering, financing of
terrorism, other financial crime, good practice
and compliance, within budgets, accounting
and auditing, capital structure including
capital adequacy and solvency requirement,
and within insurance risks, risk management
including interdisciplinary risk management,
and has general managerial experience and
legal insight including in relation to financial
legislation. Jens Møller Nielsen is chair of the
bank’s audit committee and has
competences within accounting/auditing.
Other managerial activities - member of the
management of:
• The independent institution Generator
• Ringkøbing railway station
Morten Jensen
Attorney-at-law (Supreme Court)
Dronninglund
Born on 31 October 1961
Board committees:
Remuneration committee, committee
member
Nomination committee, committee
member
Risk committee, committee member
Seniority:
Member of the board of directors since 7
June 2018
End of current term of office:
2026
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 risks of money
laundering, financing of terrorism, other
financial crime, good practice and
compliance, within budgets, accounting
and auditing, risk management including
interdisciplinary risk management, general
managerial experience and legal insight
including in relation to financial legislation,
and within sections of the business model
and liquidity risk areas.
Other managerial activities - member of the
management of:
• Advokatfirmaet Børge Nielsen
• AEC-Fonden
• Andersen & Aaquist A/S
• ANS-Fundacion Fonden
• Christine og Poul Goos Fond for Fri
Forsikring
• Dansk Facility Service Holding A/S and
two wholly owned Danish subsidiaries
• DCH A/S and one wholly owned Danish
subsidiary
• Ejendomsselskabet Svinkløv Badehotel
A/S
• Ergonomic Solutions International Ltd.
and two wholly owned Danish
subsidiaries
• Fonden for Dronninglund Kunstcenter
• Havnens Fiskebod A/S
• Kjærgaard Nord A/S
• Lundagergaard Holding ApS and one
wholly owned Danish subsidiary
• Mesterbyg Klokkerholm A/S
• Micodan Holding A/S and three wholly
owned Danish subsidiaries and one
wholly owned foreign subsidiary
• P. J. Skovværktøj, Nørresundby ApS
• PL Holding Aalborg A/S
• PM Energi A/S
• RengøringsCompagniets Fond
• Saga Shipping A/S
• Sølund Ejendomsinvest Holding A/S
• Toma Facility Danmark A/S
• Vibeke Emborg Holding ApS and one
wholly owned Danish subsidiary
Ringkjøbing Landbobank A/S Page 35
Board of directors
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 office:
2025
Independence assessment:
Independent
Professional competences:
Has special competences, knowledge, and
experience within the areas of the
business model, market risks, liquidity
risks, operational risks, IT risks/IT security,
risks of outsourcing, other risks including
risks of money laundering, financing of
terrorism, other financial crime, good
practice and compliance, within budgets,
accounting and auditing, capital structure
including capital adequacy and solvency
requirement, and within insurance risks,
risk management including
interdisciplinary risk management, has
general managerial experience, managerial
experience from other financial
undertakings, legal insight including in
relation to financial legislation, and has
experience with ESG aspects and
reporting, and within sections of the credit
risk area.
Other managerial activities - member of the
management of:
• Pensionskassen for Farmakonomer
• Pensionskassen for Socialrådgivere,
Socialpædagoger og Kontorpersonale
• Pensionskassen for Sundhedsfaglige
• Pensionskassen for Sygeplejersker og
Lægesekretærer
• PKA+ Pension Forsikringsselskab A/S
• The following operational Danish group
undertakings which are wholly or partly
owned by the above four pension funds -
either individually or co-owned by several
of them:
o AIP Management P/S
o Forca A/S
o IIP Denmark GP ApS
o IIP Denmark P/S
o Institutional Holding P/S
o Komplementarselskabet PKA
Ejendomme ApS
o Pensionskassernes
Administration A/S
o PKA Ejendomme P/S
In addition, a member of the governing
bodies of the following interest
organisations:
• Axcelfuture
• Dansk Sygeplejehistorisk Fond
• Forsikring & Pension
• Institutional Investors Group on Climate
Change (IIGCC)
Anne Kaptain
Chief HR and Legal Officer
Sæby
Born on 14 March 1980
Board committees:
Nomination committee, committee
member
Risk committee, committee member
Seniority:
Member of the board of directors since 2
March 2022
End of current term of office:
2026
Independence assessment
:
Independent
Professional competences:
Has special competences, knowledge, and
experience within the areas of operational
risks, insurance risks, general managerial
experience and legal insight including in
relation to financial legislation, and within
sections of the business model and credit
risk areas.
Other managerial activities - member of the
management of:
• Kaptain Invest ApS
• Scandinavian Medical Solutions A/S
Ringkjøbing Landbobank A/S Page 36
Board of directors
Jacob Møller
CEO
Ringkøbing
Born on 2 August 1969
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 26
April 2017
End of current term of office:
2027
Independence assessment:
Independent
Professional competences:
Has special competences, knowledge, and
experience within the areas of budgets,
accounting and auditing, capital structure
including capital adequacy and solvency
requirement, insurance risks, general
managerial experience, legal insight including
in relation to financial legislation, within ESG
aspects and reporting, and within sections of
the business model, credit risk and market
risk areas.
Other managerial activities - member of the
management of:
• Goenergi A/S
• Green Power Denmark
• Iron Fonden and three wholly owned
Danish subsidiaries
• N H Vind 16 ApS
• RAH A.M.B.A and two wholly owned
Danish subsidiaries
• RAH Fiberbredbånd A/S
• RAH Net A/S
• Scanenergi Holding A/S and three wholly
owned Danish subsidiaries
• Vestjyske Net 60 KV A/S and one wholly
owned Danish subsidiary
Lone Rejkjær Söllmann
Finance manager
Tarm
Born on 26 January 1968
Board committees:
Remuneration committee, committee
member
Nomination committee, committee
member
Risk committee, committee member
Seniority:
Member of the board of directors since 26
April 2017
End of current term of office:
2026
Independence assessment:
Independent
Professional competences:
Has special competences, knowledge, and
experience within the areas of budgets,
accounting, and auditing and within sections
of the business model and credit risk areas.
Other managerial activities - member of the
management of:
• Tama ApS
Lene Weldum
Former manager
Fredericia
Born on 31 May 1960
Board committees:
Nomination committee, committee
member
Risk committee, committee member
Seniority:
Member of the board of directors since 1
March 2023
End of current term of office:
2027
Independence assessment:
Independent
Professional competences:
Has special competences, knowledge, and
experience within the areas of operational
risks, IT risks/IT security, risks of
outsourcing, insurance risks, and has general
managerial experience and managerial
experience from other financial undertakings.
Other managerial activities - member of the
management of:
• Scalepoint Technologies Holding A/S
and one wholly owned Danish subsidiary
Ringkjøbing Landbobank A/S Page 37
Board of directors
Lisa Munkholm
Personal customer adviser
Karup
Born on 27 November 1980
Elected by the employees
Board committees:
Remuneration committee, committee
member
Risk committee, committee member
Seniority:
Member of the board of directors since 1
March 2023
End of current term of office:
2027
Independence assessment:
Not independent
Professional competences:
Has special competences, knowledge, and
experience within sections of the business
model and credit risk areas.
Other managerial activities - member of the
management of:
• The supplementary pension fund for
employees of Ringkjøbing Landbobank
In addition, a member of the governing body
of the following interest organisation:
• Financial Services Union Denmark,
District West (deputy chair)
Nanna G. Snogdal
Team leader
Tim
Born on 13 August 1988
Elected by the employees
Board committees:
Risk committee, committee member
Seniority:
Member of the board of directors since 1
March 2023
End of current term of office:
2027
Independence assessment:
Not independent
Professional competences:
Has special competences, knowledge, and
experience within sections of the credit risk
area.
No other managerial activities
Martin Wilche
Personal customer adviser
Frederikshavn
Born on 3 April 1988
Elected by the employees
Board committees:
Risk committee, committee member
Seniority:
Member of the board of directors since 1
March 2023
End of current term of office:
2027
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
Finn Aaen
Business customer adviser
Aalborg
Born on 22 April 1970
Elected by the employees
Board committees:
Risk committee, committee member
Seniority:
Member of the board of directors since 7
June 2018
End of current term of office:
2027
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
Ringkjøbing Landbobank A/S Page 38
Board of directors
Board committees
The board of directors has organised itself by appointing four different board committees comprising a remuneration
committee, a nomination committee, an audit committee, and a risk committee. Information on the individual board
committees is provided below. The bank thus complies with sections 77c, 80a and 80b of the Financial Business Act and
with section 31 of the Act on Approved Auditors and Audit Firms.
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 management 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 its
monitoring of compliance with it, assessing whether the remuneration policy needs to be updated and, if necessary,
proposing changes to the policy including:
• Drafting the remuneration policy for approval by the board of directors before recommendation for approval by
the general meeting.
• 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 otherwise 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 comply with the bank’s business strategy, objectives, 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 identifying 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 proposals 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.
• Assist with preparing the annual remuneration report for approval by the board of directors before recommendation for
a consultative vote by the general meeting.
Ringkjøbing Landbobank A/S Page 39
Board of directors
Pursuant to section 77c, (5) of the Financial Business Act, at least one member of the committee must be elected by the
employees. The bank complies with this provision since Lisa Munkholm, who was elected to the board of directors by the
employees, is a member of the committee, see below.
The following are members of the remuneration committee:
• Martin Krogh Pedersen, committee chair
• Morten Jensen
• Jacob Møller
• Lone Rejkjær Söllmann
• Lisa Munkholm
Nomination committee
The bank’s board of directors has agreed a brief for the nomination committee which includes provisions on scope and
objective, members and how the committee is constituted, tasks, meetings, authority, 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:
• Proposing candidates for election to the board of directors, including preparing a description of the functions and
qualifications required for the specific position on the board and stating the time the board member must expect to
allocate to the work.
• Setting a target percentage of the under-represented gender for board members elected by the shareholders' committee
unless there is an equal distribution of women and men among the board members elected by the shareholders'
committee.
• Setting a target percentage of the under-represented gender at other management levels unless there is an equal
distribution of women and men at the other management levels.
• Preparing a policy for increasing the percentage of the under-represented gender at other management levels unless
there is an equal distribution of women and men at the other management levels.
• Preparing a policy for diversity on the board of directors motivating sufficient diversity in qualifications and
competences among the board members.
• 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 to the full board of directors for any changes.
• 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 the individual member meets the requirements of
sections 64 and 64a of the Danish Financial Business Act and reporting and making recommendations to the full board
of directors for any changes.
• Regularly ensure that the board of directors’ decision-making is not dominated by any one individual or small group of
individuals in a manner that is detrimental to the interests of the bank as a whole.
In addition, the Recommendations on Corporate Governance require the nomination committee to undertake at least the
following preparatory tasks:
• Annually ensuring that the board members update and supplement their knowledge of relevant matters, and that the
members’ special knowledge and competences are applied in the best possible manner.
• Annually discussing which competences the board of directors should possess, collectively and individually, to perform
its duties in the best possible manner and discussing the composition of and diversity on the board of directors and
presenting the conclusions to the discussions to the board of directors.
• Describing the required qualifications for a given position on the board of directors and the general management, the
estimated time required for the position and the competences, knowledge and experience that is or should be
represented in the two management bodies. The description of the qualifications for a given position on the general
management may be made on an ad hoc basis.
• Annually evaluating the board of directors and the general management’s structure, size, composition, and results and
preparing recommendations to the board of directors for any changes.
Ringkjøbing Landbobank A/S Page 40
Board of directors
• In cooperation with the chair of the board and the chair of the committee handling the annual evaluation of the board of
directors and assessing the individual board members’ competences, knowledge, experience, and succession and
reporting on it to the board of directors.
• Handling the recruitment of new members to the board of directors and the general management and proposing
candidates for the board of directors' approval.
• Ensuring that a succession plan for the general management is in place.
• Supervising preparation of a diversity policy for the board of directors’ approval.
• Supervising general management’s policy for the engagement of managerial employees.
Finally, Finance Denmark's Corporate Governance Code requires the nomination committee to undertake at least the
following preparatory tasks:
• Ensuring that the bank uses a well-described, structured process when recruiting candidates for the board of directors
and possibly brings in external expertise.
The following are members of the nomination committee:
• Martin Krogh Pedersen, committee chair
• Mads Hvolby
• Morten Jensen
• Jon Steingrim Johnsen
• Anne Kaptain
• Jacob Møller
• Jens Møller Nielsen
• Lone Rejkjær Söllmann
• Lene Weldum
Audit committee
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 financial reporting process.
• Monitoring the financial reporting process and making recommendations or proposals for the purpose of ensuring
integrity.
• Monitoring whether the bank’s internal control system, internal audit and risk management systems are effective with
respect to the financial reporting of the bank without violating its independence.
• Monitoring the statutory auditing of the financial statements etc.
• Monitoring and verifying the auditor’s independence, pursuant to sections 24-24c of the Act on Approved 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 specific requirements regarding statutory audit of public-interest entities and approving the auditor’s provision
of services other than audit, pursuant to Article 5 of the Regulation.
• 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 specific requirements
regarding statutory audit of public-interest entities.
Applicable rules require one specially qualified member of the audit committee. The bank’s board of directors considers that
Jens Møller Nielsen is specially qualified. This is based on 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 board of directors also considers that Mr. Nielsen is independent and that he possesses the qualifications
required pursuant to the Danish Act on Approved Auditors and Audit Firms.
Ringkjøbing Landbobank A/S Page 41
Board of directors
The following are members of the audit committee:
• Jens Møller Nielsen, committee chair
• Mads Hvolby
• Jacob Møller
• Martin Krogh Pedersen
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, its meetings, authority, and resources, reporting and minutes of
meetings, publication, evaluation, and self-assessment, as well as changes to its 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 profile 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 financial products and services traded by the bank are in accordance with the bank’s business
model and risk profile, including whether the earnings on such products and services reflect 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 profile.
• 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).
• Discussing and considering the risk manager’s reporting to the board of directors either before the discussion and
consideration at the actual board meeting or simultaneously if discussed and considered at a combined committee and
board meeting.
• Conducting a review of the quarterly credit reports.
The following are members of the risk committee:
• Martin Krogh Pedersen, committee chair
• Mads Hvolby
• Morten Jensen
• Jon Steingrim Johnsen
• Anne Kaptain
• Jacob Møller
• Jens Møller Nielsen
• Lone Rejkjær Söllmann
• Lene Weldum
• Lisa Munkholm
• Nanna G. Snogdal
• Martin Wilche
• Finn Aaen
Regarding all four 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.
Ringkjøbing Landbobank A/S Page 42
Board of directors
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/IT security and relevant related matters
• Risks of outsourcing
• Other risks including risks of money laundering, terror financing, 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 financial undertakings
• Legal insight including in relation to financial legislation
• ESG aspects and reporting
See also pages 33-37 for the special competences of the individual board members.
Holdings of Ringkjøbing Landbobank shares by members of the board of directors
Reference is made to note 41 on pages 77-78 for information on holdings of Ringkjøbing Landbobank shares by members of
the board of directors.
Ringkjøbing Landbobank A/S Page 43
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.
• Chair of BI Holding A/S, Copenhagen
• Chair of BI Asset Management Fondsmæglerselskab A/S, Copenhagen
• Chair of BI Management A/S, Copenhagen
• Chair of Letpension Forsikringsformidling A/S, Copenhagen
• Deputy chair of Foreningen Bankdata, Fredericia
• Board member of PRAS A/S, Copenhagen
• Board member of the supplementary pension fund for employees of Ringkjøbing
Landbobank, Ringkøbing
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.
• Chair of Sæbygård Skov A/S, Ringkøbing
• Board member of Bokis A/S, Copenhagen
• 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
Ringkjøbing Landbobank A/S Page 44
General management
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 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
Reference is made to note 41 on pages 77-78 for information on holdings of Ringkjøbing Landbobank shares by members of
the general management
.
Ringkjøbing Landbobank A/S Page 45
Company information
Ringkjøbing Landbobank Aktieselskab
Torvet 1
6950 Ringkøbing, Denmark
Founded: 1886
Phone: +45 9732 1166
Telefax: +45 7624 4913
Email: 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 27,491,339, divided into 27,491,339 nom. DKK 1 shares.
Ownership
On 31 December 2023, Ringkjøbing Landbobank had registered shares of DKK 27,139,135 of the total share capital of DKK
27,491,339, equivalent to 98.7% of the total share capital.
The number of registered shareholders on 31 December 2023 totalled 49,809.
Major shareholder
One shareholder has notified voting rights for and management of between 5% and 9.99% of Ringkjøbing Landbobank’s
share capital at 31 December 2023:
• Nordflint Capital Partners Fondsmæglerselskab A/S, Copenhagen, Denmark held voting rights for and managed 8.29%
of the bank’s share capital at 31 December 2023.
