Vestjysk is the 9th largest bank in Denmark, with a market share of ~2%. Its core market is west-, mid- and eastern Jutland with 660 employees in 29 branches in Jutland. Arbejdernes Landsbank owns 72.7% of the stock, with the remainder held by ~51,000 shareholders. The exposure is tilted towards agriculture, but this has been steadily reduced to 11% of lending and guarantees, from 17% in 2017. The loan book split is 52% to private customers and 48% to business customers, with a targeted 60-65% business customers and 35-40% private customers.
As a means to obtain a more diversified loan book Vestjysk is targeting an increase in business customers that are not in the agricultural sector or alternatively are high-quality customers. This is a beneficial path combined with the current positive outlook for corporate lending. Solid earnings in recent years have made the first dividends since 2007 possible in 2022 following the expiration of the 12-month ban after Arbejdernes Landsbank became majority shareholder.
Regulatory risk and credit risk are the biggest risks in Vestjysk. Even though Vestjysk is well-capitalised the expected increased requirements in the coming years will have an effect. Regarding credit risk the biggest risk is still found in pig and dairy farming even though the exposure to these has been lowered to ~9% of total lending. As current conditions for milk producers are attractive apart from the cost increases, the biggest risk is found in pig farming which is not only affected by higher costs but also by volatile settlement prices, African swine fever and uncertainty in export markets.