Ringkjøbing Landbobank is a customer-focused relationship bank which endeavours daily to act competently, responsively and properly towards our four principal stakeholders:
2022 was a challenging year. At the start of the year covid-19 was still in the picture. On 24 February, war broke out in Europe – something we thought was a thing of the past. Prices had already started to rise, and the price increases of energy and food in particular accelerated during the year, which meant that the inflation in Denmark, the USA and most of Europe reached a 40-year high in 2022. This forced both the European Central Bank and the US Federal Reserve to raise interest rates at an unheard-of speed and Danmarks Nationalbank followed suit. This of course impacted on the bank’s deposit and lending rates.
In times of challenge it is important to have a solid bank which is ready to back up its customers when they need it:
- In May, the rating agency Moody’s upgraded Ringkjøbing Landbobank’s Long Term Issuer Rating to Aa3 with stable outlook. This reflects that the bank is judged to have an earning capacity and credit profile which indicate that the bank will continue to meet current macroeconomic challenges. The bank’s Long Term Bank Deposit Rating was already Aa3 with stable outlook. No other Danish bank has a better rating at Moody’s
- In June Ringkjøbing Landbobank was awarded the accolade Bank of the Year among large and medium-sized banks for the seventh consecutive year. The prize is awarded by FinansWatch and EY
- Finally, for the second consecutive year, Ringkjøbing Landbobank had the best image of banks in Denmark in the Voxmeter survey in September. The Nordjyske Bank brand advanced one place and is now number three in the survey
Ringkjøbing Landbobank thus has the strength to support both individuals and businesses in challenging times.
The bank also made progress in the area of ESG in 2022. In July 2022, MSCI upgraded the bank’s rating from BBB to A. In July 2023, MSCI upgraded the bank's ESG rating further from grade A to grade AA, which is the second highest rating grade on MSCI's 7-point rating scale.
In Ringkjøbing Landbobank we continue to focus closely on implementing the Forum for Sustainable Finance’s recommendations on how the financial sector can accelerate the sustainable transition of the economy. This applies especially in the area of investments and loans. For the second time, we publish portfolio-level carbon emissions from portfolio management schemes, including pooled schemes and the bank’s own securities portfolio, in this report, and for the first time we publish portfolio-level carbon emissions from the bank’s loans. Both statements were made at 31 December 2022.
Strong drivers of the bank’s green transition work are the business opportunities deriving from this work despite increasing competition. Since 1995, we have successfully cultivated niches that fit well into the green agenda. The distinctive feature of a niche in Ringkjøbing Landbobank is that we have studied the area in detail. This enables us to show responsiveness, integrity and expertise in our advice. Initially we financed wind turbines, which have ever since been an important business area for the bank and account for a handsome part of our total loans. Later we built expertise in and financed solar cell and biogas plants. This includes financing green utilisation of the rather large carbon dioxide emissions which have so far been associated with biogas production. This solution will increase the production of biogas by 60% with the same input of biomass.
We also provide loans for personal customers’ energy efficiency improvement of housing and purchases of sustainable vehicles. Sustainability is increasingly becoming a part of our advice to personal customers, where we place a strong emphasis on improvement of energy efficiency. Not least in our home ownership advice and other contact with our customers, we are aware that the high energy prices make many projects profitable that were perhaps too expensive to carry out earlier.
Another significant niche for the bank is private banking, which was strengthened significantly in the Copenhagen area in particular when we entered into a strategic partnership with SEB in spring 2022. Ringkjøbing Landbobank took over the relationships with SEB’s Danish private banking clients, who thereby gained access to a wider product range including mortgage credit, pension products and everything else that serves the day-to-day banking needs of personal customers. At the same time, Ringkjøbing Landbobank’s private banking clients got access to an extensive range of research, analyses, new investment opportunities, international financing and, not least, a large global network in SEB, which is today present in more than 20 countries.
In the area of investments, Ringkjøbing Landbobank works closely with BankInvest, of which we own 21%. BankInvest has a total of DKK 127 billion under management. BankInvest has joined the Net Zero Asset Managers initiative, under which asset managers commit to working towards neutralising greenhouse gas emissions from the companies invested in by 2050. This will be of great importance to BankInvest’s work with sustainable investments in future.
