Sparekassen Sjælland Fyn A/S : Interim Report H1-2023

H1 2023

Interim Report

H1 2023 highlights

PROFIT BEFORE TAX

Totals DKK 340.7m

Pre-tax profit provides returns on the opening equity at a rate equivalent to 16.5% a year. Net profit stands at DKK 265.2m, equivalent to a return on opening equity of 12.8%.

NET INTEREST INCOME

Up 26%

Net interest income is up by DKK 82.3m and totals DKK 397.1m.

FEE AND COMMISSION INCOME

Down 8%

Fee and commission income is down by DKK 26.3m to stand at DKK 309.3m. The decline is still attributable to lower activity in the housing market.

NET INTEREST AND FEE INCOME

Up 7%

Total net interest and fee income is up by DKK 49.0m and comes to DKK 718.2m.

Sparekassen Sjælland-Fyn

STAFF COSTS AND ADMINISTRATIVE EXPENSES

Up 4%

Staff costs and administrative expenses have gone up by DKK 14.0m and amount to DKK 405.0m.

CORE EARNINGS

Up 8%

H1 2023 continued to present satisfactory developments in core earnings.

IMPAIRMENT LOSSES ON LOANS AND ADVANCES ETC

Total DKK 6.0m

Despite slightly increasing impairment losses, the credit quality of Sparekassen's customers is still perceived to be fine. Provisions in the form of management add-ons total DKK 204.1m at 30 June 2023.

DEPOSITS

Up 4%

Deposits have increased by DKK 0.8bn since 30 June 2022 and total DKK 21.1bn. Since year-end 2022, deposits have gone up by 2%.

Contents

LOANS TO CORPORATE

CUSTOMERS

Up 4%

Corporate customer loans have increased by 4% since 30 June 2022. Since year-end 2022, total loans and advances have gone up by 4%.

CAPITAL RATIO

Is 24.1%

The capital ratio includes current profits. Sparekassen's capital position continues to develop quite satisfactorily.

PRE-TAX EARNINGS EXPECTATIONS FOR 2023

Ranging between DKK 650m and DKK 725m

As net interest income is expected to go up and impairment losses are expected to be lower than those budgeted, Sparekassen has adjusted its earnings expectations upwards on two occasions

• the last one being in company announcement no 15/2023 of 26 June 2023.

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Contents

2 Management commentary

H1 2023 highlights	page	2
Management commentary	page	4
Outlook for 2023	page	5
Financial highlights	page	6
Financial ratios	page	7
Core earnings	page	8
The Supervisory Diamond	page	9
Financial review of the Group	page	10
Towards New Goals -
Sparekassen's 2025 strategy	page	14
Capital structure and liquidity of the Group	page	18
Credit quality categories	page	21
Financial review of the Parent	page	22

Cover photo: The Sparekassen Sjælland-Fyn Group's head office in Holbæk.

Sparekassen Sjælland-Fyn

Contents

24 Interim financial statements

Statement by Management on
the Interim Report	page	25
Income statement	page	26
Statement of comprehensive income	page	26
Balance sheet	page	27
Statement of changes in equity	page	28
Cash flow statement	page	30
Notes	page	31
Parent	page	45
Definitions of official key ratios etc	page	55

This Interim Report has been prepared in Danish and English, with the Danish version being valid in the event of any inconsistencies.

For more information, please visit spks.dk or contact:

Lars Petersson	Lars Bolding	Morten Huse Eikrem-Jeppesen
Chief Executive Officer	Savings Bank Director	Press Officer
5948 1111	5948 1111	[phone]
[e-mail]	[e-mail]

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Management commentary

Sparekassen continued along the positive path in H1 2023 and produced a pre-tax profit of DKK 340.7m that is up 60%..

Continued improvement of core earnings

Recent years' satisfactory development in core earnings is continuing, and in H1 2023 Sparekassen has increased its core earnings by 8%. Particularly the rising interest rate levels have contributed to this positive development. Danmarks Nationalbank has continued to raise interest rates in 2023 in an attempt to curb the historic high levels of inflation. Overall, the positive key interest rate has contributed to

a positive development in Sparekassen's net interest income which has increased by DKK 82.3m to a total of DKK 397.1m in H1 2023. Like in Q1 this year, some of the increase is attributable to Sparekassen's placement of surplus liquidity with Danmarks Nationalbank, interest income from Sparekassen's bond portfolio, and increasing interest income from loans and advances.