Distribution of shareholders
End of
2023
End of
2022
End of
2021
End of
2020
End of
2019
Danish institutional shareholders
17%
17%
16%
25%
27%
Other Danish shareholders
36%
37%
38%
37%
40%
Foreign institutional shareholders
42%
41%
42%
33%
29%
Other foreign shareholders
5%
5%
4%
5%
4%
100%
100%
100%
100%
100%
Shareholders
Ringkjøbing Landbobank A/S Page 46
Company announcements
Summary of Ringkjøbing Landbobank’s company announcements to Nasdaq Copenhagen and others in 2023:
02.01.2023
Share buyback programme - week 52
06.01.2023
Election of employee representatives to the bank’s board of directors
09.01.2023
Share buyback programme - week 01
16.01.2023
Share buyback programme - week 02
18.01.2023
Expectations for 2023
23.01.2023
Share buyback programme - week 03
26.01.2023
Conclusion of share buyback programme
30.01.2023
Announcement concerning large shareholders under the Danish Capital Markets Act
01.02.2023
Ringkjøbing Landbobank’s annual report for 2022
01.02.2023
Initiation of share buyback programme
01.02.2023
The board of directors of Ringkjøbing Landbobank
01.02.2023
Annual general meeting of Ringkjøbing Landbobank
06.02.2023
Share buyback programme - week 05
13.02.2023
Share buyback programme - week 06
20.02.2023
Share buyback programme - week 07
27.02.2023
Share buyback programme - week 08
01.03.2023
Minutes of the annual general meeting held on 1 March 2023
01.03.2023
The bank’s board of directors
03.03.2023
Articles of association of Ringkjøbing Landbobank
06.03.2023
Share buyback programme - week 09
13.03.2023
Share buyback programme - week 10
20.03.2023
Share buyback programme - week 11
27.03.2023
Share buyback programme - week 12
03.04.2023
Share buyback programme - week 13
11.04.2023
Upward adjustment of expectations for 2023
11.04.2023
Share buyback programme - week 14
14.04.2023
Announcement concerning large shareholders under the Danish Capital Markets Act
17.04.2023
Share buyback programme - week 15
24.04.2023
Share buyback programme - week 16
26.04.2023
Ringkjøbing Landbobank’s report for the first quarter of 2023
26.04.2023
Early redemption of tier 2 capital
27.04.2023
Announcement concerning large shareholders under the Danish Capital Markets Act
01.05.2023
Share buyback programme - week 17
01.05.2023
Implementation of capital reduction
01.05.2023
Articles of association of Ringkjøbing Landbobank
02.05.2023
Announcement concerning large shareholders under the Danish Capital Markets Act
08.05.2023
Share buyback programme - week 18
15.05.2023
Share buyback programme - week 19
22.05.2023
Share buyback programme - week 20
25.05.2023
Announcement concerning large shareholders under the Danish Capital Markets Act
30.05.2023
Share buyback programme - week 21
06.06.2023
Share buyback programme - week 22
12.06.2023
Upward adjustment of expectations for 2023
12.06.2023
Share buyback programme - week 23
19.06.2023
Share buyback programme - week 24
Ringkjøbing Landbobank A/S Page 47
Company announcements
26.06.2023
Share buyback programme - week 25
03.07.2023
Share buyback programme - week 26
05.07.2023
Conclusion of share buyback programme
02.08.2023
Ringkjøbing Landbobank’s interim report for the first half of 2023
02.08.2023
Initiation of share buyback programme
07.08.2023
Share buyback programme - week 31
14.08.2023
Share buyback programme - week 32
21.08.2023
Share buyback programme - week 33
22.08.2023
Ringkjøbing Landbobank issues tier 2 capital
28.08.2023
Share buyback programme - week 34
04.09.2023
Share buyback programme - week 35
06.09.2023
Financial calendar for 2024
11.09.2023
Share buyback programme - week 36
18.09.2023
Share buyback programme - week 37
25.09.2023
Share buyback programme - week 38
02.10.2023
Share buyback programme - week 39
09.10.2023
Upward adjustment of expectations for 2023
09.10.2023
Share buyback programme - week 40
16.10.2023
Share buyback programme - week 41
23.10.2023
Share buyback programme - week 42
25.10.2023
Ringkjøbing Landbobank’s report for the first three quarters of 2023
30.10.2023
Share buyback programme - week 43
06.11.2023
Share buyback programme - week 44
13.11.2023
Share buyback programme - week 45
20.11.2023
Share buyback programme - week 46
27.11.2023
Share buyback programme - week 47
04.12.2023
Share buyback programme - week 48
11.12.2023
Share buyback programme - week 49
18.12.2023
Share buyback programme - week 50
27.12.2023
Share buyback programme - week 51
Notices regarding reportable transactions in Ringkjøbing Landbobank shares are not included in the summary above.
All announcements from the bank to Nasdaq Copenhagen and others can be seen on the bank´s website:
www.landbobanken.dk/en/ir-english/reportsaccounts/companyannouncements
The financial calendar for the upcoming publications etc. in 2024 is as follows:
28.02.2024
Annual general meeting
24.04.2024 Quarterly report 1st quarter 2023
07.08.2024 Interim report 2023
23.10.2024 Quarterly report 1st-3rd quarters 2023
Financial calendar
Ringkjøbing Landbobank A/S Page 48
Company announcements
Statement and reports
Page
49 Management statement
50 Auditors’ reports
Ringkjøbing Landbobank A/S Page 49
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 financial year 1 January to 31 December 2023.
The annual report was prepared in accordance with statutory requirements, including the provisions of the Danish Financial
Business Act and the disclosure requirements of Article 8 of Regulation (EU) 2020/852 (the taxonomy regulation).
We consider the chosen accounting policies to be appropriate and the estimates made responsible, so that the financial
statements provide a true and fair view of the bank’s assets, liabilities and financial position at 31 December 2023 and of the
result of the bank’s activities for the financial year 1 January to 31 December 2023. We also believe that the management’s
review contains a true and fair account of the development in the bank’s activities and financial 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 financial year 1 January to 31 December 2023,
identified as “RILBA-2023-12-31-en.xhtml”, is prepared, in all material respects, in compliance with the ESEF regulation.
The annual report is recommended for approval by the general meeting.
Ringkøbing, 31 January 2024
General management
John Fisker
CEO
Claus Andersen
General Manager
Jørn Nielsen
General Manager
Carl Pedersen
General Manager
Board of directors
Martin Krogh Pedersen
Chair
Mads Hvolby
Deputy chair
Jens Møller Nielsen
Deputy chair
Morten Jensen
Jon Steingrim Johnsen
Anne Kaptain
Jacob Møller
Lone Rejkjær Söllmann
Lene Weldum
Lisa Munkholm
Employee representative
Nanna G. Snogdal
Employee representative
Martin Wilche
Employee representative
Finn Aaen
Employee representative
Ringkjøbing Landbobank A/S Page 50
Auditors’ reports
Internal auditor’s report
To the shareholders of Ringkjøbing Landbobank A/S
Auditor’s report on the financial statements
Opinion
In my opinion, the financial statements for Ringkjøbing Landbobank A/S give a true and fair view of the bank’s assets,
liabilities and financial position at 31 December 2023, and of the results of the bank operations for the financial year 1
January to 31 December 2023 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 directors.
The audit
I have audited the financial statements for Ringkjøbing Landbobank A/S for the financial year 1 January to 31 December
2023, 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 five-year main and key figures. The
financial statements were prepared in accordance with the Danish Financial Business Act.
The audit was performed on the basis of the Danish FSA’s Executive Order on Auditing Financial Undertakings 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 financial 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 sufficient and appropriate to provide a basis for my opinion.
Statement on management review
Management is responsible for the management review.
My opinion on the financial 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 financial statements, my responsibility is to read the management review and, in doing so,
consider whether it is materially inconsistent with the financial 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
and by Article 8 of Regulation (EU) 2020/852 (the taxonomy regulation).
Based on the work I have performed, in my view, the management review is in accordance with the financial statements and
has been prepared in accordance with the requirements of the Danish Financial Business Act and the disclosure
requirements of Article 8 of Regulation (EU) 2020/852 (the taxonomy regulation). I did not identify any material
misstatement in the management review.
Ringkøbing, 31 January 2024
Henrik Haugaard
Chief internal auditor
Ringkjøbing Landbobank A/S Page 51
Auditors’ reports
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 financial position of the Bank at 31 December 2023,
and of the results of the Bank operations for the financial year 1 January to 31 December 2023 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 financial year 1 January to 31 December 2023 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 summary of significant accounting policies, and five-year financial
highlights (‘the Financial Statements’).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional 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 sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Bank in accordance with International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark. We have also fulfilled 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 Regulation (EU) No 537/2014
have been provided.
Appointment
We were first appointed auditors of Ringkjøbing Landbobank A/S on 8 June 2018 for the financial year 2018. We have been
re-appointed annually by shareholder resolution for a total period of uninterrupted engagement of six years up to and
including the 2023 financial year.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
Financial Statements for 2023. 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. We refer to note
We reviewed and assessed the impairment charges
recognised in the income statement for 2023 and in the
balance sheet at 31 December 2023.
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.
Ringkjøbing Landbobank A/S Page 52
Auditors’ reports
The independent auditor’s report - continued
Key audit matter
How our audit addressed the key audit matter
56 to the Financial Statements for a detailed description of
the accounting policies applied.
As a result of the macroeconomic development as
reflected in, for example, the increased interest rate levels
and the risk of a slowdown of the economy, Management
has recognised a significant increase in loan impairment
charges by way of an accounting estimate (“management
estimate”). The impact of the macroeconomic
development on the Bank's customers is largely
undetermined, which implies that the estimation
uncertainty related to the calculation of the indication of
impairment is increased.
Since accounting estimates are inherently complex and
subjective, and thus subject to considerable estimation
uncertainty, loan impairment charges constitute a central
focus area.
The following areas are central to the calculation of loan
impairment charges:
• Determination of credit classification.
• Model-based impairment charges in stages 1 and 2,
including Management’s determination of model
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 significant increase in credit risk (stage 2).
• Most significant assumptions and estimates applied
by Management in the calculations of impairment
charges, including principles for the assessment of
various outcomes of the customer’s financial position
(scenarios) and for the assessment of collateral value
of, for example, properties 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 individually assessed
impairment charges (management estimate), including
in particular the impact of the macroeconomic
development on the Bank’s customers.
We refer to note 55 ‘Accounting estimates and
judgements’, note 44 ‘Risk factors and risk management’
and note 45 ‘Credit risk’ to the Financial Statements which
show factors that may affect the impairment of loans and
advances.
We assessed whether the controls have been designed and
implemented to effectively address the risk of material
misstatement. 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, prepared 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 determination and
adaptation of model variables to own issues.
We reviewed and assessed the Bank’s validation of the
methods applied for the calculation of expected credit
losses as well as the procedures designed to ensure that
credit-impaired loans in stage 3 and underperforming loans
in stage 2 are identified and recorded on a timely basis.
We assessed and tested the principles applied by the Bank
for the determination of impairment scenarios and for the
measurement of collateral value of, for example, properties
included in the calculations of impairment of credit-
impaired loans and advances, and loans and advances that
are significantly underperforming (underperforming loans
in stage 2).
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 classification. This
included samples of large loans as well as loans relating to
segments with generally increased exposure, including
segments which are particularly affected by the
macroeconomic development.
We reviewed and challenged the material assumptions
underlying Management’s estimates of expected credit
losses not included in the model-based calculations or
individually assessed impairment charges based on our
knowledge of the portfolio, the sectors and current market
conditions. We focused specifically on the Bank's
calculation of management estimates for hedging of
expected credit losses as a result of the macroeconomic
development.
We assessed whether the factors which may affect loan
impairment charges had been disclosed appropriately.
Ringkjøbing Landbobank A/S Page 53
Auditors’ reports
The independent auditor’s report - continued
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 misstated.
Moreover, we considered whether Management’s Review includes the disclosures required by the Danish Financial Business
Act and Article 8 of Regulation (EU) 2020/852 (the Taxonomy Regulation).
Based on the work we have performed, in our view, Management’s Review is in accordance with the Financial Statements
and has been prepared in accordance with the requirements of the Danish Financial Business Act and the disclosure
requirements in Article 8 of Regulation (EU) 2020/852 (the Taxonomy Regulation). 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 financial 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 financial 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 influence 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 sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting 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.
Ringkjøbing Landbobank A/S Page 54
Auditors’ reports
The independent auditor’s report - continued
• 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 significant doubt on the Bank’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to 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 significant audit findings, including any significant deficiencies 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 significance in our audit of the Financial Statements for 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.
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 financial year 1 January to 31 December 2023,
with the file name RILBA-2023-12-31-da.xhtml, has been prepared in accordance with the Commission Delegated Regulation
(EU) 2019/815 on the single electronic reporting 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 Annual 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 of Ringkjøbing Landbobank A/S for the financial year 1 January to 31 December 2023, with
the file name RILBA-2023-12-31-da.xhtml, has, in all material respects, been prepared in accordance with the ESEF
Regulation.
Herning, 31 January 2024
r
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR no 33 77 12 31
Per Rolf Larssen
State Authorised Public Accountant
mne24822
Carsten Jensen
State Authorised Public Accountant
mne10954
Ringkjøbing Landbobank A/S Page 55
Management statement
Financial statements
Page
56 Statements of income and comprehensive income
56 Proposed distribution of profit
57 Core earnings
58 Balance sheet
60 Statement of changes in equity
61 Statement of capital
62 Overview of notes
63 Notes
116 Five-year main figures
118 Five-year key figures
Ringkjøbing Landbobank A/S Page 56
Statements of income and comprehensive income
Note
no.
2023
DKK 1,000
2022
DKK 1,000
1 Interest income 3,325,508
1,865,848
2 Interest expenses 785,976
185,174
Net interest income 2,539,532
1,680,674
3 Dividends from shares etc. 90,214
99,637
4 Fee and commission income 1,029,411
1,038,855
4 Fee and commission expenses 93,419
91,602
Net interest and fee income 3,565,738
2,727,564
5 Value adjustments +253,354
+73,493
Other operating income 5,829
2,055
6,7,8,9 Staff and administration expenses 939,121
870,847
10
Amortisation, depreciation, and write-downs on intangible and
tangible assets
33,377
33,035
Other operating expenses 10,044
6,607
11 Impairment charges for loans and other receivables etc. -5,792
-12,450
Results from investments in associated companies and subsidiaries +84
-37
Profit before tax 2,836,671
1,880,136
12 Tax 681,449
385,239
Net profit for the year 2,155,222
1,494,897
Other comprehensive income:
Value changes in pension liabilities 0
+2,111
Total comprehensive income for the year 2,155,222
1,497,008
2023
DKK 1,000
2022
DKK 1,000
Total comprehensive income for the year 2,155,222
1,497,008
Total amount available for distribution 2,155,222
1,497,008
Appropriated for ordinary dividend 274,913
198,658
Appropriated for charitable purposes 2,000
2,000
Transfer to net revaluation reserve under the equity method +84
-37
Transfer to retained earnings 1,878,225
1,296,387
Total distribution of the amount available
2,155,222
1,497,008
Proposed distribution of profit
Ringkjøbing Landbobank A/S Page 57
Core earnings
Note
no.
2023
DKK 1,000
2022
DKK 1,000
13 Net interest income 2,615,661
1,677,409
14 Net fee and commission income excluding securities trading 777,611
783,728
15
Income from sector shares etc.
192,974
168,922
5 Foreign exchange income 77,192
66,262
Other operating income 5,829
2,055
Total core income excluding securities trading 3,669,267
2,698,376
14
Securities trading
158,381
163,525
Total core income 3,827,648
2,861,901
16 Staff and administration expenses 939,121
870,847
16 Depreciation and write-downs on tangible assets 13,868
13,526
16 Other operating expenses 10,044
6,607
16 Total expenses etc. 963,033
890,980
Core earnings before impairment charges for loans 2,864,615
1,970,921
17 Impairment charges for loans and other receivables etc. -1,286
-2,154
18
Core earnings
2,863,329
1,968,767
18 Result for the portfolio etc. -7,149
-69,122
16,18
Amortisation and write-downs on intangible assets
19,509
19,509
18 Profit before tax 2,836,671
1,880,136
12 Tax 681,449
385,239
Net profit for the year
2,155,222
1,494,897
Ringkjøbing Landbobank A/S Page 58
Balance sheet
Note
no.
31 December
2023
DKK 1,000
31 December
2022
DKK 1,000
Assets
Cash in hand and demand deposits with central banks 4,913,795
4,750,398
19
Receivables from credit institutions and central banks
243,490
776,039
20,21 Total loans and other receivables at amortised cost 50,880,954
48,341,941
Loans and other receivables at amortised cost 50,071,202
47,300,816
Loans for renewable energy projects with direct funding 809,752
1,041,125
22
Bonds at fair value
8,126,555
6,775,872
23 Shares etc. 1,470,945
1,331,791
Investments in associated companies 485
481
Investments in subsidiaries 12,063
11,982
24 Assets linked to pooled schemes 5,845,400
4,972,840
25 Intangible assets 1,012,161
1,043,163
26 Total land and buildings 214,031
220,579
Investment properties 3,667
3,667
Domicile properties
194,684
196,048
Domicile properties (leasing) 15,680
20,864
27
Other tangible assets
16,140
14,731
Current tax assets 42,753
20,056
28 Deferred tax assets 20,006
23,033
Temporary assets
350
2,000
29
Other assets
702,186
677,490
Prepayments
18,326
17,185
Total assets
73,519,640
68,979,581
Ringkjøbing Landbobank A/S Page 59
Balance sheet
Note
no.
