Ringkjøbing Landbobank’s quarterly report for the first three quarters of 2021

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27 October 2021

Ringkjøbing Landbobank’s quarterly report for the first three quarters of 2021

The bank delivers core earnings of DKK 1,121 million and profit before tax of DKK 1,105 million. The profit before tax is equivalent to a 17.6% p.a. return on equity.

Core earnings

(DKK million)	Q1-Q3 2021	Q1-Q3 2020	2020	2019	2018	2017
Total core income	1,782	1,613	2,179	2,116	2,001	1,917
Total expenses and depreciation	600	576	788	805	866	845
Core earnings before impairment charges for loans	1,182	1,037	1,391	1,311	1,135	1,072
Impairment charges for loans etc.	-61	-185	-223	-100	-43	-70
Core earnings	1,121	852	1,168	1,211	1,092	1,002
Result for the portfolio etc.	-4	-24	-9	+49	+77	+84
Special costs	12	11	15	15	217	22
Profit before tax	1,105	817	1,144	1,245	952	1,064

Highlights of the first three quarters of 2021

• The profit before tax is DKK 1,105 million, equivalent to a 17.6% p.a. return on equity

• Core income increases by 11% to DKK 1,782 million following nine months of high activity levels

• Expenses increase by 4% to DKK 600 million

• The rate of costs decreases to 33.7%

• Continued increase in new customers results in growth of 9% in the bank’s loans compared to September 2020

• The purchase of BIL Danmark was satisfactorily completed and implemented in the third quarter

• Image and customer satisfaction are rated among the best in Voxmeter surveys

• The results for the year are expected to be at the upper end of the upwardly adjusted ranges.

Yours sincerely

Ringkjøbing Landbobank

John Fisker

Management’s review

Core income

Interest
Net interest income was DKK 988 million in the first three quarters of 2021, compared to DKK 935 million in the same period in 2020, an increase of 6%. The bank is satisfied with this development.

The development is partly attributable to a 9% increase in lending compared to the end of September 2020 including the clients taken over from BIL Danmark, while the increase excluding them was 7%. The increase in lending is broadly based and relates to both niches and retail.

The interest margin was slightly lower in the third quarter compared to a year ago, although the bank lowered the threshold for negative interest on personal customers’ deposits to DKK 100,000 with effect from the beginning of January 2021. With effect from 1 July 2021, the bank lowered the interest rate on deposits from business customers. The interest margin on the bank’s loans has thus been under pressure.

The deposit interest rate for corporate customers will be lowered by 0.1 percentage points by early November 2021 and by early December 2021 also for private customers. This is due to the lowering of the interest rate by Denmark’s National Bank per 1. October 2021.

Fee, commission, and foreign exchange income
Fee, commission, and foreign exchange income amounted to DKK 657 million in the first three quarters of 2021, compared to DKK 569 million in the same period in 2020, an increase of 15%. The bank is highly satisfied with this development, and the increase reflects a very high level of activity – especially in the first quarter of the year. However, the general levels of activity in both the second and third quarters of 2021 continued at a higher level.

The bank’s focus on the private banking segment has had a positive effect on the “Securities trading”, “Asset management and custody accounts” and “Foreign exchange income” items in particular.

Due to the high levels of activity and the continued large increase in new customers, the item “Guarantee commission and mortgage credit commission etc.” also developed positively compared to the first three quarters of 2020. The item “Loan fees” also increased in 2021, although the respective activity level has been declining slightly during 2021.

Initiatives aimed at normalising the income from payment handling activities were announced with effect from 1 April 2021. These initiatives are reflected in the income from “Payment handling”, which has improved compared to the first three quarters of 2020.

The income from “Other fees and commission” developed positively compared to 2020. This is partly attributable to the bank’s focus on the pension and insurance activities.

Sector shares and other operating income
Earnings from sector shares totalled DKK 132 million in the first three quarters of 2021, compared to DKK 108 million in the same period in 2020. The earnings derive primarily from returns on the bank’s ownership interests in DLR Kredit, BankInvest (BI Holding) and PRAS.

