Sydbank shares fall as profit drops, merger with Danish peers announced

Investing.com -- Sydbank (CSE:SYDB) shares fell on Wednesday after the Danish lender reported weaker results for the first nine months of 2025, with profit before tax down 20% to DKK 2.54 billion from DKK 3.20 billion a year earlier. 

Profit after tax declined to DKK 1.92 billion from DKK 2.40 billion, equal to a 17.4% return on equity after tax, compared with 21.7% in the same period of 2024.

Total income fell 8% to DKK 5.19 billion, driven by a reduction in net interest income of DKK 606 million to DKK 2.75 billion as interest rates eased. 

Core income amounted to DKK 4.99 billion, down from DKK 5.45 billion, while trading income edged lower to DKK 204 million from DKK 223 million.

Operating expenses rose to DKK 2.58 billion from DKK 2.45 billion, including DKK 63 million related to the 2024 acquisition of Coop Bank. 

Core earnings before impairment totaled DKK 2.61 billion, a 19% decrease from DKK 3.22 billion. Impairment charges for loans and advances rose to DKK 115 million from DKK 87 million, while core earnings declined to DKK 2.50 billion from DKK 3.13 billion.

Investment portfolio earnings increased to DKK 77 million from DKK 69 million, while non-recurring items amounted to a DKK 32 million expense compared with DKK 4 million a year earlier.

At the end of September, loans and advances stood at DKK 83.3 billion, compared with DKK 82.5 billion at the end of 2024, and deposits rose to DKK 119.1 billion from DKK 116.7 billion. Total assets reached DKK 196.6 billion, up from DKK 193.7 billion at year-end.

The bank’s CET1 ratio was 17.3%, compared with 17.8% at the end of 2024, while its capital ratio stood at 21.1%. Earnings per share were DKK 37.0, down from DKK 43.8.

Sydbank said DKK 865 million of shares had been repurchased under a DKK 1.35 billion buyback program, which was halted on October 27 following a merger agreement with Arbejdernes Landsbank and Vestjysk Bank. The combined entity will operate as AL Sydbank A/S, headquartered in Aabenraa.

“By joining forces, we will achieve a long-term position in the Danish banking market and thus safeguard our independence and long-term value creation,” said Chair Ellen Trane Nørby in a statement.

Chief executive Mark Luscombe noted growth in retail activity, saying, “Activity among retail clients in particular is significant, which is reflected in an overall increase in credit intermediation as regards retail clients of DKK 3.6bn.”

The bank said it continues to see “significant activity” across business segments and a “high level of satisfaction” among customers, supported by growth in credit intermediation and stable funding.

For 2025, Sydbank reaffirmed its outlook for profit after tax between DKK 2.4 billion and DKK 2.6 billion, with results dependent on financial market developments and macroeconomic factors such as impairment levels.