TIDM80VD
RNS Number : 9535D
Ringkjobing Landbobank A/S
05 February 2018
SUPPLEMENT DATED 5 February 2018
TO THE PROSPECTUS DATED 28 MARCH 2017
RINGKJØBING LANDBOBANK AKTIESELSKAB
(incorporated with limited liability in Denmark)
___________________________________________________________________
EUR2,000,000,000
Euro Medium Term Note Programme
___________________________________________________________________
This supplement (the "Supplement") is supplemental to, forms
part of and must be read and construed in conjunction with, the
Prospectus dated 28 March 2017 (the "Prospectus") prepared by
Ringkjøbing Landbobank Aktieselskab (the "Issuer") in connection
with its Euro Medium Term Note Programme (the "Programme") for the
issuance of up to EUR2,000,000,000 in aggregate principal amount of
notes (the "Notes"). Terms given a defined meaning
in the Prospectus shall, unless the context otherwise requires,
have the same meaning when used in this Supplement.
This Supplement has been approved by the United Kingdom
Financial Conduct Authority (the "FCA"), which is the
United Kingdom competent authority for the purposes of Directive
2003/71/EC, as amended (the "Prospectus Directive")
and relevant implementing measures in the United Kingdom, as a
base prospectus supplement issued in compliance with
the Prospectus Directive and relevant implementing measures in
the United Kingdom.
This Supplement has been prepared for the purposes of: (1)
updating the important notice to reflect MIFID II product
governance rules; (2) updating the Form of Final Terms to reflect
MIFID II product governance rules; (3) adding identifier codes to
the Form of Final Terms; (4) updating the overview of financial
performance section; (5) incorporating by reference the capital
structure, risks and risk management, auditors' reports and
financial statements sections of the Issuer's 2017 Annual Report
(as defined below); (6) adding the legal entity identifier code to
the General Information section in the Prospectus; and (7) updating
the significant or material adverse change statement in the
Prospectus.
The Issuer accepts responsibility for the information contained
in this Supplement and declares that, having taken all
reasonable care to ensure that such is the case, the information
contained in this Supplement is, to the best of its
knowledge, in accordance with the facts and does not omit
anything likely to affect the import of such information.
To the extent that there is any inconsistency between (a) any
statement in this Supplement or any statement
incorporated by reference into the Prospectus by this Supplement
and (b) any other statement in, or incorporated by reference into,
the Prospectus, the statements in (a) above will prevail.
Save as disclosed in this Supplement, no significant new factor,
material mistake or inaccuracy relating to information included in
the Prospectus which is capable of affecting the assessment of
Notes issued under the Programme has arisen or been noted, as the
case may be, since publication of the Prospectus.
Investors should be aware of their rights under Section 87(Q)(4)
of the Financial Services and Markets Act 2000.
With effect from the date of this Supplement the information
appearing in, or incorporated by reference into, the Prospectus
shall be amended and/or supplemented in the manner described
below:
IMPORTANT NOTICE
The following text is added to page v of the Prospectus:
MIFID II product governance / target market - The Final Terms in
respect of any Notes will include a legend entitled "MiFID II
Product Governance" which will outline the target market assessment
in respect of the Notes and which channels for distribution of the
Notes are appropriate. Any person subsequently offering, selling or
recommending the Notes (a "distributor") should take into
consideration the target market assessment; however, a distributor
subject to Directive 2014/65/EU (as amended, "MiFID II") is
responsible for undertaking its own target market assessment in
respect of the Notes (by either adopting or refining the target
market assessment) and determining appropriate distribution
channels.
A determination will be made in relation to each issue about
whether, for the purpose of the MiFID Product Governance rules
under EU Delegated Directive 2017/593 (the "MiFID Product
Governance Rules"), any Dealer subscribing for any Notes is a
manufacturer in respect of such Notes, but otherwise neither the
Arranger nor the Dealers nor any of their respective affiliates
will be a manufacturer for the purpose of the MIFID Product
Governance Rules.
