Denmark’s Biggest Mortgage Lender Reports 56% Jump in ProfitBy
Lender says IPO preparations continuing according to plan
Nykredit cut costs, increased income after raising fees
Nykredit Realkredit A/S, the largest lender operating in the world’s biggest market for mortgage-backed covered bonds, reported a 56 percent jump in profit last quarter after management cut costs and revenue increased.
The Copenhagen-based lender said net profit excluding minorities rose to 1.87 billion kroner ($269 million) in the fourth quarter from 1.2 billion kroner a year earlier, according to a statement on Tuesday. Nykredit said previously announced preparations for an initial public offering are “proceeding as planned,” without giving details on the timeframe.
“Nykredit achieved its best profit from core business to date,” Chief Executive Officer Michael Rasmussen said in the statement. “We have worked with all parts of our business every day and have improved the areas that we can influence. These efforts will continue in 2017.”
Nykredit, a cooperative owned by its clients, is bracing for tougher capital requirements that regulators are expected to impose amid an overhaul of global capital rules. The lender said last year in announcing its IPO that it needs access to equity markets to help build capital. Common equity Tier 1 capital fell to 18.9 percent of risk-weighted assets in the fourth quarter, compared with 19.4 percent a year earlier.
Income from core business jumped 15 percent after Nykredit raised its mortgage fees and lending increased. The lender also booked a gain of 369 million kroner after selling buildings.
— With assistance by Christian Wienberg
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.