31 December
2023
DKK 1,000
31 December
2022
DKK 1,000
Liabilities and equity
30 Debt to credit institutions and central banks 2,209,887
3,567,758
Total deposits and other debt
52,626,495
48,699,778
31 Deposits and other debt 46,781,095
43,726,938
24 Deposits in pooled schemes 5,845,400
4,972,840
32 Issued bonds at amortised cost 5,063,778
4,255,498
Preferred senior capital
2,251,655
966,492
Non-preferred senior capital 2,812,123
3,289,006
33 Other liabilities 1,042,253
1,033,971
Deferred income 240
579
Total debt 60,942,653
57,557,584
21 Provisions for losses on guarantees 60,025
66,596
21 Other provisions for liabilities 26,648
24,113
Total provisions for liabilities
86,673
90,709
Tier 2 capital 2,039,110
2,036,526
34
Total subordinated debt
2,039,110
2,036,526
35 Share capital 27,491
28,380
Net revaluation reserve under the equity method 475
391
Retained earnings
10,146,325
9,065,333
Proposed dividend etc.
276,913
200,658
Total shareholders’ equity
10,451,204
9,294,762
Total liabilities and equity
73,519,640
68,979,581
Ringkjøbing Landbobank A/S Page 60
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
2022
Shareholders’ equity at the end of the previous
financial year
29,068
428
8,487,703
205,474
8,722,673
Comprehensive income
Net profit for the year
-37
1,294,276
200,658
1,494,897
Other comprehensive income
2,111
2,111
Total comprehensive income
0
-37
1,296,387
200,658
1,497,008
Transactions with shareholders
Reduction of share capital
-688
688
0
Dividend etc. paid
-205,474
-205,474
Dividend received on own shares
5,638
5,638
Purchase of own shares
-1,507,045
-1,507,045
Sale of own shares
760,509
760,509
Other equity transactions (employee shares)
21,453
21,453
Total transactions with shareholders
-688
0
-718,757
-205,474
-924,919
Shareholders’ equity on the balance sheet date
28,380
391
9,065,333
200,658
9,294,762
2023
Shareholders’ equity at the end of the previous
financial year
28,380
391
9,065,333
200,658
9,294,762
Comprehensive income
Net profit for the year
84
1,878,225
276,913
2,155,222
Total comprehensive income
0
84
1,878,225
276,913
2,155,222
Transactions with shareholders
Reduction of share capital
-889
889
0
Dividend etc. paid
-200,658
-200,658
Dividend received on own shares
6,714
6,714
Purchase of own shares
-1,801,436
-1,801,436
Sale of own shares
973,032
973,032
Other equity transactions (employee shares)
23,568
23,568
Total transactions with shareholders
-889
0
-797,233
-200,658
-998,780
Shareholders’ equity on the balance sheet date
27,491
475
10,146,325
276,913
10,451,204
Ringkjøbing Landbobank A/S Page 61
Statement of capital
31 December
2023
DKK 1,000
31 December
2022
DKK 1,000
Credit risk
41,658,951
40,843,152
Market risk
1,532,667
1,483,592
Operational risk
5,541,119
4,528,649
Total risk exposure
48,732,737
46,855,393
Shareholders’ equity
10,451,204
9,294,762
Proposed dividend etc.
-276,913
-200,658
Addition for transition programme concerning IFRS 9
359,171
469,846
Deduction for insufficient coverage of non-performing exposures
-5,680
-25,341
Deduction for the sum of equity investments etc. above 10%
-188,016
-194,192
Deduction for prudent valuation
-16,095
-13,924
Deduction for intangible assets
-1,012,162
-1,043,163
Deferred tax on intangible assets
15,629
18,855
Deferred tax assets
-35,634
-41,888
Deduction of amount of share buyback programme
-770,000
-738,000
Actual utilisation of amount of share buyback programme
749,299
682,262
Deduction for trading limit for own shares
-15,000
-55,000
Deduction for indirect ownership of own shares
-30,623
0
Common equity tier 1
9,225,180
8,153,559
Tier 1 capital
9,225,180
8,153,559
Tier 2 capital
2,040,628
2,043,645
Deduction for the sum of equity investments etc. above 10%
-78,297
-90,606
Total capital
11,187,511
10,106,598
Non-preferred senior capital
2,909,546
3,426,434
MREL capital
14,097,057
13,533,032
Common equity tier 1 capital ratio
18.9
17.4
Tier 1 capital ratio
18.9
17.4
Total capital ratio
23.0
21.6
MREL capital ratio
28.9
28.9
Pillar I capital requirements
3,898,619
3,748,431
MREL requirement (%) fixed by the Danish FSA
17.9
17.8
Excess cover in percentage points relative to MREL requirement
11.0
11.1
Ringkjøbing Landbobank A/S Page 62
Overview of notes
Overview of notes
Page
1 Interest income 63
2 Interest expenses 63
3 Dividends from shares etc. 64
4 Fees and commission 64
5 Value adjustments 64
6 Staff and administration expenses 65
7 Number of full-time employees 65
8 Salaries paid to other major risk-takers and employees in control functions 65
9 Fees to the auditor elected by the annual general meeting 66
10 Amortisation, depreciation, and write-downs on intangible and tangible assets 66
11 Impairment charges for loans and other receivables etc. 66
12 Tax 66
13 Net interest income 67
14 Net fee and commission income excluding securities trading 67
15 Income from sector shares etc. 67
16 Total expenses etc. 67
17 Impairment charges for loans and other receivables etc. 67
18 Profit before tax and core earnings before tax 67
19 Receivables from credit institutions and central banks 68
20 Loans and other receivables at amortised cost 68
21 Impairment charges for loans and other receivables etc. 68
22 Bonds at fair value 70
23 Shares etc. 70
24 Assets linked to pooled schemes 70
25 Intangible assets 71
26 Land and buildings 72
27 Other tangible assets 72
28 Deferred tax assets 73
29 Other assets 73
30 Debt to credit institutions and central banks 73
31 Deposits and other debt 74
32 Issued bonds at amortised cost 74
33 Other liabilities 74
34 Subordinated debt 75
35 Share capital 75
36 Own shares 76
37 Contingent liabilities etc. 76
38 Assets furnished as security 76
39 Contractual obligations 77
40 Legal proceedings etc. 77
41 Related parties 77
42 Fair value of financial instruments 79
43 Hedging 81
44 Risks and risk management 82
45 Credit risks 83
46 Market risks 93
47 Interest rate risks 94
48 Foreign exchange risks 95
49 Share price risks 96
50 Value at Risk 97
51 Property risks 98
52 Liquidity risks 99
53 Non-financial risks 101
54 Derivative financial instruments 103
55 Accounting estimates and judgments 106
56 Accounting policies etc. 107
Ringkjøbing Landbobank A/S Page 63
Notes
Note
no.
2023
DKK 1,000
2022
DKK 1,000
1
Interest income
Receivables from credit institutions and central banks - net
121,484 -1,136
Loans and other receivables
3,008,420 1,581,790
Discounts - amortisation concerning loans taken over etc.
4,506 10,296
Loans - interest on the impaired part of loans
-63,594
-49,059
Bonds - net
235,514
59,503
Total derivative financial instruments - net
18,614
82,373
of which currency contracts - net
8,251
27,665
of which interest-rate contracts - net
10,363 54,708
Other interest income
564 1,285
Total interest income after offsetting of negative interest
3,325,508
1,685,052
of which interest income from collateralised repurchase agreements/reverse
repo transactions booked under the item “Loans and other receivables” is
3,731
808
Negative interest income transferred to interest expenses
Receivables from credit institutions and central banks
0
13,452
Bonds
0
2,497
Total derivative financial instruments
0 1,344
of which currency contracts
0 554
of which interest-rate contracts
0
790
Total negative interest income transferred to interest expenses
0
17,293
Total negative interest income transferred from interest expenses
Debt to credit institutions and central banks
0
57
Deposits and other debt
0
163,446
Total negative interest expenses transferred from interest expenses
0 163,503
Total interest income
3,325,508
1,865,848
2
Interest expenses
Credit institutions and central banks - net
36,453
18,736
Deposits and other debt - net
476,184
-100,778
Issued bonds
177,930
49,980
Subordinated debt
94,645
35,542
Other interest expenses
764 898
Total interest expenses after offsetting of negative interest
785,976 4,378
Negative interest expenses transferred to interest income
Debt to credit institutions and central banks
0 57
Deposits and other debt
0
163,446
Total negative interest expenses transferred to interest income
0
163,503
Negative interest income transferred from interest income
Receivables from credit institutions and central banks
0
13,452
Bonds
0
2,497
Total derivative financial instruments
0 1,344
of which currency contracts
0 554
of which interest-rate contracts
0
790
Total negative interest income transferred from interest income
0
17,293
Total interest expenses
785,976
185,174
Ringkjøbing Landbobank A/S Page 64
Notes
Note
no.
2023
DKK 1,000
2022
DKK 1,000
3
Dividends from shares etc.
Shares
90,214
99,637
Total dividends from shares etc.
90,214
99,637
4
Fees and commission
Gross fee and commission income
Securities trading
171,585 175,681
Asset management and custody accounts
233,776 221,355
Payment handling
176,097
151,053
Loan fees
86,870
126,221
Guarantee commission and mortgage credit commission etc.
248,293
256,622
Other fees and commission
112,790
107,923
Total gross fee and commission income
1,029,411
1,038,855
Fee and commission expenses
Securities trading
13,204 12,156
Asset management and custody accounts
15,442 13,919
Payment handling
50,303
47,484
Loan fees
7,792
11,694
Other fees and commission
6,678
6,349
Total fee and commission expenses
93,419
91,602
Net fee and commission income
Securities trading
158,381
163,525
Asset management and custody accounts
218,334 207,436
Payment handling
125,794 103,569
Loan fees
79,078
114,527
Guarantee commission and mortgage credit commission etc.
248,293
256,622
Other fees and commission
106,112
101,574
Total net fee and commission income
935,992
947,253
Foreign exchange income
77,192 66,262
Total net fee, commission, and foreign exchange income
1,013,184 1,013,515
5
Value adjustments
Other loans and receivables, fair value adjustment*
8,835
-28,775
Bonds
107,217 -166,484
Shares etc.
110,006 65,409
Foreign exchange
77,192
66,262
Total derivative financial instruments
18,468
-79,598
of which currency contracts
24,727
-130,997
of which interest-rate contracts
-6,261
51,399
of which share contracts
2
0
Assets linked to pooled schemes
507,479 -739,503
Deposits in pooled schemes
-507,479 739,503
Issued bonds etc.*
-58,354
198,702
Debt to credit institutions
-10,010
17,977
Total value adjustments
253,354
73,493
* See also note 43.
Ringkjøbing Landbobank A/S Page 65
Notes
Note
no.
2023
DKK 1,000
2022
DKK 1,000
6
Staff and administration expenses
Payments to general management, board of directors and shareholders’
committee:
General management (4/4 persons):
Salary
18,948
16,851
Pension
2,820 2,321
Total payments
21,768 19,172
The total taxable values of company cars amounting to tDKK 630 in 2023
and tDKK 613 in 2022 are not included in the salary amounts stated.
Board of directors (13/12 persons):
Total payments
5,665 4,367
Shareholders' committee (41/41 persons):
Total payments
978
898
Total
28,411
24,437
Staff expenses:
Salaries
406,093 389,689
Pensions
46,464 43,876
Social security expenses
6,053
5,727
Costs depending on number of staff
69,970
62,268
Total
528,580
501,560
Other administration expenses
382,130
344,850
Total staff and administration expenses
939,121
870,847
Information on the remuneration paid to the individual members of the board of directors and general management is
shown in the remuneration report for 2023, available on the bank’s website: www.landbobanken.dk/policies
7
Number of full-time employees
Average number of employees during the financial year converted into full-
time equivalent (FTE)
653
641
Number of full-time employees at the end of the period
661
646
8
Salaries paid to other major risk-takers and employees in
control functions
Fixed salary
18,826 18,053
Variable salary
385 500
Pension
2,141
2,052
Total
21,352
20,605
Number of full-time employees at end of year
21
21
Ringkjøbing Landbobank A/S Page 66
Notes
Note
no.
2023
DKK 1,000
2022
DKK 1,000
9
Fee to the auditor elected by the general meeting
Statutory audit
956
789
Other assurance engagements
115
140
Advice on tax
89
0
Other services
449
227
Total fee to the auditor elected by the general meeting
1,609
1,156
Fees for other assurance engagements primarily concern reports to public authorities and business partners.
Fees for advice on tax primarily concern the bank’s employee share ownership scheme and various aspects of VAT.
Fees for other services primarily concern issue of the comfort letter regarding the bank’s EMTN programme and
verification of regular recognition of profit in common equity tier 1 and assistance regarding customers’ refunds of
dividend tax.
The bank also has an internal auditor.
10
Amortisation, depreciation, and write-downs on intangible
and tangible assets
Intangible assets
Customer relationships, amortisation
19,509
19,509
Tangible assets
Domicile properties, depreciation
1,212 1,839
Domicile properties, write-down to reassessed value (net)
-1,000 -2,000
Domicile properties (leasing), depreciation
5,184
5,736
Other tangible assets, depreciation
8,368
7,848
Other tangible assets (leasing), depreciation
104
103
Total amortisation, depreciation, and write-downs on intangible and tangible
assets
33,377
33,035
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
32,418
18,851
Actual realised net losses
36,968
42,658
Interest on the impaired part of loans
-63,594
-49,059
Total impairment charges for loans and other receivables etc.
5,792
12,450
12
Tax
Tax calculated on income for the year including factor increase
675,491
374,752
Adjustment of deferred tax for the year
3,643
11,928
Adjustment of deferred tax due to change in tax rate
(factor increase)
-616
-2,925
Adjustment of tax calculated for previous years
2,931 1,484
Total tax
681,449 385,239
Effective tax rate (%):
Tax rate currently paid by the bank
22.0
22.0
Factor increase (extra tax imposed on financial undertakings)
3.2
0.0
Non-taxable income and non-deductible costs*
-1.3
-1.4
Change in tax rate (factor increase)
0.0
-0.2
Adjustment of tax calculated for previous years
0.1 0.1
Total effective tax rate
24.0 20.5
* Primarily value adjustment of and dividends from sector shares.
Ringkjøbing Landbobank A/S Page 67
Notes
Note
no.
2023
DKK 1,000
2022
DKK 1,000
Explanation of the correlation between profit before tax and core earnings
13
Net interest income
Net interest income - income statement
2,539,532
1,680,674
Discounts - amortisation concerning loans taken over etc.
-4,506
-10,296
Funding income - own portfolio
316,149
66,534
Bond yields etc.
-235,514
-59,503
Net interest income - core earnings
2,615,661 1,677,409
14
Net fee and commission income excluding securities trading
Fee and commission income - income statement
1,029,411
1,038,855
Fee and commission expenses - income statement
-93,419
-91,602
Securities trading - core earnings
-158,381
-163,525
Net fee and commission income excluding securities trading - core earnings
777,611
783,728
15
Income from sector shares etc.
Value adjustment of sector shares etc.
+103,486
+70,470
Dividends from sector shares etc. 89,488 98,452
Income from sector shares etc. - core earnings
192,974
168,922
16
Total expenses etc.
Staff and administration expenses - income statement
939,121
870,847
Amortisation, depreciation and write-downs on intangible and tangible assets,
net - income statement
33,377
33,035
Other operating expenses - income statement
10,044
6,607
Amortisation and write-downs on intangible assets, net - core earnings
-19,509
-19,509
Total expenses etc. - core earnings
963,033
890,980
17
Impairment charges for loans and other receivables etc.
Impairment charges for loans and other receivables etc. - income statement
-5,792
-12,450
Discounts - amortisation concerning loans taken over etc.
4,506
10,296
Impairment charges for loans and other receivables etc. - core earnings
-1,286
-2,154
18
Profit before tax and core earnings
Profit before tax
2,836,671
1,880,136
Value adjustments - income statement
+253,354
+73,493
Results from investments in associated companies and subsidiaries
+84
-37
Value adjustment of sector shares etc.
-103,486
-70,470
Foreign exchange income - core earnings
-77,192
-66,262
Funding expenses - own portfolio
-316,149
-66,534
Bond yields etc.