Other operating income stood at DKK 5 million in the first three quarters of the year, in contrast to 2020, when the figure was DKK 1 million. The other operating income for the year relates primarily to the sale of a property.

Core income
Total core income increased by 11%, from DKK 1,613 million in 2020 to DKK 1,782 million in 2021.

Expenses, depreciation, and write-downs
Total expenses including depreciation and write-downs on tangible assets amounted to DKK 600 million in the first three quarters of 2021, compared to DKK 576 million in 2020, an increase of 4%.

The increase in the cost level reflects the high levels of activity and the purchase of BIL Danmark.

The rate of costs was 33.7% in the first three quarters of the year, compared to 35.7% in 2020.

Impairment charges for loans etc.
The bank’s expenditure for losses and impairment charges was DKK 13 million in the third quarter of 2021, compared to DKK 19 million in the second quarter and DKK 29 million in the first quarter. The total expenditure for losses and impairment charges was DKK 61 million in the first nine months of the year, compared to DKK 185 million in the same period in 2020.

The bank’s expenditure for losses and impairment charges has thus fallen each quarter since the first quarter of 2020.

The credit quality of the bank’s loans portfolio is generally judged to be good. The negative consequences of the coronavirus pandemic have so far been very limited for the vast majority of the bank’s customers. However, over the last few months we have seen growing challenges for several businesses due to shortages of components and increasing cost prices, including increasing energy prices. There is also still some risk associated with ending of the government’s loan schemes, which has now been postponed to 2022.

The bank increased its management estimates for losses and impairment charges considerably during 2020, from DKK 126 million to DKK 566 million. At the end of the third quarter of 2021, the management estimates increased to DKK 614 million.

Among industry-specific events is the considerable decrease in pig prices during the third quarter. The prices paid to farmers are currently at a level which results in operating losses for the vast majority of pig producers. Loans and guarantees to pig farms accounted for 1.3% of the bank’s total exposure at the end of September, and the bank’s impairment ratio was 26%.

The credit quality of the bank’s personal customers is generally judged to be good. The marked price increases on the housing market in the past few quarters have increased the wealth of many of them. On the other hand, the bank is aware that the continuing rise in house prices may lead to an increased risk – in particular in respect of first-time buyers.

The bank’s total account for impairment charges was DKK 2,287 million at the end of September 2021 compared to DKK 2,205 million at the end of 2020. Fifty-one percent of the total account for impairment charges was classified as stage 1 or 2 exposures.

The bank’s total loans to customers with suspended calculation of interest were DKK 142 million at the end of September 2021, compared to DKK 265 million at the end of December 2020.

Core earnings
Core earnings for the first three quarters of 2021 were DKK 1,121 million compared to last year’s DKK 852 million, an increase of 32%.

(DKK million)	Q1-Q3 2021	Q1-Q3 2020	2020	2019	2018	2017
Total core income	1,782	1,613	2,179	2,116	2,001	1,917
Total expenses and depreciation	600	576	788	805	866	845
Core earnings before impairment charges for loans	1,182	1,037	1,391	1,311	1,135	1,072
Impairment charges for loans etc.	-61	-185	-223	-100	-43	-70
Core earnings	1,121	852	1,168	1,211	1,092	1,002

Core earnings per share were DKK 39.1 for the first three quarters of 2021 compared to DKK 29.3 in 2020.

Result for the portfolio etc.
The result for the portfolio etc. including funding costs for the portfolio was negative by DKK 4 million net for the first three quarters of the year. In the same period in 2020, the result for the portfolio etc. was negative by DKK 24 million net. The result for the portfolio in the third quarter of 2021 was negative by DKK 1 million, due to increases in long-term interest rates.

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 12 million in the first three quarters of the year, which is marginally higher than in 2020, due to amortisation of the purchase of the client portfolio from BIL Danmark.