FORM OF FINAL TERMS
On page 21, to reflect MIFID II product governance rules in the
Final Terms, the following text is added below the paragraph
beginning with [PROHIBITION OF SALES TO EEA RETAIL INVESTORS]:
[MIFID II product governance / Professional investors and ECPs
only target market - Solely for the purposes of [the/each]
manufacturer's product approval process, the target market
assessment in respect of the Notes has led to the conclusion that:
(i) the target market for the Notes is eligible counterparties and
professional clients only, each as defined in Directive 2014/65/EU
(as amended, "MiFID II"); and (ii) all channels for distribution of
the Notes to eligible counterparties and professional clients are
appropriate. Any person subsequently offering, selling or
recommending the Notes (a "distributor") should take into
consideration the manufacturer['s/s'] target market assessment;
however, a distributor subject to MiFID II is responsible for
undertaking its own target market assessment in respect of the
Notes (by either adopting or refining the manufacturer['s/s']
target market assessment) and determining appropriate distribution
channels.]
On page 27, to allow for additional identification codes to be
reflected in the Final Terms, the following rows are added below
the line beginning with "Common Code" in the "Operational
Information" paragraph:
CFI: [--]
FISN: [--]
DESCRIPTION OF THE ISSUER
More recent data is available as of the date of this Supplement
and the following replaces the "Overview of financial performance"
section on pages 72-76 of the Prospectus:
Overview of financial performance
The tables below set out an analysis of the Issuer's profit and
loss account and certain key figures and ratios derived from its
financial statements for the years set out below.
The financial statements have been prepared in accordance with
the provisions of the Danish Financial Business Act and other
Danish requirements regarding information in the annual financial
statements of listed financial companies.
The figures for the whole years 2012 to 2017 are audited.
Profit and loss account
Years ended 31 December
Main figures for the Issuer (million DKK)
--------------------------------------------------------------------------- -----------------------------------------
2017 2016 2015 2014 2013 2012
------ ----- ----- ----- ----- -----
Total core income excl. trading income............................. 955 942 906 871 817 799
Trading
income.................................................................. 64 41 48 36 27 24
Total core
income.............................................................. 1,019 983 954 907 844 823
Total expenses and depreciations etc.................................. 334 318 306 298 273 265
Core earnings before impairments for loans........................ 685 665 648 609 571 558
Impairment charges for loans and other receivables etc....... -10 -48 -60 -87 -120 -157
Core
earnings.................................................................
. 675 617 588 522 451 401
Result for the
portfolio................................................... 60 44 0 +65 +23 +49
Expenses for bank packages........................................... 0 0 0 0 -2 -2
Profit before
tax.............................................................. 735 661 588 587 472 448
Net profit for the
year.................................................... 589 539 459 446 358 328
Selected balance sheet figures
As at 31 December
Selected balance sheet figures (million DKK)
---------------------------------------------------------------- ----------------------------------------------------
2017 2016 2015 2014 2013 2012
------- ------- ------- ------- ------- -------
Shareholders'
equity...................................................... 3,817 3,555 3,296 3,099 2,901 2,676
Capital base(*1)
..............................................................
.. 3,514 3,355 3,275 2,779 2,979 2,980
Deposits......................................................
................. 19,110 18,314 16,987 15,450 14,114 12,867
Loans.........................................................
.................. 19,351 17,482 17,300 15,507 13,849 12,424
Balance sheet
total....................................................... 25,796 24,258 22,317 21,238 19,583 17,682
Guarantees....................................................
................ 3,184 2,460 2,234 2,218 1,902 1,667
_______________
(1) Capital base is computed as the Issuers total capital after deductions.
Key figures for the Issuer
As at 31 December
Key figures for the Issuer(*1) (per cent.)