235,514
59,503
Dividends - not sector shares
726
1,185
Result for the portfolio - core earnings (minus)
-7,149
-69,122
Special costs - core earnings (plus)
19,509
19,509
Core earnings
2,863,329
1,968,767
Ringkjøbing Landbobank A/S Page 68
Notes
Note
no.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
19
Receivables from credit institutions and central banks
On demand
243,490
776,039
Total receivables from credit institutions and central banks
243,490 776,039
Distributed as follows:
Receivables from credit institutions
243,490
776,039
20
Loans and other receivables at amortised cost*
On demand
7,978,024
7,353,370
Up to and including 3 months
2,968,599
2,475,978
More than 3 months and up to and including 1 year
10,578,051
9,815,126
More than 1 year and up to and including 5 years
12,396,714
11,945,344
More than 5 years
16,959,566
16,752,123
Total loans and other receivables at amortised cost
50,880,954
48,341,941
of which collateralised repurchase agreements/reverse repo transactions
145,682
0
* See also note 43.
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
Stage 2
Stage 3*
Total
DKK 1,000
DKK 1,000
DKK 1,000
DKK 1,000
2023
Loans and other receivables at amortised cost
381,396
1,034,615
831,905
2,247,916
Guarantees
5,336
13,548
41,141
60,025
Unutilised credit facilities and credit undertakings
12,519
14,129
0
26,648
Total impairment charges and provisions by stages
399,251
1,062,292
873,046
2,334,589
of which management estimates**
257,186
493,756
199,026
949,968
2022
Loans and other receivables at amortised cost
213,651
1,009,429
988,382
2,211,462
Guarantees
4,955
15,194
46,447
66,596
Unutilised credit facilities and credit undertakings
8,154
15,959
0
24,113
Total impairment charges and provisions by stages
226,760
1,040,582
1,034,829
2,302,171
of which management estimates**
107,591
409,336
277,283
794,210
* Including credit-impaired on initial recognition
** See the description of distribution by stages on pages 89-90.
31 Dec. 2023
31 Dec. 2022
DKK 1,000 DKK 1,000
In addition, a discount on loans and guarantees taken over from Nordjyske
Bank amounted to
0
4,506
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 financial year
155,343
190,619
Changes during the year
-54,491 -35,276
Total stage 3 impairment charges and provisions taken over
100,852 155,343
Ringkjøbing Landbobank A/S Page 69
Notes
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 by stages
Stage 1
Stage 2
Stage 3
Total
Impairment
charges etc.
taken to
income
statement
DKK 1,000
DKK 1,000
DKK 1,000
DKK 1,000
DKK 1,000
2023
Impairment charges and provisions at the end
of the previous financial year
226,760
1,040,582
1,034,829
2,302,171
-
Impairment charges and provisions for new
exposures during the year, including new
accounts for existing customers
115,671
75,989
86,003
277,663
277,663
Reversed impairment charges and provisions
for repaid accounts
-51,074
-169,305
-72,303
-292,682
-292,682
Migration of impairment charges and
provisions at beginning of year to stage 1
236,583
-233,187
-3,396
0
-
Migration of impairment charges and
provisions at beginning of year to stage 2
-14,914
68,415
-53,501
0
-
Migration of impairment charges and
provisions at beginning of year to stage 3
-361
-51,408
51,769
0
-
Impairment charges and provisions during the
year resulting from credit risk change
-113,414
331,206
-106,475
111,317
111,317
Previously written down, now definitively lost
-
-
-63,880
-63,880
-
Lost, not previously written down
-
-
-
-
9,305
Received on receivables previously written off
-
-
-
-
-36,217
Interest on the impaired part of loans
-
-
-
-
-63,594
Total impairment charges and provisions
399,251
1,062,292
873,046
2,334,589
5,792
of which regarding credit institutions etc.
593
0
0
593
202
2022
Impairment charges and provisions at the end
of the previous financial year
251,041
858,497
1,173,782
2,283,320
-
Impairment charges and provisions for new
exposures during the year, including new
accounts for existing customers
80,296
148,705
60,126
289,127
289,127
Reversed impairment charges and provisions
for repaid accounts
-66,346
-144,630
-124,811
-335,787
-335,787
Migration of impairment charges and
provisions at beginning of year to stage 1
178,445
-154,905
-23,540
0
-
Migration of impairment charges and
provisions at beginning of year to stage 2
-18,592
108,600
-90,008
0
-
Migration of impairment charges and
provisions at beginning of year to stage 3
-429
-20,717
21,146
0
-
Impairment charges and provisions during the
year resulting from credit risk change
-197,655
245,032
69,725
117,102
117,102
Previously written down, now definitively lost
-
-
-51,591
-51,591
-
Lost, not previously written down
-
-
-
-
16,300
Received on receivables previously written off
-
-
-
-
-25,233
Interest on the impaired part of loans
-
-
-
-
-49,059
Total impairment charges and provisions
226,760
1,040,582
1,034,829
2,302,171
12,450
of which regarding credit institutions etc.
391
0
0
391
-2,911
Ringkjøbing Landbobank A/S Page 70
Notes
Note
no.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
22
Bonds at fair value
Government bonds
367,089 0
Mortgage credit bonds
6,246,164 5,578,166
Corporate bonds etc.
1,513,302 1,197,706
Total bonds at fair value
8,126,555
6,775,872
Bonds at fair value by rating classes
Percent
Percent
Aaa/AAA
82
82
A1/A+
1 0
A2/A
1 0
A3/A-
3
4
Baa1/BBB+
1
1
Baa2/BBB
2
2
Not rated
10
11
Total
100
100
Ratings from the credit rating agencies Moody’s Investors Service, Standard & Poor’s and Fitch were used in the
specification. If an issue has more than one rating, the lowest is used.
23
Shares etc.
Listed on Nasdaq Copenhagen
45,377
26,449
Investment fund certificates
8,911 10,012
Unlisted shares at fair value
11,339 8,798
Sector shares at fair value
1,405,318
1,286,532
Total shares etc.
1,470,945
1,331,791
24
Assets linked to pooled schemes
Cash deposits
136,038 103,301
Bonds:
Other bonds
1,532,816
1,394,342
Total bonds
1,532,816
1,394,342
Shares:
Other shares
541,782
815,830
Investment fund certificates
3,634,764
2,659,367
Total shares
4,176,546 3,475,197
Total assets linked to pooled schemes
5,845,400 4,972,840
Ringkjøbing Landbobank A/S Page 71
Notes
Note
no.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
25
Intangible assets
Goodwill
Cost at the end of the previous financial 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 financial year
195,088
195,088
Total cost on the balance sheet date
195,088
195,088
Amortisation at the end of the previous financial year
75,180
55,671
Amortisation for the year
19,509
19,509
Write-downs for the year
1
11,493
0
Total amortisation on the balance sheet date
106,182 75,180
Total customer relationships on the balance sheet date
88,906 119,908
Total intangible assets on the balance sheet date
1,012,161
1,043,163
Goodwill was impairment-tested at the end of 2023. The merged bank was tested as a single unit, since the “old”
Nordjyske Bank is financially 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 2024. “Net profit 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 profit for the year” as the opening value in the model makes the test harder than if free cash flows were used. A
weighted average cost of capital of 9.5% and an expected annual increase in “Net profit 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 2023, the
market value was approximately two and a half times the equity value.
1
In the income statement and the statement of core earnings, write-downs for the year are presented together with an
equivalent amount of income from the previously recognised liability under the earn-out agreement which was entered
into in connection with the takeover of the BIL Danmark customer portfolio. The two items thus have zero effect on
the profit.
Ringkjøbing Landbobank A/S Page 72
Notes
Note
no.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
26
Land and buildings
Investment properties
Fair value at the end of the previous financial year
3,667 8,667
Value adjustments to fair value for the year
0 -5,000
Fair value on the balance sheet date
3,667
3,667
Domicile properties
Revalued amount at the end of the previous financial year
196,048
168,387
Additions during the year, including improvements
0
29,500
Additions on reclassification due to changed use
0
3,868
Disposals during the year
-1,387 -5,868
Depreciation for the year
-1,212 -1,839
Write-downs after revaluation for the year
0
-2,500
Reversal of previous years’ write-downs for the year and reversal of total
depreciation and write-downs on assets which were disposed of or
decommissioned during the year
1,235 4,500
Total revalued amount on the balance sheet date
194,684
196,048
Domicile properties (leasing)
Recognised amount at the end of the previous financial year
20,864
22,578
Additions during the year
0
4,041
Depreciation for the year
-5,184
-5,736
Reversal of previous years’ write-downs for the year and reversal of total
depreciation and write-downs on assets which were disposed of or
decommissioned during the year
0
-19
Total recognised amount on the balance sheet date
15,680 20,864
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.
27
Other tangible assets
Cost at the end of the previous financial year without depreciation and write-
downs
92,387
85,621
Additions during the year, including improvements
10,359 7,683
Disposals during the year
-2,170 -917
Total cost on the balance sheet date
100,576 92,387
Depreciation and write-downs at the end of the previous financial year
77,656
70,622
Depreciation for the year
8,472
7,951
Reversal of previous years’ write-downs for the year and reversal of total
depreciation and write-downs on assets which were disposed of or
decommissioned during the year
-1,692
-917
Total depreciation and write-downs on the balance sheet date
84,436
77,656
Total other tangible assets on the balance sheet date
16,140
14,731
The bank is a lessee under leases for other tangible assets, which are
recognised at
103 104
Ringkjøbing Landbobank A/S Page 73
Notes
Note
no.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
28
Deferred tax assets
The calculated provisions for deferred tax relate to the following balance
sheet items:
Loans and other receivables
6,871
77,220
Securities and financial instruments
10,312
-52,423
Intangible assets
-15,629
-18,855
Tangible assets
8,330
8,649
Other balance sheet items
10,122
8,442
Total deferred tax assets
20,006
23,033
Deferred tax assets, beginning of year
23,033
11,263
Adjustment of amount at beginning of year (transferred to current tax)
484
20,773
Deferred tax for the year
-4,127
-11,928
Adjustment of deferred tax due to change in tax rate (factor increase)
616
2,925
Total deferred tax assets
20,006
23,033
Deferred tax is calculated at a tax rate of (%)
26.0
25.2
29
Other assets
Interest and commission receivable
220,273
132,024
Positive market value of derivative financial instruments
102,316 150,673
Collateral under CSA agreements
157,872 226,293
Miscellaneous debtors and other assets
171,844
117,925
Other deposits
49,881
50,575
Total other assets
702,186
677,490
30
Debt to credit institutions and central banks*
On demand
849,133
758,592
Up to and including 3 months
12,980
331,075
More than 3 months and up to and including 1 year
556,329
1,128,099
More than 1 year and up to and including 5 years
395,902
758,383
More than 5 years
395,543 591,609
Total debt to credit institutions and central banks
2,209,887 3,567,758
* See also note 43.
Distributed as follows:
Debt to credit institutions
2,209,887 3,567,758
Ringkjøbing Landbobank A/S Page 74
Notes
Note
no.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
31
Deposits and other debt
On demand*
33,012,187 35,665,320
Deposits and other debt with notice:
Up to and including 3 months
4,572,111 2,190,631
More than 3 months and up to and including 1 year
3,049,221
2,577,901
More than 1 year and up to and including 5 years
2,895,405
621,464
More than 5 years
3,252,171
2,671,622
Total deposits and other debt
46,781,095
43,726,938
of which deposits covered by the Guarantee Fund
56.0%
55.6%
Distributed as follows:
On demand
34,115,670
34,739,640
With notice
4,630,822
2,185,866
Time deposits
3,168,922 3,106,657
Long-term deposit agreements
1,663,875 758,090
Special types of deposits*
3,201,806 2,936,685
46,781,095
43,726,938
* Special types of deposits are entered under the item “On demand” pending payment whereas, in the specification of the
different types of deposits, the sum is included under “Special types of deposit”.
32
Issued bonds at amortised cost*
Up to and including 3 months
372,647
259,405
More than 3 months and up to and including 1 year
728,180
368,799
More than 1 year and up to and including 5 years
3,562,256
2,450,260
More than 5 years
400,695
1,177,034
Total issued bonds at amortised cost
5,063,778 4,255,498
Distributed as follows:
Preferred senior capital
2,289,649 1,003,921
Adjustment to amortised cost and fair value adjustment
-37,994
-37,429
Total preferred senior capital
2,251,655
966,492
Non-preferred senior capital
2,911,643
3,426,434
Adjustment to amortised cost and fair value adjustment
-99,520
-137,428
Total non-preferred senior capital
2,812,123
3,289,006
Total issued bonds at amortised cost
5,063,778
4,255,498
* See also note 43.
33
Other liabilities
Interest and commission payable
159,835
62,372
Negative market value of derivative financial instruments
270,799
366,884
Collateral under CSA agreements
10,270 23,309
Miscellaneous creditors and other liabilities
601,349 581,406
Total other liabilities
1,042,253
1,033,971
Ringkjøbing Landbobank A/S Page 75
Notes
Note
no.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
34
Subordinated debt
Type
Interest
rate
Cur-
rency
Million
Due date
Possible early
repayment date
Tier 2 capital
1
Bond loan
2
Fixed
DKK
500
13 June 2028
13 June 2023
-
500,000
Bond loan
3
Floating
DKK
300
13 June 2030
13 June 2025
300,000
300,000
Bond loan
4
Floating
EUR
100
22 Aug. 2029
22 Aug. 2024
745,295
743,645
Bond loan
5
Floating
DKK
500
11 Jan. 2032
11 Jan. 2027
500,000
500,000
Bond loan
6
Floating
DKK
500
1 Sep. 2033
1 Sep. 2028
500,000
-
Total tier 2 capital
2,045,295
2,043,645
Adjustment to amortised cost and fair value adjustment
-6,185
-7,119
Total subordinated debt
2,039,110
2,036,526
1
See also note 43.
2
Issued on 13 June 2018. The interest rate is a fixed rate corresponding to a 5-year mid-swap plus 1.65% p.a., after
which the interest rate will be a floating rate corresponding to Cibor 6M plus 1.65% p.a. Interest expenses etc. - 2023:
tDKK 4,977 / 2022: tDKK 11,283. Costs of raising loan: tDKK 2,500
3
Issued on 13 June 2018. The interest rate is a floating rate corresponding to the Cibor 6M plus 1.85% p.a. Interest
expenses etc. - 2023: tDKK 16,255 / 2022: tDKK 6,269. Costs of raising loan: tDKK 1,500
4
Issued on 22 August 2019. The interest rate is a floating rate corresponding to the Euribor 3M plus 1.75% p.a. Interest
expenses etc. - 2023: tDKK 38,635 / 2022: tDKK 12,503. Costs of raising loan: tDKK 2,462
5
Issued on 11 October 2021. The interest rate is a floating rate corresponding to the Euribor 3M plus 1.10% p.a. Interest
expenses etc. - 2023: tDKK 24,232, 2022: tDKK 5,487. Costs of raising loan: tDKK 1,750
6
Issued on 1 September 2023. The interest rate is a floating rate corresponding to the Cibor 6M plus 2.00% p.a. Interest
expenses etc. - 2023: tDKK 10,546. Costs of raising loan etc.: tDKK 5,000
35
Share capital
Number of DKK 1 shares:
Beginning of year
28,379,666 29,067,721
Cancellation during the year
-888,327 -688,055
End of year
27,491,339
28,379,666
of which reserved for subsequent cancellation
758,610
826,527
Total share capital
27,491 28,380
The whole share capital has been admitted for listing on Nasdaq Copenhagen.
Ringkjøbing Landbobank A/S Page 76
Notes
Note
no.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
36
Own shares
Own shares included in the balance sheet at
0 0
Market value
752,162 783,548
Number of own shares:
Beginning of year
826,527 635,988
Purchase during the year
1,824,656
1,781,303
Sale during the year
-1,004,246
-902,709
Cancellation during the year
-888,327
-688,055
End of year
758,610
826,527
of which reserved for subsequent cancellation
758,610
826,527
Nominal value of holding of own shares, end of year
759
827
Own shares’ proportion of share capital, end of year (%):
Beginning of year
2.9
2.2
Purchase during the year
6.7 6.3
Sale during the year
-3.6 -3.2
Cancellation during the year
-3.2
-2.4
End of year
2.8
2.9
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 buyback programmes.
37
Contingent liabilities etc.
Contingent liabilities
Financial guarantees
2,038,132
2,345,714
Guarantees against losses on mortgage credit loans
1,821,326
2,199,287
Registration and refinancing guarantees
1,863,058
2,163,492
Sector guarantees
105,830 104,485
Other contingent liabilities
636,445 756,701
Total contingent liabilities
6,464,791 7,569,679
Other contractual obligations
Irrevocable credit undertakings
328,148
84,055
Total other contractual obligations
328,148
84,055
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 first-mortgage loans is
deducted directly from the funding at KfW Bankengruppe. The balance sheet
item is
809,752 1,041,125
Pledged to Danmarks Nationalbank as collateral for clearing etc.:
Balance in current account with Danmarks Nationalbank
17,674 35,531
Collateral under CSA agreements etc.