Profit before and after tax
The profit before tax was DKK 1,105 million, equivalent to a 17.6% p.a. return on average equity.

The profit after tax was DKK 875 million, equivalent to a 14.0% p.a. return on average equity.

Balance sheet items and contingent liabilities
The bank’s balance sheet total at the end of September 2021 stood at DKK 57,562 million, compared to DKK 53,956 million at the end of September 2020.

Relative to September 2020, the bank’s deposits including pooled schemes increased by 6% from DKK 39,204 million to DKK 41,475 million at the end of September 2021, while its loans in the same period increased by 9% from DKK 35,479 million to DKK 38,849 million.

The bank’s contingent liabilities including guarantees at the end of September 2021 amounted to DKK 10,886 million, compared to DKK 9,590 million at the end of September 2020.

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.

The development in the bank’s total credit intermediation is positive by 9% compared to the end of September 2020. The development is shown in the following summary:

Total credit intermediation	30 Sep. 2021 DKK million	30 Sep. 2020 DKK million	31 Dec. 2020 DKK million
Loans and other receivables at amortised cost	38,849	35,479	36,241
Arranged mortgage loans and funded home loans – Totalkredit	42,702	38,740	39,454
Arranged mortgage loans – DLR Kredit	9,818	9,452	9,511
Total	91,369	83,671	85,206

Securities and market risk
The item “Shares etc.” amounted to DKK 1,418 million at the end of September 2021, with DKK 27 million in listed shares and investment fund certificates and DKK 1,391 million in sector shares etc., mainly in the companies DLR Kredit, BI Holding and PRAS.

The bond portfolio amounted to DKK 6,428 million, of which the vast majority consisted of AAA-rated Danish government and mortgage credit bonds.

The total interest rate risk – impact on profit of a one percentage point change in interest level – was computed as 0,6% of the bank’s tier 1 capital on 30 September 2021.

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 the first three quarters of 2021:

	Risk in DKK million		Risk relative to equity end of period in %
Highest risk of loss	15.0		0.17%
Lowest risk of loss	4.4		0.05%
Average risk of loss	10.3		0.12%
End-of-period risk of loss	5.3		0.06%

The bank’s total market risk within exposures to interest rate risk, listed shares etc. and foreign currency remains at a moderate level, and this policy will continue.

Liquidity
The bank’s liquidity situation is good. The bank’s short-term funding with term to maturity of less than 12 months thus amounts to DKK 1.5 billion, balanced by DKK 10.0 billion in short-term deposits in Danmarks Nationalbank, the central bank of Denmark, and in liquid tradable securities.

The bank’s deposits (excluding pooled schemes) and equity exceeded its loans by DKK 6.0 billion 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 1.1 billion can be disregarded in terms of liquidity.

In terms of liquidity coverage ratio (LCR), the bank must comply with the statutory requirement of at least 100%. On 30 September 2021, the bank’s LCR was 196%, which thus met the statutory requirement by a good margin.

Capital structure
The bank’s equity at the beginning of 2021 was DKK 8,146 million. The profit for the period 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 September 2021 was DKK 8,563 million.

The bank’s total capital ratio and tier 1 capital ratio were 21.0% and 17.4% respectively at the end of September 2021.

Capital ratios	Q3 2021	Q3 2020	2020	2019	2018
Common equity tier 1 capital ratio (%)	17.4	17.8	17.5	14.7	14.6
Tier 1 capital ratio (%)	17.4	17.8	17.5	14.7	14.6
Total capital ratio (%)	21.0	21.6	21.1	20.0	18.4
MREL requirement (%) – fixed by the Danish FSA	17.9	20.2	17.9	20.7	19.7
MREL capital ratio (%)	26.8	29.2	26.7	27.3	24.9

A new five-year phasing-in period for the dynamic component of the IFRS 9 transitional arrangements was introduced in 2020. The bank now uses both the static and the dynamic components of the IFRS 9 transitional arrangements, including the simplified approach to recalculation of capital requirements.

