It has been an expensive business for Sydbank to lend money to the troubled Danish energy developer Better Energy.
The bank's annual accounts, published on Wednesday, show that it has had to make a write-down of 446 million DKK as a result of Better Energy's reconstruction. This has been a major factor in Sydbank's profit after tax falling by almost 600 million DKK to 2.7 billion. kr.
If we disregard the total write-downs, which are much higher than in 2023, the bank's CEO, Mark Luscombe, is satisfied with the results in 2024.
- It is positive that in 2024 - as a result of an increase in core earnings - we can maintain the result before write-downs at the record high level we achieved in 2023, he says in the accounts.
- The write-downs constitute an expense of 595 million kr., of which 446 million kr. can be attributed to the reconstruction of Better Energy.
Write-downs are decreases in the value of things that a company owns. Banks typically have write-downs on loans, which are money lent that the bank no longer expects to get back. This can therefore be considered a loss.
In restructuring
Better Energy, one of the country's largest developers of renewable energy, filed for restructuring in December last year. A restructuring is an attempt to save a company from bankruptcy.
Better Energy's business model is to build solar parks in Denmark, Poland and Sweden, and the company has been responsible for around half of the renewable energy production that has been built since 2020.
Sydbank is one of several parties that has had money squeezed in the venture. The state pension fund ATP has also lost a three-digit million amount in the case.
Interest income has also declined at Sydbank. This is a result of the fact that interest rates have generally fallen recently. Interest rates will probably also have consequences for the year's result. In any case, the bank expects its profit after tax to be in the range of DKK 2.2-2.6 billion.
/ritzau/
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