157,872
226,293
Ringkjøbing Landbobank A/S Page 77
Notes
Note
no.
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.
40
Legal proceedings etc.
The bank is not party to legal proceedings expected to result in major losses and therefore in substantial alteration of
the accounts.
41
Related parties
Persons comprised and definition
Related parties comprise both physical and legal persons who or which have a controlling interest in or control the
bank.
The bank has no owners, including legal persons which have a controlling or significant interest in, or control over, the
bank.
The bank’s related parties are thus the members of the bank’s board of directors and general management and their
related parties.
Board members are elected in part by the bank’s shareholders' committee and in part by the bank’s employees, and
the members of general management are employed by the board of directors on recommendation by the board’s
nomination committee.
The bank also has a subsidiary, the forestry company Sæbygård Skov A/S, and an associated company Tarm Plantage
ApS.
Transactions with related parties
There were no transactions with the subsidiary, the associated company, members of the board of directors and
general management or their related parties in 2023 except
• payment of salaries and remuneration etc. to the members of the bank’s board of directors and general
management,
• securities trading,
• deposit activities,
• loans and provision of collateral security, and
• other day-to-day banking business.
All transactions during the year with related parties were on market terms or on an at-cost basis.
Information on the remuneration paid to the board of directors and general management is given in note 6 and the
remuneration report for 2023.
Information on the size of loans, mortgages, sureties and guarantees provided to members of the bank’s board of
directors and general management, the collateral 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.
Ringkjøbing Landbobank A/S Page 78
Notes
Note
no.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
41
Related parties - continued
Amounts of loans, mortgages, sureties or guarantees provided to the
members of the bank’s organs:
Board of directors, including members elected by the employees
20,456
30,986
Interest rate
4.74%-10,15%
2.22%-21,35%
General management
1,330 1,330
Interest rate
6.74%-9,94% 4.22%-7,42%
New exposures during the year have been granted for a net
1,840
10,502
All exposures are on market terms, including both interest and guarantee commission rates.
Security provided by members of the bank’s organs:
Board of directors, including members elected by the employees
8,106
12,916
General management
0
0
Shareholdings of the board of directors and general management in
Ringkjøbing Landbobank at the end of the year*
No. of shares
No. of shares
Board of directors:
Martin Krogh Pedersen, chair
40,315 36,015
Mads Hvolby, deputy chair
3,236
3,204
Jens Møller Nielsen, deputy chair
143
270
Morten Jensen
1,100
1,100
Jon Steingrim Johnsen
0
0
Anne Kaptain
16
16
Jacob Møller
795 795
Lone Rejkjær Söllmann
1,449 999
Lene Weldum (joined on 1 March 2023)
1,467
-
Dan Junker Astrup (resigned on 1 March 2023)
-
298
Lisa Munkholm (joined on 1 March 2023)
42
-
Nanna G. Snogdal (joined on 1 March 2023)
110
-
Arne Ugilt (resigned on 1 March 2023)
- 839
Gitte E.S.H. Vigsø (resigned on 1 March 2023)
- 132
Martin Wilche (joined on 1 March 2023)
49 -
Finn Aaen
650
608
General management:
John Bull Fisker
75,915
75,915
Claus Andersen
2,070
1,947
Jørn Nielsen
8,937 8,939
Carl Pedersen
1,456 1,378
* Shares owned by members of management and their personal related parties.
Ringkjøbing Landbobank A/S Page 79
Notes
Note
no.
42
Fair value of financial instruments
Financial instruments are measured in the balance sheet at either fair value or amortised cost (with consideration to
risk cover that fulfils the conditions applying to hedge accounting).
Fair value is the amount at which a financial asset can be traded or at which a financial liability can be repaid between
agreed independent parties. The fair values of financial assets and liabilities priced on active markets are calculated
on the basis of observed market prices on the balance sheet date. The fair values of financial 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
financial instruments are measured in the accounts at fair value. Recognised 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 fixed-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 floating-rate financial liabilities in the form of deposits and debt to credit institutions measured at amortised cost,
it is estimated that the carrying value corresponds to the fair value. For fixed-rate financial 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 hedging, which is estimated
to correspond to the fair value.
Ringkjøbing Landbobank A/S Page 80
Notes
Note
no.
42
Fair value of financial instruments - continued
31 December 2023
31 December 2022
Book value
Fair value
Book value
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
4,913,795
4,913,795
4,750,398
4,750,398
Receivables from credit institutions and central
banks*
243,490
243,490
776,039
776,039
Loans and other receivables at amortised cost*
51,022,607
51,365,753
48,437,342
48,611,400
Bonds at fair value*
8,202,913
8,202,913
6,811,728
6,811,728
Shares etc.
1,470,945
1,470,945
1,331,791
1,331,791
Investments in associated companies
485
485
481
481
Investments in subsidiaries
12,063
12,063
11,982
11,982
Assets linked to pooled schemes
5,845,400
5,845,400
4,972,840
4,972,840
Derivative financial instruments
102,316
102,316
150,673
150,673
Total financial assets
71,814,014
72,157,160
67,243,274
67,417,332
Financial liabilities
Debt to credit institutions and central banks*
2,223,613
2,223,613
3,577,849
3,535,296
Deposits and other debt*
46,865,658
46,222,716
43,747,721
43,740,175
Deposits in pooled schemes
5,845,400
5,845,400
4,972,840
4,972,840
Issued bonds at amortised cost*
5,102,031
5,102,031
4,277,336
4,277,336
Derivative financial instruments
270,799
270,799
366,884
366,884
Subordinated debt*
2,060,512
2,060,512
2,045,954
2,045,954
Total financial liabilities
62,368,013
61,725,071
58,988,584
58,938,485
* 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”.
Ringkjøbing Landbobank A/S Page 81
Notes
Note
no.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
43
Hedging*
Fixed-rate loans at book value
324,619
328,788
Hedged by currency swap (EUR/DKK), maturity 2025:
Synthetic principal
149,432
149,101
Fair value
4,617
8,925
Hedged by interest rate swaps, maturity 2026-2035:
Synthetic principal
175,315
179,887
Fair value
1,501
7,174
Fixed-rate debt to credit institutions at book value
558,971
557,734
Hedged by interest rate swap, maturity 2024:
Synthetic principal
558,971
557,734
Fair value
-11,302
-18,255
Issued bonds at book value
1,884,761
3,105,355
Hedged by currency swaps (EUR/DKK), maturity 2023-2039:
Synthetic principal
931,148
1,154,662
Fair value
-92,771
-125,929
Hedged by currency swaps (SEK/DKK), maturity 2026:
Synthetic principal
638,272
684,182
Fair value
-52,671
-55,369
Hedged by currency swaps (NOK/DKK), maturity 2027:
Synthetic principal
165,811
189,375
Fair value
-24,675
-13,300
Hedged by interest rate swaps, maturity 2023-2029:
Synthetic principal
149,059
1,140,552
Fair value
-10,703
-34,119
Tier 2 capital at book value
0 500,000
Hedged by interest rate swap, maturity 2023:
Synthetic principal
0
500,000
Fair value
0
-46
Hedging is thus:
Currency swaps - total synthetic principal
1,884,663
2,177,320
Interest rate swaps - total synthetic principal
883,345
2,378,173
Fair value - currency swaps
-165,500
-185,673
Fair value - interest rate swaps
-20,504
-45,246
2023
DKK 1,000
2022
DKK 1,000
Value adjustment* for the year is distributed as follows:
Currency swaps
27,868
-140,792
Interest rate swaps
30,050
-54,196
Fixed-rate loans
10,445
-21,692
Fixed-rate debt to credit institutions
-10,010
17,978
Issued bonds
-53,917
189,168
Tier 2 capital
-4,436
9,534
Total effect on profit
0
0
* Fair value hedging only.
Ringkjøbing Landbobank A/S Page 82
Notes
Note
no.
44
Risks and risk management
The bank is exposed to various financial risks in its operations, including credit risks, market risks and liquidity risks.
There are also a number of non-financial risks, including money laundering and financing of terrorism, IT risks and
other operational risks.
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 definition of the bank’s risk profile. 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 profile, or more often
if needed.
The bank’s general principle for risk-taking is only to take risks within a moderate risk profile 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 profile. In line with the market possibilities, the board then assesses whether to adjust the bank’s
business model and risk profile. 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 management 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.
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.
See the following notes for a detailed description of risks and policies and objectives for the management of these
risks:
• Credit risks - note 45 - page 83
• Market risks - note 46 - page 93
• Interest rate risks - note 47 - page 94
• Foreign exchange risks - note 48 - page 95
• Share price risks - note 49 - page 96
• Value at Risk - note 50 - page 97
• Property risks - note 51 - page 98
• Liquidity risks - note 52 - page 99
• Non-financial risks - note 53 - page 101
The following notes to the financial statements also contain detailed information and descriptions of the bank’s risks.
Ringkjøbing Landbobank A/S Page 83
Notes
Note
no.
45
Credit risks
Credit risk is defined as the risk that payments owing to the bank are non-recoverable because the debtor is either
unable or unwilling to pay at the agreed time. Credit risk is the most significant risk area in the bank.
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 financial sector.
No material changes were made to the assumptions, objectives, exposures, or calculation methods etc. in 2023
relative to the previous year.
General information on the portfolio, its management and risk profile
Over the years, Ringkjøbing Landbobank has developed to its present status as a full-service bank to both personal
and business customers in West, Central and North Jutland. In addition, personal customers are served by the branch
in Copenhagen and business and personal customers are served by the branch in Aarhus within the two branches’
natural market areas. Outside these geographical areas, business customers with high credit quality are served.
The bank is also active within various niches. The most important areas within the niche are a private banking concept
covering asset management for affluent personal clients, medical practitioners’ and dentists’ purchases of private
practices, loans for the financing of renewable energy including wind turbines, biogas and solar cell systems, and
selected wholesale loans, including real property financing.
An important common factor in the niche loans is that the bank seeks to grant loans without prior creditors to ensure
satisfactory security in the mortgaged assets, which is an important part of its business philosophy.
Historically, Ringkjøbing Landbobank has always operated a sound credit policy, and its focus will remain on ensuring
efficient 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 financial standing and earning
capacity.
Credit exposure
The bank’s credit exposure has increased in recent years in step with the growth in its loan portfolio.
Maximum credit exposure classified by balance sheet and off-balance sheet items
(after impairment charges and provisions)
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
Loans and other receivables at amortised cost
50,880,954
48,341,941
Guarantees
6,404,766
7,503,083
Unutilised credit facilities and credit undertakings*
22,784,839
20,583,956
Other exposures, including derivative financial instruments
841,241
1,072,417
Total maximum credit exposure
80,911,800
77,501,397
* On 31 December 2023 the bank had provided unutilised credit facilities and credit undertakings to a total of DKK 22.8
billion (2022: DKK 20.6 billion). Committed credit facilities and credit undertakings were DKK 328 million (2022: DKK 84
million).
Ringkjøbing Landbobank A/S Page 84
Notes
Note
no.
45
Credit risks
Security received
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 flats and holiday homes are valued at fair value less a deduction.
• Rental properties are valued at fair values calculated on the basis of profitability analyses less a deduction.
• Movables and production facilities are in principle valued at book value less a deduction.
• Agricultural properties are valued on the same principles as used by the Danish FSA. The bank applies lower
prices for farmland than the price statistics prepared by the Association of Local Banks, Savings Banks and
Cooperative Banks in Denmark and DLR.
• Securities are valued at fair value less a safety margin.
• Wind turbines and solar energy plants are valued at the present value of the calculated cash flow over the assets’
expected/remaining lives. The calculation is based on the expected output in a normal year.
The deductions are made to cover the risk in connection with realisation, costs etc.
Security received
Maximum
credit
exposure
DKK 1,000
Loans and
guarantees
DKK 1,000
Real
property
DKK 1,000
Movables
DKK 1,000
Securities
and cash
DKK 1,000
Other
security*
DKK 1,000
Total
DKK 1,000
31 December 2023
Public authorities
23,178
1,726
471
1,169
730
120
2,490
Business customers:
Agriculture, forestry, and
fisheries
6,521,346
5,077,112
1,938,088
637,400
176,806
1,257,540
4,009,834
Industry and raw materials
extraction
3,691,892
2,263,213
285,505
722,134
47,200
180,276
1,235,115
Energy supply
5,014,462
3,155,567
531,404
8,500
44,683
2,029,182
2,613,769
Building and construction
4,018,386
2,677,580
823,572
237,473
142,731
107,620
1,311,396
Trade
3,503,072
2,264,835
626,367
704,641
110,056
91,002
1,532,066
Transport, hotels, and
restaurants
1,059,394
799,608
366,621
107,461
42,387
194,475
710,944
Information and
communication
271,540
136,887
47,448
35,164
28,085
16,595
127,292
Finance and insurance
11,251,877
7,272,042
422,987
1,075,076
2,290,852
424,604
4,213,519
Real property
12,810,253
10,591,641
6,770,509
21,098
452,912
535,784
7,780,303
Other business customers
6,980,911
3,727,284
1,304,109
271,475
1,246,388
338,025
3,159,997
Total business customers
55,123,133
37,965,769
13,116,610
3,820,422
4,582,100
5,175,103
26,694,235
Private individuals
25,765,489
19,318,225
9,593,238
2,491,780
1,860,108
2,168,735
16,113,861
Total
80,911,800
57,285,720
22,710,319
6,313,371
6,442,938
7,343,958
42,810,586
* Includes security in the form of wind turbines, farms, mortgaged share capital, surety etc.
Ringkjøbing Landbobank A/S Page 85
Notes
Note
no.
45
Credit risks - continued
Security received - continued
Security received
Maximum
credit
exposure
DKK 1,000
Loans and
guarantees
DKK 1,000
Real
property
DKK 1,000
Movables
DKK 1,000
Securities
and cash
DKK 1,000
Other
security*
DKK 1,000
Total
DKK 1,000
31 December 2022
Public authorities
23,745
2,388
702
1,348
843
120
3,013
Business customers:
Agriculture, forestry, and
fisheries
5,687,342
4,367,757
1,613,811
698,809
159,823
1,323,888
3,796,331
Industry and raw materials
extraction
2,957,433
2,001,414
282,104
662,525
54,057
212,776
1,211,462
Energy supply
5,539,631
4,301,792
247,940
500
36,073
1,977,800
2,262,313
Building and construction
3,234,559
2,065,485
705,761
201,131
165,546
153,922
1,226,360
Trade
3,382,669
2,311,666
582,236
676,697
86,983
94,864
1,440,780
Transport, hotels, and
restaurants
1,034,260
808,522
362,295
74,447
63,927
213,671
714,340
Information and
communication
292,301
173,738
67,180
43,595
23,196
10,757
144,728
Finance and insurance
9,317,870
6,005,502
513,705
832,112
1,911,538
386,785
3,644,140
Real property
13,619,395
10,480,129
6,173,461
17,217
546,817
455,358
7,192,853
Other business customers
6,800,451
3,796,549
1,342,454
250,348
1,129,790
269,118
2,991,710
Total business customers
51,865,911
36,312,554
11,890,947
3,457,381
4,177,750
5,098,939
24,625,017
Private individuals
25,611,741
19,530,082
9,520,495
2,412,294
1,816,245
2,236,228
15,985,262
Total
77,501,397
55,845,024
21,412,144
5,871,023
5,994,838
7,335,287
40,613,292
* Includes security in the form of wind turbines, farms, mortgaged share capital, surety 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 exposure is in closed circuits, where the bank
has financed 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.
Ringkjøbing Landbobank A/S Page 86
Notes
Note
no.
45
Credit risks - continued
Credit concentration
The key figure for large exposures is defined as the sum of the bank’s 20 largest exposures 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 or any material signs of weakness.
Credit concentration
End of
2023
End of
2022
End of
2021
End of
2020
End of
2019
Total large exposures
116.9%
118.0%
109.8%
99.8%
121.0%
Explanation: The Danish FSA key figure “Total large exposures”.
Geographical diversification
As the figure below shows, considerable geographical diversification of the bank’s portfolio of loans and guarantees
has been achieved via both the local and niche sections.
Explanation: Distribution of the bank’s portfolio of loans and guarantees before impairments and provisions, based on the customers’
addresses.
Ringkjøbing Landbobank A/S Page 87
Notes
Note
no.
45
Credit risks - continued
Diversification across industries
The loans via the bank’s niche have helped to ensure major diversification in the bank’s loan portfolio, so that this
portfolio is less exposed to cyclical economic fluctuations than it would be if the bank were run exclusively as a local
bank.
A more detailed distribution by sector and industry of the items “Loans and other receivables at amortised cost” and
“Guarantees” (less provisions for losses on guarantees) is given below.
Loans and guarantees, end of year, by sector and industry (net)*
31 Dec. 2023
DKK 1,000
31 Dec. 2023
Percent
31 Dec. 2022
DKK 1,000
31 Dec. 2022
Percent
Public authorities
1,726
0.0
2,388
0.0
Business customers:
Agriculture, hunting, and forestry
Cattle farming etc.