--------------------------------------------------------------------------- ----------------------------------------
2017 2016 2015 2014 2013 2012
----- ----- ----- ----- ----- -----
Pre-tax return on equity (per cent.)............................ 19.9 19.3 18.4 19.6 16.9 17.4
Return on equity after tax (per cent.)......................... 16.0 15.8 14.3 14.9 12.8 12.7
Income/cost ratio....................................................... 3.13 2.81 2.60 2.52 2.19 2.06
Rate of costs (per cent.)(*2) ........................................... 32.8 32.3 32.1 32.8 32.4 32.2
Tier 1 capital ratio (per cent.).................................... 16.5 16.9 17.1 17.5 19.2 20.9
Total capital ratio (per cent.)..................................... 17.8 18.3 18.8 17.5 20.0 22.4
_______________
(1) Key figures as defined by the Danish Financial Supervisory
Authority (the key figure "Rate of Costs" is not defined by the
Danish Financial Supervisory Authority).
(2) Defined as: Total costs and depreciations / Total core income.
The Issuer reduced its share capital once in each of 2012, 2013,
2014, 2015, 2016 and 2017. A further share capital reduction of
538,000 nom. DKK 1 shares and a new share buy-back programme of up
to a value of up to DKK 170 million and a maximum of 1,000,000 nom.
DKK 1 shares is proposed to the annual general meeting on 28
February 2018.
The Board of Directors can increase the share capital by DKK
14,210,980 to DKK 36,560,980 in one or more increases until the 21
February 2022 (figures after the share capital reduction approved
by the general meeting on 22 February 2017).
Loan and guarantee portfolio
The table below sets out the Issuer's loans and guarantees by
sector and industry, as a percentage of the Issuer's total loans
and guarantees.
As at 31 December
(per cent)
----------------------
2017 2016 2015
------ ------ ------
Public
authorities.................................................................................
................... 0.1 0.2 0.1
Business
Agriculture, hunting and forestry
Cattle farming
etc........................................................................................
............ 1.7 1.2 1.5
Pig farming
etc........................................................................................
................ 1.7 1.6 1.5
Other agriculture, hunting and
forestry..................................................................... 3.9 3.9 3.9
Fishing.....................................................................................
................................... 2.4 2.5 2.2
Mink
production..................................................................................
....................... 1.0 1.0 1.0
Industry and raw material
extraction........................................................................... 1.6 2.5 2.6
Energy......................................................................................
.................................. 1.7 2.1 3.5
Wind turbines -
Denmark.....................................................................................
...... 2.9 3.7 6.0
Wind turbines -
foreign.....................................................................................
.......... 8.1 10.0 11.9
Building and
construction................................................................................
............ 4.3 2.2 1.8
Trade.......................................................................................
................................... 3.3 3.4 3.6
Transport, hotels and
restaurants................................................................................ 1.4 1.5 1.8
Information and
communication...............................................................................
.. 0.3 0.3 0.2
Financing and
insurance...................................................................................
........... 13.6 14.3 15.0
Real
property.....................................................................................
.........................
First-priority without prior
creditors****.............................................................................
. 2.7 4.3 4.2
Other
business....................................................................................
......................... 7.1 6.7 6.1
------ ------ ------
Total
business....................................................................................
...................... 71.2 71.9 76.3
Private.....................................................................................
.................................. 28.7 27.9 23.6
------ ------ ------
Total.......................................................................................
................................... 100.0 100.0 100.0
====== ====== ======
The distribution by sector and industry is based on the sector
codes of Statistics Denmark (Da. "Danmarks Statistik").
* The comparative figures for 2015 are partly calculated on the
basis of an approximate computation principle compared with
2016.
** Loans with first mortgages on real property and construction
financing without prior creditors.
*** Other forms of real estate financing, including loans with
second mortgage on real property and a strong lessee with an
irrevocable lease.
Funding structure
The Issuer's principal source of funding is customer deposits
which accounted for 76 per cent. of the total funds (Balance Sheet
total) at 31 December 2016 and 74 per cent. at 31 December 2017.
Other sources of funding include equity, subordinated debt and
market funding (from credit institutions and central banks).