Calculated without the IFRS 9 transition programmes, the bank’s total capital ratio was 19.7% and the common equity tier 1 capital ratio 16.1% on 30 September 2021.

In the second quarter of 2021, the bank started using a new system for calculating the risk-weighted items. The system was delivered by Moody’s and implemented at the bank’s IT supplier, Bankdata. The system ensures continuous updating in line with future legislative amendments.

At the end of September 2021, the bank has calculated the individual solvency requirement at 9.3%. To this should be added a capital conservation buffer of 2.5%. The total requirement for the bank’s total capital was thus 11.8% at the end of September 2021.

The countercyclical capital buffer is currently 0%. On 23 June 2021 the Minister for Industry, Business and Financial Affairs decided to re-activate the countercyclical capital buffer at 1.0% from 30 September 2022.

On 28 September 2021, the Systemic Risk Council published a press release stating that the Council expects to recommend a 1.0 percentage point increase of the buffer rate to 2.0% at its meeting in December 2021. This will allow the increase to 2.0% to take effect at the end of 2022. The Council also stated that it is assessing the need for activating the systemic buffer. The Council expects to assess whether the buffer should be activated – and if so at what level – during 2022.

Compared with the actual total capital of DKK 8.7 billion, the bank had excess capital cover of DKK 4.9 billion relative to the individual solvency requirement, equivalent to 11.7 percentage points at the end of September 2021, and excess capital cover of DKK 3.8 billion compared to the total requirement, equivalent to 9.2 percentage points.

In October 2021, the bank issued additional tier 2 capital for a total of DKK 500 million. All else being equal, this improves the total capital ratio by 1.2 percentage points.

In December 2020, the bank received an MREL requirement of 17.9% applicable from 28 December 2020.

The bank operates with three different capital targets. The capital targets specify that the common equity tier 1 capital ratio must be at least 13.5%, the total capital ratio at least 17% and the MREL capital ratio for covering the MREL requirement at least 23.5%, including the capital buffers. Due to the announced increase of the countercyclical capital buffer, the bank’s internal MREL target will be re-assessed during 2022.

All capital targets must be met at the end of the year, but the capital ratios may fluctuate over the year. However, the MREL requirement must always be met.

To meet the MREL requirement the bank has since December 2018 and up to and including September 2021 issued non-preferred senior capital for the equivalent of a total of DKK 1.9 billion. In addition, a total of DKK 0.5 billion can be included. The latter will be phased out with effect from 1 January 2022.

The bank’s capital for covering the MREL requirement totalled DKK 11,2 billion on 30 September 2021, equivalent to an MREL capital ratio of 26.8%. The excess cover relative to the MREL requirement on 30 September 2021 was thus 8.9 percentage points.

Share buy-back programme and capital reduction
The bank’s annual general meeting of 3 March 2021 renewed the previous authorisation of the board of directors to permit the bank, in accordance with applicable law, to acquire its own shares to a total nominal value of 10% of the bank’s share capital.

In the first three quarters of the year, the bank initiated and completed two share buy-back programmes. In the period 4 February to 29 July 2021, a total of 361,605 shares were bought back, the equivalent of DKK 225 million, and in the period 5 August to 28 September 2021, a total of 40,400 shares were bought back, the equivalent of DKK 30 million.

On 15 September 2021, the board of directors decided to initiate a new share buy-back programme. The programme runs from 1 October 2021 up to and including 25 January 2022. During this period the bank will buy its own shares for up to DKK 242.5 million under the programme, but with a maximum of 800,000 shares. The share buy-back amount corresponds to the portion of the buy-back that was planned for 2020 but not executed due to the coronavirus situation. On 22 October 2021, 61,000 shares had been bought back under the programme.

The general meeting further decided to cancel the 160,600 of the bank's own shares that were bought in 2020. The capital reduction was finalised on 6 May 2021.

On 30 September 2021, the bank’s actual share capital was thus DKK 28,665,716 in nom. DKK 1 shares: see below.

