Market developments for mortgage-credit institutions in 2014

In 2014, mortgage-credit institutions generated profits before tax of DKK 9.5 bn. against profits of DKK 8.2 bn. in 2013. Most of this improvement is attributable to increased net interest income. In 2014, net interest income amounted to DKK 22.3 bn. against DKK 21 bn. in 2013, corresponding to an increase of 6.1%. The increase was mainly due to higher administration margins.

The annual impairment loss ratio for mortgage-credit institutions was 0.19% in 2014. This is unchanged compared with the previous year. Arrears are also at the same level as the previous year.

Overall, mortgage-credit institutions have excess capital proportionate to the current capital requirements. With their level of own funds at the end of 2014, all institutions are in a position to comply with the fully phased-in capital requirements laid down by CRR and CRD IV. For some institutions, the excess capital buffers will be limited, however, which makes it necessary to increase own funds up to 2019. Furthermore, mortgage-credit institutions must also take into account a future debt buffer requirement, as well as requirements from credit ratings agencies in relation to the credit rating of bonds.

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