650,334
1.1
587,975
1.1
Pig farming etc.
596,514
1.0
501,863
0.9
Other agriculture, hunting, and forestry
3,157,151
5.5
2,518,250
4.5
Fisheries
673,113
1.2
759,669
1.4
Industry and raw materials extraction
2,263,213
4.0
2,001,414
3.6
Energy supply
Renewable energy
3,033,113
5.3
4,213,630
7.5
Other energy supply
122,454
0.2
88,162
0.2
Building and construction
2,677,580
4.7
2,065,485
3.7
Trade
2,264,835
4.0
2,311,666
4.1
Transport, hotels, and restaurants
799,608
1.4
808,522
1.4
Information and communication
136,887
0.2
173,738
0.3
Finance and insurance
7,272,042
12.7
6,005,502
10.8
Real property
Real property financing without prior
creditors
8,156,244
14.2
8,061,051
14.4
Other real property financing
2,435,397
4.3
2,419,078
4.3
Other business customers
3,727,284
6.5
3,796,549
6.8
Total business customers
37,965,769
66.3
36,312,554
65.0
SMEs’ share of this (in percentage points)
33,347,333
58.2
31,515,956
55.9
Private individuals
19,318,225
33.7
19,530,082
35.0
Total
57,285,720
100.0
55,845,024
100.0
* The distribution by sector and industry is made on the basis of Statistics Denmark’s sector codes etc.
Ringkjøbing Landbobank A/S Page 88
Notes
Note
no.
45
Credit risks - continued
Diversification across industries - continued
Comments on certain industries
There were small changes to the bank’s distribution by industry in 2023.
Loans and guarantees for agriculture grew in 2023 with the category other agriculture growing from 4.5% to 5.5%. The
category includes financing of land in Denmark and abroad and security consists primarily of farmland.
Loans and guarantees for finance and insurance grew from 10.8% to 12.7%. This industry includes exposure to well-
consolidated financial counterparties, loans granted on mortgage deed portfolios, leasing companies and the bank’s
concept for securities lending. Security consists, among other things, of listed securities, mortgage deeds and lease
assets.
Loans and guarantees for renewable energy decreased from 7.5% to 5.3%. The industry comprises financing of wind
turbines, solar energy plants and biogas plants. The decrease is primarily attributable to repayments of loans for
biogas plants and a generally strong repayment ability within wind, solar and biogas energy. Security consists of
mortgages on the plants and assignment in electricity accounts etc.
Loans and guarantees for building and construction increased from 3.7% to 4.7%. The industry comprises both
financing of craft industry enterprises’ operating activities and construction of major building projects intended for
resale. Security consists, among other things, of security in real property and business charges.
The share of loans and guarantees for real property is more or less unchanged. These loans include first mortgages
on real property and construction financing without prior creditors. The risk profile is judged to be lower than for
traditional real property financing, which is typically junior to mortgage credit financing.
The share of loans and guarantees to personal customers decreased in the period. The reasons include a decrease in
guarantees for home loans, transfer of home loans for funding by Totalkredit and the fact that the share decreases
automatically when the loans to other industries grow. Loans to the industry were mainly used to finance homes and
the security received from personal customers consists primarily of mortgages on real property (private homes).
Ringkjøbing Landbobank A/S Page 89
Notes
Note
no.
45
Credit risks - continued
Credit quality
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.
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
DKK 1,000
Stage 2
DKK 1,000
Stage 3
DKK 1,000
Credit-
impaired on
initial
recognition
DKK 1,000
Total
DKK 1,000
Total
Percent
31 December 2023
Credit quality
High
61,641,599
48,040
0
0
61,689,639
74.9
Medium
11,359,422
2,748,161
0
0
14,107,583
17.1
Low
1,205,698
3,943,486
0
0
5,149,184
6.2
Credit-impaired
-
-
1,297,358
161,384
1,458,742
1.8
Total
74,206,719
6,739,687
1,297,358
161,384
82,405,148
100.0
Impairment charges
etc.
399,251
1,062,292
772,194
100,852
2,334,589
31 December 2022
Credit quality
High
58,193,355
51,430
0
0
58,244,785
74.0
Medium
11,063,228
2,409,161
0
0
13,472,389
17.1
Low
1,165,646
4,404,266
0
0
5,569,912
7.1
Credit-impaired
-
-
1,214,455
229,610
1,444,065
1.8
Total
70,422,229
6,864,857
1,214,455
229,610
78,731,151
100.0
Impairment charges
etc.
226,760
1,040,582
879,486
155,343
2,302,171
The table shows exposures by high, medium, and low credit quality as well as credit-impaired on initial recognition and
indicates that the credit quality is high for 74.9% of the bank’s exposures, which is marginally higher than the 74.0%
last year.
The categories high, medium and low credit quality do not translate directly into the Danish FSA’s rating classes but,
as a rule, high credit quality can be viewed as FSA rating classes 3 and 2a, medium 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. Exposures which
are in stage 3 or credit-impaired on initial recognition are those where losses are expected in the most probable
scenario.
The credit quality is determined mainly on the basis of the customer’s accounting figures and financial circumstances.
Accounts reflect the economic situation with a natural delay, and falling house prices are only gradually incorporated
into statements of assets and liabilities etc. Changes in the economic situation are consequently not reflected as an
immediate decrease in credit quality. The present economic downturn is therefore only reflected to some degree in the
credit quality stated. The bank is aware of this and has downward adjusted the credit quality of the largest customers.
If the economic downturn continues, the stated credit quality is also expected to fall.
Ringkjøbing Landbobank A/S Page 90
Notes
Note
no.
45
Credit risks - continued
Credit quality - 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
DKK 1,000
Stage 2
DKK 1,000
Stage 3
DKK 1,000
Credit-
impaired on
initial
recognition
DKK 1,000
Total
DKK 1,000
Total
impairment
charges etc.
DKK 1,000
31 December 2023
Public authorities
22,347
0
1,995
0
24,342
1,164
Business customers:
Agriculture, forestry, and fisheries
5,428,443
1,265,911
526,710
66,889
7,287,953
803,513
Industry and raw materials
extraction
3,368,117
237,095
45,986
164
3,651,362
73,040
Energy supply
4,946,430
84,259
444
7,690
5,038,823
42,107
Building and construction
3,641,495
364,426
123,386
2,052
4,131,359
113,106
Trade
3,068,417
405,270
28,654
2,825
3,505,166
87,081
Transport, hotels, and restaurants
960,246
105,892
13,507
1,411
1,081,056
28,561
Information and communication
239,869
30,316
18,255
0
288,440
18,960
Finance and insurance
10,476,737
553,469
17,286
0
11,047,492
123,164
Real property
11,421,211
1,369,946
273,749
35,140
13,100,046
436,128
Other business customers
6,345,094
666,459
60,973
1,884
7,074,410
155,059
Total business customers
49,896,059
5,083,043
1,108,950
118,055
56,206,107
1,880,719
Private individuals
24,288,312
1,656,645
186,413
43,329
26,174,699
452,706
Total
74,206,718
6,739,688
1,297,358
161,384
82,405,148
2,334,589
Total (percent)
90.0
8.2
1.6
0.2
100.0
31 December 2022
Public authorities
23,442
374
660
0
24,476
731
Business customers:
Agriculture, forestry, and fisheries
4,474,520
1,382,805
618,976
119,354
6,595,655
974,753
Industry and raw materials
extraction
2,552,250
320,438
42,847
225
2,915,760
59,694
Energy supply
5,425,297
126,750
458
7,290
5,559,795
37,758
Building and construction
2,872,240
356,916
107,760
2,396
3,339,312
104,887
Trade
2,999,472
345,575
40,352
2,998
3,388,397
82,139
Transport, hotels, and restaurants
877,953
166,483
12,764
1,587
1,058,787
34,026
Information and communication
255,802
30,660
25,681
0
312,143
21,892
Finance and insurance
8,678,227
484,874
38,501
0
9,201,602
98,842
Real property
12,457,659
1,126,304
70,608
31,571
13,686,142
219,831
Other business customers
5,983,638
534,520
55,741
2,405
6,576,304
143,513
Total business customers
46,577,058
4,875,327
1,013,688
167,824
52,633,897
1,777,335
Private individuals
23,821,729
1,989,158
200,107
61,784
26,072,778
524,105
Total
70,422,229
6,864,857
1,214,455
229,610
78,731,151
2,302,171
Total (percent)
89.4
8.7
1.6
0.3
100.0
As shown in the table at 31 December 2023 on page 89, 90.0 percent of the bank’s exposures are in stage 1, while 8.2% are in stage 2.
The bank's exposures in stage 3 account for 1.8%. 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 classification in stages are described in
note 56 “Accounting policies etc.” in the section “Model for impairment of expected credit losses on loans and other receivables etc.”
Ringkjøbing Landbobank A/S Page 91
Notes
Note
no.
45
Credit risks - continued
Credit quality - continued
Loans in stage 3
31 December 2023
Loans (gross) with
impairment charges
DKK 1,000
Impairment charges
DKK 1,000
Security for impaired
loans
DKK 1,000
Public authorities
1,837
1,155
485
Business customers:
Agriculture, forestry, and fisheries
536,380
246,428
229,957
Industry and raw materials
extraction
9,300
6,644
2,391
Energy supply
7,622
8,130
0
Building and construction
83,322
30,365
52,574
Trade
27,247
17,099
8,266
Transport, hotels, and restaurants
13,794
9,193
4,510
Information and communication
16,949
13,377
3,751
Finance and insurance
12,311
7,752
4,549
Real property
302,371
103,554
161,741
Other business customers
56,881
37,318
13,955
Total business customers
1,066,177
479,860
481,694
Private individuals
198,019
151,864
31,125
Total
1,266,033
632,879
513,304
31 December 2022
Public authorities
660
621
45
Business customers:
Agriculture, forestry, and fisheries
674,155
335,451
311,977
Industry and raw materials
extraction
6,804
3,733
1,673
Energy supply
7,477
7,497
1
Building and construction
86,074
43,232
43,725
Trade
36,553
25,328
11,145
Transport, hotels, and restaurants
12,862
8,676
4,232
Information and communication
24,182
16,303
7,335
Finance and insurance
35,399
12,816
23,024
Real property
100,874
40,276
54,506
Other business customers
52,730
34,694
16,554
Total business customers
1,037,110
528,006
474,172
Private individuals
226,499
182,472
51,159
Total
1,264,269
711,099
525,376
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 collateral.
Ringkjøbing Landbobank A/S Page 92
Notes
Note
no.
45
Credit risks - continued
Suspended interest
The credit quality is also documented by the size of exposures with
suspended interest.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
Loans and other receivables with suspended interest on the balance sheet
date
119,789
81,176
Other credit risks
Exposure to financial counterparties, and consequently a credit risk, including a settlement risk, arises from the
bank’s loans to other banks, its possession of bonds, its trading in securities, foreign currency and derivative
financial instruments, and its payment handling.
The settlement risk is the risk that the bank will not receive payment or securities corresponding 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 financial counterparties. When
granting lines, account is taken of the individual counterparty’s risk profile, any rating, size, and financial
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 financial counterparties in derivatives contracts.
Whether hedging covers the bank or the financial counterparty with whom the individual derivatives contract was
signed depends on the market value of the derivatives in question.
The bank’s policy is to keep the credit risk exposure to financial 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 financial 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 on demand.
The bond portfolio
The bank’s bond portfolio is another major item involving credit risk exposure to financial counterparties.
The majority of the bond portfolio is AAA-rated Danish mortgage credit bonds.
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-specific
circumstances can also affect the value of these bonds.
The 10% non-rated securities include non-preferred senior issues.
Please also see note 22.
Ringkjøbing Landbobank A/S Page 93
Notes
Note
no.
45
Credit risks - continued
Derivative financial instruments
The positive market value of derivative financial instruments decreased during the year.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
Positive market value (by counterparty risk) after netting
Counterparty risk weighting 20%
31,165
42,315
Counterparty risk weighting 50%
33,847
50,102
Counterparty risk weighting 75%
14,227
12,727
Counterparty risk weighting 100%
8,765
13,416
Counterparty risk weighting 150%
194
78
Total risk weighting
88,198
118,638
46
Market risks
Market risk is defined as the risk that the market value of the bank’s assets and liabilities will change as a result of
fluctuations in market conditions. The bank’s total market risk comprises interest rate risks, foreign currency risks,
share price risks and property 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.
To supplement the more traditional measures of market risk, the bank uses a mathematical/statistical model to
compute market risks. The model is used to compute Value at Risk (VaR), which is regularly reported to the bank’s
management. The model is thus used as one of a number of tools in the bank’s management of market risks. Please
see note 50 on page 97 for more information.
Ringkjøbing Landbobank A/S Page 94
Notes
Note
no.
47
Interest rate risks
The bank’s lending and deposit activities and accounts with credit institutions are mostly based on a floating rate.
However, the bank also has certain fixed-rate financial 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 figure shows, the bank has had a moderate interest rate risk over the last five years, in accordance with its
policy for this type of risk.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
Total interest rate risk, including by foreign currency
Total interest rate risk
48,786
60,813
Interest rate risk (%)
0.5
0.7
Interest rate risk by foreign currency:
DKK
44,108
59,858
CHF
-102
-133
EUR
4,397
1,096
GBP
-164
-630
NOK
144
121
SEK
93
304
USD
280
198
Other currencies
30
-1
Total
48,786
60,813
Ringkjøbing Landbobank A/S Page 95
Notes
Note
no.
48
Foreign exchange risks
The bank’s principal currency is the Danish krone (DKK), 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 exposure to foreign exchange risk, and the bank thus reduces ongoing positions
in foreign currencies via hedging. The primary foreign currency is the euro (EUR).
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 2023 was at an insignificant level.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
Assets and liabilities in foreign currency and foreign exchange indicators
Total assets in foreign currency
7,282,170
5,710,341
Total liabilities in foreign currency
9,989,133
9,741,588
Foreign exchange indicator 1
55,154
87,595
Foreign exchange indicator 1 as a percentage of tier 1 capital (%)
0.6
1.1
Foreign exchange indicator 2
984
1,052
Foreign exchange indicator 2 as a percentage of tier 1 capital (%)
0.0
0.0
Ringkjøbing Landbobank A/S Page 96
Notes
Note
no.
49
Share price risks
The bank is a co-owner of various sector companies such as BI Holding A/S (BankInvest), 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 1,471 million at the end of the year, with DKK 54 million in listed shares
and investment fund certificates and DKK 1,417 million in sector shares etc. Please see note 23 on page 70
for a
specification.
The bank’s policy is to maintain a moderate exposure to 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 directors.
As is evident from the figure below, the bank’s exposure to shares, excluding sector and bond-based investment fund
certificates etc., as a percentage of its equity, has been in accordance with the bank’s policy for this type of risk over
the last five years. This documents the bank’s efforts to achieve its goal of maintaining a moderate risk on share
prices.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
Sensitivity analysis of sector shares
Sector shares cf. note 23
1,405,318
1,286,532
Impact on the profit of a 10% price change
140,532
128,653
The prices of sector shares depend on the companies’ earnings. The above shows the effect of a 10% decrease in
earnings.
Ringkjøbing Landbobank A/S Page 97
Notes
Note
no.
50
Value at Risk
As stated in the management review and note 46, Ringkjøbing Landbobank uses a Value at Risk (VaR) model as a
sensitivity analysis to compute market risks as a supplement to the more traditional measures of market risk. The
model is thus used as one of a number of tools in the bank’s management of market risks. VaR is a measure of risk
which describes the bank’s risk under normal market conditions.
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 financial assets etc., including different share indices, various official interest rates and interest swap
rates, and different exchange rate indices.
By combining historical knowledge of the covariance on the financial markets with the bank’s current positions, the
model can calculate a 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
calculation, 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.
A separate VaR is thus calculated for interest rate, foreign exchange and listed share positions etc., and a total VaR is
also calculated for all of these. The calculated VaR indicates the bank’s sensitivity to losses on the basis of its
positions.
This possibility of calculating 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 model’s underlying data are calibrated every month to reflect current market conditions, but the model’s method is
unchanged compared to last year.
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. Back-tests of the model were performed throughout the
year with satisfactory results.
Ringkjøbing Landbobank A/S Page 98
Notes
Note
no.
50
Value at Risk - continued
Value at Risk summary
The bank’s total VaR was DKK 14.4 million at the end of 2023. 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.
As indicated in the table, the bank’s total VaR in 2023 varied from DKK 9.0 million to DKK 65.2 million. The average
VaR figure was DKK 30.9 million.
Risk type
(DKK million)
Average
VaR figure
Min.
VaR figure
Max.