	Number of shares
Beginning of 2021	29,228,321
Capital reduction completed by cancellation of own shares	-160,600
After the capital reduction in May 2021	29,067,721
Share buy-back programmes totalling DKK 255 million
Bought under the share buy-back programmes	-402,005
Actual number of shares on 30 September 2021	28,665,716
DKK 242.5 million share buy-back programme
Bought under the share buy-back programme in October 2021	-61,800
Actual number of shares on 22 October 2021	28,603,916

The Supervisory Diamond
The bank complies with the Danish FSA’s Supervisory Diamond which contains a number of benchmarks and associated limit values which Danish banks must observe. With effect from 1 July 2021, the “Funding ratio” benchmark was removed from the Supervisory Diamond.

The Supervisory Diamond benchmarks and limit values and the bank’s key figures are given in the following table.

Benchmark	Limit value	Q3 2021	Q3 2020	2020	2019	2018
Liquidity benchmark	> 100%	191.3%	205.6%	177.6%	193.2%	179.5%
Total large exposures	< 175%	112.8%	104.9%	99.8%	121.0%	106.0%
Growth in loans	< 20%	9.4%	2.1%	2.2%	6.3%	*72.3%
Real property exposure	< 25%	18.0%	18.0%	17.9%	17.5%	15.8%

* The increase was mainly caused by the merger with Nordjyske Bank. The pro forma growth in loans for the full year 2018 was 7.0%.

As shown above, Ringkjøbing Landbobank meets all four current limit values by a good margin.

Rating
The bank is rated by the international credit rating agency Moody’s Investors Service.

Moody’s confirmed the bank’s ratings on 22 September 2021, including Aa3 for long-term bank deposits, P-1 for short-term bank deposits and A1 for long-term issuer – all with stable outlook.

BIL Danmark
In June 2021, the bank entered into an agreement with Banque Internationale à Luxembourg S.A., of Luxembourg, regarding takeover of all BIL Danmark’s clients. The client transfer process was completed satisfactorily in the third quarter of 2021 and the clients taken over will now be served by the bank’s employees, including those who were transferred from BIL Danmark.

The takeover of the BIL Danmark client portfolio strengthens the bank’s position in private banking.

Increase in customers and Voxmeter survey ratings
Both of the bank’s brands are placed high in Voxmeter’s annual Image and Reputation survey published in September 2021: the “Ringkjøbing Landbobank” brand takes first place and the “Nordjyske Bank” brand takes fourth place.

The poll thus ideally supplements Voxmeter’s customer satisfaction survey published in January 2021, which also ranked the bank among the best in the Danish banking sector.

Both surveys are by far the biggest in Denmark and based on more than 39,000 and more than 60,000 respondents respectively.

The high level of customer satisfaction and the bank’s image and reputation have contributed to the continued highly satisfactory growth in new customers and good retention of customers in 2021, like in previous years.

Organisational adjustments
In the third quarter of 2021, the bank has decided various adjustments to its organisational structure and administrative set-up for implementation during the fourth quarter of 2021 and the first quarter of 2022.

The aim of all the adjustments is to strengthen the bank’s specialist environments to ensure the continued best possible advisory services and experience for its customers.

The employees in the bank’s branch in Hvide Sande will in future be permanently attached to Ringkøbing, but the Hvide Sande branch will continue to be the venue for customer meetings etc.

The bank’s branch on Kastetvej in Aalborg will be combined with the branch in Hasseris, Aalborg. This will make Hasseris one of the bank’s largest retail customer branches.

Central Production in North Jutland has so far been located in both Nørresundby and Frederikshavn. In the future, Central Production will be in one location in Frederikshavn.

The coronavirus situation
We see support of our customers and business partners during the coronavirus pandemic as an important part of our task. From the start of the pandemic we have, of course, also placed great emphasis on protecting our employees to lessen the risk of transmission of the virus.

The bank has thus prepared for operating in an ever-changing environment due to the coronavirus situation and for potential reintroduction of varying restrictions.

