Realkredit Danmark reports net profit of DKK 4,396 million for 2019

Realkredit Danmark today published its annual report for 2019.

Carsten Nøddebo, CEO, comments on the financial results:

“2019 was a satisfactory year for Realkredit Danmark, characterised by strong remortgaging activity. The result was affected, however, by an increase in loan impairments due to specification of the models we use to calculate losses. Underlying credit quality remained solid.

Remortgaging activity was historically high in 2019. Our customers achieved total interest savings of DKK 2.1 billion, with customers who have fixed-rate loans accounting for DKK 1 billion.

We saw particularly strong demand for fixed-rate loans, but also our FlexLife® loan, a highly flexible type of loan launched in 2017, became increasingly popular.”

The report is available at rd.dk. Highlights are shown below:

• The Realkredit Danmark Group recorded a net profit of DKK 4,396 million in 2019, against DKK 4,649 million in 2018. The profit was affected by higher impairments.
   
• Impairments amounted to an expense of DKK 265 million in 2019, against an income of DKK 204 million in 2018. The development was due to an update and specification of statistical loss models used to calculate expected credit losses. Underlying credit quality remained strong with low delinquencies and good collateralisation.
   
• With interest rates falling to an all-time low, borrowers have remortgaged to an extent never seen before. The overall interest rate savings for Realkredit Danmark’s customers amounted to DKK 2.1 billion in 2019, of which customers with fixed-rate mortgages accounted for DKK 1 billion. For Realkredit Danmark, remortgaging totalled DKK 155 billion during 2019.
   
• Borrower demand in 2019 centred on fixed-rate loans and FlexLån® loans with 5-year refinancing intervals, and customers are increasingly making repayments on their loans. This resulted in a small decline in administration margin income.
   
• For the first time ever, Realkredit Danmark is now offering its customers 15-year and 20-year mortgage loans with a coupon of 0.0%.
   
• In April 2019, Realkredit Danmark launched green funding for commercial property, and to date, Realkredit Danmark has disbursed RD Cibor6® Green loans with a total value of DKK 810 million.
   
• Realkredit Danmark expects net profit for 2020 to be at a lower level than in 2019.

Carsten Nøddebo, CEO, tel. +45 45 13 20 82.

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