As at 31 December
Funding sources (million DKK)
---------------------------------------------------------------- ----------------------------------------------------
2017 2016 2015 2014 2013 2012
------- ------- ------- ------- ------- -------
Equity................................................ 3,817 3,555 3,296 3,099 2,901 2,676
Subordinated debt........................... 372 371 373 366 371 383
Other liabilities etc........................ 225 263 226 176 192 217
Deposits and other debt.................. 19,110 18,314 16,987 15,450 14,114 12,867
* on demand..................................... 12,268 11,952 11,183 9,209 8,325 7,537
* up to 1 year................................... 3,555 3,502 2,560 2,826 2,631 2,396
* more than 1 year and up to 5 years 1,468 1,192 967 948 1,502 1,415
* more than 5 years.......................... 1,819 1,668 2,277 2,467 1,656 1,519
Core funding.................................... 23,524 22,503 20,882 19,091 17,578 16,143
Credit institutions and central
banks.............................................. 1,599 1,458 1,502 1,911 1,755 1,198
* on demand..................................... 269 281 268 258 298 214
* up to 1 year................................... 338 162 227 555 453 200
* more than 1 year and up to 5 years 605 660 594 611 560 517
* more than 5 years.......................... 387 355 413 487 444 267
Issued bonds..................................... 673 297 0 236 250 341
- - - - -
* on demand..................................... -
* up to 1 year................................... 298 - - 236 4 225
* more than 1 year and up to 5 years 375 297 - - 246 116
- - - - -
* more than 5 years.......................... -
Market funding................................ 2,272 1,755 1,502 2,147 2,005 1,539
------- ------- ------- ------- ------- -------
Total Funds (Balance Sheet total). 25,796 24,258 22,384 21,238 19,583 17,682
======= ======= ======= ======= ======= =======
The funding structure by the end of December 2016 and the end of
December 2017 are both shown in the table below.
As at 31 December 2016 As at 31 December 2017
Distribution of funding (per cent.) (per cent.)
-------------------------------------------------------------------- ----------------------- -----------------------
Capital base (equity and subordinated
debt).............................................................
........................... 16 16
Other
liabilities.......................................................
..................................................................
......... 1 1
Deposits and other
debt..............................................................
....................................................... 76 74
Debt to credit institutions - term to maturity over 1
year..............................................................
... 4 4
Debt to credit institutions - term to maturity under 1
year..............................................................
.. 2 2
Issued bonds - term to maturity over 1
year..............................................................
........................ 1 2
Issued bonds - term to maturity under 1
year..............................................................
....................... - 1
----------------------- -----------------------
Total.............................................................
..................................................................
.................. 100 100
======================= =======================
As seen from the table above and the below table, the Issuer has
debt to credit institutions and issued bonds of DKK 905 million DKK
which expire within the next 12 months. This is more than covered
by claims on central banks, other credit institutions and listed
securities (as seen from the table below):
As at 31 December 2016 As at 31 December 2017
(million DKK ) (million DKK )
----------------------- -----------------------
Debt to credit institutions and central banks - term to maturity
under 1 year................................... 443 607
Issued bonds - term to maturity under 1
year..............................................................
...................... 0 298
Total.............................................................
..................................................................
................. 443 905
Cash in hand and demand deposits with the central bank of
Denmark............................................... 284 308
Receivables with notice from central banks - certificate of
deposits................................................. 1,572 957
Receivables from credit institutions - term to maturity under 1
year................................................ 356 200
Listed bonds, shares and investment funds certificates at fair
value................................................... 3,612 3,973
Total.............................................................
..................................................................
................. 5,824 5,438
----------------------- -----------------------
Excess
cover.............................................................
..................................................................
..... 5,381 4,532
======================= =======================
As per the table above, the Issuer had excess coverage of
approximately DKK 5.4 billion at the end of December 2016 and DKK
4.5 billion at the end of December 2017.
Market Risk
The Issuer's total Value at Risk at 31 December 2017 was DKK 6.0
million. This sum relates to the maximum loss from a statistical
perspective which the Issuer could risk losing with 99 per cent.
probability if all market positions were retained unchanged for a
period of 10 days.