The bank supports the Government’s and Finance Denmark’s declaration of intent of 9 September 2021 regarding termination of the governmental loan schemes.

Expected results for 2021
On publication of the 2020 annual report, the bank announced its expectations for core earnings for 2021 in the range DKK 1,100-1,300 million and profit before tax in the range DKK 1,000-1,300 million.

On 8 June 2021, the bank upwardly adjusted its expectations for 2021, primarily as a result of a better income flow than previously expected, due to a continued large increase in customers and a high level of activity among other things.

The upwardly adjusted expectations for the full year are core earnings in the range DKK 1,300-1,500 million and profit before tax in the range DKK 1,200-1,500 million. The upwardly adjusted expectations are maintained, but we now expect results at the upper end of the ranges.

Accounting policies
The accounting policies are unchanged relative to those in the submitted and audited 2020 annual report.

Key figures

	Q1-Q3 2021	Q1-Q3 2020	Full year 2020
Key figures for the bank (percent)
Profit before tax as a percentage of average equity, per annum	17.6	14.1	14.5
Net profit as a percentage of average equity, per annum	14.0	11.3	11.7
Rate of costs	33.7	35.7	36.2
Common equity tier 1 capital ratio	17.4	17.8	17.5
Tier 1 capital ratio	17.4	17.8	17.5
Total capital ratio	21.0	21.6	21.1
MREL requirement – fixed by the Danish FSA	17.9	20.2	17.9
MREL capital ratio	26.8	29.2	26.7
Key figures per DKK 1 share (DKK)
Core earnings	39.1	29.3	40.2
Net profit	38.5	22.6	31.6
Book value	298.7	271.2	280.2
Share price, end of period	741.0	482.0	554.0
Basis of calculation, number of shares	28,665,716	29,067,721	29,067,721

Quarterly overviews

Core earnings

	Q3 2021	Q2 2021	Q1 2021	Q4 2020	Q3 2020	Q2 2020	Q1 2020	Q4 2019	Q3 2019	Q2 2019	Q1 2019
(DKK million)
Net interest income	336	327	325	321	319	311	305	292	294	296	291
Net fee and commission income excluding securities trading	170	166	159	156	147	136	152	154	163	159	150
Income from sector shares etc.	49	43	40	43	38	35	35	36	36	36	37
Foreign exchange income	14	13	16	13	9	9	10	8	9	8	6
Other operating income	0	1	4	1	0	1	0	5	7	0	1
Total core income excluding securities trading	569	550	544	534	513	492	502	495	509	499	485
Securities trading	34	29	56	32	39	28	39	35	29	23	41
Total core income	603	579	600	566	552	520	541	530	538	522	526
Staff and administration expenses	191	195	198	206	179	190	191	202	180	198	198
Depreciation and write-downs on tangible assets	3	4	3	4	5	2	3	9	8	4	2
Other operating expenses	2	2	2	2	2	0	4	1	0	2	1
Total expenses etc.	196	201	203	212	186	192	198	212	188	204	201
Core earnings before impairment charges for loans	407	378	397	354	366	328	343	318	350	318	325
Impairment charges for loans and other receivables etc.	-13	-19	-29	-38	-44	-66	-75	-25	-26	-24	-25
Core earnings	394	359	368	316	322	262	268	293	324	294	300
Result for the portfolio etc.	-1	+7	-10	+15	+17	+29	-70	-4	+20	+7	+26
Amortisation and write-downs on intangible assets	4	4	4	4	3	4	4	4	3	4	4
Profit before tax	389	362	354	327	336	287	194	285	341	297	322
Tax	87	71	72	64	64	60	36	62	66	76	63
Net profit	302	291	282	263	272	227	158	223	275	221	259

Quarterly overviews – continued

Balance sheet items and contingent liabilities

	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
(DKK million)
Loans	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	41,475	41,376	41,766	39,639	39,204	39,670	37,051	38,128	38,554	39,070	37,439
Equity	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	57,562	57,123	56,845	54,862	53,956	53,984	51,531	52,941	53,601	52,426	50,266
Contingent liabilities	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

