October 25, 2017 / 9:50 AM / a year ago

Jyske Bank down 3.3 pct as Q3 net interest income misses forecast

COPENHAGEN, Oct 25 (Reuters) - Shares in Denmark’s Jyske Bank are traded 3.3 percent lower on Wednesday after it posted lower-than-expected third-quarter net interest income.

* Net interest income amounted to 1.38 billion Danish crowns ($218.19 million) in the quarter from 1.39 billion in the same quarter last year, and below the 1.41 billion expected by eight analysts in a Reuters poll

* “We’ve increased loans by 30 billion crowns since last year, and that has of course increased our interest income, but there are other items pulling in the other direction,” Chief Executive Anders Dam said, outlining those items:

* “There’s a margin pressure, we’re losing money on our deposit products due to negative interest rates, and we’ve reduced our bond portfolio, as we fear interest rates will rise at some point,” he said

* “Lastly we’ve taken up supplementary capital to optimize our capital structure. That also adds some interest expenses”.

* Unlike competitors, Jyske Bank has not increased its so-called contribution rates on mortgage loans, something that could help it increase its interest income

* For the time being the bank has no plans to increase contribution rates, a fee paid by home-owners, Dam said, but added that, unlike last year, he will no longer guarantee that the rates will remain untouched

* The drop in Jyske Bank’s share price on Wednesday came despite a stronger than expected third quarter pretax result

* “Investors had hoped that the bank’s loan volume growth and the lower deposit rates for corporate customers could have offset the headwind in net interest income more,” analyst Mikkel Emil Jensen of Sydbank said ($1 = 6.3249 Danish crowns) (Reporting by Teis Jensen, editing by Terje Solsvik)

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