VaR-figure
End of year
VaR figure
Interest
30.4
8.6
63.8
16.3
Foreign exchange
0.2
0.2
1.1
0.3
Share price
5.6
2.8
8.9
5.2
Diversification
-5.3
-7.9
-2.0
-7.4
Total VaR figure
30.9
9.0
65.2
14.4
51
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 therefore mainly consists of domicile properties, plus investment properties which represent an
extremely modest proportion of both the bank’s balance sheet total and its equity.
Development in Value at Risk
0
5
10
15
20
25
30
35
40
45
50
55
60
65
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Value at Risk (DKK million)
10-days period with 99%
probability
Interest Total
Foreign currency
Share
Ringkjøbing Landbobank A/S Page 99
Notes
Note
no.
52
Liquidity risks
Liquidity risk is defined as the risk that the bank’s cash resources prevent it from honouring its obligations.
It is the bank’s objective that the budgeted liquidity should meet the current LCR (liquidity coverage ratio) requirement
for a period of at least 12 months. The bank seeks to maintain sufficient liquidity for a stress scenario by means of
recovery plans for a period of at least 12 months.
In terms of the 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 figure 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 specific rules.
On 31 December 2023 the bank’s LCR was 254%, which thus met the statutory requirement.
In addition to the LCR figure, a liquidity benchmark also applies to the bank as mentioned in the section “The
Supervisory Diamond” in the financial review. 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 figure,
but the basis of calculation is more relaxed for some of the components involved. The bank’s key figure for the
liquidity benchmark was 225% on 31 December 2023, compared to a limit value of 100%. The bank thus also met this
statutory requirement.
Finally, the bank must meet the Net Stable Funding Ratio (NSFR). Like the LCR requirement, the NSFR requirement is
part of EU regulations and aims to ensure that financial institutions have sufficient 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 123% on 31 December 2023, which exceeded the statutory requirement.
The bank’s assets and thus its loan 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 etc., issuing both preferred and non-preferred senior capital and finally 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.
To ensure diversification 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 2023.
Finally, the bank 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.
Ringkjøbing Landbobank A/S Page 100
Notes
Note
no.
52
Liquidity risks - continued
As evident from the following, 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 2023 was DKK 10.8 billion, while the
corresponding figure at the end of 2022 was DKK 9.5 billion.
31 Dec. 2023
DKK 1,000
31 Dec. 2022
DKK 1,000
The short-term funding (term to maturity less than 1 year)
Debt to credit institutions and central banks
1,418,442
2,217,766
Issued bonds
1,100,827
628,204
Total
2,519,269
2,845,970
Covered as follows
Cash in hand and demand deposits with Danmarks Nationalbank
4,913,795
4,750,398
Receivables from credit institutions, term to maturity less than 1 year
243,490
776,039
Bonds, shares and investment fund certificates at fair value
8,180,843
6,812,333
Total
13,338,128
12,338,770
Excess cover
10,818,859
9,492,800
Distribution of funding end of
2023
Total capital base, 17%
Other liabilities
, 2%
Deposits, 63%
Deposits in pooled schemes, 7%
Issued bonds – term to maturity less
than 1 year, 1%
Issued bonds – term to maturity
more than 1 year, 5%
Debt to credit institutions- term
to maturity more than 1 year, 2%
Debt to credit institutions- term
to maturity less than 1 year, 3%
Ringkjøbing Landbobank A/S Page 101
Notes
Note
no.
53
Non-financial risks
Non-financial risks comprise various risks such as the risk of money laundering and financing of terrorism etc., IT risks
and other operational risks.
The risk of money laundering and financing of terrorism is defined as the inherent risk that the bank may be abused for
money laundering and financing of terrorism.
Another non-financial risk is the risk of non-compliance with financial sanctions.
IT risk is defined as risks associated with the bank’s systems and data. Examples are cyber security, compliance with
data ethics, the integration and adequacy of the bank’s IT systems, dependence on external factors, including
outsourcing, and IT risks linked to the bank’s organisation, including ineffective separation of functions.
Other operational risks are those entailing other direct or indirect financial losses as a result of flaws in internal
processes and systems, human error or external events.
The bank regularly registers the losses and events which are attributed to operational risks. These registrations are
used as the basis for an assessment of whether procedures etc. should 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 compliance
and risk functions and by internal 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-financial risks is the risk that the bank could be abused for money laundering or
financing of terrorism.
The bank wants to combat any form of money laundering and financing of terrorism etc. As a bank in a globalised
world, the bank is required to maintain high standards for combating money laundering and financing of terrorism and
to monitor and comply with financial sanctions.
The bank has implemented internal procedures, controls, monitoring etc. to help comply with applicable rules in the
area. The employees complete in-service training in combating money laundering and financing of terrorism. For
further information, please see pages 25-26.
Ringkjøbing Landbobank A/S Page 102
Notes
Note
no.
53
Non-financial risks - continued
IT risks
IT supports a large part of the systems and processes used by both the bank’s customers and its employees. IT
security is therefore an important element in the assessment of the bank’s non-financial 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. The policy is the foundation of the bank’s work with IT risks and its IT security policy. The IT
security policy states how the bank manages IT security and ensures that the risk level complies with the risk profile
requested by the board of directors.
Part of the work with IT risks and their management is an annual risk analysis performed by the bank’s IT security
department to assess the bank’s IT risks. The analysis is based on the IT and outsourcing risks identified and
registered by the bank. The register contains an assessment of risks based on the probability and consequences of
different risks - before and after mitigating measures. The risk analysis made is presented in a heatmap, which
documents the bank’s risk profile in terms of IT and outsourcing risks.
As part of this work, the IT security department reorganised the IT security management to the ISO 27001 framework
in 2023. By selecting a framework like ISO 27001, the bank makes use of a well-developed, best practice framework
which is acknowledged internationally and deals with all aspects of IT security. The bank thereby obtains a
“connecting thread” through all its primary IT security documents. In connection with the reorganisation, the bank also
prepared for the implementation of the forthcoming DORA regulation.
The bank’s suppliers of IT systems are assessed annually to check whether they comply with the requirements of the
outsourcing agreement entered into. The outsourcing suppliers’ compliance with the outsourcing agreement is
monitored regularly, including the receipt of reports on the stability of operations and handling of IT security.
Based on the above, the board of directors annually updates and approves the above-mentioned two policies.
The bank’s IT organisation and management 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 apply 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 external 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
It is a high priority for the bank that customer data are processed and kept confidential in conformity with the
applicable rules on data processing (GDPR). The bank’s board of directors has therefore adopted a data ethics policy.
The policy supplements the bank’s systems and procedures. The policy, systems and procedures are all designed with
the aim of ensuring correct and confidential processing of customer data.
Quantification 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
financial years’ net incomes. A sum is then quantified and added to the total risk exposure to cover the bank’s
operational risks.
Please see page 61
for further details on the amount recognised.
Ringkjøbing Landbobank A/S Page 103
Notes
Note
no.
54
Derivative financial 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
31 December 2023
Nominal value
Net market
value
Nominal value
Net market
value
Currency contracts
Spot, purchase
113,594
-65
0
0
Spot, sale
13,718
23
0
0
Forward transactions/futures, purchase
5,135,285
8,145
1,255,369
7,455
Forward transactions/futures, sale
11,238
15
0
0
Swaps
0
0
1,027,936
8,623
Options, acquired
2,236
-64
0
0
Options, issued
2,288
64
0
0
Interest-rate contracts
Spot, purchase
454,833
1,619
0
0
Spot, sale
668,813
-5,709
0
0
Forward transactions/futures, purchase
283,304
3,095
13,233
125
Forward transactions/futures, sale
465,573
-8,023
45,312
-722
Swaps
0
0
580,831
-11,476
Options, acquired
0
0
10,000
78
Options, issued
0
0
10,000
-53
Share contracts
Spot, purchase
3,213
-269
0
0
Spot, sale
3,206
202
0
0
Options, acquired
8,662
1,430
5,559
1,000
Options, issued
8,663
-1,430
5,572
-1,000
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
336
3
0
0
Swaps
1,945,420
-75,583
610,935
-58,531
Interest-rate contracts
Swaps
658,790
-25,939
164,592
-11,957
Options, acquired
19,688
661
25,065
909
Options, issued
19,688
-646
15,321
-463
Share contracts
Options, acquired
307
78
0
0
Options, issued
308
-78
0
0
Ringkjøbing Landbobank A/S Page 104
Notes
Note
no.
54
Derivative financial instruments - continued
DKK 1,000
Total nominal value
Total net market value
31 December
2023
2022
2023
2022
Currency contracts
Spot, purchase
113,594
74,343
-65
-138
Spot, sale
13,718
13,507
23
39
Forward transactions/futures, purchase
6,390,990
4,892,100
15,603
-49,963
Forward transactions/futures, sale
11,238
93,678
15
1,012
Swaps
3,584,291
3,550,961
-125,491
-96,880
Options, acquired
2,236
930
-64
-5
Options, issued
2,288
956
64
5
Interest-rate contracts
Spot, purchase
454,833
708,804
1,619
584
Spot, sale
668,813
175,689
-5,709
1,138
Forward transactions/futures, purchase
296,537
273,206
3,220
-4,872
Forward transactions/futures, sale
510,885
562,858
-8,745
6,640
Swaps
1,404,213
2,681,505
-49,372
-74,071
Options, acquired
54,753
66,488
1,648
1,439
Options, issued
45,009
62,741
-1,162
-1,216
Share contracts
Spot, purchase
3,213
1,621
-269
214
Spot, sale
3,206
1,638
202
-172
Forward transactions/futures, purchase
0
147
0
144
Forward transactions/futures, sale
0
147
0
-109
Options, acquired
14,528
42,726
2,508
943
Options, issued
14,543
42,666
-2,508
-943
Total net market value
-168,483
-216,211
Ringkjøbing Landbobank A/S Page 105
Notes
Note
no.
54
Derivative financial instruments - continued
DKK 1,000
Market value
Average market value
Positive
Negative
Positive
Negative
31 December
2023
2022
2023
2022
2023
2022
2023
2022
Currency contracts
Spot, purchase
254
88
319
226
303
488
512
480
Spot, sale
28
39
5
0
70
86
9
168
Forward transactions/ futures,
purchase
41,139
21,109
25,536
71,072
35,746
49,042
17,866
24,671
Forward transactions/ futures, sale
15
2,613
0
1,601
541
8,621
0
14,750
Swaps
48,488
99,556
173,979
196,436
57,746
77,056
221,091
134,555
Options, acquired
0
0
64
5
0
9
16
3
Options, issued
64
5
0
0
16
3
0
9
Interest-rate contracts
Spot, purchase
1,675
1,121
56
537
1,833
4,073
814
2,418
Spot, sale
414
1,624
6,123
486
2,610
6,635
2,956
2,920
Forward transactions/ futures,
purchase
3,388
1,917
168
6,789
1,727
5,474
1,039
12,830
Forward transactions/ futures, sale
465
9,728
9,210
3,088
3,858
24,617
3,010
5,690
Swaps
613
8,753
49,985
82,824
922
10,268
63,220
62,932
Options, acquired
1,719
1,497
71
58
1,811
969
48
441
Options, issued
0
157
1,162
1,373
62
678
1,378
915
Share contracts
Spot, purchase
754
754
1,023
540
4,323
5,117
1,073
1,402
Spot, sale
792
571
590
743
1,072
1,491
14,203
4,901
Forward transactions/ futures,
purchase
0
166
0
22
10
382
32
10
Forward transactions/ futures, sale
0
32
0
141
38
13
3
372
Options, acquired
2,508
943
0
0
1,796
396
0
0
Options, issued
0
0
2,508
943
0
0
1,796
396
Total market value
102,316
150,673
270,799
366,884
114,484
195,417
329,065
269,863
All contracts of derivative financial instruments are non-guaranteed contracts.
Ringkjøbing Landbobank A/S Page 106
Notes
Note
no.
55
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 final actual results may thus deviate from the estimates, 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 financial instruments
• Valuation of intangible assets including customer relations
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 estimates. The assessment
involves estimates of various scenarios of future cash flows 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 ratings 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 percentage loss if a loss arises. The historical data are translated into forward-looking expectations
via a macroeconomic adjustment.
These estimates comprise considerations regarding the industry i.e., not the individual exposure, and the macro-
economic impact of the probability weightings used for calculating the individual facilities. In 2023, concerns about
the housing market, land prices, the increasing interest rates, a possible climate tax on agriculture and uncertainty
relating to property development 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 56 “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 risks”.
Fair value of unlisted financial instruments
The bank measures a number of unlisted financial instruments at fair value, including all derivative financial
instruments and unlisted shares.
As part of its operations, the bank has acquired strategic shares in different sector companies. 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
influenced by co-ownership, trading, shareholders’ agreements etc.
Estimates are an influence where valuations of financial 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 financial instruments” and “Bonds and shares” under “Accounting policies etc.” in note 56.
Ringkjøbing Landbobank A/S Page 107
Notes
Note
no.
55
Accounting estimates and judgments - continued
Valuation of goodwill and customer relationships
Customer relationships and goodwill are impairment-tested at least annually. This involves a degree of estimation in
quantifying 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 25 “Intangible assets” for further details on the impairment test of goodwill.
56
Accounting policies etc.
General
The annual report was prepared in accordance with statutory requirements, including the provisions of the Danish
Financial Business Act and the disclosure requirements of Article 8 of Regulation (EU) 2020/852 (the taxonomy
regulation).
The annual report is presented in Danish kroner (DKK).
The accounting policies are unchanged since the last financial year. However, the presentation of the items “Assets
linked to pooled schemes” and “Deposits in pooled schemes” under “Value adjustments” in note 5 has changed. Both
“value adjustment” entries for the 2023 financial year have been reduced by DKK 218 million. The comparative figures
have been adjusted accordingly and the reduction was DKK 125 million. The change relates to dividends received in
the pools and do not affect the profit, balance sheet total or equity.
Recognition and measurement - general
Assets are recognised in the balance sheet when it is probable that future financial advantages 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 financial assets, financial liabilities and derivative financial instruments 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 significant inputs
are based on observable market data.
• Level 3: Valuation methods where any significant 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.
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 identified the fixed 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 finance
Ringkjøbing Landbobank A/S Page 108
Notes
Note
no.
56
Accounting policies etc. - continued
for a similar asset with a financing term similar to the term of the lease.
When measuring the lease liability, the bank uses borrowing rates of 1-3% for discounting future lease payments.
The bank has chosen not to recognise low-value asset leases and short-term leases in the balance sheet. Lease
payments for these leases are instead recognised in the income statement.
Financial instruments - general
In general, the bank measures financial assets and liabilities at fair value on initial recognition. Measuring is
subsequently carried out at fair value unless otherwise specifically stated in the following sections on the individual
items. The bank uses the date of payment as the date of recognition for financial instruments.
Derivative financial instruments
Forward transactions, interest rate swaps and other derivative financial instruments are measured at fair value on the
balance sheet date.
Hedging transactions which, under 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 hedging instrument and the hedged part of the financial instrument.
All value adjustments concerning derivative financial 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’
identifiable 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 identifiable net assets is recognised as goodwill.
Any negative difference between the cost price and fair value of the identifiable net assets is recognised as badwill
under other operating income in the income statement.
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 insignificant 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 statement 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 income 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.
Ringkjøbing Landbobank A/S Page 109
Notes
Note
no.
56
Accounting policies etc. - continued
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 profit 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 accounting and booking of
taxable income and expenses. Changes in the corporate tax rate and the factor increase (extra tax on financial
undertakings) 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 financial reporting because they are deemed to give a true and fair view of
the actual banking operations. Overall, core earnings contain the same items as the traditional measure of
performance “Profit before tax,” but the calculation method and degree of specification are different.
Core earnings show the bank’s income and expenses adjusted for temporary fluctuations following from the
development in the bank’s trading portfolio of securities (the securities portfolio less sector shares etc.), and the profit
before tax is divided into two main elements: core earnings and result for the portfolio.
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 “Profit before tax” and “Core earnings” is given in notes 13-18 on
page 67.
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 financial 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 classified as finance leases if they transfer substantially all risks and rewards of ownership
pertaining to an asset to the lessee.
Finance lease assets where the bank is the lessor are recognised as loans at the net investment in the lease contracts
less depreciation (repayments) calculated according to the annuity 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 finance lease
agreements.
Ringkjøbing Landbobank A/S Page 110
Notes
Note
no.
56
Accounting policies etc. - continued
Model for impairment of expected credit losses on loans and other receivables etc.
Under the IFRS 9-compatible impairment rules, all financial 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 financial 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 evidence of impairment had to exist before
impairment charges could be and had to be recognised.
For financial 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 balance sheet.
Provisions for losses on unutilised credit facilities, loan undertakings and financial guarantees are recognised as
liabilities.
Development stages for credit risk
The expected loss impairment rules mean that, on initial recognition, a financial 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
significantly relative to initial recognition, the financial 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 classified as weak stage 2 for presentation purposes: see the section “Definition of
credit-impaired and default”.
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 classification of off-balance sheet items. The maturities of
the facilities are determined based on their actual term to maturity up to a maximum of five years. For customers
showing material signs of weakness, the actual term to maturity is used.