Ringkjøbing Landbobank sees a great need for promoting the sustainable transition in businesses with a large environmental footprint and we want to help finance this.
The bank thus does not want to invest in and provide financing only to those businesses that emit least carbon.
Once again, the bank is pleased with a very satisfactory employee survey. The survey comprises 20 questions and all answers showed increased satisfaction, even though the level was also high in 2021. The employees are asked to express their satisfaction on a scale from 1 to 10, where 1 is "I fully disagree" and 10 is "I fully agree".
For example, we ask our employees every year to consider the statement “I thrive in the bank”. Here, the average answer increased from 8 to 8.7. The good results were achieved even though covid-19 was hardly over when we conducted the survey in the spring. On top of that we were really busy in the bank at the time.
As a bank we experience constantly shifting needs and requirements for our advice. It is wise, therefore, that one of the Forum for Sustainable Finance’s 20 recommendations is that we should focus on education and training in the finance sector. This has always been a high priority in Ringkjøbing Landbobank. We offer our employees education and training in our own academy and in collaboration with Aalborg and Aarhus Universities, Finanssektorens Uddannelsescenter (the Financial Sector’s Training Centre) and local business academies. In 2022, we placed extra emphasis on education and training in investment advice, profiling of our customers’ sustainability preferences and IT awareness.
We also give several young employees an education every year. At the end of 2022, we were training 31 apprentices and trainees, whom we are pleased to offer good opportunities in their local areas. This is a necessity for the bank. It can be difficult to attract trained employees to our strong market areas in West, Central and North Jutland, which is why we have chosen to provide our own training to employees.
It is thus a great satisfaction to us that the two-year finance programme for young people with a general upper secondary education has been made permanent, strongly assisted by the Financial Services Union and the Financial Sector’s Training Centre etc.
Ringkjøbing Landbobank’s goal is to be carbon-neutral. We own Sæbygård Skov forest, in which the annual growth captures more carbon dioxide than the bank emits. However, carbon sequestration in forestry is only accepted in carbon accounting if the forest is certified under a UN-approved standard. We have therefore decided also to offset our CO2 scope 1 and scope 2 emissions by buying climate credits, and we make an effort to reduce our own emissions as much as possible to minimise the need for offsetting through climate credits.
We have outsourced our IT development and operations to Bankdata, which in turn has outsourced the energy-hungry IT operations to JN Data. Bankdata and JN Data have entered into a long-term Power Purchase Agreement (PPA) with Better Energy, which has built a solar energy park as part of the agreement. From 2023, the bank’s entire indirect electricity consumption for IT operations is thus balanced by the production of green electricity.
As a strong local bank in West, Central and North Jutland, we are of great importance to local communities. We provide finance to personal customers’ purchases of housing, vehicles etc. and to local business development and are proud to support more than 1,100 local clubs, associations, initiatives and events.
Ringkjøbing Landbobank expends substantial resources on combating money-laundering and financing of terrorism, on data security and on preventing cyber crime. We are also one of Denmark’s top 50 taxpayers (fiscal year 2020) and contribute free of charge to society by handling a range of other imposed tasks, e.g. in tax reporting and digitalisation. From 2023 we are also required to pay a surtax to finance the so-called Arne pension although we have no responsibility for and no influence whatsoever on whether or not “Arne” is able to work until the general pensionable age. From now on we and the rest of the financial sector must pay a higher income tax rate than other private-sector businesses.
Ringkjøbing Landbobank’s business model must be robust and sustainable for all stakeholders. This is a precondition for generating a satisfactory return on our shareholders’ investments.
Ringkjøbing Landbobank supports the 15 ESG key figures defined by Nasdaq Copenhagen, the Danish Finance Society and FSR – Danish Auditors to make data comparable across industries and sectors.
You will find the status of these key figures, and much more about sustainable banking operations in this Ringkjøbing Landbobank’s ESG report and includes an extract of the bank’s reporting on the UN Sustainable Development Goals and the Ten Principles of the UN Global Compact.