	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
(DKK million)
Common equity tier 1	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	7,255	7,274	7,122	7,277	7,049	6,973	6,109	6,072	5,624	5,441	5,284
Total capital	8,743	8,763	8,614	8,774	8,553	8,507	8,009	8,242	7,786	6,854	6,667
MREL capital	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	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	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	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	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	26.8	28.2	25.6	26.7	29.2	29.8	26.5	27.3	27.3	23.8	23.6

Statements of income and comprehensive income

Note		Q1-Q3 2021 DKK 1,000	Q1-Q3 2020 DKK 1,000	Full year 2020 DKK 1,000
1	Interest income	1,065,033	1,024,457	1,373,215
2	Interest expenses	66,239	91,921	120,910
	Net interest income	998,794	932,536	1,252,305
3	Dividends from shares etc.	77,109	71,106	71,241
4	Fee and commission income	682,258	603,681	814,821
4	Fee and commission expenses	67,968	62,459	85,545
	Net interest and fee income	1,690,193	1,544,864	2,052,822
5	Value adjustments	+90,589	+50,546	+126,079
	Other operating income	5,110	519	2,054
6,7	Staff and administration expenses	584,303	559,945	765,933
	Amortisation, depreciation, and write-downs on intangible and tangible assets	22,426	20,859	29,241
	Other operating expenses	5,830	6,058	8,110
8,12	Impairment charges for loans and other receivables etc.	-68,303	-192,505	-233,348
	Results from investments in associated companies and group undertakings	0	0	-13
	Profit before tax	1,105,030	816,562	1,144,310
9	Tax	230,062	159,361	224,596
	Net profit	874,968	657,201	919,714
	Other comprehensive income:
	Value changes in pension liabilities	0	0	-561
	Total comprehensive income for the period	874,968	657,201	919,153

Core earnings

Note		Q1-Q3 2021 DKK 1,000	Q1-Q3 2020 DKK 1,000	Full year 2020 DKK 1,000
	Net interest income	988,131	934,599	1,255,816
4	Net fee and commission income excluding securities trading	495,101	435,320	591,147
	Income from sector shares etc.	131,704	108,010	150,935
4	Foreign exchange income	42,631	28,161	40,759
	Other operating income	5,110	519	2,054
	Total core income excluding securities trading	1,662,677	1,506,609	2,040,711
4	Securities trading	119,189	105,902	138,129
	Total core income	1,781,866	1,612,511	2,178,840
6,7	Staff and administration expenses	584,303	559,945	765,933
	Depreciation and write-downs on tangible assets	10,049	9,609	14,241
	Other operating expenses	5,830	6,058	8,110
	Total expenses etc.	600,182	575,612	788,284
	Core earnings before impairment charges for loans	1,181,684	1,036,899	1,390,556
	Impairment charges for loans and other receivables etc.	-60,581	-184,783	-223,052
	Core earnings	1,121,103	852,116	1,167,504
	Result for the portfolio etc.	-3,696	-24,304	-8,194
	Amortisation and write-downs on intangible assets	12,377	11,250	15,000
	Profit before tax	1,105,030	816,562	1,144,310
9	Tax	230,062	159,361	224,596
	Net profit	874,968	657,201	919,714

Balance sheet

Note		30 Sep. 2021 DKK 1,000	30 Sep. 2020 DKK 1,000	31 Dec. 2020 DKK 1,000
	Assets
	Cash in hand and demand deposits with central banks	3,334,658	665,083	659,004
10	Receivables from credit institutions and central banks	242,884	2,571,061	3,376,233
11,12,13	Total loans and other receivables at amortised cost	38,848,705	35,479,206	36,241,166
	Loans and other receivables at amortised cost	37,771,612	34,292,880	35,088,380
	Wind turbine loans etc. with direct funding...