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:
Sven A. Blomberg, 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 2015 2014 2013 2012 2011 DKKm Contribution income, etc. 1,687 1,494 1,408 1,250 1,292 Other net interest income -45 81 -60 -152 -95 Net fee and commission income, etc. 256 184 136 117 -11 Value adjustments, etc. (- is an expense) -106 -61 50 17 27 Other income 40 15 8 2 5 Core income 1,832 1,713 1,542 1,235 1,218 Core expenses 908 963 952 910 916 Core profit before loan impairment charges and provisions for guarantees 923 751 590 324 302 Loan impairment charges and provisions for guarantees 103 1,069 505 493 459 Core profit 821 -318 85 -169 -157 Investment portfolio earnings 89 -30 328 421 285 Pre-tax profit 909 -348 413 252 127 Tax (- is income) 210 -72 110 66 33 Post-tax profit or loss 699 -276 302 185 95 Selected key ratios20152014201320122011 Common Equity Tier 1 capital ratio (CET) (%) 18.9 17.5 16.6 15.2 16 Individual solvency requirement (%) 9.6 10.8 10.5 10.3 9.5 Pre-tax profit as a percentage of opening equity 8.2 -3.4 4.1 2.6 1.3 Profit for the year as a pct. of av. equity 6.1 -2.6 3 1.9 1 Income/cost ratio (%) 1.9 0.8 1.3 1.2 1.1 Accumulated impairment ratio (%) 0.6 1.1 0.9 0.8 0.8 Impairment ratio for the year (%) 0 0.5 0.2 0.2 0.2
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 249 billion (approx. EUR 33.5 billion) distributed on around 137,000 mortgage loans, managed by just over 700 full time employees.
The chart show the composition of mortgage loans in BRFkredit end of 2015 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 9.7%
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