Fee and commission income stands at DKK 309.3m at 30 June 2023, representing a decline of 8% on the same date last year. The primary reasons for the decline are lower activity in the housing market and that the number of loan conversions has gone down to a more normal level after a busy 2022.

In total, Sparekassen's net interest and fee income has increased to DKK 718.2m, or 7% in all.

Staff costs and administrative expenses are up 4%. The increase has been caused by some strategic investments, including increased PR costs to promote Sparekassen, increased costs to instruct and train staff and to attract specialist competencies that are to accelerate Sparekassen's current positive development, for example, in the data and product development area.

Growth in the corporate customer area

Sparekassen's total lending has increased by 4% since 30 June 2022. The corporate customer area in particular is developing posi- tively, alongside Sparekassen strengthening its position in the corporate customer segment. Corporate customer loans have gone up by 4% on H1 2022, and this is considered very positive. Also, funding of commercial properties and farms through DLR Kredit has increased by 6% over the past 12 months. So, this increase bears witness of the continuously fine activity with existing corporate and agricultural customers and the influx of new customers in this segment.

Especially Sparekassen's short response times are highlighted positively by the customers.

Corporate customer lending is expected to increase further in 2023. This, along with the generally high interest rate levels, will support a continuously positive development in interest income. Core business thus continues to develop positively.

Impairment losses remain low

A sustainedly strong credit quality of its private and corporate customers means that Spare- kassen's is still seeing generally low impairment losses which stand at DKK 6.0m in H1.

This development is supported by deposits which at 30 June 2023 amounted to DKK 21.1bn, which is 2% up on the amount at 30 June 2022. The increase bears witness of a continuously fine savings capacity with our customers and generally sound finances.

However, across the board, inflation readings are in decline again, and employment rates remain high with fine job market activity, and these factors are considered to have a positive impact on private households and business operators. Yet Sparekassen is maintaining

its management add-ons and provisions for potential losses at a conservative level because uncertainty remains about the implications

of the rising interest rate levels, geopolitical tensions, etc. Management add-ons total DKK 204.1m at 30 June 2023. So Sparekassen is well equipped to handle any losses.

Towards New Goals

In April 2022, Sparekassen launched its four- year strategy "Towards New Goals" to ensure that it will remain strong also in future and keep up with current opportunities and require- ments. The execution of the strategic initiatives that are intended, for example, to strengthen Sparekassen's commercial processes, product and service offerings and to unlock much more time for customer service, is proceeding as planned. By strengthening Sparekassen's operations, competitive power and earnings capacity in the short term as well as the long term, these initiatives are intended to assist in Sparekassen meeting its objective of a rate of costs below 50% from the financial year 2026 at the latest.

As part of the ongoing strengthening of Spare- kassen and the execution of the "Towards New Goals" strategy, Sparekassen opened a branch

Sparekassen Sjælland-Fyn

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in Gilleleje in North Zealand in Q2 2023. The branch received a warm welcome.

In Q2 2023, Sparekassen also announced the opening of a new 4,500-square metre centre of excellence in 2025 at Carlsberg Byen in Copen- hagen. This will enhance the commercial launch pad for further growth, and Sparekassen will be in an even stronger position to attract and retain tomorrow's skilled manpower and capabilities.

Outlook for 2023

At the beginning of the year, the pre-tax earnings expectations for 2023 ranged between DKK 500m and DKK 600m. Considering the rising interest rate levels and lower impairment losses than anticipated, Sparekassen has twice adjusted its pre-tax earnings expectations upwards - the last one being company announcement no 15/2023 of 26 June 2023, when they were raised from between DKK 550m and DKK 650m to between DKK 650m and DKK 725m.

Lars Petersson

Chief Executive Officer

Lars Bolding	Jan Kolbye Jensen
Savings Bank	Savings Bank
Director	Director

LARS BOLDING		LARS PETERSSON		JAN KOLBYE JENSEN
Savings Bank Director		Chief Executive Officer		Savings Bank Director

Sparekassen Sjælland-Fyn

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