The classification in stages and computation of the expected loss are based on the bank’s rating models, which were
developed by the data centre Bankdata, and the bank’s internal credit management.
Assessment of significant increase in credit risk etc.
A significant 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 classification.
Payments that are more than 30 days overdue are also considered a significant increase in credit risk.
A major downgrading within the Danish FSA’s rating class 2b is also considered a significant increase in credit risk.
The Danish FSA’s rating class 2c in principle always characterises a significant 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 classified in stage 1. Facilities in stage 3 are treated as credit-impaired on initial
recognition.
If the credit risk on the financial asset is considered low on the balance sheet date, the asset remains in stage 1, which
is characterised by no significant 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. Please also see the section on credit quality in note 45, “Credit risks”, which shows the classification of
assets with low credit risks and the distribution by industry. It is judged only to be relevant to give an account of assets
with credit risk for the item “Loans and other receivables at amortised cost”.
Ringkjøbing Landbobank A/S Page 111
Notes
Note
no.
56
Accounting policies etc. - continued
Definition of credit-impaired and default
An exposure is defined as credit-impaired (stage 3) and in default if it meets at least one of the following criteria:
• The borrower is in significant financial difficulties and the bank judges that the borrower will fail to honour their
obligations as agreed;
• The borrower is in breach of contract, for example by failing to meet their 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 considered were it not for
the debtor’s financial difficulties;
• The borrower is likely to go bankrupt or be subject to other types of financial restructuring;
• A financial asset is acquired at a considerable discount which reflects losses incurred;
• The exposure has been in arrears/overdue for more than 90 days by an amount judged to be not insignificant.
However, if the customer is in significant financial difficulties, the financial asset remains in stage 2 if no losses are
expected in the most probable scenario (weak stage 2).
The definition of credit-impaired and default used by the bank when measuring the expected credit loss and for
transfers to stage 3 corresponds to the definition used for internal risk management purposes and is also adjusted to
the definition of default in the capital requirements regulation (CRR).
The definitions of default and credit-impaired are also in line with the definition of non-performing as the bank has
aligned the entry criteria for the three concepts. Only the exit and quarantine periods associated with the different risk
classification concepts differ.
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 probabilities that they will occur.
In addition, a management estimate reflecting macroeconomic expectations and uncertainties in models is allocated:
see also note 55.
Calculation of expected losses
The portfolio-based calculation model is based on the bank’s rating of its customers in different 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, supplemented 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 Councils, Danmarks Nationalbank and
others. The forecasts generally cover two years and include variables such as increase in public spending, increase in
GDP, trends in house prices 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 financial assets from the balance sheet
Financial assets are derecognised fully or partly from the balance sheet when the exposure or a significant part of it is
deemed to be lost. Derecognition is based on a specific assessment of the individual exposures. For business
customers, the bank bases its assessment on financial indicators such as the customer’s cash flows, 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 financial situation, including the possibility of enforcing the security, if any. When a financial
asset is derecognised fully or partly from the balance sheet, the associated impairment charges for the financial asset
are also removed from the cumulative impairment charges: see note 21.
Ringkjøbing Landbobank A/S Page 112
Notes
Note
no.
56
Accounting policies etc. - continued
As a rule, the bank’s efforts to collect the assets continue after derecognition from the balance sheet. The steps taken
depend on the specific situation. The bank first attempts to reach a voluntary agreement with the customer, including
renegotiation of terms or restructuring of an enterprise. Debt recovery and petition for bankruptcy are not applied until
other steps have been tried.
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 and illiquid bonds are measured at fair value, computed on the basis of the price of a transaction between
independent parties. Measurement is based on available information on transactions, published announcements of
financial results or, alternatively, market capitalisation calculations (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 and illiquid shares are measured at fair value, computed on the basis of the price of a transaction between
independent parties. Measurement is based on available information on transactions, published announcements of
financial 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 statement under the item
“Value adjustments”.
Investments in group undertakings and associated companies
Investments in group undertakings 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 profits after tax and any gain or loss on sale of the investment are recognised in the
income statement.
Net revaluation of investments in group undertakings 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 reserves as long as a reserve for offsetting exists.
Group undertakings 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 deficit, 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 carrying amount exceeds the higher of net sales
price and value in use, which corresponds to the net present value of expected future cash flows.
Ringkjøbing Landbobank A/S Page 113
Notes
Note
no.
56
Accounting policies etc. - continued
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. Impairment 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 depreciation 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 five years for operating
equipment and up to 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 exposures, the intention being to
sell off the assets as soon as possible. Temporary assets are included at cost on transfer and will subsequently be
written down to a possibly lower realisation value.
Loss due to impairment arising on initial classification as temporary assets, and gains and losses in subsequent
measurements, are recognised in the income statement under the items to which they relate.
Other assets
Other assets include interest and commission receivables as well as the positive market value of derivative financial
instruments.
Tax assets and tax liabilities
Current tax assets and current tax liabilities are recognised in the balance sheet as tax calculated 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 assessment of the asset’s
value.
The effect of changes in the corporate tax rate is recognised in “Deferred tax assets”/“Provisions for deferred tax”.
Ringkjøbing Landbobank A/S Page 114
Notes
Note
no.
56
Accounting policies etc. - continued
Other liabilities
Other liabilities include interest and commission payable and the negative market value of derivative financial
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 financial guarantees and unutilised credit undertakings in accordance with the
IFRS 9-compatible impairment rules: see the section “Model for impairment 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
simplified 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 figures (page 3)
“Key figure per DKK 1 share” is calculated on the basis of:
• 2023: 26,732,729 shares
• 2022: 27,553,139 shares
• 2021: 28,431,916 shares
• 2020: 29,067,721 shares
• 2019: 29,228,321 shares
Statements in the financial review
Core earnings and the associated graphs for 2018 on pages 7 and 8 are proforma figures (i.e., as if the merger had
taken effect on 1 January 2018). The figures were calculated by adding up figures from Ringkjøbing Landbobank’s
statement of the alternative measure of performance “Core earnings” and proforma figures from Nordjyske Bank,
converted and adjusted to Ringkjøbing Landbobank’s statement of the alternative performance measure “Core
earnings”.
Ringkjøbing Landbobank A/S Page 115
Notes
Note
no.
56
Accounting policies etc. - continued
Core earnings per DKK 1 share (page 8)
The bank’s alternative performance measure “Core earnings” is used as the value of earnings. For the years 2014-
2017, core earnings figures from the “old” Ringkjøbing Landbobank were used, for 2018, the proforma core earnings
for the merged bank were used and finally, for 2019-2023 the actual core earnings for 2019-2023 for the merged bank
were used.
The following numbers of shares were used in the calculation:
• End of 2023: 26,732,729 shares
• End of 2022: 27,553,139 shares
• End of 2021: 28,431,916 shares
• End of 2020: 29,067,721 shares
• End of 2019: 29,228,321 shares
• End of 2018: 29,906,383 shares
• End of 2017: 21,812,000 shares
• End of 2016: 22,350,000 shares
• End of 2015: 22,850,000 shares
• End of 2014: 23,350,000 shares
The number of shares is calculated based on transactions made.
Ringkjøbing Landbobank A/S Page 116
Five-year main figures
Summary (DKK 1,000)
2023
2022
2021
2020
2019
Income statement
Interest income
3,325,508
1,865,848
1,459,846
1,373,215
1,299,449
Interest expenses
785,976
185,174
103,080
120,910
131,144
Net interest income
2,539,532
1,680,674
1,356,766
1,252,305
1,168,305
Dividends from shares etc.
90,214
99,637
77,109
71,241
70,409
Fee and commission income
1,029,411
1,038,855
939,219
814,821
833,082
Fee and commission expenses
93,419
91,602
91,183
85,545
78,541
Net interest and fee income
3,565,738
2,727,564
2,281,911
2,052,822
1,993,255
Value adjustments
+253,354
+73,493
+163,127
+126,079
+168,906
Other operating income
5,829
2,055
5,490
2,054
13,582
Staff and administration expenses
939,121
870,847
790,374
765,933
778,458
Amortisation, depreciation, and write-downs on
intangible and tangible assets
33,377
33,035
35,793
29,241
37,959
Other operating expenses
10,044
6,607
7,643
8,110
3,934
Impairment charges for loans and receivables etc.
-5,792
-12,450
-78,629
-233,348
-110,172
Results from investments in associated companies
and subsidiaries
+84
-37
+22
-13
+201
Profit before tax
2,836,671
1,880,136
1,538,111
1,144,310
1,245,421
Tax
681,449
385,239
308,846
224,596
267,156
Net profit for the year
2,155,222
1,494,897
1,229,265
919,714
978,265
Ringkjøbing Landbobank A/S Page 117
Five-year main figures
Summary (DKK 1,000)
End of 2023
End of 2022
End of 2021
End of 2020
End of 2019
Balance sheet
Assets
Cash in hand and deposits with credit institutions and
central banks
5,157,285
5,526,437
3,675,561
4,035,237
3,354,295
Loans and other receivables at amortised cost
50,880,954
48,341,941
41,179,255
36,241,166
35,465,416
Securities
9,610,048
8,120,126
8,223,754
8,035,251
8,076,548
Assets linked to pooled schemes
5,845,400
4,972,840
5,537,863
4,700,080
4,276,344
Intangible assets
1,012,161
1,043,163
1,062,672
1,034,838
1,049,838
Tangible assets
230,171
235,310
214,631
233,536
228,936
Other assets
783,621
739,764
463,652
582,021
489,517
Total assets
73,519,640
68,979,581
60,357,388
54,862,129
52,940,894
Liabilities and equity
Debt to credit institutions and central banks
2,209,887
3,567,758
2,030,175
2,448,918
2,172,765
Deposits and other debt
46,781,095
43,726,938
38,202,186
34,938,565
33,851,493
Deposits in pooled schemes
5,845,400
4,972,840
5,537,863
4,700,080
4,276,344
Issued bonds
5,063,778
4,255,498
2,961,422
2,361,796
2,212,709
Other liabilities
1,042,493
1,034,550
730,121
592,837
533,417
Provisions for liabilities
86,673
90,709
128,443
124,908
83,433
Subordinated debt
2,039,110
2,036,526
2,044,505
1,549,150
2,200,857
Share capital
27,491
28,380
29,068
29,228
29,662
Reserves
10,423,713
9,266,382
8,693,605
8,116,647
7,580,214
Total shareholders’ equity
10,451,204
9,294,762
8,722,673
8,145,875
7,609,876
Total liabilities and equity
73,519,640
68,979,581
60,357,388
54,862,129
52,940,894
Contingent liabilities etc.
Contingent liabilities
6,464,791
7,569,679
10,270,428
9,811,830
9,664,674
Irrevocable credit undertakings
328,148
84,055
781,832
0
281,000
Total contingent liabilities etc.
6,792,939
7,653,734
11,052,260
9,811,830
9,945,674
Ringkjøbing Landbobank A/S Page 118
Five-year key figures
2023
2022
2021
2020
2019
Capital ratios:
Total capital ratio
%
23.0
21.6
22.3
21.1
20.0
Tier 1 capital ratio
%
18.9
17.4
17.6
17.5
14.7
MREL capital ratio
%
28.9
28.9
27.8
26.7
27.3
Earnings:
Return on equity before tax
%
28.7
20.9
18.2
14.5
16.8
Return on equity after tax
%
21.8
16.6
14.6
11.7
13.2
Income/cost ratio
DKK
3.87
3.04
2.69
2.10
2.34
Cost/income ratio
%
25.2
31.1
33.6
36.2
38.0
Return on assets
%
2.9
2.2
2.0
1.7
1.8
Market risk:
Interest rate risk
%
0.5
0.7
0.4
1.1
0.9
Foreign exchange position
%
0.6
1.1
1.5
0.1
1.4
Foreign exchange risk
%
0.0
0.0
0.0
0.0
0.0
Liquidity risk:
Liquidity Coverage Ratio (LCR)
%
254.0
187.9
175.8
207.3
203.5
Net Stable Funding Ratio (NSFR)
1
%
122.7
118.9
116.2
-
-
Loans and impairments thereon relative to deposits
%
100.9
103.8
99.1
96.7
98.1
Credit risk:
Loans relative to shareholders’ equity
4.9
5.2
4.7
4.4
4.7
Growth in loans for the year
%
5.0
17.5
13.5
2.2
6.3
Total large exposures
%
116.9
118.0
109.8
99.8
121.0
Cumulative impairment ratio
%
3.9
4.0
4.2
4.6
4.3
Impairment ratio for the year
%
0.01
0.02
0.15
0.48
0.21
Proportion of receivables at reduced interest
%
0.2
0.1
0.2
0.5
0.4
Share return:
Earnings per share
2/4
DKK
7,814
5,340
4,276
3,156
3,311
Book value per share
2/3
DKK
39,095
33,734
30,679
28,029
26,036
Dividend per share
2
DKK
1,000
700
700
700
1,100
Market price relative to earnings per share
2/4
12.7
17.8
20.5
17.6
15.5
Market price relative to book value per share
2/3
2.5
2.8
2.9
2.0
2.0
1
2
3
4
Comparative figures are only stated for the years when the key figure 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, which is calculated as a simple average of the shares at the beginning of
the year and at the end of the year.
Ringkjøbing Landbobank A/S Page 119
Five-year main and key figures
Definitions of the official key figures/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
Profit 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 profit for the year 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.
Income/cost ratio
Income for the year divided by expenses for the year including impairment charges for loans and other receivables etc.
Cost/income ratio
Total expenses etc. in percent of total core income.
Return on assets
Net profit for the year as a percentage of total assets.
Interest rate risk
Interest rate risk as a percentage of tier 1 capital.
Foreign exchange position
Foreign exchange indicator 1 as a percentage of tier 1 capital.
Foreign exchange risk
Foreign exchange indicator 2 as a percentage of tier 1 capital.
Liquidity Coverage Ratio (LCR)
Holding of liquid assets as a percentage of net outflows over 30 days.
Net Stable Funding Ratio (NSFR)
1
The ratio of available stable funding, which includes deposits and shareholders’ equity, to the required stable funding.
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 transactions).
Total large exposures
The total sum of the 20 largest exposures as a percentage of common equity tier 1.
Cumulative impairment ratio
Impairment charges for loans and provisions for losses on guarantees etc. as a percentage 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 as a percentage 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 as a percentage of loans plus impairment charges for loans plus
guarantees plus provisions for losses on guarantees etc.
Earnings per share
2/4
Net profit for the year/average number of shares.
Book value per share
2/3
Shareholders’ equity/share capital excluding own shares.
Dividend per share
2
Proposed dividend/share capital.
Market price relative to earnings per share
2/4
Market price/earnings per share.
Market price relative to book value per share
2/3
Market price/book value per share
1/2/3/4
See page 118.
Ringkjøbing Landbobank A/S Page 120
The bank’s branches
Branch Address
Phone
Ringkøbing, head office Torvet 1, 6950 Ringkøbing +45 9732 1166
Brønderslev Algade 39-41, 9700 Brønderslev +45 9870 4500
Frederikshavn Jernbanegade 4-8, 9900 Frederikshavn +45 9870 6000
Herning Torvet 18, 7400 Herning +45 9721 4800
Hjørring Østergade 4, 9800 Hjørring +45 9633 5520
Holstebro Den Røde Plads 2, 7500 Holstebro +45 9610 9500
Holte Kongevejen 272A, 2830 Virum +45 7624 9550
Copenhagen Bernstorffsgade 50, 8. sal, 1577 Copenhagen V +45 7624 9640
Copenhagen Frederiksborggade 1, 1. th., 1360 Copenhagen K +45 9633 5240
Læsø Byrum Hovedgade 79, 9940 Læsø +45 9633 5480
Nørresundby Torvet 4, 9400 Nørresundby +45 9870 5000
Skagen Sct. Laurentiivej 39 B, 9990 Skagen +45 9633 5210
Sæby Vestergade 21, 9300 Sæby +45 9633 5320
Tarm Storegade 6-10, 6880 Tarm +45 9737 1411
Vejle Lysholt Allé 10, 7100 Vejle +45 7624 9780
Viborg Gravene 18, 8800 Viborg +45 8662 5501
Vildbjerg Søndergade 6, 7480 Vildbjerg +45 9713 3166
Aabybro Østergade 12, 9440 Aabybro +45 9870 5400
Aalborg
Hasseris Thulebakken 34, 9000 Aalborg +45 9870 5900
Vejgaard Vejgaard Bymidte 2, 9000 Aalborg +45 9870 4400
Aarhus Marselis Boulevard 9, 8000 Aarhus C +45 7624 9760
Ringkjøbing Landbobank A/S Page 121
The bank’s branches
Ringkjøbing Landbobank A/S Page 122
The bank’s branches
Ringkjøbing Landbobank A/S
Torvet 1
6950 Ringkøbing, Denmark
Phone: +45 9732 1166
Email: post@landbobanken.dk
Web: www.landbobanken.com
CVR no.: 37536814