BRFkredit is a Danish mortgage credit institution lending against collateral on owner-occupied homes, commercial properties and subsidised housing.
Loans for residential purposes account for the majority of all lending. Corporate lending is loans for office and business properties, private rental and cooperative housing.
Management, Board of directors and auditors
Carsten Tirsbæk Madsen, CEO
Lars Waalen Sandberg, Executive Vice President
Board of directors of BRFkredit a/s:
Anders Dam, Chairman
Per Skovhus, Deputy Chairman
Niels Erik Jakobsen
Laila Busted, employee elected
Kim Henriksen, employee elected
Deloitte Statsautoriseret Revisionspartnerselskab, Silkeborg
Financial highlights and key figures for BRFkredit group
Selected income statement figures and key ratios for our recent annual reports.
Additional data and interim reporting available under Financial statements.
SUMMARY OF INCOME STATEMENT 2017 2016 2015 2014 2013 DKKm Contribution income, etc. 1,881 1,785 1,687 1,494 1,408 Other net interest income -60 -53 -80 -63 -155 Net fee and commission income, etc. 262 207 244 151 82 Value adjustments, etc. (- is an expense) 28 39 -22 -190 17 Other income 24 50 45 35 26 Core income 2,135 2,028 1,872 1,427 1,378 Core expenses 851 840 873 876 866 Core profit before loan impairment charges and provisions for guarantees 1,284 1,188 999 1,194 512 Loan impairment charges and provisions for guarantees 202 -32 186 843 415 Core profit 1,082 1,220 813 -351 97 Investment portfolio earnings 49 80 89 -30 328 Pre-tax profit 1,131 1,299 902 -321 425 Tax (- is income) 245 284 218 -34 118 Post-tax profit or loss 886 1,015 685 -287 306 Selected key ratios20172016201520142013 Common Equity Tier 1 capital ratio (CET) (%) 20.8 19.0 18.8 18.5 17.5 Individual solvency requirement (%) 9.3 9.3 9.6 10.6 9.9 Pre-tax profit as a percentage of av. equity 7.9 10.6 7.9 -3.0 4.0 Profit for the year as a pct. of av. equity 6.2 8.3 6.0 -2.7 3.0 Expenses as a pct. of income 39.9 41.4 46.6 61.4 62.8 Accumulated impairment ratio (%) 0.4 0.4 0.6 0.7 0.5 Impairment ratio for the year (%) 0.07 -0.01 0.07 0.38 0.20
BRFkredit's lending focus has since 1993 been directed at private owner-occupied homes, private rental housing, non-profit housing and office and business properties.
BRFkredit has lending of around DKK 308 billion (approx. EUR 41.4 billion) distributed on around 155,000 mortgage loans, managed by around 212 full time employees.
The chart show the composition of mortgage loans in BRFkredit end of 2017 Q4.
More general information on the Danish mortgage credit system is available here
BRFkredit finances the current lending by issuing covered bonds and mortgage bonds continuously, i.e. as tap issues.
It is the borrower's choice of loan type that determines the type of bonds BRFkredit issues. The Danish Mortgage Loans and Mortgage Bonds Act requires a very close link between the loans granted and the bonds issued.
The bonds are bearer bonds issued in book-entry form registered at VP Securities Services (Værdipapircentralen, the Danish Securities Depository and Clearing Centre) or VP Luxembourg. The bonds are listed for trading on NASDAQ OMX Copenhagen (Copenhagen Stock Exchange).
BRFkredit issues bonds in a range of maturities and with a range of coupons:
- Fixed coupon bullet bonds (non-callable) with maturities from one to ten years with annual coupon payment
- Fixed coupon annuity bonds (callable) with maturities of 10, 15, 20 and 30 years with quarterly repayment
- Floating-to-fixed floating rate annuity bonds with a maturity of 30 years and quarterly payments. The bonds initially carry a floating interest rate and have an embedded interest rate cap. If the floating rate rises to the threshold interest rate (knock-in rate) the bonds change into a fixed interest rate
- Capped floating rate annuity bonds with a maturity of 30 years with quarterly payments. The bonds carry a floating interest rate and have an embedded interest rate cap. The bonds continue to carry floating interest rate even if the interest rate at a previous fixing has been capped at the cap rate (i.e. "capped floaters")
- Ratched capped floating rate annuity bonds with a maturity of 30 years and quarterly payments. The bonds carry a floating interest rate which can not exceed the previous coupon reset on the bond.
Identical, but separated bond series are issued where the borrowers have the option of paying interest-only for up to 10 years.
To finance adjustable rate mortgage loans (ARM loans) BRFkredit uses – inter alia – non-callable bullet bonds (RTL-bonds) and short term callable annuity bonds (RTL F-bonds). ARM loans are typically 30 year annuity loans with annual coupon adjustment. These loans are funded by the issuance of RTL- and/or RTL F-bonds depending on the fixed rate period. At the refinancing of ARM loans we typically sell new bonds to replace the old underlying bonds. Once the sale has been completed we will redeem the old bonds.
These BRFkredit mortgage bonds are rated by Standard & Poor's. Read more on the current S&P ratings here
BRFkredit has a market share of the total Danish mortgage market of approximately 11%
Jyske Bank and BRFkredit is Denmark’s fourth largest financial institution
BRFkredit was established in 1959 as an independent business foundation authorised to grant third-mortgage loans under the name "Byggeriets Realkreditfond", abbreviated BRF. The original purpose was for BRF to grant mortgage loans for specific purposes.
In 1970, the Danish Mortgage Credit Act was amended. The system with three layers of mortgage financing was abandoned, and BRFkredit was allowed to grant mortgage loans in general. The amendments led to a series of mergers between Danish mortgage credit institutions and in 1975, the first Danish mortgage credit institution "Husejernes Kreditkasse" merged with Byggeriets Realkreditfond.
In 1990, Byggeriets Realkreditfond changed its legal structure, and the business was transferred from the foundation to a new company named BRFkredit a/s. The business foundation changed its name from Byggeriets Realkreditfond to BRFfonden.
BRFkredit was end of April 2014 merged with Jyske Bank, and became the fourth largest financial institution in Denmark.
Read more on the history of the Danish Mortgage Credit system