AL Sydbank delivers best quarterly performance and raises its expectations

Dear Sirs

AL Sydbank delivers best quarterly performance and raises its expectations

AL Sydbank continues the positive trend from the first two quarters of the year and delivers its best quarterly result so far in 2026. Earnings rose, costs fell and the return on tangible equity exceeded the Bank’s target in Q3. Also, the integration of the new bank is proceeding as planned.

AL Sydbank has ended the first nine months of the year with a post-tax profit of DKK 2.8bn, which is the Bank’s best quarterly performance. The overall result is equivalent to a return on tangible equity of 14.1% after tax. Taken in isolation, Q3 return represents 16.0%, which is above the Bank’s target of 15%. The positive trend is driven by growth in core income of 4% and a decrease in costs (core earnings) of 7% in Q3 compared with Q2.

“After 10 months as one bank, we have delivered our best quarterly performance so far. We have a robust business model and we are making good progress in reducing costs. At the same time, we are starting to realise the benefits of the merger synergies and during the first three quarters of the year, we have achieved cost synergies of DKK 347m,” says Mark Luscombe, CEO of AL Sydbank.

The international economy is still characterised by considerable uncertainty. Geopolitical tensions, the war in Ukraine and developments in trade policy, interest rates and energy prices are affecting the framework conditions for businesses and may impact investment appetite as well as the demand for financing. However, the Danish economy has a solid starting point due to high employment. Despite macroeconomic uncertainty, AL Sydbank – with its strong capital position and robust business – is well equipped to navigate the volatile market conditions.

“From the beginning, the ambition with the merger has been to combine the strengths of a major bank with local proximity to customers. For the third quarter in a row, AL Sydbank has demonstrated that the Bank is capable of delivering strong financial results while implementing an extensive and complex integration with impressive momentum. This requires great effort from the employees and underscores the Bank’s strong execution capability. This is a solid foundation for achieving the ambitions of the merger and creating long-term value for both customers, employees, local communities and shareholders,” says Ellen Trane Nørby, Chair of AL Sydbank.

Fast-paced integration and investment in the future

AL Sydbank’s integration of the three banks continues at a fast pace. Concurrently with the day-to-day operations and customer service, the Bank is working to develop a shared direction, harmonise prices and processes and build a common culture. Meanwhile, the preparations for the two large IT conversions in 2027 are progressing according to plan. In parallel with the merger, AL Sydbank is investing in skills development. The Bank has launched a comprehensive programme for strengthening employees’ AI skills, and all employees are expected to have completed the development programme in 2027.

“We are undertaking a large and complex integration. Within a short timeframe, we must deliver significant change while shaping the Bank for the future – all while running a bank and being there for our customers every day. This places considerable demands on our employees, and the progress we have achieved is to a large extent a result of their dedication and hard work. They deserve great credit for this,” says Mark Luscombe.

Outlook for 2026

• Growth is projected for the Danish economy.
• Profit after tax is now expected to be in the range of DKK 3,800-4,200m.
• The outlook is subject to uncertainty and depends, among other factors, on financial market developments, interest rate developments, integration costs and macroeconomic factors which may affect customer activity and the level of impairment charges.
  
  

Q1-Q3 2026 – highlights

• Profit for the period of DKK 2,833m equals a return on tangible equity of 14.1% after tax
• Core income of DKK 9,018m is 81% higher compared to the same period in 2025
• Trading income of DKK 225m compared to DKK 204m in the same period in 2025
• Costs (core earnings) of DKK 5,076m against DKK 2,576m in the same period in 2025
• Core earnings before impairment of DKK 4,167m are 59% higher compared to the same period in 2025
• Impairment charges for loans and advances etc represent an expense of DKK 217m
• Bank loans and advances have gone up by DKK 2.5bn, equal to an increase of 1.8% compared to year-end 2025
• The CET1 ratio is 16.6% compared to 15.8% at year-end 2025

Further information:
Investors: Jørn Adam Møller, CFO, tel +45 74 37 20 30
Press: Kristine Racina, Press Officer, tel +45 21 26 34 71

Yours sincerely

AL Sydbank A/S