End of
VaR summary 2017 (million DKK) Average Minimum Maximum year
---------------------------------------------------------------------- -------- ------------ ------------ --------
VaR VaR
Risk figure VaR figure* VaR figure* figure
---------------------------------------------------------------------- -------- ------------ ------------ --------
Interest............................................................
........................ 9.6 0.9 16.3 5.8
Foreign
exchange............................................................
......... 0.2 0.2 0.1 0,1
Share
price...............................................................
................ 2.5 2.5 2.8 1.1
Diversification.....................................................
.................... -2.3 -1.1 -1.7 -1.0
Total VaR
figure..............................................................
......... 10.0 2.5 17.5 6.0
-- *Determined by the total VaR figure.
-- As shown from the table, the Issuer's total VaR figure
throughout 2017 varied from DKK 2.5 million to DKK 17.5 million
with an average of DKK 10.0 million. The variation over time
reflects the fact that the Issuer regularly adjusts the size of its
market positions, and that the risk in the financial markets varies
over time.
Credit concentration
The Issuer is focused on its credit concentration. A measure of
the Issuer's credit concentration is given by the Total Large
Exposure, which is the Issuer's exposure to customers exceeding 10
per cent. of the Issuer's own funds.
2017 2016 2015 2014 2013 2012
----- ----- ----- ----- ----- -----
Total Large Exposures (per cent.)......................................... 22.5 29.5 63.4 47.8 35.0 27.2
Total Large Exposures as at 31 December 2017 amounts to 22.5 per
cent. on two good quality exposures and fully hedged with adequate
security.
DOCUMENTS INCORPORATED BY REFERENCE
The following sections of the Issuer's annual report for the
financial year ended 31 December 2017 (the "2017 Annual Report")
shall be deemed to be incorporated by reference in, and form part
of, this Supplement and the Prospectus:
-- capital structure on pages 19 to 23 inclusive (excluding the
section titled "future capital structure" on pages 21 to 23);
-- risks and risk management on pages 24 to 35 inclusive;
-- auditors' reports on pages 49 to 53 inclusive; and
-- financial statements on pages 54 to 101 inclusive.
The information set out on pages 1 to 18, pages 36 to 48 and
pages 102 to 120 and the section titled "future capital structure"
on pages 21 to 23 of the 2017 Annual Report are not incorporated in
and do not form part of this Supplement and the Prospectus.
Any information contained in the 2017 Annual Report which is not
incorporated by reference in this Supplement is either not relevant
to investors or is covered elsewhere in the Prospectus or this
Supplement.
The sections in the 2017 Annual Report which are incorporated by
reference in this Prospectus are direct and accurate translations
of the original Danish text. To the extent that there is any
inconsistency between the English translations and the original
Danish text, the original Danish text will prevail.
Copies of the 2017 Annual Report have been filed with the FCA
and the National Storage Mechanism. An electronic copy will be
available for inspection (without charge) on the National Storage
Mechanism website, www.morningstar.co.uk/uk/nsm, and can also be
obtained (without charge) from the website of the Regulatory News
Service operated by the London Stock Exchange at
www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
Copies of the 2017 Annual Report can also be obtained from the
registered office of the Issuer and from the specified office of
the Paying Agent and www.landbobanken.com.
GENERAL INFORMATION
To reflect the Issuer's Legal Entity Identifier code, the
following text is added below the paragraph beginning with "The
yield of each Tranche of Notes" on page 90 of the Prospectus:
The Legal Entity Identifier Code
The Legal Entity Identifier code of the Issuer is
2138002M5U5K4OUMVV62.
To reflect an update to the significant or material change
statement, the sentence beginning with "there has been no
significant change in the financial position" is deleted and
replaced with the following on page 90 of the Prospectus:
There has been no significant change in the financial position
of the Issuer since 31 December 2017 and there has been no material
adverse change in the financial position or prospects of the Issuer
since 31 December 2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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